8.2 Economic Development Services Agr
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION
DATE
01/28/2008
TIME
4:00 P.M.
AGENDA SECTION
NO:
8
ORIGINATING DEPARTMENT: APPROVED FOR
AGENDA:
ITEM
NO.
Page 1
FINANCE AND ADMINISTRATION
2
BY:
BY: Rod Franz
ITEM: Resolution No. 08-6484
A resolution authorizing the Mayor to enter into an agreement for Economic Development Services with the Salina
Area Chamber of Commerce.
BACKGROUND:
The Salina Area Chamber of Commerce has provided economic development services to the Salina area for
many years. This included a provision for "industrial" development services as far back as 1955. "Commercial"
development was added in 1987.
Funding for this program has been provided by an annual budget authorization of $85,000 for the last 16 years.
During 2006 - 2007, the Chamber developed a new multi-year Economic Development Strategic Plan. The
Strategic Plan was presented to the Salina City Commission on June 25, 2007, and, as a result, budgetary
provisions were made to support the plan for 2008. The amount allocated from General Fund resources is
$206,000.
The attached agreement formalizes the relationship, and provides for the City's intent to support the program
over a five-year period, subject to annual appropriation. The amounts for future years are:
2009: $ 256,000
2010: $ 256,000
2011: $ 206,000
2012: $ 206,000
Distributions to the Chamber of Commerce are to be made quarterly. The agreement provides for performance
reporting as requested by the City Commission. These provisions are a continuation of those within previous
agreements.
The Salina Economic Development Incentives Council has recommended a supplemental program to support
and encourage Entrepreneurial Development, with a one-time contribution from the Economic Development
Sales Tax of $45,000. This will be a four-year (2008-2011) program, administered by the Chamber. The
distribution of $45,000 will be a one-time lump sum distribution to be made upon request from the Chamber of
Commerce.
FISCAL NOTE:
$206,000 is budgeted out of City General Funds for the Economic Development Strategic Plan. $45,000 is
available in the Sales Tax Economic Development fund.
CONFORMANCE WITH THE STRATEGIC PLAN:
"Salina will encourage and be supportive of industrial development, economic expansion, market-driven tax
base growth, and home grown entrepreneurial ism."
COMMISSION ACTION:
Pass Resolution Number 08-6484, authorizing the Mayer to execute an agreement for economic development
services with the Salina area Chamber of Commerce.
The New Salina Economic
Development Strategic Plan
2007-2012
Economic Development Strategic Plan
· Tom Bell
· Scott Bergkamp
· Larry Britegam
· Rita Deister
. Larry Fief
· Jason Gage
· Charlie Grimwood
· Alan Jilka
· Dennis Lauver
· Dana Morse
. Daran Neuschafer
· Pete Peterson
· Tim Rogers
· Julie Sager Miller
. Kristin Seaton
. Harry Smith
· Craig Stephenson
· Jeff Thompson
· Betsy Wearing
· Paula Wright
The Nell' Salina Economic
Development Strakgic Plan
1
Workforce Quantity & Quality
The Nell' Salina Economic
Development Stratllgic Plan
2,050 net new employees =
approx. 5.5 percent increase
2007-2012
2
Industry Segment FUNIS Industry Cfus Used Direct Hourly Hoo", !l!..d lEarnings Total Employment Total
Emplovement Rate I Mfvear Earnlnas Multiplier Eaml.... Mu/UoUe' emDloyme rot
A~ation and 15. Mot'" vehicle. body.
aefO$p;lce trailer. and parts
manutlcturina manufacturing 425 23,17 2080 2(1,482.200 1.7763 36.382.674 2.675 1.137
18. Miscellaneous
Manuf.llctunna manufacturing 681 15,55 2000 28.495.064 1.4546 41.44ll.92O 1.6900 1.490
loglstios.
