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HomeMy WebLinkAbout1987-03-24 Economic Development Commission SummaryECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 - 7' 00 PM Kenai City Hall - Council Chambers Vince O'Reill¥, Chairman AGENDA 1. ROLL CALL 2. APPROVAL OF AGENDA 3. APPROVAL OF MINUTES of March 10, 1987 4. REVIEW OF PROGRESS TO DATE 5. PRESENTATION OF NEW MATERIAL 6. PRESENTATION OF TESTIFIERS AND/OR SPECIALISTS a. Mr. Jim Weederman of State Department of Commerce 6. PUBLIC TESTIMONY 7. COMMITTEE DISCUSSION 8. PREPARE NEXT AGENDA 9. ADJOURNMENT (9- 30 PM) ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987, Tuesday, 7:00 p.m., AST Held, Kenai City Hall, Council Chambers Minutes, Regular Meeting Presiding: Vince O'Reilly, Chairman 1. ROLL CALL Present ,, Absent Vince O'Reilly Mike Meeks Jim Carter Roseanna Shelden Bob Scott Barry Thomson Jim Elson George Miller Darren Bond In Attendance: Mayor John Williams Note: Mayor Williams waived the rule to acknowledge absences as excused or unexcused for this committee due to its' temporary status at this time. 2. APPROVAL OF AGENDA Chairman O'Reilly added to the agenda under Item #7- Committee Discussion; Resource Development Council, April 2nd and 3rd, and also a follow-up Council on April 4th, Community Leadership Workshop. Under Item #4 - Review of Progress to Date, O'Reilly has been invited to talk at the Chamber 25th. Also add, Hudson Bay Company. Chairman on Mar ch The spelling of Mr. Wiedeman's name was corrected. Agenda will stand as revised. · APPROVAL OF, MINUTE..S -. Mar,c,h 10, 1987 The minutes were approved as presented with the spelling correction of Mr. Wiedeman's name noted and corrected. · REVIEW OF PROGRESS TO DATE Chairman O'Reilly: The Chamber asked that I talk with them and give a report on what th is committee's been doing. I ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -2- agreed, with the proviso that the Chamber will be told, (I will have a draft of the talk tomorrow, here, if anyone wishes to go through it or over it) that our report is going to be to the Mayor and Council. And what the Chamber will be getting will just be an outline of what's segments of the economy; the banks, the real estate, the utility companies, have come and talk with us. Secondly, that the committee has not sat down and deliberated yet, and thirdly, of course, that the committee has not made recommendations per commission, should there be a commission, if so, what type of commission, etc. So, with those provisos, I thought I'd be willing to talk to the Chamber, just update them. By strange coincidence, a fellow by the name of Peter McDowel, who is working with the State Chamber, in some type of commission on strategic planning, in the State, can come down tomorrow and will come down, and what the group he's with, this commission, it has like Mr. Heinz from ARCO, and that type of persons on their ten or twelve member commission. There trying to develope strategic planning, economic development for the State. And they're doing it from a private enterprise prospective. They don't have any State or Federal involvement, and it may be an item that the commission may wish to consider, either joining with, or participating in, or having some kind of relationship with. So the two of us will be giving a talk on those two matters tomorrow (3/25/87). I'm going to advise the Chamber that the talk tomorrow is just an update on what our activities have been and it's not any part of the report to the Council. Now Hudson Bay Company. Spoke to George Whitman Monday afternoon. When the four people, the technical group, left, I thought they left on a very prudently optimistic note. They had seen what the wanted to see. They came with a lot of information that they needed and my impression of their attitude was prudently optimistic. They went back to Winnipeg and found that Hudson's Bay had undergone a massive friendly reorganization, with all the Canadian stores moving to a different entity, owned by some Winnipeg retailers and also, one of the major Canadian insurance companies. Mr. Whitman tells me that the group that was here will be making it's report and recommendations to the new directors late April, early may, and that it's prudently optimistic about ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -3- what their report and recommendation to that Board of Directors is going to be. We will then be hearing back from Mr. Whitman, I guess, and there again, I think that will be something that should be a matter for, if we decide to recommend a commission. A commission for them to work with. Committee Member Scott: The transportation person just contacted Northern Air Cargo for more information and Northern Air Cargo has contacted me, and at the end of April, Northern Air Cargo wants me to go back with them to meet with him. Chairman O'Reilly: I suggested to Mr. Whitman at some point, that it probably would be appropriate to have a small well informed delegation go to Winnipeg and make a tough hard hitting presentation. At least that we welcome, so we can show some thing on our behalf. Something for the committee to think about. Chairman O'Reilly suggested to the committee members that they meet after the Chamber wi th Mr. McDowel to see how it possibly relates to what they're doing. Committee Member Shelden: When are you wanting us to make the recommendations on the commission? Chairman O'Reilly: I took a stab today of sorting out, and we have a pile of material that has been presented to us. The way I understand the charge to this committee, is that we don't have to give a detailed substantiated report to the Council. What we have to give to the Council is our snapshot picture of what the City's economy looks like and what we see are the strong points and the weak points. I reviewed the various segments that have made presentations to us, (Chairman O'Reilly passed hand outs to the committee members of the testifiers and/or specialists) and some of the highlights that I could think of that were presented. In other words, the fact that there's 2,900 unemployed and that compares to our usual unemployment of 1,900, so we're talking about a thousand unemployed. The fact that that data that we've been using, that