loudoun county, virginia - april 15, 2013 board of … · item #6: rebds recommendations economic...
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Date of Meeting: April 15, 2013
BOARD OF SUPERVISORS
ECONOMIC DEVELOPMENT COMMITTEE
ACTION ITEM
SUBJECT: Rural Economy Business Development Strategy
Recommendation
ELECTION DISTRICT: Countywide
STAFF CONTACT: Tom Flynn, Director, Department of Economic Development
Kellie Boles, Department of Economic Development
REDC CONTACT: Mary Ellen Taylor, Chair, Rural Economic Development
Council
REBDS CONTACTS: Martin Hamberger, Co-Chair, Rural Economy Business
Development Strategy
Doug Fabbioli, Co-Chair, Rural Economy Business
Development Strategy
RECOMMENDATIONS:
REDC: The Rural Economic Development Council (REDC) recommends approval and
implementation of the Rural Economy Business Development Strategy (REBDS), to include
commitment to funding phase one of each of the nine (9) recommendations, as outlined in the
REBDS and to include an additional full time equivalent be added in FY14 to the Department of
Economic Development-Rural Business Development team to assist with ongoing and future
rural business development efforts.
STAFF: Staff recommends approval and implementation of the Rural Economy Business
Development Strategy.
BACKGROUND:
At the February 25, 2013 meeting of the Economic Development Committee of the Board of
Supervisors the REDC recommended approval and implementation of the Rural Economy
Business Development Strategy (REBDS), to include commitment to funding phase one of each
of the nine (9) recommendations, as outlined in the REBDS and to include and additional full
time equivalent be added in FY14 to the Department of Economic Development-Rural Business
Development team to assist with ongoing and future business development efforts (Attachment
1).
At the February 25, 2013 meeting of the Economic Development Committee of the Board of
Supervisors the Committee delayed action on the REBDS to allow members more time to read
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Item #6: REBDS Recommendations
Economic Development Committee Meeting
April 15, 2013
Page 2 of 7
the final report and to get through the budget process. The Committee forwarded the REBDS
information to Board of Supervisors budget work session.
At the March 11, 2013 budget work session of the Board of Supervisors the Board voted 9-0 to
enhance the DED budget for FY14 to include $30,000 for implementation of the REBDS as
recommended in FY14. Further, the Board of Supervisors voted 5-4 to add an additional FTE to
the Department of Economic Development in FY14 to support the Rural Business Development
Strategy
At the April 3, 2013 meeting of the Board of Supervisors, the Board approved the Loudoun
County FY14 budget, to include $30,000 for implementation of the REBDS as recommended in
FY14 and to include an additional FTE to the Department of Economic Development in FY14 to
support the Rural Business Development Strategy
FISCAL IMPACT:
Implementation of this strategic plan will have an impact on program budgets at the operating
level and will likely effect capital budgeting in the future. The operating budget estimates, which
are summarized in the table below, should be used for guidance only on costs associated with
implementation of the strategic plan and are not a result of a detailed budget analysis. Many of
the initiatives are expected to generate significant grant and private funding and County funds
would be used to supplement or match these grants and private sectors funds. As these projects
are studied further, the Board of Supervisors would review these projects in more detail and
make decisions on county contributions to these projects as part of County budget processes in
FY15 and beyond.
Implementation of phase one (1) of each of the nine (9) recommendations, will require the
following estimated County funding by fiscal year:
*FY14 $57,000 Program Execution
**$63,000 1FTE Enhancement-Program Administration
FY15 $58,000 Program Execution
**$65,000 1FTE Enhancement-Program Administration
FY16 $35,500 Program Execution
**$67,000 1FTE Enhancement-Program Administration
FY17 $35,000 Program Execution
**$69,000 1FTE Enhancement Program Administration
*$30,000 of the FY14 Program Execution can be funded using the Department’s FY2014
proposed base budget.
**FTE Enhancement and Program Execution funds for FY14-FY17 represents the same FTE and
funding levels; not an additional FTE or funds.
Item #6: REBDS Recommendations
Economic Development Committee Meeting
April 15, 2013
Page 3 of 7
The chart below outlines the estimated cost for each recommendation on a fiscal year by fiscal
year basis. For FY14, the total cost to implement phase one of each recommendation is $99,500,
of which, $30,000 has been allocated in the existing FY14 Department of Economic
Development budget to develop an integrated approach to equestrian industry enhancement
through a survey of the equine sector for $20,000 and to enhance the rural business development
message and tools on the biz.loudoun.gov website for $10,000.
