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HomeMy WebLinkAboutCochella Valley Economic Partnership FY 15/16 FundingCITY OF PALM DESERT STAFF REPORT REQUEST: APPROVE AN EARLY FUNDING COMMITMENT OF $50,000 TO THE COACHELLA VALLEY ECONOMIC PARTNERSHIP'S BUDGET FOR FISCAL YEAR 2015/2016 SUBMITTED BY: Ruth Ann Moore, Economic Development Manager DATE: March 12, 2015 CONTENTS: City of Palm Desert Return on Investment Report 2014 Recommendation By Minute Motion: 1. Appropriate an additional $50,000 from Unobligated General Funds to Account No. 110-4430-422.36-30 Dues, for the Fiscal Year 2014-2015; and 2. Authorize the expenditure of $50,000 as a pre -payment of the Fiscal Year 2015-2016 Dues to the Coachella Valley Economic Partnership. Executive Summary The Coachella Valley Economic Partnership (CVEP) is a regional collaboration of cities and county, companies and school districts working toward growing business and developing a skilled workforce for the Coachella Valley. With the creation of the Coachella Valley Hub, a business incubator and accelerator campus in 2009, CVEP has helped launch almost 30 companies and created more than 100 high -skilled, year- round jobs. To date, five of the Hub businesses have either relocated to or are currently operating from locations in Palm Desert. CVEP's College and Career Readiness program provides scholarships, career consulting and paid internships by local businesses. Over the past four years, more than 1,550 scholarships totaling $7.6 million have been awarded to Coachella Valley students. Due to a lack of continued participation by several cities and former business partners, CVEP currently has a shortfall to cash flow operations. CVEP staff is out aggressively raising funds and cutting expenses, and have requested early funding of the City's Fiscal Year 15-16 sponsorship dues. As of the writing of this report, the following are the results of that effort: City of Palm Springs — approved an additional $131,320 to fund the Hub facility La Quinta — a request has been made to have the City's sponsorship reinstated from $10,000 back to $50,000 Staff Report CVEP Dues pre -payment for FY15-16 March 12, 2014 Page 2 of 3 • Desert Hot Springs, Cathedral City and Rancho Mirage — appointments have been made to discuss their previous financial commitments • JFK Memorial Hospital — has increased their sponsorship from $10,000 to $50,000 • Eisenhower Medical Center — has increased their sponsorship from $10,000 to $25,000 Background Since 2010, The City of Palm Desert has invested $50,000 each year as its contribution toward the regional economic development efforts of CVEP. Palm Desert's 2014 Return on Investment (ROI) is listed in detail in the attached report and the following is an overview of services, investments, business development and workforce results for the City: • The Coachella Valley Small Business Development Center (SBDC), operated by CVEP offers free consulting to entrepreneurs to start a business and assists to secure financing. The SBDC also produces monthly professional development workshops in English and Spanish that are held in Palm Desert at the UCR campus with almost 1,000 in attendance for the year. In 2014 the services to Palm Desert businesses included: 0 2 newly created Palm Desert businesses 0 24 created and retained jobs o $2.9 million in loans and equity secured 0 31 Palm Desert clients received 200 hours of counseling • The Coachella Valley iHub is both a physical and virtual business incubator and accelerator campus that helps innovators launch job -creating businesses in the fields of renewable energy, medical technology, advanced manufacturing, and digital media. In 2014, five businesses are either currently receiving services or have graduated from the iHub and relocated to Palm Desert. o Virtual companies located in Palm Desert ■ Swiss Hy Tech • Desert GeoExchange, www.desertgeoexchange.com ■ Heightened Security, www.hs-usa.com o Graduate companies that have relocated to Palm Desert ■ Mobile Farming Systems, www.mobilefarming.com ■ Silicon Springs Enterprises, www.siliconsprings.com • The Coachella Valley Regional Plan for College and Career Readiness has developed in -school career academies around specific industries such as G \rda\Ruth Ann Moore\word data\STAFF REPORTS\CVEP dues pre -payment FY15-16 doc Staff Report CVEP Dues pre -payment for FY15-16 March 12, 2014 Page 3 of 3 healthcare, digital arts, culinary arts, and renewable energy. The program also assists students with financial aid, counseling and support services. Since the inception of the program 153 Palm Desert students have received $785,000 in scholarships. The yearly breakdown is as follows: 0 2009 22 Students $127,500 0 2010 23 Students $117,500 0 2011 29 Students $115,000 0 2012 33 Students $195, 000 0 2013 21 Students $117,500 0 2014 25 Students $112,500 Fiscal Analysis Funding for the FY 2015/2016 sponsorship is not currently funded and would take an action by City Council to use funds from the Unobligated General Fund. Similar to the regional role the City plays with the Convention and Visitors Bureau, Palm Desert has supported the valley's regional economic development by its sponsorship of CVEP. This increases the economics of the valley and quality of life for Palm Desert residents. Attracting business to the Coachella Valley whether located in Palm Desert, another city, or the unincorporated area will add wealth to the community allowing Palm Desert to increase its tax base. Therefore, staff recommends the approval of the early