DRAFT REINVENT HAMPTON ROADS BOARD OF DIRECTORS MEETING NO. 3 October 7, 2016 Meeting number three of the Board of Directors of Reinvent Hampton Roads ( RHR ) was held Friday, October 7, 2016, in the conference room in Suite 415 in the World Trade Center. Members Present: Members Absent: Others Present: Deborah M. DiCroce James K. Spore John O. Wynne None Franklin T. Dunn, Hampton Roads Community Foundation Donna S. Morris, Reinvent Hampton Roads 1. Welcome and Call to Order Mr. Wynne determined the presence of a quorum and called the meeting to order at 10:44 a.m. 2. Proceedings of Previous Meeting ON A MOTION BY DR. DICROCE, SECONDED BY MR. SPORE, THE BOARD OF DIRECTORS APPROVED THE MINUTES OF THE MAY 5, 2016, MEETING AS CONTAINED IN THE MEETING MATERIALS. 3. Financial Statements The directors reviewed and accepted the financial statements for the periods ending June 30 and September 30, 2016 as attached. Subsequently in the meeting, Mr. Spore noted that the Hampton Roads Economic Development Alliance s $50,000 contribution had been received. He also reported that Peninsula Now s second $25,000 contribution had not yet been received, but that he assumed it would be paid in December. 4. President s Report 4.1. REAP Update. Characterizing the Regional Export Acceleration Program (REAP) as being on track, Mr. Spore reported that he had met with Dean Tanner and Mr. Lant of Old Dominion University (ODU) to discuss the status of REAP. He noted that they reported having held two scale-up meetings, one in South Hampton Roads and another in Williamsburg, with a total of about 20 companies in attendance. He indicated that the ODU staff are attempting to recruit additional companies to participate in the program, contacting about 40 companies that went through the first phase of the program. The directors discussed the program, agreeing that Mr. Spore would invite Dean Tanner and Mr. Lant to provide a briefing for them. In addition, Mr. Spore will provide a detailed explanation of the CoreValue assessment tool and how it works. 4.2. Status of Workforce Gap Analysis. Mr. Spore reported that a contract had been signed with Emsi (formerly, Economic Modeling Specialists, International) for the workforce gap analysis. He indicated that the consultants planned to survey some 300 businesses and conduct on-site interviews in Hampton Roads with a goal of submitting their report
Meeting Number 3 Reinvent Hampton Roads Board of Directors Page 2 of 2 by November 14 th. Mr. Wynne suggested that, after the experience with the industry cluster study, it would be important to validate the interview questionnaire after several interviews to insure that it is eliciting the desired level of information. 4.3. HREDA August 25 th Workshop. Mr. Spore reported that he had attended HREDA s workshop and that the results of RHR s industry cluster study were being used to frame the regional economic development discussion. Referring to the attached presentation slides from the workshop, Mr. Spore noted that six of RHR s seven clusters are represented in the industry sectors that HREDA proposes to target for business attraction efforts with recreation and leisure being the only cluster not represented. Mr. Wynne suggested that a situation analysis should be conducted to determine whether the region has the elements necessary to attract the desired business sectors. Mr. Spore reported that the HREDA presentation had been well received and that the strategy for business attraction is expected to be approved by its governing board in December. 5. Adjournment There being no further business to come before the board, Mr. Wynne adjourned the meeting at 11:11 a.m. Respectfully submitted, Deborah M. DiCroce Secretary to the Board APPROVED John O. Wynne Chair of the Board