Item #6: REBDS Recommendations
Economic Development Committee Meeting
April 15, 2013
Page 4 of 7
Budget Implications
FY2014 FY2015 FY2016 FY2017
FOUNDATION STRATEGIES
A. Assess the need for a
Loudoun Agriculture
and Rural Business
Accelerator
$50,000/$25,0
00
TBD TBD
B. Develop an Integrated
Approach to Equestrian
Industry Enhancement
$25,000/$20,0
00
$0 TBD TBD
C. Conduct a Regular
Rural Business Owners
Survey
$10,000/$8,00
0
$10,000/$8,00
0
$10,000/$8,00
0
D. Create a Formal
Rural Business Peer-to-
Peer Consulting and
Research Network
$50,000/$15,0
00
$50,000/$15,0
00
$50,000/$15,0
00
PROGRAM STRATEGIES
A. *Re-design
Loudounfarms.org and
biz.loudoun.gov
Websites to Add a
Greater Level of
Business Support
Information
$12,000/$12,00
0***
TBD TDB TBD
B. Encourage the
Formation of a Loudoun
County Trails
Associations
$15,000/$2,50
0
$15,000/$2,50
0
C. Enhance Marketing
Programs to Improve
Linkage Between Rural
and Urban Economies
$5,000 TBD TBD TBD
D. Create a Branded
Rural Business
Awareness Program
$17,500/$5,00
0
$20,000/$10,0
00
$20,000/$10,0
00
$20,000/$10,0
00
E. Develop a
Consolidated, Year-
Round Farmers Market
in Loudoun County
$40,000/$20,0
00
TBD TBD TBD
Note: Figures in Blue represent total estimated expenditure. Figures in Black represent
total estimated County contribution. TBD: To be determined based on program
development and implementation feedback.
Item #6: REBDS Recommendations
Economic Development Committee Meeting
April 15, 2013
Page 5 of 7
The $30,000 FY14 funds approved as part of the FY 14 DED budget will pay for $5,000 to
create a branded rural business awareness program, $20,000 for market analysis and feasibility
study to develop a consolidated, year-round farmers market in Loudoun County and an
additional $2,000 toward the $10,000 in the existing FY14 DED budget to enhance the rural
business development message and tools on the biz.loudoun.gov website.
Staff has identified the following potential funding sources to leverage County funding: Virginia
Department of Agriculture and Consumer Services, Agriculture and Forestry Industries
Development Planning Grant program, the United State Department of Agriculture, Value-
Added Producers Grant and Farmers Market Promotion Program Grant and through the Visit
Loudoun Marketing Leverage Program.
Execution Summary
May 2013-June 2013 Begin to secure additional outside funds through Visit
Loudoun, VDACS, USDA and SBA.
Draft requests for proposals to: survey equine owners, to
provide a market analysis and feasibility study to develop a
consolidated, year-round farmers market and enhance the
rural business development tools and message on
biz.loudoun.gov.
July 2013 Advertise to fill Rural Business Development Assistant
position.
Release requests for proposals for: equine survey, and
market analysis and feasibility study to develop a
consolidated, year-round farmers market.
August 2013 Hire FTE.
September 2013-November 2013 Conduct equine owners and event attendees survey.
Conduct feasibility study and market analysis to develop a
consolidated, year-round farmers market.
November 2013 Release requests for proposals to enhance the rural business
development tools and message on biz.loudoun.gov.
*Currently in process.
*** Work already begun and funded in FY13, DED Operating Budget
Item #6: REBDS Recommendations
Economic Development Committee Meeting
April 15, 2013
Page 6 of 7
January 2013-April 2013 Enhance the rural business development tools and message
on biz.loudoun.gov.
Ongoing FY14 Enhance marketing programs to improve linkage between
rural and urban economies.
Integrate a product focused branded rural business
awareness program.
REBDS Program Progress and Successes
As previously noted, due to the formation of the Loudoun County Equine Alliance (LCEA), staff
has been able to work directly with the equine sector to facilitate the development of the
mechanism to conduct a regular rural business owner’s survey, which will be the foundation step
to developing an integrated approach to equestrian industry enhancement. The LCEA has been
working closely with DED, Visit Loudoun and the Weldon Cooper Center for Public Service to
finalize the “Horse Event Attendance Survey” and the “Equine Event Managers Survey”. In
order to move forward within the 2013 equine event season, the LCEA, Visit Loudoun and the
Weldon Cooper Center for Public Service partnered to surveyed 340 attendees at the Piedmont
Races in Upperville, VA on March 23, 2013.
