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HomeMy WebLinkAboutReso 94-183 - Approve Funding Agreement Between COR & Economic Dev Corp for Industrial Promotion in the Redding Area During FY 1994-95 RESOLUTION A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING APPROVING THE FUNDING AGREEMENT BETWEEN THE CITY OF REDDING AND THE ECONOMIC DEVELOPMENT CORPORATION FOR INDUSTRIAL PROMOTION IN THE REDDING AREA DURING FISCAL YEAR 1994-95, AND AUTHORIZING THE MAYOR TO SIGN SAME IT IS HEREBY RESOLVED by the City Council of the City of Redding as follows: 1. The City Council of the City of Redding hereby approves the Funding Agreement between the City of Redding and the Economic Development Corporation for industrial promotion in the Redding area during fiscal year 1994-95, a true copy of which is attached hereto and incorporated herein. 2. That the Mayor of the City of Redding is hereby authorized and directed to sign said Agreement on behalf of the City of Redding, following approval by the Economic Development Corporation Board of Directors, and the City Clerk is hereby authorized and directed to attest the signature of the Mayor and to impress the official seal of the City of Redding. I HEREBY CERTIFY that the foregoing Resolution was introduced and read at a regular meeting of the City Council of the City of Redding on the5thday of July , 1994, and was duly adopted at said meeting by the following vote: AYES: COUNCIL MEMBERS: P. Anderson, Kehoe, McGeorge, Murray and R. Anderson NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ABSTAIN: COUNCIL MEMBERS: None 000 RIOBERT C. ANDERSON, Mayor City of Redding ATTEST: FORM APPROVED: r Q CONNIE STROHMAYER, CiWClerk RA ALL A. HAYS, eity Attorney • FUNDING AGREEMENT THIS AGREEMENT, made and entered into this day of 1994, by and between the CITY OF REDDING, a Municipal Corporation and General Law City, hereinafter referred to as "City," and the ECONOMIC DEVELOPMENT CORPORATION, a non-profit corporation duly organized and existing under and by virtue of the laws of the State of California, hereinafter referred to as "EDC": WITNESSETH: WHEREAS, the City Council of the City of Redding is empowered by the State of California to appropriate and expend money from City funds for industrial promotion in the Redding area; and WHEREAS, City has no organized means of its own for conducting the systematic expenditure of such funds so that City may receive the utmost benefit therefrom; and WHEREAS, the EDC is particularly well equipped to administer a program for industrial promotion of the City, including administration and marketing activities associated with the Shasta Metro Enterprise Zone; and WHEREAS, the proposed Marketing Program by the EDC is an extension of the EDC's business recruitment project which began in 1980, together with effectuation of the Enterprise Zone, and will be a continuation and a re-emphasis of the commitment by the City of Redding and Shasta County to promote the area for new business growth; and WHEREAS, this cooperative effort of the EDC and the City of Redding will provide a productive and coordinated program for job creation, business development and Enterprise Zone administration; NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED by and between the parties hereto as follows: 1. The EDC does hereby agree during the term hereof to perform the task of industrial promotion and Enterprise Zone administration as outlined in the Scope of Services attached hereto and incorporated herein by reference. 2. To partially offset the EDC's costs incurred in providing and maintaining said industrial promotion and Enterprise Zone administration, the City agrees to pay the EDC for said services, as outlined in the Scope of Services and Budget Summary attached hereto, and during the fiscal year 1994-95 the sum of One Hundred Twenty-six Thousand Dollars ($126,000.00) total reimbursement upon submission of invoices to the City's Director of Finance. 3. The EDC covenants and agrees to submit a summary statement of its income and expenditures in the performance of its contractual responsibilities herein to the City's Director of Finance at monthly intervals during the fiscal year 1994-95, and at the end of each fiscal year; and further agrees to keep a full and complete account of its use of all funds received from City and agrees to make such account available to City at any and all reasonable times, upon request. 4. The EDC does hereby agree to hold the City of Redding, its officers, agents and employees, harmless from any and all actions, causes of action, claims, demands, and damages, costs, loss of services, expenses, and compensation, on account of or in any way arising out of City's expenditure of said funds to the EDC for industrial promotion outlined above. 