COUNTY ADMINISTRATION OFFICE - R. ESPINOSA

Approve budget adjustment to increase economic development appropriations in the amount of $67,000.00; and receive staff recommendations on the allocation of Economic Development Funds for FY 18/19.

SBC FILE NUMBER: 865

Background:

Annually, during the budget hearings, the Board of Supervisors allocates funding for Economic Development in San Benito County. The amount allocated for FY 18/19 is $35,000.

In fiscal year 17/18 the funds were allocated to the following organizations:

The board has requested that staff review options for increasing funding and provide alternative recommendations for the use of funds towards economic development.

Analysis:

The following options have been identified as possible scenarios to address economic development in the current fiscal year:

1. Hire full time Economic Development Coordinator. (Alternatively, work with the Cities to share costs of full-time position.) 
2. Contract out Economic Development Coordinator position to a non-government organization (NGO).
3. Increase funding to the economic NGO's outlined above.

Full-time Economic Development Coordinator position.

The County does not and has not staffed an Economic Development Coordinator position. As an example of the position we have referred to the County of Santa Cruz. At the County of Santa Cruz they staff both a director and coordinator position. The definition of the coordinator position is as follows: "under general direction, to plan, organize, coordinate and implement economic development strategies, projects and related activities in cooperation with public agencies, educational institutions, businesses and community groups; to develop, prepare and review grant funding applications and proposals; to analyze and evaluate County sponsored economic vitality programs including contract administration and compliance monitoring; and to perform other work as required," (Santa Cruz County, Economic Development Coordinator, Job Spec.).

At the County of Santa Cruz the position commands a yearly salary between $100,963.20 - $134,950.40. Assuming San Benito County provided a similar competing wage of approximately $100,000 the fully benefited cost of an Economic Coordinator is estimated at $150,000. These costs could be shared with the local Cities with an agreement similar to the Housing Coordinator position shared between the County and City of Hollister.

If option one is chosen by your board, staff recommendation is to prepare a job specification, work with the Cities to prepare a cost sharing agreement, and begin the hiring process. Funding will be reviewed at budget hearings for FY2019/2020, as the position would not be filled till approximately July.

Contract with NGO

In previous fiscal years the Economic Development Corporation (EDC) staffed an Executive Director position. This position was funded partially from County general fund contributions. In fiscal year 2007/2008 the County entered into a contract with the EDC to provide the organization $50,000 per year. Funding from the County ended in fiscal year 2012/2013.

The scope of services in the previous contract with the EDC included the following:

• Selection of an Executive Director of the Economic Development Corporation. (County was active in the selection of a candidate.)
• Assist with the development of Economic Development Element of the County's Revised General Plan.
• Assist with the development of an Economic Development Strategic Plan.
• Marketing
• Analysis (economic research and analysis of data; periodic reports to be provided to the County)

A contract with an NGO would provide the County with flexibility to end the contract and funding of the position as well as provide fully benefited cost savings from a traditional employee position.

Increase NGO Funding

Option number three is to increase funding to the NGO's to provide economic development outreach and analysis for the region. Per board direction funding for fiscal year 2018/2019 can be increased to any of the Economic NGO's that the County has worked with in the past or additional organizations approved by your board.

Conclusion:

All of the above options will come with an increased cost in the current fiscal year (2018/2019) than what has been adopted in the budget. It is estimated that there is approximately $67,000 of budget left that was appropriated for a contract Lobbyist. The Lobbyist contract has been terminated and it is recommended that the remaining funding be repurposed for economic development in FY2018/2019. The revised funding for Economic Development in FY2018/2019 would be $102,000.

At this time staff requests that the Board provide feedback and direction on the three scenarios proposed above for the allocation of Economic Development funds for FY2018/2019.

Board direction will be used for staff proposals in the FY2019/2020 budget hearings for future Economic Development funding.

1. Approve budget amendment to decrease lobbyist appropriations and increase economic development appropriations in an amount not to exceed $67,000 for FY2018/2019.
2. Provide direction to staff on allocations of economic development funds for fiscal year 2018/2019 (I.e. increase allocation to EDC by $67,000).