everyone's been using doesn't cover the commercial fisherman. On the real estate, the fact that the number of listings of properties for sale, ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -4- and the length that they've been listed for sale, is growing. I think that whatever comments you, individually see, and then we could all fill out these reports and expand on them, collate them and make that our report to the Council. The matrix you have before you is one way of trying to take that mass of data and putting into some intelligible form. We have two meetings in April and we can go through these segments one by one. Chairman O'Reilly would like for the Apr il meetings, to have compile all the minutes of all the meetings available, and have just one master copy of all those minutes. The committee can go back and run through that material and start coming to some summaries here and then address the question of the commission. 6. PRESENTATION OF TESTIFIERS AND/.OR SPECIALISTS a. Mr. Jim Wiedeman- State Department of Commerce. Mr. Wiedeman: I am by profession an Economical Development Planner. I work primarily assisting people, groups, organizations, business, whatever, that are interested in economic development, to put together their plans and their programs into what is now euphoniously called, strategies, cause nobody likes to talk about planning anymore. But, basically how to put things together in such a way that you can have action programs and carry out implementation. I've been at it for a number of years, working here in Alaska. I've worked Montana and California doing much the same sort of thing. In Montana my primarily field was in utilities planning, which was a big thing in Montana in the mid sixties, and that's where I got my first taste for it, working in small communities. When you got to looking at what the community requirements and the community needs were for utilities, the basic determinant was what were you going to use those utilities for and generally it came down to some type of economic development activity. Or the wish to attract some type of economic development activity. Small communities in ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -5- Montana are in much the same situation the State of Alaska is in right now. They were in a very depressed economy, that was before the days of coal companies and cattle and the wheat farms were just about to go out of business. They were looking for other ways of making a living as well. So, I've been involved in working with communities and regional corporations, and On a State level, with economic development, and in economical development programs for a number of years, in areas much like Alaska and in Alaska itself. I talked to Vince earlier and he indicated that you were really interested in trying to take a look at what kind of a formal organization you might like to leave with the community to run economic development in the future to provide some continuity and to maintain what is absolutely required, and that's a long term effort in economic development. One of the mistakes that too people make when they get involved in economic development, particularly when your in a problem situation, everybody is excited, and everybody wants the quick fix. It doesn't necessarily work and too many times the solutions that you think of will in the long run be more of a detriment than they are positive, attribute. You've got to approach this from a long term effort. When I talk about a long term, minimum of five years and a maximum of as long as you can keep the program together. Those communities that have been able to advance, have been able to do something in economic development, if you go back and look at them, that always has been the key. There's been some type of an organization that has been involved over the long term promoting the development, making sure that with the various changes in politics and changes in mayors and councils, that the program goes on. Just even with the various as they occur every two, three or four years. So the structure is very important and what you decide and the kind of structure that you put together is also very important, because that will be a reflection of what you are trying to accomplish. One of the things that I suggest to everybody I talk to, is that you have vision of what you want to happen in your ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -6- community before you attempt to start putting together commissions, and commissions in long term programs or anything. Basically, all that's come down to, is what do you want your community to be? What do you want it to look like? What are the things that you are trying to change? What are the things that you are trying to preserve? It can be a variety of things. You may want to decrease unemployment. You want to maintain your rural life style. Or perhaps you want to develope and increase an development district, like you've got over at Nikiski. Maybe one of the purposes is to maximize the development possibilities of a port and a petro chemical industry. So, you need to think about why your doing this. What do you want to accomplish? There are basically five different kinds of organizations. The first is what can be called an ad hoc or~.anization, and ,,, this is generally in some communities where a group of people feel that something should happen. So they get together on their own and develope a program and then through their personal influences with the Mayor and the Council and with the other decision makers, try to change the direction that the program is going. Basically, it's done from outside of government. It's effectiveness relies on how much pressure and what the individual integrity of the group are. It has worked in other areas. Many of your small town development commissions in the New England area, have started out as ad hoc groups where people have gotten together to address one or two problems and then gradually evolved into some other kind of organization. The second kind of development group is what you could call the app.ointed commission.. This is where a Mayor or some other city official, l~k~ a City Manager will determine that there's a need for a commission to address