17 - ECONOMIC DEVELOPMENT PROGRAM

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Item No. 17 memorandum TO: Mayor & City Council FROM: John Godwin, City Manager SUBJECT: ECONOMIC DEVELOPMENT PROGRAM DATE: August 21, 2017 BACKGROUND: The city council recently approved calling a November election to allow voters to consider eliminating the one -fourth cent Type A local sales and use tax, and substituting a local option road maintenance sales tax in an equal amount. At the same meeting during which the election was called, the council discussed that it was not the city's intention to eliminate economic development activities or staff entirely, but to fund that function from the city's general revenues. Specifically, we briefly discussed deleting the funding for road materials from the city's General Fund since road maintenance would be funded by the new road tax (if approved), and in turn funding an economic development office in an amount roughly equal to that which we are now expending on road materials ($600,000 in 2017 -18). This would have an overall neutral impact on funding, but would shift more funds from ED to road maintenance. STATUS OF ISSUE: In order to be prepared to make the change if voters approve it in November, and also to educate voters on what the city's plans are in that event, the council should discuss and consider what sort of economic development program, funding, and staffing it wants. We also recommend that if the PEDC and its board of directors are eliminated, an economic development advisory board be created and appointed in its place. Citizen input and the added expertise of such an advisory board would still be crucial to the success of ED efforts going forward. The council also needs to consider the timing of changes, since financial liabilities will require the PEDC to continue to exist for at least several months, and perhaps as long as two years after the election, regardless of its outcome. I have attached a suggested approach, possible timing restrictions, and a draft plan for a new board. BUDGET: NA. RECOMMENDATION: Provide direction to staff.