'#/larMousmg &
<islribullon 36. Warehousing and storage 305 15.57 2080 9.ll77.008 1.3402 13.237.970 1.4694 44ll
11. Fabricated md.al product
Metal fabrication manufacturing 151 16,93 2080 5.317,374 1.5966 8.489.720 1.7442 263
t a. MisccMlaneous
Machine shops manufacturing 120 18.17 2000 4.535.232 1.4546 6,596.946 1.6wa 2(13
14. Electrical equipment and
BIQ--teeh appianee manufacturing 168 19.5 2000 6.814,08(1 1.5699 10.697.424 1.9238 323
I I I
! !m.5ZU381 ' ' ! 3.0041
;Totals 2050' 1$116.653.657'
Potential Economic Benefit
2,050 new net jobs
2007-2012
$ XXX,XXX,XXX
SOtlKi:: \Vichita State- University
"'l
.J
Workforce Housing
· Targets 90 to 130 percent of median income
· $750,000 federal appropriation request
· Non-profit developer
· Multiple builders and multiple buyers
· Cooperation with City of Salina & Saline County
· Covenants restrict size & price of home to hit
target
The New Salina Economic
Development Strategic Plan
Performance Benchmarks
V"'2,050 net new employees
- 1,800 employees net new to Salina labor shed
working @ existing employers
- 250 employees net new to Salina labor shed
working @ new employers
TIle Nell' Salina Economic
Development Strategic Plan
4
Support the Expansion &
Retention of Existing Employers
The Nell' Salina Economic
Development Strategic Plan
Performance Benchmarks
-/60 to 75 face-to-faceyisits annually to area
employers
-/10 visits annually to corporate offices
-/ Quantity and dollar value of building
pennits for existing employers
The Ne1l' Salina Economic
Development Strategic Plan
5
Enhance New Business
Attraction Efforts
The New Salina Economic
Development Strategic Plan
Performance Benchmarks
'/Develop and maintain "short list" with
minimum of 14 active prospects
'/250 employees net new to Salina labor shed
working @ new employers
,/ Quantity and dollar value of building
permits for new employers
The ,Vell' Salina Economic
Development Strategic Plan
6
Stimulate Retail Development
The New Salina Economic
Development Strategic Plan
Performance Benchmarks
./Salina trade market retail sales
./PuH/leak data
./Sq. feet of new construction/remodeling
./ Quantity and dollar value of commercial
building permits
The Ne1/' Salina Economic
Development Strategic Plan
7
Examine & Address Regulatory
Process & Building Services
Concerns
TIle New Salina Economic
Development Strategic Plan
Specific strategies
1. Policy & Code
.. Stay current with national/international codes
.. Input from all stakeholders to review codes
The Nell' Salina Economic
INvelopment Strategic Plan
8
Specific strategies
2. Procedures
· Continue improvement of code interpretation with
emphasis on Quick Problem Resolution process to
resolve the inconsistencies in code interpretation by
the stakeholders
Work. to reducdeliminate "special conditions" that exist because of the
qu.1lity and completeness of the information
City will review/categorize the "special conditions" previously issued to
identify recurring issues that can be addressed with a review of the process.
Continue 'special conditions" where it allows work to proceed because the
information can be submitted and approved later
Staffwill make frequent phased completion site visits
Standardize checking for plan review and inspections
Develop online permit applications with reporting and project tracking
D.::sign Review Te:un sWrwill meet with Oversight Council
TIle l'-,!ew Salina Economic
Development Strategic Plan
Specific strategies
3. Personnel
· Local government staff will develop and exhibit "Yes
Somehow" attitude and focus on "Commitment to
Service Quality"
· Continued department restructuring and
empowerment of key development personnel when in
the best interest of service quality
· Continue City of Salina efforts to recruit Director of
Community & Development Services position
TIll~ Nell' Salina Economic
Development Strategic Plan
9
Define Industrial Expansion &
Attraction Targets
The New Salina Economic
Development Strategic Plan
Expansion & Attraction Targets
1. Focus community resources on the following
target industry list:
· Aviation & Aerospace
· Manufacturing
· Logistics, Warehousing and Distribution
· Metal Fabrication
· Machine Shops
· Biotech
2. Complete feasibility and market study for each
target
The Nell' Salina Economic
Development Strategic Plan
10
Maximize Current & Potential
Incentives
The New Salina Economic
Development Strategic Plan
Incentive Considerations
1. Continue to fund Salina. Economic Development
Incentives Council - current source expires July
2010
A tool for incentives is needed for Salina to be competitive
2. Incentives for target industries:
Wage must exceed average wage for the i.ndustry
Benefit/cost analysis must be greater than 1.0 for City of
Salina, Saline County, USD 305 and Salina Airport
Authority
Grants for human capital investment and capital investment
should be leveraged for maximum leverage. All potential
state/local incentives that are available should be used.
The Nell' Salina Economic
Development Strategic Plan
11
Prioritize a Defmed Plan for
City/County Urban Service Area
The New SlIlina Economic
Development Strategic Plan
City/County Urban Service Area Plan
1. City/County Urban Service inter-local
government agreement amended by Dec.
31 2007.
