Rock Island City Council met November 13.
Rock Island City Council met November 13.
Here is the minutes provided by the Council:
Quad Cities First Presentation
City Manager Randy Tweet introduced Liz Tallman, Chief Economic Development Officer, and Tami Petsche, Vice President of Economic Development, from Quad Cities First. Ms. Tallman thanked Council for the opportunity to talk about what they do in economic development. She began the presentation with a review of the history of Quad Cities First. It began as a public- private partnership in 2009 with a collaborative effort by the cities, two counties (Scott and Rock Island) and the two chambers in Illinois and Iowa before the merger. Quad Cities First is an independent non-profit 501(c)(6) corporation that does regional economic development based on business attraction. They service six counties: Clinton, Muscatine, and Scott in Iowa and Henry, Mercer, and Rock Island in Illinois. The laborshed is 588,000 population.
Ms. Tallman reviewed the business attraction process: lead generation, marketing and communications, prospect and project management, research, inventory, and management with their partners. They have staff on the road calling on companies. Ms. Tallman said it is a very sophisticated and targeted process for these sales calls. Last year, they met with 189 site consultants, had 105 corporate level business meetings outside of the region, and attended seven trade shows. They also hired a company to research for them and identify those companies where it would make sense for them to be in the region. She gave an example of a business attraction project in 2012, the FedEx project in Rock Island named Project "Chaser." Quad Cities First was contacted by a site consultant looking for a site for a logistics facility with a list of site specifications. She explained they don't know what company is looking for a site when they are contacted. In this instance, Quad Cities First submitted twelve (12) sites and a proposal explaining what makes the Quad Cities attractive to a company. Rock Island won the project because the City was able to put together a very competitive site proposal with the assets the company needed.
From a 2013-2014 market study, Quad Cities First identified and targeted the following industries: advanced metals and materials, agricultural innovation, corporate operations and support services, defense, and logistics. These are the primary industries which make the most sense for the region. Ms. Tallman said they are targeting industries with higher quality jobs. Resources are limited; that is why they don't focus on retail which is usually done at the community level.
They utilize an active website and good data about the assets and the region in their marketing and communications. Ms. Tallman explained that site consultants are looking at your community before you know it. Having good data and assets on the website is essential. They updated the website in 2016. They also use data analytics to determine who is looking at the Quad Cities and also in attracting new folks to the region.
Ms. Tallman said it is critical to have good buildings and sites to offer in their inventory in order to compete at the national and international level. Time is money for companies. She said the Quad Cities building inventory is primarily old and often obsolete. They have to identify ways to develop new inventory with shovel-ready sites or spec buildings. Ms. Petsche works with CED Director Chandler Poole and Economic Development Manager Bret Gardella to keep the Rock Island inventory in the database on the website. Rock Island has been making use of a drone to make video of their sites which is drawing attention. They must have the most up to date information for their research and data tools.
Quad Cities First works in partnership with the Quad Cities Manufacturing Innovation Hub which was funded through a federal grant and is helping them develop additional resources. They also have a supply chain mapping tool which can determine the locations of all the suppliers in the supply chain for a particular company and how close they are to a particular site.
Ms. Tallman next reviewed the business retention and expansion process which is funded through Chamber dues. They focus on the existing businesses; 82% of companies will expand. Through their Business Connections interviews, they meet annually with 100 to 150 companies. They go in partnership with city staff. She presented a list of 24 businesses that were interviewed last year in Rock Island. They use a very sophisticated questionnaire to identify opportunities to determine what can be done to help the company grow. Ms. Tallman said workforce is the number one issue, finding a good skilled workforce. They try to match resources to the company's needs. She gave an example of Crawford Company in 2011. The Quad Cities First and chamber staff also meet with Rock Island staff on a monthly basis to identify resources to help with the City's economic development efforts. She gave an example of a robotics company, Hawk Technologies, who wanted to expand to Iowa, but instead stayed and expanded in Rock Island. She also gave the retention example of Hill and Valley and identifying issues they were facing. Ms. Tallman said the Business Connections interviews are so important.
Ms. Tallman discussed business creation and innovation efforts through their QC Venture School program giving entrepreneurs an opportunity to vet their business ideas. It is a six week program and there is a state competition too. A recent class of sixteen had six who qualified for state resulting in a first place, a third place and a fourth place statewide. They also sponsor "meet-ups" or networking meetings. At an upcoming Quad Cities Start-up Community Spotlight event on November 28, Mr. Poole will be bringing several entrepreneurs from Rock Island to tell their stories and Mr. Poole and Erik Reader will share available resources in Rock Island.
Ms. Tallman explained they will be putting all resources ( business attraction, retention, and expansion) under one roof at Quad Cities First. The partnership with Rock Island will be governed by an Economic Development Services Agreement that spells out the scope of services and the funding amount. The agreement will detail what Quad Cities First will do for the City and how much it will cost with a funding model that makes the most sense. Now, there is a fee for Quad Cities First based on $1 per capita plus QC Chamber dues. Ms. Tallman said the Economic Development Partners Agreement will provide clarity of roles; how they can best help City staff with no duplication of efforts. There is also a Memorandum of Agreement for the no poaching rule. The agreements will first be presented to the Quad Cities First board, then to the QC Chamber, and back to the cities for approval.