Rural Business Development Team Workplan Updates
Implementation of the Strategy is expected to result in an increase in the Department business
development metrics. The monthly Director’s report will reflect progress of the Strategy through
an increase in the number of current active prospects in the pipeline, number of visits to existing
businesses to build new/renew relationships, project ombudsman assistance provided, percentage
of existing business issues resolved, unique website user sessions, members of DED-supported
rural associations/groups and number of rural business development educational events.
The Strategy Update will continue to be supported by the Rural Economic Development Council
and will be reported on monthly at REDC meetings Subsequently, the REDC will provide
quarterly updates to the ED Committee on progress and implementation milestones if the
Committee so desires.
DRAFT MOTIONS:
1. I move that the Economic Development Committee recommend to the Board of
Supervisors approval and implementation of the Rural Business Development Strategy.
Item #6: REBDS Recommendations
Economic Development Committee Meeting
April 15, 2013
Page 7 of 7
-OR-
2. I move an alternate motion.
ATTACHMENTS:
1. February 25, 2013 REBDS Action Item to the Economic Development Committee of the
Board of Supervisors
Date of Meeting: February 25, 2013
BOARD OF SUPERVISORS
ECONOMIC DEVELOPMENT COMMITTEE
ACTION ITEM
SUBJECT: Rural Economic Development Council Update-Rural Economy
Business Development Strategy Recommendations
ELECTION DISTRICT: Countywide
STAFF CONTACT: Tom Flynn, Director, Department of Economic Development
Kellie Boles, Department of Economic Development
REDC CONTACT: Mary Ellen Taylor, Chair, Rural Economic Development
Council
REBDS CONTACTS: Martin Hamberger, Co-Chair, Rural Economy Business
Development Strategy
Doug Fabbioli, Co-Chair, Rural Economy Business
Development Strategy
REDC RECOMMENDATION: The Rural Economic Development Council (REDC)
recommends approval and implementation of the Rural Economy
Business Development Strategy (REBDS), to include commitment
to funding phase one of each of the nine (9) recommendations, as
outlined in the REBDS and to include an additional full time
equivalent be added in FY14 to the Department of Economic
Development-Rural Business Development team to assist with
ongoing and future rural business development efforts.
STAFF RECOMMENDATION: Staff recommends approval and implementation of the
Rural Economy Business Development Strategy and that the Board
of Supervisors considers funding an additional staff to support the
Rural Business Development Strategy as part of the Board’s FY14
Budget Review process.
BACKGROUND:
In 2000, the Loudoun County Board of Supervisors created the Rural Economic Development
Council (REDC), a public/private partnership responsible for promoting rural economic
development in the County and advising the Board on items of import on rural economic
development.
#3
ATTACHMENT 1
Item #3: REDC Update-
REBDS Recommendations
Economic Development Committee Meeting
February 25, 2013
Page 2 of 6
At the January 4, 2011 meeting of the Rural Economic Development Council, the Council voted
to recommend that the Board authorize the REDC to develop a Rural Economy Business
Development Strategy (REBDS), for consideration by the Board of Supervisors.
On April 19, 2011, the Board of Supervisors moved to authorize the REDC to prepare a Rural
Economy Business Development Strategy which will identify what a vibrant rural economy for
Loudoun County should be in the future and describe the tools necessary for the rural economy
to get there.
The REBDS will serve as a blueprint for REDC to recommend new strategies for supporting the
rural economy through:
the implementation of new and improved marketing strategies,
research and education,
evaluation of existing and new financial tools to support entrepreneurs entering or
expanding within the rural economy,
resources needed to reach the level of support required public policy development.
The REBDS committee, a sub-committee of the REDC, consists of fifteen (15) sector leaders
and two co-chairs tasked with broad outreach to sectors of the rural economy.
At the November 6, 2012 meeting of the Rural Economic Development Council, the Council
voted to approve presentation of Preliminary Recommendations of the REBDS Sub-Committee
to the Economic Development Committee of the Board of Supervisors for review. The
Preliminary Recommendations of the REBDS were presented to the Economic Development
Committee as an Information Item on November 19, 2012 (Attachment 1).
Following the November 19, 2012 presentation to the Economic Development Committee, the
REBDS Committee presented the preliminary recommendations to various Loudoun County
stakeholders. Recommendations of the REBDS were presented to the Loudoun County Chamber
of Commerce, the Loudoun County Farm Bureau, Visit Loudoun Board of Directors, the
Purcellville Town Council, the Economic Development Commission, Middleburg Town Council
and others. The REBDS was well received by all of the organizations and formally endorsed by
many (Attachment 2).
