BUDGET ECONOMIC DEVELOPMENT business attraction business support small business and entrepreneur programs A thriving and vibrant community relies on a strong economic base to support the many services that create quality of life. Economic Development promotes a stable and diverse economy through strategic business attraction and business growth and expansion. In partnership with the community, the department identifies desired businesses and services and commits to ensure the City is prepared to meet the needs of those organizations. Grants, education and mentorship programs provided by Economic Development nurture local businesses with the resources they require to flourish in today s market. BUSINESS ATTRACTION BUSINESS RETENTION AND GROWTH Identify Leads Work with Business to Establish Operations Ensure the Community is Prepared for Desired Development Opportunities Promote and Attract Opportunities Within Alberta s Industrial Heartland Economic Diversification Sustainable Growth Support the Needs & Interests of Existing Businesses Support and Mentoring for Small Businesses and Entrepreneurs The subsequent pages will provide information on the department s budget, 2018 operating budget requests and fees and charges.
Page 8-2
Revenues Economic Development 2018 Proposed Budget 2017 2018 2018 Approved Committed/ 2018 2018 2018 Proposed Budget Capital Items Inflation Growth New Initiatives Budget User Fees & Charges 215,500 - - 8,904-224,404 Funding From Reserves - - - - - - Total Revenues 215,500 - - 8,904-224,404 Expenses Salaries, Wages & Benefits 303,600 - - 86,149-389,749 Contracted Services 105,000 - - (24,897) - 80,103 Transfer to Reserves 55,300 - - (33,750) - 21,550 Materials & Supplies - - - - - - Grants to Organizations 5,000 - - - - 5,000 Advertising & Printing 126,800 - - (17,300) - 109,500 Training & Development 35,395 - - 10,265-45,660 Phones & Postage 3,600 - - (1,270) - 2,330 Other Expenses 129,408 - - (129,408) - - Memberships 8,132-21,871 127,971 21,298 179,272 Total Expenses 772,235-21,871 17,760 21,298 833,164 Net (Surplus)/Deficit 556,735-21,871 8,856 21,298 608,760 Page 8-3
Page 8-4
Page 8-5
Page 8-6
Edmonton Metro Regional Entity Request #61-0040 Division: Infrastructure & Planning Division Budget Year: 2018 Department: Economic Development Category: New Service Responsibility: Economic Development Director Corporate Strategic Plan: Strong, Diverse Economy Budget Impact (Expenditure/ Revenue) Funding Source One Time or Ongoing $21,298 Operations Ongoing Overview On May 23, 2017, Council voted to be a shareholder of the Edmonton Metropolitan Region Economic Development Entity (Edmonton Global). This entity is a Part-9 company owned by shareholder municipalities in the capital region and tasked with promoting investment opportunities in the region on a global level. As a shareholder, the City of Fort Saskatchewan is required to contribute annual funding amounts based on population and assessments for a period of 3 years. These amounts escalated over that time frame to account for increased operations and costs of the entity. Our contribution for 2018 will be $21,298, funded from the Economic Development Department Budget. We anticipate the funding required in 2019 will be $41,940. Edmonton Global was created through extensive consultations with municipalities and stakeholders and will increase regional collaboration and provide a pool of shared resources to increase awareness of investment opportunities in the region. It was designed to ensure that it did not have any negative impacts on existing municipal economic development operations or budgets. As a shareholder municipality, these fees are mandatory. Historical Trends As outlined in the Articles of Association, in 2017 the City s provided $10,977 in funding. Page 8-7
Comparators All 13 municipal shareholders of the entity are required to provide annual funding. The Cities of Edmonton, Leduc, Spruce Grove, and St. Albert, along with Parkland County, Strathcona County, and Leduc County contribute higher annual amounts than Fort Saskatchewan. Page 8-8