· Define accommodation of residential, commercial
and industrial development
2. Define conlffion City/County urban
developnlent areas
The Nell' Salina Economic
Development Strategic Plan
12
Organize to Obtain an Accurate
2010 Census
TIle New Salina Economic
Development Strategic Plan
Plan & Construct the
Infrastructure for Growth
The Nell' Salina Economic
Development Strategic Plan
13
Planning Considerations
III
II
1. Commercial air service at Salina Airport is
a high priority
2. Develop inventory of "certified" market-
ready property
3. Focus resources on "certified sites"
4. Infrastructure fmancing tools traditionally
used for new projects should be expanded
to include redevelopment projects in
targeted locations
The Nell' Salina Economic
Development Strategic Plan
Planning Considerations
5. Public should initiate construction of
necessary off-site infrastructure for
qualifying projects in targeted locations
6. Prevent "leap frog" development where
possible to efficiently use public resources
7. Study burying utilities and aesthetic
site/building design considerations along
major corridors and community entrances
The Nell' Salina Economic
Development Strategic Plan
14
Planning Considerations
8. Consider if the project is a high user of a
natural resource that is in low supply
9. Establish a tool to deternline financial risk
of applying public infrastructure funding
tools to projects
TIle N~yw Salina Economic
Development Strategic Plan
Performance Benchmarks
'nltJ New Salina Economic
DevelopmtJllt Strategic Plan
15
Performance Benchmarks
· Job growth - 2,050 new jobs
.. $150M - Private sector capital investment
.. More than 50,000 City of Salina Population
.. Sales tax increase
.. Property tax base increase
.. Quantity and value of building permit values
- Commercial
- Residential
- Industrial
The New Salina Economic
Development Strategic Plan
Governance & Organizational
Capacity
The Ne1l' Salina Economic
Development Strategic Plan
16
~PtC_dll....(9<,t,t
a:.lflu,Et....-kI'Noi""",.... T~ (la-~1
WwkIloI_ n"""",,,!,,_AivI.--rC'_dt"
TIle New Salina Economic
Ikvelopment Strategic Plan
2007 - 2012 Budget
The New Salina Economic
Ikvelopment Strategic Piau
17
Budget Summary
by percent of total budget
.. Workforce Development - 48.10
.. Existing Business Expansion - 20,94
.. New Business Attraction - 13.71
.. Retail Development - 3.04
.. Air Service - 8.79
.. Research & Planning - 2.38
.. Org. Capacity & Facility Development - 1.78
.. Census Outreach - 1.26
The New Salina Economic
Development Strategic Plan
18
Salina Small Business Entrepreneur Development Proposal
The Salina Small Business Entrepreneur Development Project establishes designated
funding to support entrepreneurial development in Salina, with special emphasis on
owner-operated businesses. The purpose of this project is to educate entrepreneurs in best
business practices and help them establish or expand their businesses in Salina, Kansas.
The project period is four years to commence March 1, 2008. A warded projects will be
followed and surveyed annually for three years. Therefore, the full project duration may
be seven years.
The Salina Area Chamber of Commerce will administer this project as an expansion of
their current Economic Development Agreement with the City of Salina.
The Salina Small Business Entrepreneur Development Project (SSBEBP) includes
Entrepreneur Training and Business Development Funds. Applicants must successfully
complete Entrepreneur Training prior to applying for Business Development Funds.
Applicants must reside in Saline County Kansas or own a small business in Salina
Kansas.
Entrepreneur Training
Eligible Applicants
1. Applicants may be existing business owners in Saline County.
2. Applicants for Entrepreneur Training need NOT have started a business.
Applicants must be developing a business concept they intend to locate in the
Salina Kansas area.
As a prerequisite to apply for Business Development Funds, the applicant must complete
a business training program and write or update their Business Plan. This program will
provide the tuition for the Small Business Development Center courses at no cost.
Normally, the three seminars cost a lotal of $40. This program will also reimburse
registration fees for approved alternate Entrepreneurial Training up to a maximum of
$200.
Applicants must complete one of the following business training programs:
Option A
This program is a series of three Small Business Development Center courses. The SBDC
seminars will be held in Salina and are led by the Director of the regional Small Business
Development Center.
1. Learning the Basics of Money, Marketing and Management - Essential
information to assess the feasibility of your ideas to start or grow your business.
Those completing this step will be ready to write a business plan and create cash
flow projections.
2. The Right Start - Using A Business Plan - Details about developing the
essential business plan arc learned. A highly interactive session that wi!] increase
learning.
3. Cash Flow - Accurately calculate jit/ure sales and costs, determine working
capital needs, and prepare for the ji/ture needs oj'new and existing businesses.