5. The term of the Agreement shall be for a period of one (1) year commending on July 1, 1994, and terminating June 30, 1995. 6. No member of the City Council or of any Board, and no officer or employee of City shall be or become, directly or indirectly, financially interested in this Agreement or in the work or business to be performed by the EDC as provided herein. 7. In providing its services, EDC will act as an independent contractor, and no officer or employee of EDC will be deemed an officer or employee of the City of any purpose. 8. This Agreement is granted upon the express condition that City shall be free from any and all liability and claims for damages for personal injury, death, or property damage in any way connected with EDC's services to be performed hereunder, including claims of EDC, its officers, agents, employees, and members. EDC shall indemnify and save harmless City, its officers, agents, and employees, from any and all liability, loss, cost, or obligation on account of or arising out of any such injury, death, or loss caused by the negligence or other legal fault of EDC or its officers, agents, employees, and members. 9. It is understood and agreed as a condition of this Agreement that EDC shall, at its own expense and at all times during the term of this Agreement, obtain from a company authorized to do business in the State of California and keep in full force and effect public lability insurance in the minimum amounts of $300,000 for injury or death to any person and $500,000 for injury or death of more than one person in the same accident, and public liability insurance for property damage in the minimum amount of $50,000.00; OR, in the alternative, a combined single-limits policy in an amount of not less than $500,000.00. Said policy shall name City, its officers, agents, and employees, as additional insured, and shall further contain a provision obligating the insurance carrier to notify City in writing at least ten (10) days prior to any cancellation or reduction of such insurance. A Certificate of Insurance evidencing such coverage and notice requirement shall be approved by the Risk Manager of the City and filed with him prior to the commencement of this Agreement. - 2 - 10. It is further understood and agreed as a condition of this Agreement that EDC will provide workers' compensation insurance on its employees, and furnish the Risk Manager of City with a Certificate evidencing such insurance, to be approved by him, prior to the commencement of this Agreement. Said Certificate shall contain a provision obligating the insurance carrier to notify City in writing at least ten (10) days prior to any cancellation or reduction of such insurance. To obtain an exemption from this requirement should EDC have no employees, EDC shall provide the Risk Manager of City with a letter stating that it is not employing any person or persons in any manner so as to become subject to the workers' compensation laws of California provided, however, that should EDC later become subject to the workers' compensation provision of the Labor Code, it will forthwith comply with the insurance requirements set forth above. 11. In the event EDC violates the provision of this Agreement for any reason other than the occurrence of circumstances over which it can exercise no effective control, and such violation shall not be cured or remedied within sixty (60) days after notice thereof by City, in addition to any other remedies provided for in the Agreement, City shall have the right to terminate this Agreement by written notice duly served upon EDC. 12. It has been determined that this matter is not subject to the provisions of the California Environmental Quality Act. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. CITY OF REDDING BY: ROBERT C. ANDERSON, Mayor ECONOMIC DEVELOPMENT CORPORATION BY: BY: ATTEST: CONNIE STROHMAYER, City Clerk FORM APPROVED: RANDALL A. HAYS, City Attorney agree.edc - 3 - ECONOMIC DEVELOPMENT CORPORATION OF SHASTA COUNTY SALES AND CLIENT SERVICES PROGRAM JUNE 1994 PREFACE The following is the detail of EDC's proposed sales program directed towards personal contacts with target companies, extensive follow-up and client services support. It represents a major shift in EDC activities and transitions the organization into aggressive sales. This program does provide for marketing support, but it's focus is to personally contact qualified target companies through the use of an outside sales professional. The purpose of the program is to increase personal contacts with qualified prospects, increase qualified prospect visits to Shasta County and ultimately, increase Basic Industry job creation in Shasta County. Implementation of the program is dependent on joint funding from the cities of Anderson, Redding and Shasta Lake and the County of Shasta, in addition to EDC's commitment of its own reserves