Business Support and Growth Request #61-0041 Division: Infrastructure & Planning Division Budget Year: 2018 Department: Economic Development Category: Growth Responsibility: Economic Development Director Corporate Strategic Plan: Strong, Diverse Economy Budget Impact (Expenditure/ Revenue) Funding Source One Time or Ongoing $8,904 Rental Revenue Ongoing $17,760 Operations Ongoing $8,856 Overview A major function of the Economic Development Department is to provide support to local businesses to help them grow and succeed. Local businesses are a vital part of the City s economy, employing over 16,000 people in 2016. The number of licensed local businesses in Fort Saskatchewan has been increasing on average by 11% per year for the past 10 years; from 459 in 2008 to over 1,400 local and non-resident businesses today. As the number of businesses increases so too does the workload of the Economic Development Department staff to respond to the increasing number of requests for support. This is particularly important during economically challenging periods when supporting local businesses to diversify their revenues and enter new markets is critical. In addition to supporting local businesses, the department is also responsible for attracting new industrial and commercial development in an increasingly competitive market. Increased services levels including enhanced participation in Alberta s Industrial Heartland Association and Edmonton Global are requiring more and more staff time. As such, the Economic Development Department has reached the capacity of its current staff and is requesting additional resources to be able to maintain the service levels expected of it and to undertake initiatives it has been unable to implement to date due to staff constraints. The following chart summarizes the current composition of the department, and the service levels it provides. Page 8-9
Director of Economic Development Economic Development Officer Industrial Attraction AIHA Participation EMREDE Participation Industrial Business Support Business Communications Data Collection & Analysis (Industrial) Department Administration & Budgeting Council Directives & Reports Commercial Attraction Business Support Programs ICSC Particpation Business Licensing Chamber of Commerce & Downtown Liason Land Administration Data Collection & Analysis (Development) Development Facilitation As a result of the current workload of the Department, they have been unable to implement a number of initiatives and activities for which they are responsible. To that end, the department has often contracted a third party to deliver services on their behalf, often at a higher cost. Business visitations Workforce development Entrepreneurship support Business start-up support Home-based business support Enhanced business directory Infill development Export development Business database management City lease administration The Department is requesting an additional FTE so that these important activities can be undertaken in a more efficient and effective manner. A complement of 3 staff would provide the resources the Department needs to operate effectively for the long term. With an additional staff person, the composition and workload of the department would be configured as follows: Page 8-10
Director of Economic Development Industrial Attraction AIHA Participation Edmonton Global Participation Industrial Business Support Business Communications Data Collection & Analysis (Industrial) Department Administration & Budgeting Council Directives & Reports Export Development Economic Development Officer (Commercial) Commercial Attraction ICSC Particpation Land Administration Data Collection & Analysis (Development) Development Facilitation Infill Development City Lease Administration Business Database Management Economic Development Officer (Business Support) Business Support Programs Business Licensing Business Visitations Entrepreneurship & Business Start-up Homebased Business Support Enhanced Business Directory Chamber of Commerce & Downtown Liason The total cost of an FTE including benefits is $114,865. The Department has identified $84,411 in funds within our existing budget from our Contracted Services Budget and Business Licence Revenue that can be reallocated. In addition, an additional $9,742 in efficiencies have been found, reducing the total cost to $20,712. Combined with $8,904 anticipated in additional lease revenue, the Department is requesting $11,808 ($8,856 in 2018 and $2,952 in 2019 as per Operating and Capital Budgets Policy FIN-024-C). FTE and Benefits $114,865 Additional Lease Revenue: ($8,904) Business Licence Revenue Reallocation: ($33,750) Reallocation from Contracted Services: ($50,661) Additional Budget Efficiencies: ($9,742) Total Request $11,808 The services and activities that are currently contracted out will now be done in-house, as such the Department s Contracted Services Budget can be reallocated. Additionally, a portion of the Business Licence revenue, in particular fees collected from non-residential businesses, can be allocated to help cover the cost of the additional services that the department will now be delivering to local businesses. Additional reallocations have been made to the Department s budget which will provide the new staff person with resources and professional development to ensure they are able to accomplish their expected duties. Options Considered In considering this plan request, Economic Development examined the option of continuing to contracting out the activities to a third party. Page 8-11
Efficiencies The new position will be responsible for undertaking a number of activities that the department currently has to contract out. By bringing these service levels in-house we will be improving efficiency through reduced overall costs, and increasing effectiveness by building and maintaining a direct relationship with the local business community. Historical Trends An Economic Development Officer was added to the department approximately 10 years ago to support the Director. At that time the population of Fort Saskatchewan was 16,146 and there were 459 licenced local businesses. Today, the City s population is 25,533 with over 1000 local businesses and approximately 400 non-resident businesses licensed to date (June 8, 2017). The enclosed chart demonstrates business growth in Fort Saskatchewan in the past 10 years. 1800 Licensed Businesses 2008-2017 1600 1400 1200 608 524 678 490 401 1000 800 600 400 200 459 496 571 634 701 853 892 952 1016 1004 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Local Non Resident *No Data for Non-Resident Businesses from 2008-2012 Comparators Economic Development Department staff levels of the 8 metro areas of the capital region are illustrated in the following chart. The City of Edmonton has been excluded from the list of metro areas as it is difficult to draw a direct comparison between Fort Saskatchewan and Edmonton. Page 8-12
9 Regional Economic Development Departments 7 6 5 4 3 2 2 Staff Level Fort Saskatchewan s current department staff level is comparable to Stony Plain which has a population of 17,189 (2016) and 842 businesses (2015). We would like to bring the total staff level to 3, which would align us with the City of Spruce Grove with a population of 34,006 (2016) and 1700 businesses (2014) Other Department(s) Impact Information Technology People Services Page 8-13
Page 8-14
Economic Development For 2018, Economic Development is proposing revisions to its fees and charges to meet demands for services, reflect market rates and obtain vital data about the City s business community. Revised Fees 1. Business License Fee: Economic Development charges a fee to issue business licences to new and existing businesses. Licences are required for all businesses operating in Fort Saskatchewan, regardless of if they have a physical location within the City or not. Licences are valid for the calendar year and are renewed annually. Resident Business having a physical location within the City. These include home-based businesses. Non-Resident Business Operating within the City but based elsewhere (such as a landscaping company based in Edmonton). Temporary Business A business licenced to operate within the City for a period of no more than 28 days. Economic Development is proposing an increase in the Business License Fees. Renewal: 3.5% for both Resident Business ($3.20 increase) and Non-Resident Business ($11.00 increase). No fee increase is proposed for Temporary Business Licences. 