Option B
fastTrac~ is a comprehensive entrepreneurship-educational program that provides
entrepreneurs with business insights, leadership skills and professional networking
connections so they are prepared to create a new business or expand an existing
enterprise. The program was developed and is funded by the Kaufmann Foundation.
The FastTrac program includes practical, hands-on business development programs and
workshops for existing entrepreneurs, aspiring entrepreneurs, as well as entrepreneurship
curriculum. FastTrac is designed to help entrepreneurs hone the skills needed to create,
manage and/or grow successful businesses.
Participants work on their own business ideas or ventures throughout the program -
moving their venture to reality or new levels of growth. Pm1icipants will be given a list
of registered FastTrac instructors, class sites and course schedules.
Special arrangements will be made for entrepreneurs needing instruction in a language
other than English.
2, Complete a Business Plan
2
Business Development Funds
Eligible Applicants
Eligible applicants must have completed Entrepreneur Training, which includes an
approved training program and completing or updating a business plan, prior to applying
for Business Development runds.
Applicants must own an existing business or be developing a business concept they
intend to locate in Saline County.
Project Objectives
The Business Development funds are intended to accomplish two objectives, per the
Salina Economic Development Strategic Plan, adopted by the City of Salina and the
Salina Area Chamber of Commerce:
I) Increase the ability of the firm to attract customers that are currently not in the Salina
market. This will increase the amount of trade and commerce occurring in Salina via
new business activity.
2) Increase the ability of the firm to retain customers that are currently leaving the Salina
market to purchase the product or servicc. This will increase the amount of trade and
commerce occurring in Salina via better retention of business activity that should
occur in Salina but doesn't.
Eligible Use of funds:
Small Business Development Funds may be used to assist owner-operated businesses
with objectives identified in their business plan. Some of those objectives may include:
I) Continuing Education: This is tuition reimbursement for post secondary business
courses offered through an accredited associate or degrced business program. This is not
a scholarship or grant to assist individuals seeking post secondary business degrees.
Transcript with a minimum 2.0 GP A and/or a certificate of course completion will be
required before reim bursement.
2) Professional Services: May include services of professionals identified within the
business plan developed or updated as part of Entrepreneurial Training. Professional unit
service rates will be subject to review and approval of the Entrepreneurial Development
Committee. These professionals may include but are not limited to:
. Accountants
. Architects
. Legal Counsel
. Marketing Professionals
. Design Professionals
3
3) Brick and MOliar Improvements: Projects may include but are not limited to:
411 Building expansion
411 Vacant building redevelopment
411 Facade renovation and restoration (em phasis on removal of fa((ade modi fications
which have not reached historical significance on building aged 50 years or older)
. For Lee District applicants ONLY - Work complying with Lee District Design
Guidelines and contingent on Design Review Board approval. Lee District
businesses may include up to 50% funds received from the Small Business
Development Program as a source of matching funds for Salina Downtown, Inc.
Development Incentive Program (formerly Exterior Improvement Program).
4) Marketing: Projects may include but are not limited to:
. Marketing Research
. Marketing/advertising costs identified in the business plan. For existing
businesses, these must be ncw eosts above thc previous annual marketing costs.
. Design
" Printing
. Signage
5) Additional product lines or major product line expansion as projected in the business
plan.
6) Additional or significantly expanded services as projected in the business plan,
Additional Entrepreneur Development Resources
There is a State of Kansas program that can be accessed for additional financial support
on a project-by-project basis. The mission of StartUp Kansas is to partner with local or
regional business support providers in providing or obtaining seed capital funding for
Kansas entrepreneurs for for-profit business startups and expansions in rural and
distressed communities. StartUp Kansas is a service of the Kansas Center for
Entrepreneurship, through its Kansas Community Entrepreneurship Fund, all of which
were established by the Kansas Legislature in 2004 through the Kansas Economic
Growth Act. These programs are administered by the Kansas Department of Commerce,
which provides oversight and management under guidelines approved by the Secretary of
Commerce.
The Salina Area Chamber of Commerce and Salina Downtown Inc. arc both registered as
a "business support partner" with SlatiUp Kansas. Entrepreneurs and existing small
businesses may only access StartUp Kansas funding by working with local or regional
non-profit business support providers like the chamber or Salina Downtown Inc.
StartUp Kansas' support is on a dollar to dollar basis and is awarded on a competitive
basis. The maximum that StartUp Kansas can provide to an individual project as a match
is $45,000.
4
Ineligible Use of Funds
Primary industrial projects are NOT eligible to apply for these funds. Primary industrial
projects are encouraged to apply directly to the Salina Economic Development Incentive
Council for funding consideration.