BUDGET TO ACTUAL FY16 AS OF JUNE 30, 2016 Revenue Approved Budget FY16 Actual as of 06/30/16 1. Hampton Roads Community Foundation $ 325,000.00 $ 325,000.00 2. Hampton Roads Business Roundtable 100,000.00 100,000.00 3. Port of Virginia 50,000.00 50,000.00 4. Hampton Roads Economic Development Alliance 50,000.00 0 5. Peninsula Now 50,000.00 25,000.00 Available Total Revenue $ 575,000.00 $ 500,000.00 Operating Expenses 1. Personnel President/CEO 1 $ 220,000 $ 107,830.36 $ 112,169.64 Administrator 2 0 0 0 Support Staff 3 60,000 11,113.75 48,886.25 Total Personnel $ 280,000 $ 118,944.11 $ 161,055.89 2. Office Operations Office Space Renovation Cost 4 $ 30,000 $ 26,257.37 $ 3,742.63 Office Space Furniture 5 15,000 15,185.86 (185.86) Office Sublease 4 0 0 0 Telecommunications Services 6 3,900 1,090.97 2, 809.03 Managed IT Services 7 17,924 12,833.60 5,090.40 Accounting Services 8 7,500 562.50 6,937.50 Payroll Services 2,500 12.25 2,487.75 Legal Services 9,000 15,267.92 (6,267.92) Website Hosting & Maintenance 9 3,000 0 3,000.00 Insurance 10 3,100 3,425.95 (325.95) Supplies 5,000 2,509.85 2,490.15 Travel/Meetings 12,500 1,950.38 10,549.62 Miscellaneous 2,500 1,770.80 729.20 Total Office Operations $ 111,924 $ 80,867.45 $ 31,056.55 Total Operating Expenses $ 391,924 $ 199,811.56 $ 192,112.44 Uncommitted Balance $ 183,076 $ 300,188.44 Notes 1. Reflects position filled at an annual salary rate of $200,000, with a starting date of January 4, 2016. Remaining $20,000 covers benefits initially as set by HRCF, to include parking. DMD/DSM R10/05/16
2. Reflects HRCF loan of Donna S. Morris, Vice President for Strategic Initiatives, to fill this position for up to the initial twelve months of operation. Cost of position if filled for FY16 estimated at $125,000 for salary and benefits. 3. Reflects position filled at an annual salary rate of $40,000, with remaining $20,000 covering benefits initially as set by HRCF, to include parking. Position filled April 11, 2016. 4. Reflects office space as provided in the World Trade Center in Downtown Norfolk in Suite 415 which is leased to JOW, Inc. Reinvent Hampton Roads subleases 617 assignable square feet with an additional 1,133 square feet of common area from JOW, Inc. Associated cost of sublease (valued at $31,510 for 2016) is donated by John O. Wynne. A one-time cost estimated at $30,000 will cover renovation of the sublet space. 5. Reflects one-time cost of office furniture. 6. Reflects annual cost of internet, telephone, and television services. 7. Reflects $11,000 for computer hardware, with remaining $6,924 covering annual contractual IT services with Mode 5. 8. Reflects accounting services which include preparation of 990 s, audit, and consulting. 9. Reflects annual cost of hosting and maintenance of RHR website by WHRO. 10. Reflects annual cost of both renter s insurance (estimated at $600) and director/officer liability insurance (estimated at $2,500). DMD/DSM R10/05/16
BUDGET TO ACTUAL FY16 AS OF SEPTEMBER 30, 2016 Revenue Approved Budget FY16 Actual as of 09/30/16 1. Hampton Roads Community Foundation $ 325,000.00 $ 325,000.00 2. Hampton Roads Business Roundtable 100,000.00 100,000.00 3. Port of Virginia 50,000.00 50,000.00 4. Hampton Roads Economic Development Alliance 50,000.00 50,000.00 5. Peninsula Now 50,000.00 25,000.00 Available Total Revenue $ 575,000.00 $ 550,000.00 Operating Expenses 1. Personnel President/CEO 1 $ 220,000 $ 161,655.34 $ 58,344.66 Administrator 2 0 0 0 Support Staff 3 60,000 23,864.84 36,135.16 Total Personnel $ 280,000 $ 185,520.18 $ 94,479.82 2. Office Operations Office Space Renovation Cost 4 $ 30,000 $ 26,257.37 $ 3,742.63 Office Space Furniture 5 15,000 15,185.86 (185.86) Office Sublease 4 0 0 0 Telecommunications Services 6 3,900 1,927.97 1,972.03 Managed IT Services 7 17,924 15,258.60 2,665.40 Accounting Services 8 7,500 1,025.00 6,475.00 Payroll Services 2,500 33.25 2,466.75 Legal Services 9,000 15,267.92 (6,267.92) Website Hosting & Maintenance 9 3,000 0 3,000.00 Insurance 10 3,100 4,043.20 (943.20) Supplies 5,000 3,744.47 1,255.53 Travel/Meetings 12,500 3,986.16 8,513.84 Miscellaneous 2,500 1,770.80 729.20 Total Office Operations $ 111,924 $ 88,500.60 $ 23,423.40 Total Operating Expenses $ 391,924 $ 274,020.78 $ 117,903.22 Uncommitted Balance $ 183,076 $ 275,979.22 Notes 1. Reflects position filled at an annual salary rate of $200,000, with a starting date of January 4, 2016. Remaining $20,000 covers benefits initially as set by HRCF, to include parking. DMD/DSM R10/05/16