2017 2018 Approved Proposed Resident Business: $ 91.80 $ 95.00 Non-Resident Business: $309.00 $320.00 As licence fees remained stagnant for over 15 years, the department is implementing a gradual increase to reflect inflationary impacts and maintain a low- to mid-range comparability within the province. Fees increased in 2017 by 2% for Resident Business and 3% for Non-Resident Business. These increases are a reflection of provincial ranking. Compared regionally and provincially, the City of Fort Saskatchewan ranks among the lowest fees for resident and non-resident businesses out of 21 comparable municipalities, as shown in the following chart. Page 8-15
2017 Annual Fees Home Based Business Resident Business Non - Resident Business Low End High End Low End High End Low End High End Average Edmonton $ 51.00 $ 172.00 $ 518.00 $ 6,087.00 $ 518.00 $ 743.00 $ 1,348.17 Spruce Grove $ 260.00 $ 260.00 $ 260.00 $ 260.00 $ 425.00 $ 425.00 $ 315.00 Calgary $ 141.00 $ 1,380.00 $ 222.00 $ 1,380.00 $ 909.00 $ 1,212.00 $ 874.00 Cochrane $ 192.00 $ 192.00 $ 192.00 $ 192.00 $ 384.00 $ 384.00 $ 256.00 Lethbridge $ 187.00 $ 267.00 $ 187.00 $ 267.00 $ 774.00 $ 789.00 $ 411.83 Okotoks $ 140.00 $ 140.00 $ 185.00 $ 480.00 $ 350.00 $ 480.00 $ 295.83 Brooks $ 150.00 $ 300.00 $ 150.00 $ 300.00 $ 550.00 $ 1,500.00 $ 491.67 Lloydminster $ 150.00 $ 435.00 $ 150.00 $ 500.00 $ 225.00 $ 360.00 $ 303.33 City of Leduc $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 300.00 $ 300.00 $ 200.00 Camrose $ 150.00 $ 150.00 $ 150.00 $ 150.00 $ 300.00 $ 300.00 $ 200.00 Chestermere $ 50.00 $ 100.00 $ 150.00 $ 150.00 $ 300.00 $ 300.00 $ 175.00 St. Albert $ 140.76 $ 140.76 $ 140.76 $ 140.76 $ 682.38 $ 682.38 $ 321.30 Grande Prairie $ 100.00 $ 3,000.00 $ 100.00 $ 3,000.00 $ 100.00 $ 400.00 $ 1,116.67 Airdrie $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 200.00 $ 200.00 $ 133.33 Fort Saskatchewan 2018* $ 95.00 $ 95.00 $ 95.00 $ 95.00 $ 320.00 $ 320.00 $ 170.00 Beaumont $ 92.70 $ 92.70 $ 92.70 $ 515.00 $ 103.00 $ 515.00 $ 235.18 Medicine Hat $ 81.60 $ 81.60 $ 88.20 $ 4,391.10 $ 727.20 $ 5,194.35 $ 1,760.68 Cold Lake $ 150.00 $ 150.00 $ 75.00 $ 200.00 $ 500.00 $ 500.00 $ 262.50 Red Deer $ 180.00 $ 180.00 $ 60.00 $ 1,095.00 $ 180.00 $ 1,095.00 $ 465.00 Wood Buffalo $ 50.00 $ 50.00 $ 50.00 $ 50.00 $ 200.00 $ 500.00 $ 150.00 Strathcona County N/A N/A N/A N/A N/A N/A N/A Average $ 129.71 $ 406.42 $ 131.92 $ 768.29 $ 399.09 $ 865.40 $ 450.14 *Proposed 2018 Fees $ 268.06 $ 450.10 $ 632.24 The proposed fee increases will maintain the City s low- to mid-range fee position within the province, to encourage businesses to comply with the business licence bylaw and obtain their licence. Ensuring a high rate of compliance is important, as the business licencing program provides Economic Development with vital data that helps to track the overall health and well being of the business community in the City, as well as identify potential opportunities for businesses to expand and grow. Page 8-16 Novemer 7, 2018
City of Fort Saskatchewan Fees and Charges Schedule A Bylaw Cxx-xx Note Description GST Applicable Unit of Measure 2017 * 2018 * * Fees and Charges exclude GST. Where taxable (T), GST is charged at point of sale. Taxable = T Exempt = E Approved Proposed Division: Infrastructure & Planning Department: Economic Development Business License Fees - New: Business License Issued Between: * * Applies to Residential, Non-Residential, Transient Traders / Hawkers and Peddlers - January 1st and March 31st E - April 1st and June 30th E - July 1st and September 30th E - October 1st and December 31st E Business License Fees - Renewal: per license / % of business license renewal fee 100% 100% per license / % of business license renewal fee 75% 75% per license / % of business license renewal fee 50% 50% per license / % of business license renewal fee 25% 25% 1 Resident E per license / per calendar year $ 91.80 $ 95.00 1 Non-Resident E per license / per calendar year $ 309.00 $ 320.00 Temporary Licence E licence / 28 consecutive days $ 100.00 $ 100.00 Note Description Plan Request # 1 Increase fee to adjust for inflation Page 8-17
Page 8-18