and revenue raised through local business support of EDC through its Associates program. This program requires a minimum of a three year commitment and represents the best option that will allow Shasta County to be competitive in today's industrial recruitment environment. SITUATION ANALYSIS There are currently numerous sales programs aimed at California companies by communities outside of California. The level of funding for these sales and marketing programs has elevated the competition for coveted Basic Industry Employment. Shasta County and its cities are not widely known commodities throughout the State. In actuality, experience shows that there is a general perception that anything North of Sacramento is isolated and rural. It is only when companies visit that this perception can be diffused and this fact can be documented by EDC experience over the last few years. In addition, stylish marketing techniques, including advertising, direct mail and even telemarketing, are not effective when dealing with the facts of a poor statewide business climate and a misconception about Far Northern California. EDC's Board of Directors has comprehensively reviewed the current program structure, the competitive environment and funding resources. The result is a formal resolution to redirect EDC's program toward an aggressive personal sales/client services program. In the last two months the EDC Board has: 1) ELIMINATED LOAN PROGRAM ADMINISTRATION SO AS TO BETTER UTILIZE ITS RESOURCES. THE BOARD RECOGNIZES THE VALUE OF SMALL BUSINESS LOANS AND REMAINS COMMITTED TO BUSINESS DEVELOPMENT AND RETENTION. HOWEVER, THE EDC WILL ELIMINATE LOAN PROGRAM ADMINISTRATION SO AS TO BETTER UTILIZE ITS RESOURCES, RECOGNIZING THAT OTHER LOCAL SERVICE PROVIDERS SUCH AS THE SUPERIOR CALIFORNIA DEVELOPMENT COUNCIL CAN DELIVER AND PRESERVE THE LOCAL SERVICE. 2) CONDUCTED A COMPREHENSIVE STAFFING ANALYSIS CULMINATING IN THE ELIMINATION OF ONE POSITION AND ONGOING REVIEW OF THE CHANGING FUNCTIONS WITHIN THE ORGANIZATION. 3) REPRIORITIZED THE BUDGET REFLECTING THE SHIFT TO DIRECT SALES AND PRESENTED THIS CONCEPT TO ELECTED OFFICIALS OF THE COUNTY AND THE CITIES. The Sales Program will be augmented by two (2) active EDC committees. The Industrial Sites Committee will initially inventory existing sites, review opportunities to expedite site development and study the possibility for future public/private industrial park development. The Public Policy Committee will monitor the competitiveness of our program and consider public policy issues that may be required to keep us competitive in the future. 2 EDC SALES PROGRAM Goal 1. Over a three year period, substantially increase the volume of new Basic Industry sitings in Shasta County with the resulting creation of new Basic Industry Employment. The focus of this effort will be small and medium size companies, 200 employees or less. *Objectives 1. Personally contact 240 Qualified Basic Industry Employers in the first year of the program. Qualified refers to those companies that either have an active relocation or expansion project in progress or, those that because of growth experience will be likely to expand in the near future. 2. Develop client relationships with 40 new Basic Industry Employers as a result of sales calls. 3. Coordinate site visits for 35-40 Qualified Basic Industry Employers in the first year of the program. 4. Receive commitments for the siting of three (3) new Basic Industry Employers in the first year of the program. * These objectives assume a 12 month time period and would be affected by a time lapse in the start-up. Additionally, for years two and three, the objectives would be redefined after review of the first year's activities and successes. 3 BUDGET EDC's Sales and Marketing Committee and Finance Committee has worked together to develop a comprehensive budget to support the new program. This budget was adopted by the EDC Board of Directors on May 18, 1994 and commits substantial EDC reserves and income, as well as relying on additional revenues from the Cities and the County. By eliminating loan program administration, EDC can redirect those resources to the sales program. In addition, EDC is committing its operating reserves. PROPOSED INCOME EDC Reserves $ 29,040 *EDC "Other" Income 84,575 Total EDC $113,615 City of Anderson $ 13,600 City of Redding 126,000 City of Shasta Lake 20,000 County of Shasta 60,200 Total 219,800 Total Budget 333,415 *EDC "Other" income includes Business Associate membership dues, loan program income and a substantial commitment from the Shasta County Board of Realtors and the Builders Exchange. 