2. Reflects HRCF loan of Donna S. Morris, Vice President for Strategic Initiatives, to fill this position for up to the initial twelve months of operation. Cost of position if filled for FY16 estimated at $125,000 for salary and benefits. 3. Reflects position filled at an annual salary rate of $40,000, with remaining $20,000 covering benefits initially as set by HRCF, to include parking. Position filled April 11, 2016. 4. Reflects office space as provided in the World Trade Center in Downtown Norfolk in Suite 415 which is leased to JOW, Inc. Reinvent Hampton Roads subleases 617 assignable square feet with an additional 1,133 square feet of common area from JOW, Inc. Associated cost of sublease (valued at $31,510 for 2016) is donated by John O. Wynne. A one-time cost estimated at $30,000 will cover renovation of the sublet space. 5. Reflects one-time cost of office furniture. 6. Reflects annual cost of internet, telephone, and television services. 7. Reflects $11,000 for computer hardware, with remaining $6,924 covering annual contractual IT services with Mode 5. 8. Reflects accounting services which include preparation of 990 s, audit, and consulting. 9. Reflects annual cost of hosting and maintenance of RHR website by WHRO. 10. Reflects annual cost of both renter s insurance (estimated at $600) and director/officer liability insurance (estimated at $2,500). DMD/DSM R10/05/16
Business & Financial Services Info, Analytics & Security Advanced Manufacturing Bio Science & Bio Medical Maritime, Logistics & Supply Chain Aviation, Aerospace & Defense
Hampton Roads Higher Wage Target Industry Sectors BUSINESS SERVICES INFORMATION, ANALYTICS & SECURITY ADVANCED MANUFACTURING LIFE SCIENCES & HEALTHCARE MARITIME, LOGISTICS & SUPPLY CHAIN AVIATION, AEROSPACE & DEFENSE Professional Services Financial Services Shared Services Management Consulting Policy Associations Government Contracting Contact Centers Cybersecurity Modeling, Simulation and Training Software Development Game Development and Mobile App Energy Solutions Advanced Manufacturing Advanced Industrial Technologies Food and Beverage Processing Smart Sensors Manufacturing Materials Science Specialty Pharma Medical Devices Biotechnology Diagnostic Testing Pharmaceuticals Clinical Trials Bio Informatics Medical Simulation Port Related Operations Maritime Services Ship Building and Ship Repair Supply Chain Operations Distribution and Warehousing Defense Activities Maintenance, Repair and Overhaul (MRO) Aviation Related Manufacturing Air Service Development CORPORATE & REGIONAL HEADQUARTERS - CENTERS OF EXCELLENCE - RESEARCH AND DEVELOPMENT
$3,500,000 $3,111,334 Total Funding by Source $3,000,000 $2,500,000 $1,212,250 $2,285,270 $2,000,000 $850,000 Total Funding has $1,500,000 declined by $1,000,000 $500,000 $1,849,084 $1,424,970 $826,064 or 26.6% in 10 Years $- 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Public Funding Private Funding Other
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Percent of Funding By Source 40.8% 39.0% 43.8% 42.6% 41.7% 41.2% 40.4% 40.5% 38.4% 38.6% 35.8% 58.1% 59.4% 53.4% 54.7% 56.5% 57.00% 58.1% 58.5% 60.5% 60.6% 63.8% 37.2% Private Funding in 2016 62.4% Public Funding in 2016 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Public Funding Private Funding Other
Regional Economic Development Competitive Funding Model Overall Funding: $2.00 per capita ($1.00 Public and $1.00 Private) Revenue Mix: 50:50 Public-Private Funding Ratio Timeframe: 3-5 Year Program Focus and Commitment Support: Deep Engagement of Public & Private Leadership Evaluation: Clear and Measurable Annual Performance Targets
MSA Population (millions) Regional ED Funding (millions) 3.00 2.00 1.00-2.43 2.39 1.27 1.72 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $- $4.5 $1.0 $3.5 $6.8 $2.8 $0.2 $2.6 $2.2 Charlotte Orlando Richmond Hampton Roads Total Public-Private Per Capita Public-Private Funding Ratio % $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $- $1.86 $0.41 $1.45 $2.85 $2.21 $0.16 $2.05 $1.28 100% 80% 60% 40% 20% 0% 37% 70% 63% 55% 63% 30% 37% 45% Charlotte Orlando Richmond Hampton Roads Public Funding Private Funding
Annual Job Growth (Thousands) Annual Job Growth (%) 60.0 40.0 32.1 56.5 23.8 6.0% 4.0% 2.7% 4.5% 3.7% 20.0 4.7 2.0% 0.6% - 0.0% Charlotte Orlando Richmond Hampton Roads Charlotte Orlando Richmond Hampton Roads Annual Labor Force Growth Unemployment Rate % 40,000 30,000 20,000 10,000-27,625 29,357 8,817 6.0% 4.0% 2.0% 5.0% 4.5% 4.0% 4.5% (10,000) (20,000) (10,151) 0.0% Charlotte Orlando Richmond Hampton Roads Charlotte Orlando Richmond Hampton Roads