Alderman Mayberry asked about the poaching program. Ms. Tallman explained there is a regional agreement going back twenty years between the communities through the Bi-State Regional Commission that gives the host community of a company wanting to move the opportunity to exhaust all resources and incentives before the company can move elsewhere in the region. The agreement is updated annually through Bi-State. The focus is on Quad Cities retention of businesses. City staff help enforce the agreement through communication.
Ms. Tallman explained she meets with Mr. Poole and staff every month to discuss projects as well as with Mr. Tweet, City Manager, on a monthly basis. The economic development professionals in the Quad Cities meet every other month. Ms. Tallman believes they can do a better job of communicating and celebrating the successes they have as well as educating Council more about what they are doing. Economic development is often a covert process.
Mayor Thoms asked about spec buildings. Ms. Tallman replied that a 75,000 to 150,000 square foot light industrial building with 30-35 foot ceilings and with expansion potential are most in demand. The difficulty is who will hold the risk when building spec buildings. It is patient money. Mayor Thoms asked if there were other items requested. Ms. Tallman said most RFPs are for manufacturing or logistics (warehousing and distribution) companies. She said the Quad Cities buildings were built in the 1940s and often don't have sufficient electrical power. Ms. Petsche said the size and ceiling height of buildings are most critical. Ms. Tallman said timing is most important to companies when relocating; they want to be operational within three to six months. An existing building is best.
Mayor Thoms asked about rail. Ms. Tallman said rail is not in demand as much any more. Alderman Parker asked what can be done about aging buildings, especially downtown. Ms. Tallman said they work closely with Brian Hollenback; Rock Island was the first community to have a cool downtown. Quad Cities First does not do much in that area of redevelopment. There are a variety of tax credits for rehabbing older buildings. Alderman Parker asked about their advocacy programs; the tax credits will be cut if tax reform passes. Ms. Tallman said Henry Marquard is their legislative guy and there is a policy agenda; she will have Mr. Marquard contact Alderman Parker. Alderman Spurgetis asked about trucking as the preferred mode of transportation. Ms. Tallman said even though there is rail in SW Rock Island, there is not much need now. Most logistics are handled by truck now. Mayor Thoms said there is a lot of good truck access in Rock Island with IL 92. Ms. Tallman said Rock Island has redevelopment along the industrial part of the river. Ms. Tallman thanked Council and encouraged them to contact her with questions.
Finance: CY 2018 Capital Improvement Plan
Finance Director Stephanie Masson said two spreadsheets were provided to Council; one is staff's recommendations for the entire Capital Improvements Plan (CIP) and the other is for the portion of CIP funded by the Gaming Tax. CIP is supported through multiple funding sources. When preparing the CIP, available revenues as well as Council goals are considered. The 2018 CIP budget is $32 million in total projects; last year's CIP was $42 million. The difference is in Public Works; last year there was $8 million for a Waste Water project funded by IEPA and there was also a $2.5 million bond for street work that was completed this year. Equipment purchases will increase in Public Works to replace four snow fleet vehicles next year. Ms. Masson reminded Council that payments for rebates and redevelopment agreements are part of the CIP and are covered under Miscellaneous (and required under the GASB Finance Code).
Ms. Masson reviewed the 2018 CIP funding sources: 38% comes from IEPA loans for the Water Treatment Filter Facility; 17% through Gaming; 16% through contributions and grants from other agencies such a the state's portion for street work on 38th Street and 18th Avenue and for breathing apparatus for the Fire Department; 13% through TIF funds; and 8% through user fees. The CIP focus areas or categories are primarily based on the City's core services (74%) with 43% for utility projects and 21% for streets and street maintenance. Of the 43% in utility projects, water projects account for $12.9 million. The Water Treatment Facility project is the most significant accounting for $12 million in funds. Also included is the rehabilitation of the Ridgewood water tower and water main work. Funding for the continuation of the RFP response for Arsenal Utilities in shared by both Water and Waste Water. Waste Water projects also include the Grit Channel rehabilitation. There are no major Storm Water projects planned for CY 2018, but there are some smaller maintenance projects related to to outfall work and storm sewer reconstruction.
Street projects planned for 2018 total $6.6 million including resurfacing of 38th Street and 18th Avenue and engineering costs for the resurfacing of 20th Street from 7th Avenue to 18th Avenue. Street maintenance expenditures of $173,000 will go towards asphalt patching, sidewalk repair, brick street, and concrete patching. Last year, there was $2.5 million in bonds which went towards 9th Street being re-done; and Lincoln Court reconstruction which is almost complete. Bonds also paid for engineering work on the 18th Avenue and 38th Street projects.