4 STAFFING General Manager The General Manager, at the direction of the Board and in liaison with City and County staff, will oversee the implementation of the overall program. The General Manager Aill direct the sales program in conjunction with the Client Services Director. The General Manager's role will be to oversee and monitor the sales call processes, the follow-up and the organization of site visits to Shasta County. The General Manager will be the local coordinator for site visits and will work with Development Teams from each jurisdiction, local business representatives and the Board of Directors to insure that quality, professional treatment is advanced to each visiting client. The General Manager will also partner with the Client Services Director for some sales calls and will be available to react quickly for any project need. Additionally, the General Manager will be responsible for reporting quarterly to each jurisdiction as to the progress of the program. As the administrator for the organization, the General Manager will be responsible for developing internal control systems to monitor expenditures for travel, expenses, promotion and advertising. The General Manager also has overall administrative responsibilities for the organization, including contract administration, community liaison work, Board of Director business, Shasta Metro Enterprise Zone administration. Client Services Director (To be recruited) This position will be responsible for outside sales calls to qualified prospect companies and will work under the direction of the General Manager. The position will be responsible for industry and prospect research, individual company needs analysis and the creation of individualized, custom presentations. Once the prospects have been qualified, the Client Services Director will coordinate site visits to Shasta County with the General Manager. The General Manager will coordinate the site visit process and will work in conjunction with the Client Services Director for an extensive follow up process. Marketing Information Specialist This position is being eliminated in September, 1994 as a result of budget considerations and an evaluation of staffing requirements for the sales program. Tasks associated with this position will be redirected to the General Manager and other staff. 5 • Administrative Assistant This position requires multi-faceted responsibilities including bookkeeping and accounting, computer system and data base management and site visit coordination. This position will act as the intermediary between the General Manager and the Client Services Director and will require some client contact. Responsible for project presentation materials, correspondence, scheduling and the Computerized Industrial Information System. Secretary/Receptionist Responsibilities involving typical clerical support functions such as word processing, filing, etc. Also responsible for support for direct mailing lists, operation of EDC's prospect data base and newsletter processing. This position is a main telephone contact with some personal client contact and project proposals. Acts as clerical support to the General Manager and Client Services Director. 6 THE SALES PROCESS Geographic Target - Year One San Francisco Bay Area with focus on expanding companies in San Jose and Richmond areas, so as to build on our successes of companies recently locating from those areas; Surbore and WesFlex Target Industries Medical Instruments and Devices, Machinery and Equipment, and Data Processing as identified by Coopers & Lybrand study for Shasta County. These targets are in growth industries; generally small and medium size, owner operated with 200 employees or less. They can usually ship easily from any location and generally produce quality employment opportunities, not seasonal or cyclical. Industry Lists/Initial Contacts The EDC currently has lists of companies with high growth potential identified through J.D. Whitaker and Associates. These lists will be updated and refocused toward geographic target areas. This comprehensive data will insure that the initial contacts are qualified companies with sales and growth histories that indicate strong probability of expansion. Example: Condor Electronics, Inc. 580 E. Weddell Drive, 3 Sunnyvale, CA 94089-2112 Telephone: 408-745-7141 Neil Dorward, President Ward Dorward, Vice President Mfg Luminous Electronic Instrument Panels &Transformers SIC Code: 38230414 Panel Board indicators, recorders and controllers Sales: $4.9m Sales Growth: 308% Employment: 16 Employment Growth: N/A Year Established: 1976 Square Footage: 7,300 Rented 7 i Company Contact Process A brief introductory letter will be mailed to the company indicating the intention to schedule a personal meeting and the purpose. A personal call will ensue to arrange the meeting. The meeting will focus on the Client Services Director's completion of a needs analysis that will identify what the company is looking for in its expansion or relocation project, ie. labor, utilities, shipping, training, etc. The