OFFICE OF ECONOMIC DEVELOPMENT

2014 CITY COUNCIL BUDGET REVIEW

OCTOBER 2, 2013

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Economic Development Strategic Overview Citywide Vision: We will deliver a world-class city where everyone matters

Mission: The Denver Office of Economic Development (OED) will be a driving force that advances economic prosperity for the City of Denver, its businesses, neighborhoods and residents through purposeful and intentional economic development that: (1) broadens the tax base; (2) stimulates balanced economic growth through business assistance, neighborhood revitalization and the development of a skilled workforce; and (3) focuses on innovation, sustainability and education

Goal1: Connectivity Goal 2: Sustainable Innovation Goal 3:.Economic Vibrancy

Strategy: Enhance Denver as a global city that attracts international travelers, conventions and investors

Task: Create a international trade & investment position, and support additional direct international flights

Strategy: Establish permanent funding sources for affordable, economic friendly mixed-income housing

Strategy: Broaden the tax base, with a focus on sustainable recurring fiscal activity

Goal 4: Administration

Strategy :Deliver highest level of customer services in the most efficient and cost effective manner

Task: Implement Peak Performance Lean processes through out all divisions

Task: Develop tools that demonstrate the effectiveness of the city’s investments on critical performance metrics such as income, employment levels, educational attainment and safety

Strategy Develop and maintain information to support strategic and program decisions

Task: Implement the retail strategy to improve the performance of retail centers and encourage new retailers to locate in Denver .

Strategy: Strengthen Denver as a national leader in sustainable practices, including energy efficiency, water conservation and recycling

Task: Complete the development of a Net Zero Energy Community of significant scales.

Task: Support and leverage funds to develop mixed-use developments (TOD) in close proximity to light rail and high access bus.

Strategy: Reduce the Physical and social barriers that separate and prevent our neighborhoods from fully participating in Denver’s Economic vitality

Strategy: Increase the diversity and depth of Denver’s business sectors

Task Focus workforce development resources to help disconnected youth obtain GED & basic skills for employment through partnerships with community colleges

Task: Establish a leading center for supporting entrepreneurism and emerging technologies, along with small business growth support.

Task: Link individuals in safety net programs with training and employment opportunities.

Task: Support startup and small and emerging business growth with resources for customer, financial, idea and workforce access.

Task: Establish business infrastructure to eliminate food deserts into public schools and local markets.

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Economic Development Mission Level Metrics Priority Metrics

2011 2012 2013 YTD

2014 Projected Status Quo

2014 Projected Expansion

BIF jobs created/retained 300 1,638 550 750 850

BIF Leverage Ratio 68.5 126.3 45 40 45 BIF Funds per Jobs $3,300 $783 $365 $1,000 $1,000 Jobs Created through RLF 183 98 145 75 105 RLF Leverage Ratio 8.2 6.7 6.5 6.5 6.3 RLF Fund per Job Created $16,900 $12,800 $16,700 $35,000 $32,000 Denver Firms Employing > 100 Persons 412 416 420 422 425 Small Businesses (5-100) average employment size

18.0 18.1 18.3 18.5 18.3

Affordable Housing Leverage Ratio 4.4 16.3 10.0 10.0 12.0 80% AMI Housing Units to be Developed 425 426 190 250 450 40% AMI Housing Units to be Developed 79 95 18 50 150 Job Placement Rate 50.5% 57.0% 57.0% 58.0% N/A Number of Youth Served 979 1,928 1,659 2,600 N/A Youth Mentoring/ and Internships 200 156 282 300 N/A Youth Direct Training 300 300 198 300 N/A

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Economic Development – Organization Chart

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Economic Development Budget Overview Expenditures 2011 Actual 2012 Actual 2013 Revised 2014

Proposed Budget Variance

General Fund $2,894,556 $3,075,949 $3,028,455 $3,763,100 $734,645

Special Revenue Fund $61,444,616 $60,173,710 $49,095,552 $40,880,425 ($8,215,127)

Other Funds $0 $0 $0 $0 $0

Capital Improvement Fund $0 $0 $0 $0 $0

TOTAL $64,339,172 $63,249,659 $52,124,007 $44,643,525 ($7,480,482)

Revenue 2011 Actual 2012 Actual 2013 Revised 2014 Proposed Budget

Variance

General Fund $608,784 $560,013 $665,400 $755,000 $89,600

General Fund Transfers $623,700 $1,573,700 $1,573,700 $4,773,700 $3,200,000

Summary of 2014 Budget Proposal Expenditures • Special revenue changes due to reduction in TANF, NSP, and WIA programs . • Increase in one FTE due to transfer from CFO to OED and the addition of 1FTE in the DSBO Airport Budget . • See Decision Package slides for additional information on General Fund increase.