At the February 12, 2013 meeting of the Rural Economic Development Council, the Council
voted to approve the presentation of the final REBDS (Attachment 3) to the Economic
Development Committee of the Board of Supervisors with a recommendation to the Board for
approval and implementation, to include commitment to funding phase one (1) of each of the
nine (9) recommendations and to include an additional full time equivalent for the Economic
Development-Rural Business Development team to assist with ongoing and future rural business
development efforts.
Item #3: REDC Update-
REBDS Recommendations
Economic Development Committee Meeting
February 25, 2013
Page 3 of 6
REBDS Recommendations
Foundation Strategies
Foundation strategies are a collection of recommendations and suggested implementation
actions upon which solid rural economic development efforts can be based. The four
recommended Foundation Strategies are:
A. Assess the need for a Loudoun Agriculture and Rural Business Accelerator
B. Develop an Integrated Approach to Equestrian Industry Enhancement
C. Conduct a Regular Rural Business Owners Survey
D. Create a Formal Rural Business Peer-to-Peer Consulting and Research Network
Programmatic Strategies
The five Programmatic Strategies that follow are designed to address specific economic
development, business development, and marketing needs, as defined through the REBDS
process. These strategies are:
A. Redesign/Enhance the rural business development component of biz.loudoun.org and
loudounfarms.org to add a greater level of business support information
B. Encourage the formation of a Loudoun County Multi-User Trails Associations
C. Enhance Marketing Programs to Improve Linkage Between Rural and Urban
Economies
D. Create a Branded Rural Business Awareness Program
E. Develop a Consolidated, Year-Round Farmers Market in Loudoun County
Net Cost of Community Services (NCOCS) Study
On July 21, 2012, the REDC presented to the Economic Development Committee, as an
Information Item, the initiative of the Council to undertake the project of a “Net Cost of
Community Services Study” (Attachment 4). The study is an attempt to further determine the
net fiscal contribution of open space, agricultural operations and forestal lands.
The REDC subcommittee’s preliminary findings show that rural farmland and open space in
Loudoun County provide more revenue to the County budget than are returned in the cost of
services and programs. The conclusion was reached by comparison of taxes paid ($15,472,783)
by residents of rural farmland and open space to expenditures ($11,108,820) from the FY11
County budget.
The subcommittee first completed the expenditure review side of the equation by taking a
conservative approach in assigning expenditures to rural farmland and open space on a per capita
basis. Next, the subcommittee captured the real property revenue to the County for rural
farmland and open space. The NCOCS Study is currently evaluating additional revenue sources
to the County from rural farmland and open space outside of real property.
Item #3: REDC Update-
REBDS Recommendations
Economic Development Committee Meeting
February 25, 2013
Page 4 of 6
The REDC is prepared to make a full presentation to the Economic Development Committee in
April 2013, following the completion of the revenue determination and the final review and
approval of the NCOCS Study by the Rural Economic Development Council.
Return on Investment
To address comments received from the Economic Development Committee, the REBDS
Committee evaluated the expected returns to the County through investment into the rural
economy via the initiatives in the Strategy (Attachment 5). A few highlights of this return on
investment analysis are:
1. The recommendation to “Develop an Integrated Approach to Equestrian Industry
Enhancement” is based on the large populations of performance and recreational horses
currently in the County, which drive a diverse but vibrant rural economy. For each
performance horse added to the County’s inventory, annual rural economy sales of
$7,000 can be expected and new investment in real property of $42,500 per horse can be
expected. The real property component of the investment translates directly to revenue
generated for the County. The County has an equine population estimated at 15,500 and
is a nationally recognized center for performance horses.
2. Based on the model of the Cobb International Farmers Market in Smyrna, GA or the
Roots Market in Worcester, OH, developing a year-round destination market can support
annual sales of $3,000,000 and create at-place employment for sixteen (16) individuals in
Loudoun County.
3. The payback from development of trails, which generally occur through indirect
expenditures. Based on recent research on the economic benefit of trails to a community
by use, it was found that the average in-jurisdiction horse owner will spend $566.20 per
equine ($29.80 per day) in trail use annually which equates to nearly $8.8 million in
annual revenue given Loudoun’s current equine population. However, studies indicate
that horse owners are eclipsed in trail spending by mountain bike riders who spend an
average of $142 per trail day in-jurisdiction.
REBDS Program Progress and Successes
The process of developing a strategy for Loudoun’s rural economy has served as motivation for
sectors of the rural economy to become organized to act as a catalyst to implement final strategy
recommendations. In addition to newly organized business sector groups, the Department of
Economic Development has also initiated progress on the recommendations summarized below.
