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HomeMy WebLinkAboutFunding - CV Economic PartnershipPALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: APPROVE FUNDING IN THE AMOUNT OF $50,000 YEARLY FOR THE NEXT TWO YEARS AS AN ANNUAL CONTRIBUTION FOR THE COACHELLA VALLEY ECONOMIC PARTNERSHIP (CVEP) SUBMITTED BY: RUTH ANN MOORE, ECONOMIC DEVELOPMENT MANAGER DATE: JUNE 12, 2008 Recommendation: By Minute Motion, that the Agency Board: 1. Approve funding in the amount of $50,000 yearly for the next two years, as an annual contribution for the Coachella Valley Economic Partnership; and 2. Appropriate an additional $50,000 to Fund 850-4430-422-3090. Executive Summary: Approval of the above recommendations will establish funding for CVEP and the development of a comprehensive economic strategy to ensure long-term economic stability for the Coachella Valley. Discussion: The Coachella Valley Economic Partnership (CVEP) was established by a group of private investors in 1994 with the mission of diversifying the regional economy in order to level the impact of the off season of the region's primary industry sector — tourism. Financial support of the organization comes predominantly through the private sector with about 10% coming from city governments. The value of CVEP has been largely understood as founded in its capacity to provide data, to attract businesses and generate leads for the region, and to provide networking opportunities for the business community and local government. Over the past 14 years, while CVEP has been successful at varying degrees in its business attraction, many efforts have succeeded in building a foundation to expand economic development for the region including: • Business Clusters — CVEP brought together the area leaders in business, education and government to focus on attracting the business clusters of Staff Report Approve Funding ($50,000) as Annual Contribution for next two years to CVEP Page 2 of 5 June 12, 2008 healthcare, alternative energy, media, recreation and education. All marketing and attraction efforts focus on these clusters that will allow for the expansion of living wage jobs in the valley. • Career Pathways Initiative (CPI) — Begun with an initial grant of $250,000 from the Irvine Foundation in 2005, CPI brings industry and education together to ensure students in the K-12 and college systems are learning the critical skills necessary to meet the workforce demands. The program focuses on three of the five identified clusters; healthcare, alternative energy, and multi -media. Over 2,000 students have received opportunities in a career choice through targeted curriculum, guest speakers, and shadowing programs in area medical and media facilities. Now with grants totaling over $1.6 million from various community organizations, CPI in partnership has been awarded a planning grant by Ford Motor Company Fund to help establish a regional Career Pathways Resource Center in the Coachella Valley — one of two in California. • CVEP has sponsored an annual economic forecast event (Dr. John Husing), along with underwriting the cost of compiling demographic data for the region, which includes housing, employment, crime, education, general demographics and population trends, as well as drill -down data for the individual cities within the Coachella Valley. • Ernst & Young Entrepreneur of the Year Award — CVEP assisted in keeping the award convention at the Marriott Desert Springs Hotel in Palm Desert and is instrumental in presenting the Coachella Valley to the national award winners. • CVEP's active leads list includes 22 companies representing over 4,000 jobs. Eleven of the 22 companies have visited sites and conducted meetings with city leaders, property owners, or brokers. All 22 are still listed as "active leads." CVEP's focus is on diversifying the economic base by marketing the Coachella Valley region. Economic development on a regional scale is not simply about attracting businesses, but determining long-term regional goals and developing strategies to attain them. Each of the nine cities of the Coachella Valley has seen significant economic growth over the past decade in the regional population. This factor has contributed to reducing some of the seasonal downturn at retail establishments. The majority of jobs created have been in the lower wage service industries. The average annual pay in the United States in 2005 was approximately $40,000 compared to the Coachella Valley average of $31,733. As we have added jobs in response to the demands of a greater G\BusCtr\Ruth Ann Moore\word data\STAFF REPORTS\CVEP Contribubon.dou Staff Report Approve Funding ($50,000) as Annual Contribution for next two years to CVEP Page 3 of 5 June 12, 2008 population, we have also grown poorer as a region. Moving Forward — The Plan: CVEP is proposing the development of a comprehensive economic "blue print" strategy to ensure long-term economic success for the Coachella Valley. As a region, the Coachella Valley has focused on protecting land and biological species from the impacts of development. We have addressed air quality, transportation issues, and provided the institutions for our children to enjoy access to higher education. What we have not addressed in a comprehensive manner is long-term