problems and to get things going. And so, acting on his authority as Mayor or City Manager, he will appoint a commission and these appointed commissions are an arm of the local government, but they are not an enabled commission. In other words, they do not have the force of law. All they have is the power of suggestion and once again, their influence generally can be measured in the individual integrity of the people on the commission and the amount of collective influence that they can put on the political body running the city. ECONOMIC DEVELOPMENT Mar ch 24, 1987 COMMITTEE page -7- The third kind of organization is a statutory commission. This is a commission that is set up mu6'~" l~ke you'r planning commission and your planning boards. It's written into the statutes or into the charter of the local community that such and such a commission will be appointed and will function, and this is perhaps the most common type of development commission that you see across the country. I would say probably 80% of the economic development commissions operating right now, are of the statutory type, where their powers, their duties and their responsibilities are written into law, and as a result, they generally are an ongoing group. As long as the city recognizes the need, they will go until the statutes are changed. And in most cities that's not done very readily. They usually are very, very long term groups. Much like planning commissions. They go on through variety of terms of changes of Mayors, changes of Councils, Assemblies, whatever. They probably have the most influence on the operations of that local governmental unit of any of the first three that I've talked about. Because they are literally a part of that city organization. They have their own statutory base and they can do things and accomplish certain things on their own, without going back to the power source, going back to the Mayor or the City Manager. That's probably, as far as being a part of the governmental unit itself, probably the most powerful way to go. Now, there's another organization called, by various names, by I'd just like to refer to them as authorities. What this is, it harkens back to a number of other k'i'h'~s authority, you may be familiar with; port authority, airport authority, but it is a semi-autonomous governmental group. It is appointed, generally appointed by the Mayor with a concurrence of the Council or whatever the organization is, but it is in essence an independent operating agency. The authority is set up by, once the authority is set up, it operates pretty much independently with only a minimum of oversight on the part of the elected officials. Basically, this is done in order to maintain continuity. By the way, the oversight generally has to do with budget, not with personnel. In most places where they have this kind of authority, the budget still must go back to the funding agency for approval and that's how the local agency makes ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -8- sure that the authority is going in the direction that they want it to go. But, in it's operations and in it's decisions, it operates like an independent business and there's only a minimal of control and a minimal of oversight on the part of your elected officials. This is generally in a larger area, where your addressing specific problems of one sort or another. I, frankly, know of three or four in the whole country of economic development authorities. The State of Indiana has one on a State wide basis, where the State has actually turned over to a development authority the entire operation of the State economical development function, and it also has bonding and lending authority as well, so it operates as sort of a total funding and implementation group for economic development. The Minneapolis, St. Paul cog, Council of Governments, which are eight major governmental units, has a economic development authority, operates in much the same way. The individual towns do not go their separate ways, they all work through this cog organization. It has worked very well. The authority has been able to cut through local jurisdictional prejudice and prioritize the needs and requirements for infrastructure development and for location decisions, so that they can put new industries; put the new buildings, put the new expansions in the proper places where it can maximize employment. This is sort of a specialize thing, and probably hasn't got a lot of similarity to conditions here, but it's something that's kind of interesting to think about. That you can have these independent authorities doing what, basically is considered governmental work. Then, there is the totally independent commission. This is a group that is organized independent 'of t'he government completely. It is maintained by subscription. In other words, the group that puts the organization together is, each of them pledges to put so much money in to operate. The difference between this group and an ad hoc group is that the independent group will go a head and hire an executive director and put a staff to work. They become like a parallel governmental group. These are generally single issue groups and usually are brought about in the case of problems that appear to be beyond the capabilities ECONOMIC March 24, DEVELOPMENT COMMITTEE 1987 page -9- of the local governmental group. Basically, what I'm saying is, this usually happens when enough people get upset at the local government, that they decide to take things into their own hands, organize a group, put a program together and then present it to the City Council and try to force it through, given their influence and their organizing abilities. The basic problem with these is that they come and they go. By their nature they are a fractious and once they have addressed, they usually are, like I said, caught up by a single issue and once that first rush of adrenal in is dissipated, and once they've addressed that issue, it's very difficult to keep this group together. We have an example of this in the State right now on a State wide basis and that's the Resource Development Council. They have managed to stay together because the problem that they are addressed is still not solved, and that is the land