funding of the FY 2015/2016 sponsorship commitment of $50,000 to CVEP. Submitted By: 1 4�1j) uth iin Moor , Economic Development Manager C Paul S. Gibson, Director of Finance Approval: n M. Wohlmuth, City Manager 7Departm2entHea. artin Alvarez, Director of Economic Development /?tl, 14�r�z Rudy Mosta, Assistant City Manager G \rda\Ruth Ann Moore\word data\STAFF REPORTS\CVEP dues pre -payment FY15-16 doc COACHELLA VALLEY5COR] ECONOMIC PARTNERSHIP CITY OF PALM DESERT Return on Investment Report 2014 Coachella Valley Economic Partnership 3111 East Tahquitz Canyon Way Palm Springs, CA 92262 760-340-1575 www.cvep.com INTRODUCTION THE COACHELLA VALLEY ECONOMIC PARTNERSHIP (CVEP) has emerged a vital innovator of business and workforce development initiatives, with programs such as the nationally acclaimed Coachella Valley iFlub and Workforce/ Jobs Model. The partnership promotes a diversified, year-round economy by facilitating programs that stimulate job creation in key industries and unite business and education to create well -prepared workforce. The City of Palm Desert invested $5o,000 in 2014 and the return on investment (POI) includes the following: ✓ $3 million in loans and equity investments to domiciled businesses ✓ Two graduate Coachella Valley il-lub companies operating in Palm Desert ✓ Three current Coachella Valley Nub companies operating in Palm Desert ✓ An average of $130,000 per year in scholarships to 26 students The following report provide detailed metrics for all business and workforce development programs delivered to Palm Desert business owners and student. BUSINESS DEVELOPMENT The Coachella Valley Small Business Development Center, operated by CVEP, offers free, confidential, one-on- one consulting to entrepreneurs who seek guidance on developing a business plan, planning strategy, preparing financial statements and projections for loans, accessing capital, developing a marketing plan, growing sales, overcoming obstacles in management and human resources, fine-tuning operations, integrating technology, achieving sustainability, buying and selling a business, and gaining information and advice about local industry and economic trends. The Coachella Valley SBDC also produces monthly professional development workshops in English (Fireside Chat series) and Spanish (LanzaTech workshops). Services delivered to Palm Desert businesses and entrepreneurs, January 1-December 31, 2074 New Businesses Created 2 Jobs Created (full and part time) 8 Jobs Retained 16 SBA Loans (Dollars) $2,471,158 Non -SBA Loans $100,000 Equity Capital $400,000 Total Capital (Loans and Equity) $2,971,158 Total Clients Counseled 31 Total Counselor Hours 191.67 Total Client Hours 183.17 Long Term Clients (since start of fiscal year) 14 Training Events at LICP Palm Desert 22 Training Attendance (Total) 986 BUSINESS DEVELOPMENT (continued) The Coachella Valley il-lub, a business incubator and accelerator campus operated by the Coachella Valley Economic Partnership in Palm Springs, helps innovators launch job -creating businesses in the fields of renewable energy, medical technology, advanced manufacturing, and digital media. Since its 2010 inception, the iHub has been home to almost 30 companies and created more than loo high -skill, year-round jobs. Companies accepted into the program receive workspace, basic office resources like telephones and photocopiers, and access to management consulting resources. An economic impact study by economist John Musing forecasts that the iHub will create more than 3,50o direct jobs across 81 surviving startups during the next 20 years (and potentially faster if the pace of 2014 continues). Active (virtual) companies located in Palm Desert 3 Swiss HyTech Desert GeoExchange, www.desertgeoexchange.com Heightened Security, www.hs-usa.com Graduate companies located in Palm Desert 2 Mobile Farming Systems, www.mobilefarming.com Silicon Springs Enterprises, www.siliconsprings.com WORKFORCE EXCELLENCE The Coachella Valley Regional Plan for College and Career Readiness outlines how business and education will collaborate to develop, refine, and sustain career pathways for local students. The plan includes career explorations and in -school career academies around specific industries such as healthcare, digital arts, culinary arts, and renewable energy; work -based learning, such as internships, job shadowing, mentoring, and faculty externships; scholarships in conjunction with community matching partners, and student financial aid, counseling, and support services. Scholarships Awarded to Palm Desert Students from 2009 to 2014 YEAR NUMBER AMOUNT 2009 22 $127,500 2010 23 $117,500 2011 29 $115,000 2012 33 $195,000 2013 21 $117,500 2014 25 $112,500 Total 153 $785,000 WORKFORCE EXCELLENCE (continued) Palm Desert Students Who Completed Free Application for Federal Student Aid Since 2011 YEAR NUMBER AMOUNT 2011 201 $868,029 2012 212 $852,763 2013 223 $918,875 2014 281 $1,127,513 Total 917 $3,767,179 Palm Desert Student and Business Metrics, January 1-December 31, 2014 Palm Desert Students Who Attend College of the Desert 106 or CSUSB Palm Desert Campus Palm Desert Students Who Participated in Direct Work 234 Experience Facilitated by CVEP Student Impact Hours Provided by 960 Palm Desert Employers and Professionals Number of Business Professionals Engaged 30 Number of Volunteer Hours Donated by Palm Desert Professionals 231 Full-time Paid Internships Through 8 CVEP/Healthcare Career Connection Percentage of CVEP/Healthcare Career Connection 23 Host Companies Located in Palm Desert