Client Services Director will decide during this meeting how best to deal with the company issues. Because of knowledge about general needs of these industries, pre-designed presentations, customized for the company can either be available in the form of a flip chart or utilizing a lap top computer. By utilizing the EDC's Computerized Industrial Information System, the Client Services Director can also have immediate access to site and facility information transferred immediately by modem. The personal call can identify the need and produce the solutions with a very sophisticated and professional approach. Shasta County will not be perceived as isolated and remote. At the end of the visit, the Client Services Director will make available Shasta County marketing information, brochures, video and the comprehensive area profile. The final focus of the meeting will be to solicit a site visit by the company to Shasta County and accommodate the company to any reasonable extent needed. Follow Un A systematic follow up will be designed and may include promotional materials, letters from elected officials, chambers of commerce and/or other businesses and community leaders. This effort will once again focus on scheduling a site visit to Shasta County and may require one or more additional follow up meetings. During the needs analysis and sales process, the Client Services Director will report to the General Manager at least twice weekly. As the calls produce qualified prospects, company information will be immediately reported to jurisdictions where potential sites can be identified. The Site Visit The site visit process itself will be scheduled by the General Manager and the Client Services Director. The EDC General Manager will coordinate with a Development Team from each jurisdiction that will consist of representation from the city manager's office and/or county CAO, planning director, public works director, fire marshal, and other resource agency personnel as needed, such as air quality and environmental health. 8 Depending on the length of stay, the EDC General Manager will personally coordinate area community tours, facility and site tours and meetings with appropriate Development Teams. Hosted lunches, dinners and other entertainment will be coordinated with local business representatives, the chambers of commerce and, where appropriate, elected officials. The thrust of the site visit will be to provide a comfortable, quality visit that accentuates Shasta County's many cost-saving attributes and positive business environment. Follow Uv It will be the responsibilities of the General Manager, along with the Client Services Director, to develop immediate follow up procedures to insure that all company concerns and questions are met and to offer any assistance necessary to "close". If additional visits to the company are required, they will be scheduled, including, if appropriate, visits by community and business leaders, city and county representatives and/or elected officials. Reporting, Accountability EDC maintains a comprehensive data base and contact log for each prospect company. Every contact made is documented in the data base log and a "tickler" file built into the software automatically produces follow up reminders on a weekly basis. Through the use of this system, as well as comprehensive sales reports to be completed weekly by the Client Services Director, quarterly statements of progress will be made available to elected officials. Reporting to city and county staff can be accomplished through the Shasta Metro Enterprise Zone Advisory Panel on a monthly or quarterly basis. This panel currently has economic development staff representation in place for each city and the county. EDC's current monthly billing system will produce financial documentation necessary to monitor program expenditures. Any other documentation. or reporting will be provided on request. 9 SCOPE OF SERVICES The 1994-95 industrial promotion agreement between the City of Redding and the EDC will fund portions of both the local business development and manufacturing recruitment components. The following activities are highlights of the program elements supporting business expansion and retention and EDC's sales and client services program geared to the creation of basic industry employment growth. IERPRISE,ZONE ADMINISTRATIQN • EDC's responsibility for the administration of the Shasta Metro Enterprise Zone includes coordinating with the Department of Commerce and the Franchise Tax Board for t�Qbaj�al assistance when needed, • The EDC will be responsible for any reporting requirements needed by Department of Commerce, including the annual report. 