Gaming proceeds of $536,000 (an increase over $446,000 last year) are budgeted for contributions accounting for 1.7% of the overall CIP. Besides the $50,000 allocated by the Citizens Advisory Committee, the City contributes to Bi-State Regional Commission, DARI, Growth, Keep Rock Island Beautiful, The Metro Arts Summer program, QC First, QC Arts Sculpture program, RI Arsenal lobbying, River Action, The District, neighborhood organizations, Red, White & Boom, and the Labor Day Parade. The plan also includes a $50,000 contribution to the Quad City Botanical Center which will continue at that level for two more years. Alderman Parker asked if business organizations such as College Hill are the same as neighborhood organizations. Ms. Masson responded they are different. She explained that neighborhood organizations is a new initiative by the Community and Economic Development Department. CED Director Chandler Poole said the neighborhood engagement piece of the CIP in the amount of $25,000 will be funding Community Caring Conference to hold meetings in the neighborhoods and for Neighborhood Partners when they get going as well as neighborhood groups and ward meetings.
The CIP also includes several miscellaneous items such as an upgrade to Microsoft Office 2016 (from 2007) and an upgrade to the utility software and cyclical replacement of aging computer equipment throughout the city. Building maintenance for the SW Library and the SW Fire station and a tuckpointing project for the Hauberg Civic Center are included. Ongoing operation costs for the body worn cameras in the Police Department, breathing apparatus for the Fire Department, and a variety of Economic Development expenditures for facade improvement, demolition, rebates and redevelopment agreements, and the downtown streetscape (new item) are included in the CIP. Alderman Spurgetis asked if the spreadsheet item, City Hall remodel, is part of the building maintenance mentioned earlier. Ms. Masson responded that refers to replacing the carpeting on the 2nd floor of City Hall.
Ms. Masson reviewed the Gaming and General Fund carryover. The total allocation for 2018 is $5.5 million (down from $5.9 million last year). It reflects gaming revenues received in CY 2016 and unspent prior year budgeted project and interest income. There was no CY 2016 General Fund carryover to allocate. The City's fiscal policies state carryover beyond 90 days reserves should be used for future capital or general fund support. The CY 2017 budget was a deficit budget so CY 2016 carryover was used for that purpose of supporting the general fund. The categories of the Gaming and General Fund Carryover is 46% for debt service, 41% for miscellaneous, 10% for contributions (up from 7% last year), and 3% for streets. Ms. Masson noted that $1 million will be spent to bring down the debt service balance.
Ms. Masson said after feedback from Council, the plan is to bring the CIP to Council for approval at next week's Council meeting. Although the CIP is a five-year plan, Council will only vote to approve the CY 2018 CIP.
Mr. Tweet said aldermen can email their questions if they don't get to all of them. Alderman Spurgetis asked about the Recommended and Requested columns in the spreadsheet. Mr. Tweet explained that each department puts in a request for what they want for the following year. Alderman Spurgetis asked about when there is no figure in the line item such as with service contracts. Ms. Masson explained that as they go through the budget process, they work with the departments to identify contracts that could be paid with CIP funds; requests are not submitted in those cases. Ms. Masson said there was some carryover which they are using to pay $1 million of the debt service and some CIP funds will be used to pay some of those service contracts. Mr. Tweet explained further that they are using the funds to support the General Fund. Alderman Spurgetis asked for clarification regarding the columns where requests were made, but the recommended column is empty; yes, the request was cut. Mr. Tweet said that happens every year with more requests to be funded than there is money available.
Alderman Spurgetis asked about street reconstruction items with 2013, 2015, 2016, and 2017 General Obligation bonds; it's all funded by debt service. He assumes these were major street projects. He asked if the City issues bonds to finance the projects and is the City still paying off those bonds. Ms. Masson replied the City generally issues twenty-year bonds and they are not always for one major project. She said this past fall when the City issued bonds, $1 million was for 9th Street, $500,000 for the Lincoln Court reconstruction, and the rest for engineering work for street projects.
Alderman Parker asked if it was normal practice to bond for street work. Ms. Masson replied it is a funding tool for capital projects and infrastructure improvements, but there is a cost for bonding including interest. A source is needed to repay the principal and interest of the bonds. Her ideal would be to pay-as-you-go. Mayor Thoms stated gaming revenues have been used to pay for some of the street projects and other CIP items. Alderman Parker said he remembers discussing at Goal Setting to look at funding options for street repair. He agreed that it would be best not to bond for street work. Mr. Tweet said that is the goal. Alderman Tollenaer said that going back more than five years, the biggest complaints were for streets and alleys. Alderman Spurgetis said the City's debt service is of great concern to many of Council members. Mr. Tweet said there are street projects in the CIP to be funded with bonds, but they are not proposing for them to be funded for that reason.
Ms. Masson asked Council to reach out to her and Mr. Tweet if they have questions regarding the CIP. Mr. Tweet said the CIP will be on the agenda exactly like they see it now. If they have questions, they should get in touch with him. Alderman Geenen asked if they could do it by line item by line item at the meeting. Mr. Tweet said they could, but it would be better if they let him know before the meeting.
The study session concluded at 6:36 p.m.