issues, the land problems and all of the issues surrounding the development of resources. So basically those are about the five different kinds of groups that are put together. Like I said, you can have all kinds of permutation of these things. Combinations and individual variations on the local level, but, they all come basically under that. Like I said, the most common one of all is the statutory commission and probably the one has the most influence over all on local development because there are so many of them, and the fact that they do have the tendency to have a long range view. The continuity is almost assured. Mr. Wiedeman asked for questions. Chairman O'Reilly: The Juneau Commission. What's your experience with that? Mr. Wiedeman: The Juneau Commission is an interesting one in that it goes through the evolution of a lot of commissions. It started out as an ad hoc commission. It started out with a group of people, including some local municipal people who got together to discuss economic development problems. They did feel that what was happening ECONOMIC DEVELOPMENT March 24, 1987 COMMITTEE page -10- at the borough, at the particular point in time, was really addressing what they thought needed to be addressed. And they wanted to try to add a different voice into the voices that were going into the borough. So, they got together, they organized themselves and basically they became a lobbying group. Now, ago, if I'm correct. did organize, the did community and they commission, where the been approved by the economic borough development commission to in order to address certain this was about two and a half years Over the two and a half years, they become a voice for development in the have now evolved in an appointed Mayor has taken the action and has assembly down there, to appoint an operate as a part of the problems. It's kind of interesting what their view point is and what they feel their mission is, and that's basically to assure that all of the money that was spent for municipal buildings was not wasted. And municipal construction was not wasted. In other words, their actions are to see that there is sufficient growth in the borough to maintain full occupancy of these buildings, without raises mill levels. They have an idea of where they're going. They're going to have to talk about jobs and employment, but their basic viewpoint is they want to make sure that they do not waste that money that has been spent on municipal building and municipal construction. That those buildings be utilized to there fullest, that they do not become a burden on the borough. Particularly, I'm talking about the Centennial Building and the airport construction, and the schools, and the money that went into all of these various ones. So, they are progressing gradually through. The next probable step will be, I think in three or four years, if their successful at doing anything, is probably they'll be written in as a statutory commission, operating parallel to and along with the development, the planning commission. Same thing is happening in the North Star Borough. There is a group called Unified Fairbanks, run by a gentleman by the name of Chuck Reeves. He put together what was basically one of the independent commissions. It's supported by subscription, by the people who think things still need to be done and he has literally forced both the City and Borough to come together now to form a economic development ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -11- commission for the City and Borough. It's an appointed commission and they will be operating now in order to talk about economic development problems for both the City and the Borough. I want to mention one other item. I picked up on it earlier and that is the governmental response to economic development and economic development commissions, and the need for there to be a central point for somebody to go to talk to. Many times, this is one of the more difficult things to do because of strains on staff and strains on budget. But if there is any way possible that you can do it within the administration of the city or whatever group, the borough, or whatever group your talking about, try to identify a staff person. One of whose responsibilities is the economic development program of that particular unit. Now, it can be a part time position. It can be a, if you have a planning department, but maybe it's one of the Mayor's assistant's or the clerk's, anyway, in order to have a focal point inside of the city, for people to go and for people to disCuss problems with, try to find somebody that can be appointed for that, that it becomes part of their over all duties. You'll want to rely the commission, whatever type, to come up to, to do most of the public relations work. You need the people to talk to development, the variety of development people to make up through, you need the commission people to act as your greeters to represent the community, to provide that community view point, any investors that might be interested, but you still need somebody in the government, as a focal point for people to come to and for people to talk to. And it keeps things from being fractionated. It keeps things from being splintered. And, this way you have somebody who has a general over view of what's happening, and also, somebody that maybe can get the State, can be your spokesman to the State when you need data and information or you need assistance of one sort or another. Or you need somebody to come down and talk with you or someone in the administration who is interested and knowledgeable about economic development that is willing to operate as a focal point. A coordinator or just somebody who~can take the information and collect the information and get it back down to your commission. It's really important. ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -12- Chairman O'Reilly: Excellent. I have some questions. In your experience, what is there in a relationship of ad hoc committees and commissions and the chambers? Or, also, what has been the experience of chambers that you've seen? Mr. Wiedeman: Chambers are immensely important. If you have an operating Chamber of Commerce, they have to a part of that group. Some of them may choose not to be on a formal bas is, but informally, you' ve got have a representation of your Chamber group inside of your ad hoc committee. It generally is not good just to have the Chamber to do it, because the Chamber is a one view, and I don't mean that in any detrimental way, but the Chamber represents the businessmen in the community. And when your doing economic development, you've got to have a wider view than that. You've got to take in people who, your blue collar workers. The people who are the employees of the business people. You've got to take into consideration your hospitals, your schools, all of the amenities, all of these various people have got to be involved in putting together your development program. You've got to have all of these view points, not just the Chamber, but, if you don't have the Chamber, you don't have that business view point, your really going to be lacking, and quite frankly, you probably will not be successful. So, you've got to be very careful of whatever group that you put together to have the Chamber of Commerce actively represented on that group. The best thing to do, is to try to convince the Chamber to appoint somebody to the commission to be their active representative. So that you make it sort of an official relationship. If you can do that, that solves a lot of problems. Next best thing, is just to appoint an active, if they don't seem to be willing to do that or if they have a reason they don't want to do that, appoint one of the active chamber people as a part of your committee. One of the weakness of the ad hoc committee is of course, they put themselves together. And they may or may not be as completely representative of the community as you might wish. For a group, the size of a community like this, you probably can get a relatively small group to be highly representative ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -13- of the community. One of the things, just as an aside is, don't get your commission too large. You get above, I would say a maximum of twelve people, it becomes un-wieldy. You start having real problems getting something done, particularly when you're talking about something that can be as complicated as economic development planning and economic development strategy. Look carefully at the groups that you need to have involved and try to get those groups on the commission that will both support the actions and proposals or the commission, as well as trying to provide a voice for major sections of the community. It is not necessary for you to appoint everybody. Or is not necessary to appoint people who will disrupt the actions of the commission. Try to avoid that as much as possible as well. At this point Planning Specialist Loper of the City of Kenai joined the meeting for a brief time. Chairman O'Reilly: If the purpose of the commission is well laid out, the person should be appointed to the commission that are in agreement with that purpose. Mr. Wiedeman: That's exactly right. They don't have to be in total agreement with everything that's being done, but they should agree with the philosophy and the need that some thing does have to be done. Chairman O'Reilly: Do you see any revival of anything like, at the Federal level of the old EDA, OEDP or anything like that? Do you see anything along that line? Mr. Wiedeman: Yes. They are going to require you to have an OEDP in order to be eligible for public works and technical assistance and other funds, but they're not going to pay for them. They are going to require you to have an OEDP and approved Overall Economic Development Plan in order to qualify for receiving funds, but they're not going to pay you for doing it. Chairman O'Reilly: Not going to pay for the planning effort but there will be some funding for capital improvement projects? ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -14- Mr. Wiedeman: Yes. In fact, if the budget passes today, the Federal budget passes the way it's been written, EDA is in for about a 70% increase in funding. We did approximately seven and a half million dollars in EDA funds last year in the State. Mayor Williams: One of my thoughts in recent weeks has been around grant writing. It's come to my attention that there are various areas of funds available out there for grantsmanship, and the Reagan administration, in fact we heard there's a bill in for this eight billion dollars nationally for development of tourist projects like the one we're talking about. I've also identify several other block grant programs through community and regional affairs and others and I'm beginning to think that the City may very well serve itself well by getting into the grant writing business again. Like we were before we all had a lot of money. We kind of gave up grant writing when the State took over the function. What I'm hearing from you is that a commission or a committee on OEDP has to be place it appears before a lot of these grants would be forth coming. The next question is, would the economic development commission or committee under take the responsibility of grant writing through a grantsman or should the City, in fact, have a professional grantsman, either under contract or through the City itself doing these things? My thinking has been to have a grantsman on a contract basis for the City, perhaps on a basis of percentage of grants received, contracted on a percentage of grants received, if he writes a grant and were successful on $200,000 and he's got a 5% figure, he gets $10,000. Have you ever run into that type of situation? Then the question is who he answers to; does he answers to the economic development committee first? Planning Specialist Loper gave the committee members information she had regarding the procedure the Borough uses on grant writing and grant writers being used at the Borough. Mayor Williams: One of the reasons that was my feeling that we needed to institute our own economic development counsel ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -15- or commission or committee, here at the city level, is that I feel that the benefits accruing to the city are much greater if we do it here, on a local basis, than they are if we try to access grants through the borough or in association with