Summary of 2014 Budget Proposal Revenues • Projected revenue increase due to General Services certifications. • $200,000 increase in the Transfer to Business/Community Investment SRF to Retail Incentives. • $3M in transfers for the Housing Investment Trust (one-time)

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Economic Development General Fund CSA Personnel Overview Career Service Authority (CSA) Employees

2011 Actual 2012 Actual 2013 Revised Budget

2014 Proposed Budget

Total Personnel Budget $2,319,410 $2,303,051 $2,293,139 $2,783,093

Comp Time $0 $0 $0 $0

Overtime $0 $0 $0 $0

Total FTE 29.8 27.5 24.1 30.1

On-Call Budget $0 $0 $0 $0

On-Call FTE – CSA 0 0 0 0

Key Drivers:

• 2 in-year changes: Increase of 2 FTE due to transfer one FTE from CFO to OED and the addition of one FTE paid out of the DSBO Airport budget. • 4 changes for 2014: 2 new DSBO positions; 1 International Business position; 1 appointee conversion. • OED does not budget for comp time or overtime. • Of OED’s total FTE count, 8 are Mayoral Appointees.

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Non-General Fund Overview Special Revenue Fund – Funded FTE

2014 Funding Drivers – Anticipate reduction in Federal formula and discretionary funds:

• $1.79 million reduction in TANF • $1.08 million reduction in WIA formula and discretionary grants • $1.6 million reduction in the NSP program based on completion of the NSP1 & 2 allocations (NSP 3

will be complete in 2014) • $1.8 million reduction based on completion of the Challenge Grant

– Off-setting programmatic changes: • DHS providing a one-time infusion of funds to offset workforce reductions ($2.6M over 2013 and

2014) • NSP1 program efforts continue through program revolving funds by outside partners • NSP-increased leveraging and partnerships for housing unit production

– Peak Performance • RIE process improvements identified savings of $1.0M in federally funded programs.

Projected reductions due to Sequestration are $1.6M for the workforce programs (PY 2014/15) and $1.3M in CDBG & HOME allocations.

2011 Actual

2012 Actual

2013 Budget

2013 Revised

2014 Projected

Change

Workforce Development 202.65 221.35 178.95 203.75 202.00 (1.75)

Housing & Neighborhood 32.18 31.68 33.43 32.68 32.68 (.00)

Total 234.83 253.03 212.38 236.43 234.68 (1.75)

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2014 Budget Decisions for OED Key Expansion Proposals – Division of Business Development Title: International Business Development Description: An increase of 1 position to spearhead International Business Development in concert

with the Mayor’s International Welcome Center. Financial Impact: $127,900 Title: Center for Entrepreneurism and Technology Description: Integrate the current BAC and DDP’s Entrepreneurial Town Hall into a center to

advance entrepreneurism and consumer –focused technology businesses. This center will have key partners co-located (e.g. CO Bio-Science and CO Technology Association).

Financial Impact: $37,500 – TEMPORARY Title: Retail Development and Attraction Description: Implement DRSAC retail study recommendations. Initiate a dedicated, robust retail

development program, including store attraction and development, revitalizing existing retail centers and area, and the development of new market -appropriate centers.

Financial Impact: $365,000 – $165,000 – Temporary for Implementation – $200,000 – Permanent for Incentive

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2014 Budget Decisions for OED Key Expansion Proposal – Denver Housing & Neighborhood

Division Title: Housing Investment Trust Description: This program would establish a housing trust to provide a new funding stream to provide long-term

capital for affordable and workforce housing preservation. To establish this trust fund, the City of Denver will participate in the capital pool through support of the interest reserve (a credit/risk enhancement).

Financial Impact: $3,000,000 TEMPORARY Title: Convert the Director of Housing and Development position to a CSA position Description: To better meet the needs of the organization, the Director position will be converted to

a CSA position. The mayoral appointee position will be downgraded and redeployed to the Office of the Director.

Financial Impact: $77,900

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2014 Budget Decisions for OED Key Expansion Proposals – Division of Small Business Opportunity Title: Disparity Study Recommendation Implementation Description: An increase of two positions to correspond with increased workload to certify General

Services and Goods vendors. Financial Impact: $133,000

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2014 Budget Decisions for OED Key Expansion Proposals – Workforce Development Title: Convert the Workforce Director position to a CSA position Description: To better meet the needs of the organization, the Director position will be converted to a

CSA position. The mayoral appointee position will be redeployed to Community Planning and Development.

Financial Impact: $120,000 (Realized in CPD)