0 The Zone Coordinator will oversee the Business Retention Program as documented in the final application. • The EDC will sponsor two seminars for local businesses relating to Enterprise Zone benefit, • The Zone Coordinator will report to the Shasta Metro Enterprise Zone Advisory Board on Zone activities. • The Shasta Metro Enterprise Zone Marketing Plan will be administered by EDC and the Zone Coordinator. 0 The Zone Coordinator will administer any Enterprise zone expansion process in conjunction with the Enterprise Zone Advisory Board. • EDC staff will continue to market Zone benefits to local business through service club presentations, advertising, and coordinated job development activities with the PIC, EDD, GAIN and chambers of commerce. ENTERPRISE ZQNE GOAIS AND QB 1I�;GTIVFS 1) EDC will coordinate (2) two educational seminars for Shasta Metro Enterprise Zone businesses, 2) EDC will coordinate the Business Retention Program and will receive responses from (50) fifty Enterprise Zone business owners to EDC's comprehensive retention survey. Page 2 • 3) FDC will conduct an Enterprise Zone direct mail education program to 1500 local Enterprise Zone businesses in conjunction with the Employment Development Department. 4) EDC staff will make (5) five presentations to local service clubs and business groups regarding the Enterprise Zone program and benefits. BASIC MUSTRY-SALESAND RECRUITMENT PRO RAIZ LIE T IC " EDC's sales program for FY 1994-1995 will include funding for outside sales, advertising, site visits, promotion, trade shows and other client activities. This is a planned three year program and is intended to increase the volume of qualified prospect site visits which will ultimately increase the siting of new facilities and the creation of more basic industry employment in the county. • STAjN!QjPERSONNEL EDC intends to hire a full time sales professional to focus on a targeted personal sales campaign, In order to initiate the program the EDC may hire a consultant while recruitment is in process. • TRADE SHOWS The EDC will participate in the Medical Design Trade Show in Anaheim, January 10-12, 1995, and has budgeted to build a new trade show display. Additionally, the LDC will participate in three cooperative trade shows with Team California and the Trade and Commerce Agency. • INDUSTRIA DEVELOPMENT RESEARCH COUNCIL The City of Redding will support EDC's membership activities in IDRC, the professional association for corporate real estate executives, facility managers and site location specialists. Activities may include conferences, chapter meetings and site visits to Shasta County. • PROSPECT CELS,CLIENT VISITS TO SHASTA COUNTY/PROMOTIONAL ACTIVITIES Funding is allocated for travel and promotion expenses associated with prospect development of qualified leads. A detailed plan will be developed that will lay out a strategy for a targeted geographic sales campaign designed to culminate in qualified prospect visits to Shasta County. Funding is earmarked for client services, including travel, accommodations and promotions, 0 Page 3 • TARGEnD pIRECT MAIL IJSTS EDC will contract with J.D. Whittaker and Associates to update targeted industry lists for Instruments, Machinery and Equipment, and Data Processing. These lists were originally purchased through a state grant and will be the basis for the sales campaign. • ADVERTISING The EDC will develop an advertising program aimed to reach its target audience and will, to the extent possible, focus on industry publications deemed most likely to reach those qualified prospects. The advertising program may also include utilization of other media resources as deemed appropriate. • l7ISCO VER SHASTA COUNTY DAY EDC will plan, coordinate and sponsor a visitation day or days to Shasta County that may involve: 1) Qualified client prospects, or 2) Site location consultants. The purpose of this program will be to host travel, promotional events and accommodations for a group of qualified prospects or key site location consultants. The itinerary would include community tours, industrial site and facility tours and receptions for elected officials and community business leaders. SES AND_CLIENT SERVICFS PRQgRAM PERFORMANCE MEASIMES 1) EDC will make personal contact with 240 qualified basic industry employers. 2) Develop client relationships with 40 new basic industry employers as a result of the sales call. process. 3) Coordinate site visits with 35-40 qualified basic industry employers. 4) Site (3) three new basic industry employers in Shasta County. 5) EDC staff will continue to participate in the Northern California Industrial Develop- ment Executives Association regional advertising program and qualify and respond to 100 leads generated through that effort. 6) EDC staff will respond to l00 qualified leads generated from trade show activity. 7) EDC will provide a report at the conclusion of the funding year measuring its success in achieving the goals and objectives set forth above.