1. One of the primary tools that the DED Rural Business Development Team uses to recruit
new companies in targeted sectors and expand, retain and grow existing businesses, small
businesses and entrepreneurship is by maximizing networks of common business
clusters. As a result of the REBDS project, two new producer organizations have been
formed: the Loudoun County Equine Alliance and the Middleburg Arts Council.
2. As a result of the formation of the Loudoun County Equine Alliance, staff has been able
to work directly with the equine sector to facilitate the development of the mechanism for
the second Foundation Strategy: conduct a regular rural business owner’s survey.
Item #3: REDC Update-
REBDS Recommendations
Economic Development Committee Meeting
February 25, 2013
Page 5 of 6
3. Phase 1 of the first Program Strategy Recommendation: re-designing loudounfarms.org
and biz.loudoun.gov websites has been completed. The re-designed loudounfarms.org
website went live on January 28, 2013. Phase 1 of the project was to remove the business
development message from the site and enhance the look and feel of the site to better
engage Loudoun citizens in the rural economy. Phase 2 of the project will be the transfer
of all of the rural business development information to the biz.loudoun.gov site and the
enhancement of the rural business development messaging to provide a greater level of
business support information attract, retain and expand existing businesses.
4. The Rural Economic Development Council has formed an Agriculture and Rural Affairs
Steering Subcommittee in order to take a more proactive role in bringing forward
recommendations to the full REDC regarding rural policy updates and issues.
5. As the first step to implement the fourth Program Strategy Recommendation, the creation
of a branded rural business product awareness program, staff is in the final stage, along
with a subcommittee of the REDC, in redesigning a Loudoun Grown product logo.
Anecdotally, Department staff has engaged in many conversations with likely partner
organizations on the potential of moving projects forward as described in the REBDS, including
Visit Loudoun, Morven Park, Piedmont Epicurean Arts Center, Virginia Tech, Virginia
Department of Agriculture and Consumer Services and the Town of Purcellville, to name a few.
FISCAL IMPACT:
Implementation of this strategic plan will have an impact on program budgets at the operating
level and will likely effect capital budgeting in the future. The operating budget estimates, which
are summarized in Attachment 6, should be used for guidance only on costs associated with
implementation of the strategic plan and are not a result of a detailed budget analysis. Many of
the initiatives are expected to generate significant grant and private funding and County funds
would be used to supplement or match these grants and private sectors funds. As these projects
are studied further, the Board of Supervisors would review these projects in more detail and
make decisions on county contributions to these projects as part of County budget processes in
FY15 and beyond.
Implementation of phase one (1) of each of the nine (9) recommendations, will require the
following estimated County funding by fiscal year:
*FY14 $57,000 Program Execution
$63,000 1FTE Enhancement-Program Administration
FY15 $58,000 Program Execution
$65,000 1FTE Enhancement-Program Administration
FY16 $35,500 Program Execution
$67,000 1FTE Enhancement-Program Administration
Item #3: REDC Update-
REBDS Recommendations
Economic Development Committee Meeting
February 25, 2013
Page 6 of 6
FY17 $35,000 Program Execution
$69,000 1FTE Enhancement Program Administration
*$30,000 of the FY14 Program Execution can be funded using the Department’s FY2014
proposed base budget (please note that only 1 FTE is being requested over the four year fiscal
period listed above)
Funding and support must be sought on a project-by-project basis and will require significant
investment in grant writing and relationship building. These activities alone are likely to require
additional staffing resources within the Department of Economic Development, even without the
additional administrative burden of expanding web resources, supporting programs such as
mentor-protégé, and staffing additional marketing events. Combined, these additional
administrative and project management functions will require an additional full-time equivalent
position within the Department of Economic Development (as shown above) in order to
implement the strategic plan within the time frames recommended by the REDC and the
consultant. Absent this additional staff, plan implementation will take significantly longer.
DRAFT MOTIONS:
1. I move that the Economic Development Committee recommend to the Board of
Supervisors approval and implementation of the Rural Business Development Strategy
and that the Board of Supervisors consider funding an additional FTE to support the
Rural Business Development Strategy as part of the Board’s FY14 Budget Review
process.
-OR-
2. I move an alternate motion.
ATTACHMENTS:
1. November 19, 2012 REBDS Update to the Economic Development Committee of the Board
of Supervisors
2. Letters of Stakeholder Support
3. Rural Economy Business Development Strategy
4. July 21, 2012 REDC and REBDS Update to the Economic Development Committee of the
Board
5. Conceptual Program Returns 6. Budget Implications Summary Chart