Project Effectiveness & Key Performance Indicators
As the administer, the Salina Area Chamber of Commerce will provide quarterly updates
to the SEDIC and annual financial and performance audit to funding sources. The annual
report will include but may not be limited to:
. number of participants in the Entrepreneur Training
. number of business start-ups from the Entrepreneur Training participants
. number of jobs created
. customer demographics and reslllting changes
. longevity of the business over a minimum of three years
. total volume of sales for new businesses
. increase in sales for existing businesses
. private investment generated as a result ofthis incentive program
. an annual survey of the project participants
. additional data necessary to appropriatcly evaluate project cCfcctiveness based on the
award criteria to individual businesses.
Entrepreneur Development Committee
Thc entrepreneur development committce will oversee this initiative. The primary task
for the committee will be to review applications for entrepreneur training and business
development funds, The committee will have the authority to award business
development funds.
The committee will include representatives from funding, educational and economic
development resources serving the Salina area. The committee will establish the criteria
for selection and have the authority to make cash awards to eligible applicants.
Applications will be reviewed within 30 days of the application deadline. A wards will
then be made established criteria. The suggested committee members are:
. Board of Director Member, Salina Area Chamber of Commerce
. SEDIC member or designee
. President/CEO, Salina Area Chamber of Commerce
. Board of Director Member, Salina Downtown Inc.
. Executive Director, Salina Downtown Inc.
. City Manager, City of Salina or his designee
. Executive Director, North Central Regional Planning Council
. Dr. John DeLeon, Kansas State University - Salina
5
Funding Sources
There is an anonymous source that we believe will match, on a dollar-for-dollar basis, all
local dollars generated to support entrepreneur development in Salina.
This program proposes using Salina Economic Development Incentives Council financial
support as one of several local matches that will be doubled by this anonymous source.
We recommend using a portion of the local option sales tax income that IS designated for
economic development to the Salina City Commission.
addition, other private sources will be solicited for financial support to maximize local
funding that can be doubled by the anonymous financial supporter. Tax-deductible
donations will be received at the Salina Area Chamber of Commerce Foundation, a
501 (c)3 entity.
Project Budget
TOTAL FOUR-YEAR BUDGET
Salina Economic Development Incentives Council *
Additional Local Income Sources
Matched Income (Anonymous supporter)
Total Resources
$ 45,000
$ 50,000
$ 95,000
$ 190,000
Entrepreneur Training
Business Development Funds
Total Expenses
$ 50,000
$ 140.000
$ 190,000
ANNUAL EXPENSES
Entrepreneur Training (including translation)
Business Development Funds
Total Expenses
$ 9,500
$ 38,000
$ 47,500
* SEDIC funds will be used exclusivelyfor Business Development Funds. This is (/ one
I ime request for a 4 year budget.
The total available funds will be equally distributed over the four-year award period
($47,500/year). Each year 20% of the total budget will be reserved for Entrepreneur
Training ($9,500) and 80% for Business Development Funds ($38,000). Any unexpended
Entrepreneur Training funds for a specific year will be transferred to the Business
Development Fund increasing the maximum available for the following project year.
Project awards must meet a minimum 1:1 cash match. Awards will be a minimum of
$2,500 and a maximum of $5,000 per approved application. These are (HIe-time awards.
Successful applicants may not re-apply.
6
The examples below show the power of leveraging and compounding. SED1C funding
and other local support can exponentially enhance the ability to support those that are
seeking to retain dollars that are leaving Salina and attract new trade and commerce to
Salina. The examples assume the applicants complete training, submit a successful
application for business development funds and are successful in receiving StartUp
Kansas funds.
Example # I - Business Located Anywhere in Salina, including Dovvntown
Entrepreneur Training
Business Development Funds for approved project
Matching Support Provided by Entrepreneur
Project Subtotal
StartUp Kansas matching support
Total Project Support to Assist the Entrepreneur
$ 60.00
$ 4,350.00
$ 4,350.00
$ 8,760.00
U.700.00
$ 17,460.00
Example #2 - Business J"ocated in Downtown S'alina with a Fa (fa de Improvement Project
Entrepreneur Training
Business Development Funds for approved project
Fac;ade Improvement Funds - SDl
Matching Support Provided by Entrepreneur
Project Subtotal
StartUp Kansas matching support
Total Project Support to Assist the Entrepreneur
7
$ 60,00
$ 4,350.00
$ 2,175.00
$ 4,3,~.00
$ 10,935,00
$ 10,935.00
$ 21,870.00