Agenda Item Wording:
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Authorization to execute annual service agreement with Visalia Economic Development Corporation (VEDC) for $60,000 and appropriate $40,000 ($20,000 for FY 22/23 and $20,000 for FY 23/24) from the General Fund to fund the increase in requested services.
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Deadline for Action: 6/20/2022
Submitting Department: Community Development
Contact Name and Phone Number: Devon Jones, 4190
Department Recommendation:
Authorize staff to execute the annual service agreement with Visalia Economic Development Corporation (VEDC) for $60,000 for FY 2022/23 services. This contract includes a one year extension. The agreement for service includes a $20,000 annual increase due to increased service deliverables requested by the City of the VEDC, outlined in more detail below, in addition to service expectations that may impact VEDC’s ability to generate private memberships. It has been more than a decade since the City has increased it’s payment to the VEDC.
Background Discussion:
The City has partnered with the Visalia Economic Development Corporation (VEDC) for economic development services since its inception in 1996. The VEDC was instrumental in the development of the industrial park and services today focus more on marketing of the industrial park, coordination with key stakeholders, and outreach assistance to local existing industrial employers to help retain and expand jobs in the industrial park. The VEDC is currently in a period of transition as they are going to bring on a new Executive Director with the upcoming retirement of Nancy Lockwood from this post. The VEDChas selected Bruce Nicotero, former General Manager of JoAnn’s Distribution Center in the Visalia Industrial Park (VIP), as the new Executive Director. Staff has worked with Mr. Nicotero for many years and is confident that he will effectively lead the VEDC and deliver requested services in this city service agreement. In addition to Mr. Nicotero, who will functionally fill a part time position, the VEDC is also likely to contract certain services to the Tulare County Workforce Investment Board (WIB) to assist in conducting all of the VEDC’s activities. Staff is supportive of this approach as the most critical need for the VIP at this time is workforce development and employee recruitment and retention, particularly given the rapid increase in development activity that does not appear to be slowing down. Contracting services to the WIB will secure dedicated time and staff resources to the VIP and greatly enhance the VEDC’s capacity to develop long term workforce development solutions and ongoing recruitment coordination. In addition, this multi-pronged approach fits within the VEDC’s existing annual budget.
Below is an outline of the major proposed changes to the service agreement for the coming FY:
1. Industrial Roundtable format - Staff is proposing a change in format of the existing monthly industrial park roundtable meetings. While they are currently well attended and beneficial networking opportunities for attendees, staff believes that the industrial park leaders could benefit from more time to discuss their current issues, needs or generally provide information to economic development and workforce development partners of the VEDC. As the VEDC is a membership supported organization and the industrial roundtable is a good opportunity for service providing members to have access to industrial park companies, the focus on the issues of the industrial park companies themselves has been diminished. The service agreement now formalizes format expectations of these meetings and therefore could potentially negatively impact the VEDC’s short term membership drives. Additionally, staff would expect that VIP employers could attend these roundtables without being paying members of the VEDC.
2. Workforce development - The anticipated role of the VEDC, as it pertains to workforce development, is enhanced with this service agreement, again, given the current growth expectations in the VIP and the ongoing need for additional workers in the VIP. There are numerous existing efforts as it pertains to industrial occupation workforce development and talent pipeline development, many of which city staff are directly involved in, and there are a number of high-quality resources and partners available to VIP employers to develop and maintain long term solutions. The VEDC should now increase its direct involvement in these matters.
3. Business visitations and data collection - While VIP employer visits have always been conducted in partnership with VEDC, this service agreement formalizes metrics associated with this activity. Further, it requires the VEDC to convert visit information (such as expressed needs, particular input regarding workforce development issues, utility or other infrastructure issues, resource requests, etc.) into a customer relationship management (CRM) program so as to better compile trend data and convert feedback to intelligence that can inform the various partner stakeholders. Company specific information will be kept confidential where appropriate.
4. Follow up on Applied Development Economics (ADE) Study - Not only did the ADE study provide a prospect list for potential new companies to attract to Visalia, but it provided local analysis of industries impacted by COVID, local economic conditions, and export/trade exposure and local purchasing demand. This analysis should inform local business outreach efforts and potentially lead to business retention and expansion activity. Staff will work closely with VEDC contracted staff to implement follow up activities in partnership.
5. Maintenance of an industrial park directory - Staff is recommending the VEDC keep an up-to-date industrial park directory (current directory can be downloaded via VEDC website homepage: www.visaliaedc.com <http://www.visaliaedc.com>). The directory can passively generate business-to-business activity, assist local job seekers to familiarize themselves with employment opportunities in the VIP, help to foster a community feel in the VIP, as well as inform prospective new industry of who is in the industrial park and provide contacts for inquiries into Visalia.
6. Create a VEDC Board seat for City - While the City has always been an active partner of the VEDC, this service agreement formally requires that city representation have a voting board member position. Further, this city representative board member will be allowed to attend the VEDC Executive Committee meetings in addition to the City’s Economic Development Manager.
7. Increase of agreement to $60,000 from $40,000 - As detailed above, there are several additions to service expectations of the VEDC. As such and given the potential impacts to membership generation (at least in short term) due to required changes in industrial roundtable format, staff believes the additional funding is justified. Staff is confident in the VEDC’s proposed staffing decisions and in the VEDC’s ability to deliver on these service expectations.
Other edits include changing the payment schedule from a membership match to biannually. This is being changed to both reflect typical service agreements of this nature and also because the membership match requirement seems to encourage a membership driven focus at the VEDC, which based on services requested by the city, does not reflect city priorities. While the VEDC, as a nonprofit, must generate memberships in order to sustain itself, staff believes the city should not make its own investment into the organization dependent on the VEDC’s ability to generate memberships.
The VEDC has been a strategic economic development partner of the City’s since its inception in 1996. The formation of the VEDC was originally in response to a need for economic development services for the city specifically and was driven by support from the private sector. The partnership helps with ongoing business retention, expansion and attraction efforts and most importantly, helps to maintain an open line of communication with local economic development stakeholders and private sector leaders in the VIP. The organization continues to focus on the industrial sector primarily and is an essential partner for the continued vitality of the VIP. One of the most essential roles the organization plays is in working with local industrial park employers as a community’s ability to attract new industry is dependent on what local industry may say about doing business in the local community. The current contract expires at the end of June and was approved by Council in 2018. The current contract amount is $40,000/year.
Fiscal Impact:
The current contract amount is $40,000 per a year. The new contract will require additional funding of $20,000 per year, bringing the total contract to $60,000. The budget for FY 22/23 and 23/24 is being approved tonight with $40,000 annually for this contract. Staff is recommending an additional appropriation of $20,000 for each year from the General Fund.
Prior Council Action: 3.19.18 - approved existing service agreement retroactively for FY 2017/18 services as a formal service agreement was not in place prior.
Other: N/A
Alternatives: Do not approve additional appropriation and authorize historical service contract amount of $40,000
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to execute annual service agreement with Visalia Economic Development Corporation (VEDC) for $60,000 and appropriate $40,000 ($20,000 for FY 22/23 and $20,000 for FY 23/24) from the General Fund.
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: Service agreement