the borough. Committee Member Thomson: accessing the expertise. What I'm talking about is Ms. Lope r: Pick Using his channels, so that we know who to apply his expertise, but not have them write them for Mr. Wiedeman: The key, many times to a successful grant program is, you've got to have somebody who knows how to work the Federal Agencies and find out where there at. Sometimes you can do this by tapping the expertise at the Borough. I mean working together. There are various publications that you can now but dig out the programs and know what the programs are. address th is. If you have a enough grants out there to make advantage of the local area subscribe to that do nothing let various interest groups There are various ways to large program and there are it worth while, it is to the to hire somebody who does nothing but that. But, I'd run a cross benefit analysis on it before I'd do it to see what the grants are and how much time would be spent in looking for it, and whether or not you can do the same thing by tapping another expertise. Don't forget the State writes them all the time too, and we're there to provide help and assistance to the local communities. Myself, people in Department of Community and Regional Affairs, all of us have experience in writing grants and to helping people write grants. So, you've got several pools of talent at that, if something comes up and you really need some help. It is getting to the point where there are grants becoming available again, that makes it worth while looking at. You should be trying to find those that will help the local community. Chairman O'Reilly: Another point you may wish to cover us, I have an understanding that at this point things are in a state of flux in Juneau. What do you see is the attitude as regards to economic development efforts down there that will be either State wide or local community interests? ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -16- Mr. Wiedeman: There are some changes in policy coming down the road. And, they have been nailed down yet, so I'm just telling you of my impressions of what I have heard and during my conversations with my Commissioner and with Department of Community and Regional Affairs. There is a decided shift in the Department of Community and Regional Affairs into economic development, into community economic development. They have directed by the Governor that that is where their primary efforts will be. They've also, however, been directed to take, that when they do these, that they are to take the lead from the Department of Commerce and Economic Development. So, we'll be working very closely with the Department of Community and Regional Affairs trying to bring them up to the point where they can operate on a local level in the economic development area. In a way this is good, in the fact that they do have more field personnel than we do. In another way, I'm a little concerned about it in the fact that I am not really sure that their quite equipped to handle that job yet. There is a definite shift in the Community and Regional Affairs into addressing, one; rural development activities and secondly; community development activities. We also have been directed to intensify our efforts to work with organized communities, regional organizations, such as, the organized boroughs and native and private regional development groups. One of the interests that has appeared is the desire on the part of the State to develope an number of regional economic development districts throughout the State. Basically, this has not been really thought out to well yet, as to exactly what they are going to identify, but basically, what it amounts to is that the organized boroughs, with the exception of Anchorage, will be considered as a regional, will be addressed as a development region. And then the unorganized boroughs will be divided up into a number of regions on some as yet to be determined specifications. ~ Surprisingly enough, along with this, the Economic Development Administration is suddenly very, very interested in the State of Alaska developing economic development districts, along the lines of the EDA requirements. It may be coincidence, I'm not sure, but, the two of them appear to ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -17- have surfaced at the same time; two ideas have appeared to surface at the same time, so that's one of the things we're going to be working on as the department in the future. We're about to sign a memorandum of understanding with the Department of Community and Regional Affairs that will lay out the various rolls, duties and responsibilities of the two departments in the entire area of economic development in the State. And one of the requirements that I'm sure is going to be, is that we'll have some oversight on the activities of the Department of Regional and Community Affairs, at least for the immediate future and their efforts to get into the economic development. We are still maintaining are efforts in small business development. This is something that the commission should be aware. Although our funding for small business development has been severely cut in the past two years, we've managed to salvage a fairly descent program by working with the Small Business Administration and the University of Alaska, and so we are still able to offer technical assistance to small business; by the way that small business is identified by the Small Business Administration, as basically anyone with less than 500 employees, and in Alaska there's four companies with more than 500 employees. So for all intense and purposes, we can just about service any business in the State of Alaska, with technical assistance and expertise. We got a pretty good pool to work with now of people who know what they're doing in business. As a sign of the times we have been sort of specializing in the last six months in what we call survival tactics, business survival tactics. It the how to protect yourselves as a business man in these times of depressed economies and even how to get out of business without loosing your shirt, and so we still have our small business program going. One of the most exciting things that we've got going, is an attempt at doing some state