economic stability through a regional economic development strategy. It is this factor, above all others, that will determine the level of economic opportunity for our growing population and our quality of life in the next 20 years. This comprehensive plan will involve: • Defining the valley's strengths, weaknesses, opportunities and threats, as well as what underlying factors need to be addressed to ensure that we grow toward economic sustainability. • Evaluate the valley's competitive position as a region in the global market place for attracting desirable industry clusters to the area, what those industries should be, and how to fund our attraction efforts. • Define CVEP's role in regional economic development, identify points of collaboration among other economic development entities in the region, create measurable objectives, and provide a lasting vision. • Create a tool by which performance in regional economic development can be measured, i.e. accountability. Regional economic development is not simply about moving businesses into the area. It is about quality of life, regional wealth, establishing true economic drivers and stability, economic opportunity for the population, and the impact upon our socio-economic structure related to jobs, income, and environment. Member Development: During FY 2007-08, membership revenue activity included: $32,000 in lost memberships G \BusCtr\Ruth Ann Moore\word data\STAFF REPORTS\CVEP Contribution docx Staff Report Approve Funding ($50,000) as Annual Contribution for next two years to CVEP Page 4 of 5 June 12, 2008 (largely related to the downturn in the construction industry), $22,000 in new memberships, and approximately $16,000 in additional funding from professional services. CVEP 2007-2008 Budget Overview: • CVEP's current annual budget is just under $1 million, about $500,000 of which is restricted funding related to the CPI program. • CVEP's projected total operations revenue for 2007-2008 is about $331,800, while projected expenses will total about $419,300 — a shortfall of $87,500. • CVEP began the 2007-08 FY with an unpaid liability of about $53,000 for a total projected year-end (May 31) shortfall of $140,500. • This shortfall, as well as operating budget for 2008-09, must be addressed in order for CVEP to remain a viable organization. Solvency is the first priority followed by funding for a comprehensive economic development plan. Request: CVEP is requesting $450,000 per year over the next two years from the nine cities of the Coachella Valley ($50,000 per city annually). Funds will be used to retire the current budget shortfall and to develop the comprehensive economic development plan. At the end of the planning period, the member jurisdictions will determine whether the plan warrants implementation, prior to providing ongoing financial support. In addition to the funds being proposed from local jurisdictions, CVEP will continue to grow its private sector membership, seek outside grant funding for projects, and collaborate wherever possible to ensure that the day-to-day activities of the organization can be facilitated. The benefits to Palm Desert for CVEP's role as a regional player in the economic development of the Coachella can be summed up in the following ways: • Assisting to bring living wage jobs to the valley increases the viability of the existing business community in Palm Desert. Whether the business locates in Palm Desert or another city, those employed will shop in the city for goods and services. G.\BusCtr\Ruth Ann Moore\word data\STAFF REPORTS\CVEP Contnbubon.docx Staff Report Approve Funding ($50,000) as Annual Contribution for next two years to CVEP Page 5 of 5 June 12, 2008 Increasing jobs that require additional education and technical skills will increase the number of students in the higher education systems in the city. This may allow for increased classes and faculty that will allow the universities to grow. Growing universities create their own economic development to both the city and surrounding community. • The ability for staff to use the John Husing demographic material is valuable when attracting business to the city and could not be reproduced by the city for less than the yearly contribution request from CVEP. • CVEP has also created an atmosphere where the economic and redevelopment staff members from the various cities have built cooperative relationships in order to exchange information and to develop and work on valley -wide goals. Since the role of CVEP falls under regional and city economic development, staff finds that the funding can come from the Redevelopment Agency, and therefore, recommends the request for funding for the next two years to CVEP. Subm mic De Approval: pment Manager Jan McC�6 y, ACM Redevelopment Carlos L. Ort a, Executive Director Approval: �BaGe Yrigoyen Director of Re �elopment/Housing Paul S. Gibson, Director of Finance �L �1 BY RDA * By Minute Motion: 1) Approve funding in the amount of $50,000 for one year, as VERIFIED BY annual contribution for the Coachella Valley Economic Partnership; 2) appropriate Original on file with City Clerk'. Offic an additional $50,000 to Fund 850-4430-422-3090 for this purpose. G:\BusCtr\Ruth Ann Moore\ward data\STAFF REPORTS\CVEP Contribution.dou 3-2 (Finerty, Benson NO)