REPORT TO THE CITY COUNCIL December 14, 2017 FROM: WILMA QUAN-SCHECTER, City Manager Office of the Mayor & City Manager BY: LARRY WESTERLUND, Director Economic Development SUBJECT ..Title Approve a five-year agreement between the City of Fresno and the Economic Development Corporation serving Fresno County to assist in implementing and administering local economic development business attraction, expansion and retention activities. ..Body RECOMMENDATION The Administration recommends Council approve a five-year agreement with the Economic Development Corporation serving Fresno County (EDC) at a base rate of $100,000 per year to administer economic development business attraction, expansion and retention activities and services. This agreement would include potential annual increases for years two, three, four and five based on the Consumer Price Index for all Urban Consumers (CPI-U). EXECUTIVE SUMMARY The City of Fresno understands that market competitive economic development services require a collaborative partnership of local economic development agencies to gain market visibility and, ultimately, to create jobs. As the State of California designated regional contact and referral point for businesses and industries, the EDC has established itself as an integral part of that partnership. The City of Fresno, in an effort to contribute to the services provided by the EDC, desires to allocate funds to assist in implementing and administering certain local economic activities such as advocacy, marketing, promotion and technical support, to create ongoing employment opportunities for residents. In past years, the City has awarded a contract to the EDC in the amount of $50,000 to assist in implementing local economic development business attraction activities for the City of Fresno. This new five-year agreement would include additional funding (for a total of a $100,000 annual base rate) to also include business expansion and retention services. The annual amount would be eligible for an increase based on the CPI-U. This contract would include an added $50,000 to be paid in Fiscal Year 2018, for expansion and retention services provided in Fiscal Year 2017. BACKGROUND In past years, the EDC has assisted in promoting the City of Fresno, as well as the 14 other cities in Fresno County, to site selectors, brokers, investors and business owners through missions, tradeshows, site tours and by responding to requests for information. In Fiscal Years 2018 through 2022, the EDC is committed to being an ongoing connection for companies looking to relocate or expand in the City of Fresno. The EDC is also helpful in marketing local, state and federal incentives. From July 1, 2016 - June 30, 2017, a total of 132 leads were received from companies seeking to expand or relocate in the near future. The EDC provided each client with information about the City of Fresno and Fresno County, including real estate, workforce and quality of life information. At this time, the EDC is currently working with clients who are actively searching in Fresno County. Each client is followed until the file becomes a success, a loss or is considered dead. The EDC promotes the City of Fresno and Fresno County to brokers and site selectors via its website, mailers, tradeshows, missions and newsletters. Annually, the EDC participates in approximately 10 -15 tradeshows and missions, including those in partnership with the Central California Economic Development Corporation and Team California. In Fiscal Years 2018 through 2022 the goal is to continue to promote the City of Fresno as the ideal location to do business. The annual financial obligation breakdown over the life of the contract will be as follows: FISCAL YEAR AMOUNT 2018 $150,000 (includes $100,000 base + $50,000 for services rendered in FY 2017) 2019 $100,000 + potential increase based on CPI-U 2020 FY 2019 Rate + potential increase based on CPI-U 2021 FY 2020 Rate + potential increase based on CPI-U 2022 FY 2021 Rate + potential increase based on CPI-U ENVIRONMENTAL FINDINGS This is not a project pursuant to CEQA Guidelines section 15378. LOCAL PREFERENCE The EDC is a local business. FISCAL IMPACT For FY 2018, $125,000 of the funding for this agreement will come from existing appropriations within the General Fund and $25,000 will come from Airports Department. In subsequent years, $25,000 will continue to be provided by Airports with the remainder to be identified and approved by the City Council during the budget process. Attachment: Agreement