wide marketing. The State of Alaska as a good place to do business. It will basically, in the beginning be piggy backed on the programs being done by tourism. And basically try to evolve into a marketing program for the State as a place to do business. That's a long term effort. That's probably, the scheme we have set out now is four years long, building up to a fairly descent ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -18- program at the end of the fourth year, items we hope to get under way. involving a number of Chairman O'Reilly: Do you see State funding coming down for economic development? Mr. Wiedeman: Not th is year. Chairman O'Reilly: These technical workshops, by the way, I became a late convert to that, I saw the sense of them. They were very effective. Those would be available within the city then, by request? Mr. Wiedeman: Yes, workshops that we put that we put on. And, workshops that is the first workshop is for definitely so. We have a series of on. Business assistance workshops they are, there's a sequence of three basic forum and they go from, the people who are thinking about going into business, a pre-business workshop. Talks about entrepreneurship and talks about the needs and requirements of going into business. We even get into a bit of psychology about people who go into business and why, and what the risks are. What the rewards are. But, what we try to do, is to give those people who are really serious about going into business the needed information that they need to make a serious attempt at it and secondly, to talk about 50% of them out of it all together. Because, they're either not ready or they just don't understand what's going on. Second series that we give is our workshop on business techniques; accounting, marketing, inventory control, tax laws, personnel management, how to read a financial statement, how to know what a financial statement says when you do read it, which a lot of people do not know. I am constantly amazed at the number of people who cannot read a financial statement, their own financial statement and know what it means when they get through with it. And the final one we do, is survival techniques. There's a pattern in small business. Most small business, nine tenths of the small businesses fail in ten years. Fifty percent fail in the first two years. And they fail because of generally speaking of bad management and cash flow problems, ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -19- which goes back to bad management. So what we try to do is, we try to interdict at this area and talk to these people who are facing this situation and try to give them enough information to give them the ability to get over that hump. Then there's a second crises at about seven years that's a different type. It's usually they get tried. They' re complacent or they're at the end of seven years, they're at the point where they are ready to grow and they don't know how to grow. They don't know how to take advantage of the business that they've built up and they don't know the techniques and the procedures to go from a ten man staff to a hundred man staff, and do it in such a way to maintain your cash flow without loosing track of everything that's going on. So we have what we call these survival workshops. And then right now, we've switched our survival workshops, there basically, just how to determine what your cash positions is and what your competitive position is and what your market position is, and what to do about it, so that you'll be able to see where your at and if you can get out of the hole that you're in or, even better, if we can wget to you before you get in that hole and show you how to change things. Or to get out of the business, one of the two. Those are the three basic workshops, series of workshops. Then we have a lot of specialty workshops. If you've got a particular problem that you want to talk about; insurance, past two years we've done nine or ten insurance workshops, on liability insurance. My department is particularly lucky in the fact that we have the division insurance with our Insurance Commissioner. We can pull in any of the insurance people we want to from any of the companies doing business in Alaska and have them in workshops to talk about why insurance is the way it is. So, we do specialty workshops. 7. COMMITTEE DISCUSSION Chairman O'Reilly: Further comments or questions from the committee. I think we're at the point where we might just as well continue with pros and cons a commission, what should it be, etc., while we have Mr. Wiedeman. Committee Member Carter: The Governor talked about fifteen ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -20- points on a financial hub and international trade, that kind of a thing, are you aware of a time table for setting those things in motion? Mr. Wiedeman: About the only way I can answer that is, the Governor is going to discuss just exactly that at the RDC Conference. And at the Export, Saturday. Chairman O'Reilly: I guess it would have to be this committee that would have to recommend what should be the purposes of the commission, subject to the obvious pool of council and additions by counsel and deletions by council. But, I think that's an excellent point that Jim brought out there, that establish what should be the main thrust of the commission. Is it to achieve a certain type of goal as to what this City should be like in 1997, and how do we get there. What's the committee's thinking along that line? Committee Member Shelden: It's been my thoughts through the meetings that something good has been started here. I don't think it should be dropped at this point. It definitely is not going to be solved at the end April. I, myself think that a commission should be selected for a long range plan. As a retailer in this town, I'm at the point where I would like to have more confidence in something before I know what steps to make and I think a lot of people are at that point. There's quite a bit of confidence in our city government right now. I think we all feel confident that our city administration is doing a good job. I think there's a lot of unrest as to what else is taking place, swinging back and forth all the time. What's ahead ...... I think this commission could do a lot to restore a little confidence to this community. Committee Member Scott: What does the council/city management want us to do? Want this group to do. I think that's really important that we also look and see what their looking for. Mayor Williams: When this idea first came about for an Economical Development Commission, I sat down with one of my mentors, and Vince said let us convene a committee to determine the state of the economy and where on the economic ECONOMIC DEVELOPMENT COMMITTEE Mar ch 24, 1987 page -21- curve we're at. Whether or not, in fact what we're looking at is a lull in the economy and is there a propensity for change back to a norm, or in fact is the economy on such a down hill slide that none of us can stop it, or in fact is there a need for a commission that can move in and fill and void and help stabilize and cause the economy to come out this and stable that. And so the idea then was to form, first the committee. And this committee was to study all the ramifications of the economy within the sector that you've done and then come forward with a recommendation. Should in fact there be a full commission? Should there not be a commission? If there is a commission, what form should it take? I think that was pretty well the basis of it. I think right now a lot of people 'are asking the question, is there a propensity to change and can we hold on until the change occurs. Mayor Williams went on to discuss with the committee members what he sees as the general state of the economy in the city and general area and what he would like to see established. Chairman O'Reilly: It's the continuity, depth of effort. If a commission had been in effect and operative in 80's, and putting out quarterly reports of the city's economy, you can deal with a problem, you can't deal with an unknown problem. Tentatively, is it the committees' thinking, and this is just tentative, that ad hoc committees' formed as kind of, that we' re probably going to have to go to some more permanent type committee? The general consensus of the committee was in the affirmative. General discussion was held with the Mayor, committee members and Mr. Wiedeman in regards to a commission; how it should be established and what type of commission. Chairman O'Reilly: How do commissions go about getting a set of goals. Have you seen goals spelled out by commissions that you think would be worth while to examine? ECONOMIC DEVELOPMENT COMMITTEE Mar ch 24, 1987 page -22- Mr. Wiedeman: There's some excellent examples around. I could obtain and get them to you. The only comment I have about that is, I would suggest you try to do some of your own work before you look at this. It's important for you to have some idea, then you can look at how other people structure theirs and the kind of things that they think are important. The goals and analysis of what they mean by a goal for your community doesn't have to be an involved sort of situation. It can be nothing more than the consensus of the group as to what they wish to approach down the road. And there are ways of going about doing that. There are formal ways of actually structuring goals programs. I don't know if you really want to get into that, but I'd be more than happy to come back and talk about that in some future date, because that's about a two day workshop. There's definite ways of going about formulating goals for local communities and ways that do represent a reasonable consensus of what the community wants. You'll never satisfy everybody, but if you can get enough of a feeling of what the community wants and you can get majority support, that's really what your looking for. It might be good to read, not just the goals, but there are a couple of excellent reports that I have at the office, that I'll send back down, on the over all community programs for a couple of communities that I am acquainted with, as to what they think is important and how they went about doing it. I'll send those down early next week to Vince. Chairman O'Reilly: I think that would be very important, because in making a proposal like this you've got to drag everybody out of their customary ways of thinking. We're all guilty of it. I think we're fortunate on this committee that we've had these presentations by these various people. Speaking of myself, my eyes have been opened as to the strength of the city that is largely un-publicized. The real fundamental strength of this city and then also, the identification of where the weak spots are. Mayor Williams: Might I suggest that when you get ready to make your presentation to the Council, that we pick a Saturday afternoon, and go through the scenario of educating the Council on what you've found and what you've done and ECONOMIC DEVELOPMENT COMMITTEE March 24, 1987 page -23- take them step by step through your report. And I think that should be the method in which you present this to Council, an afternoon's workshop away from City Hall. This suggestion was discussed further by the committee members and the preparation for such a work shop to take place. Chairman O'Reilly: Things like goals have to be tied into the capability of reaching those goals. Our goals are going to have to be tied into the capability as far as we can see, realistic goals and realistic capability of getting to those goals. Mayor Williams: Our economic development has to be aimed at things that are realistic and that can occur here. Chairman O'Reilly brought into discussion the youth of the community and what percentage stay, where and why they go. There was general discussion. Mr. Wiedeman passed out several hand out brochures for the committee members, (attached for file). 8. PREPARE NEXT AGENDA Committee Members Thomson and Carter will attend the Great Opportunities Conference Apr il 2 and 3 in Anchor age. Chairman O'Reilly and Committee Member Meeks will attend the Community Workshop April 4 in Anchorage. April meetings are scheduled for April 7 and 21. The Chairman would like the minutes from all the Economic Development Committee meetings be compiled into one master copy for review. 9 . ADJOURNMENT Meeting was adjourned at 9:30 p.m. Niva' A'.' AbU-rto ............... dba/Niva's Clerical Servics for the City of Kenai