DEPARTMENT: Economic Development
DEPARTMENT HEAD: Rene Dominguez
COUNCIL DISTRICTS IMPACTED: City-wide
SUBJECT:
Approval of consulting agreement with Economic & Planning Systems, Inc. (EPS)
SUMMARY:
An Ordinance approving an agreement for up to $100,000 with Economic & Planning Systems, Inc. (EPS) for development of an Inclusive Growth Framework within the 2019-2020 Tax Abatement Guidelines.
BACKGROUND INFORMATION:
The mission of the City of San Antonio’s Economic Development Department (EDD) is to support continuous improvement towards a highly competitive, diverse and sustainable economy that supports prosperity and increases the quality of life for all residents.
Overall, San Antonio’s local economy has been resilient and strong - a key driver in the surging population and economic growth that has garnered attention from business publications such as Forbes and national think tanks such as the Kauffman Foundation, Brookings, Pew, and the Milken Institute. San Antonio’s local unemployment has dropped to record lows in recent quarters, and the City weathered the most recent economic recession with less dramatic shifts in local unemployment than experienced in other American cities. The City has also exceeded its goals for job creation in targeted industries, based on those set by the community visioning process SA2020.
While the City has created opportunities and supported an attractive environment for business formation, relocation, and expansion, city-wide educational attainment rates and wage levels remain below state and national averages. Additionally, when elements such as unemployment are disaggregated along lines of geography, race, and educational attainment, the seemingly broad pathway to prosperity appears to narrow for large portions of San Antonio’s population. According to the Economic Innovation Group’s 2017 Distressed Communities Index (DCI), Bexar County had an estimated 412,000 people or 22.6% of its population living in distressed zip codes.
The City recognizes distressed communities as a cause for concern based on the unrealized potential of a large portion of the San Antonio workforce and the implications for San Antonio’s long-term economic competitiveness. San Antonio’s ability to adapt and actively connect residents in distressed communities to jobs through training opportunities, proximity to the project, transportation, and supported career pathways will determine our city’s future economic competitiveness and success.
In August 2016, City Council adopted the SA Tomorrow Comprehensive Plan as San Antonio’s 25-year framework guiding future growth and development. The plan addresses a range of policy areas that affect how San Antonio will prepare for the expected growth of approximately one million residents, 500,000 new jobs, and 500,000 new households.
On April 3, 2018, EDD presented an Inclusive Growth Strategy development approach that called for the 3-5 year development of integrated programming in conjunction with the SA Tomorrow Sub Area Plans. The Economic and Workforce Development Council Committee endorsed EDD’s recommendation to issue a request for proposals (RFP) to research, develop, and present best practice policies for Tax Abatement Guidelines. The Guidelines will serve as a first step in the development of an Inclusive Growth strategy to connect people, project, and place as a common priority. This will inform an Inclusive Growth strategy development process beginning with economic development projects. The RFP will also inform a series of community conversations with stakeholders to provide a national perspective and secure local input and experience.
EDD is seeking best practices and policy recommendations to incorporate inclusive growth strategies into transactional economic development job creation projects through the industry recruitment and retention processes. EDD is focusing initial framework discussions on the Tax Abatement policy because by State law these policies must be adopted every two years. The Tax Abatement Guidelines have traditionally shaped the overall strategic and policy goals of other tools and incentives within the department. They have also been the subject of on-going discussion with private sector and community stakeholders.
The City is seeking frameworks to both clearly articulate where and to what degree economic development incentives, infrastructure, and workforce development investments are applied to advance San Antonio’s near term competitiveness and support its long-term sustainability through inclusive growth. In short, how do we effectively connect people, place, and projects to support San Antonio’s long-term economic goals?
ISSUE:
On April 13, 2018, EDD released a RFP seeking best practices and policy recommendations regarding how an inclusive growth strategy can be advanced through job/investment creation projects developed through the industry recruitment and retention processes that have requested incentives as a condition to locate, remain, or expand in San Antonio.
The RFP was advertised in the San Antonio Express-News, TVSA channel, City’s website, SAePS e-Procurement portal, and distributed by email to a list of potential Respondents identified by EDD. Responses were due May 11, 2018, and a total of four (4) firms responded to the RFP for consideration.
A panel consisting of representatives from EDD, Planning, Neighborhood and Housing Services Department, the Center City Development and Operations Department, the SABER Institute, Project Quest, and the San Antonio Economic Development Foundation (SAEDF) were engaged to review and score all RFP responses. After all discussions and scoring were completed by City staff and the evaluation committee, the highest ranked firm, Economic & Planning Systems, Inc., was selected for award recommendation. The recommendation was based on the following scoring criteria; Experience, Background and Qualifications (35 points), Proposed Plan (40 points), the Small Business Enterprise (SBE) Prime Contract Program (5 points), the Minority/Women-Owned Business Enterprise (M/WBE) Prime Contract Program (5 points), the Local Preference Program (10 points) and the Veteran-Owned Small Business Preference Program (5 points).
This contract will be awarded in compliance with the Small Business Economic Development Advocacy (SBEDA) Program, which requires contracts be reviewed by a Goal Setting Committee to establish a requirement and/or incentive unique to the particular contract in an effort to maximize the amount of small, minority, and women-owned business participation on the contract. The Goal Setting Committee applied the SBE and the M/WBE Prime Contract Programs with five (5) evaluation preference points for each program, respectively. Economic & Planning Systems, Inc. was not awarded these points, as the firm is not located within the San Antonio Metropolitan Statistical Area.
There were no proposals submitted from local Respondents for this contract; therefore, the Local Preference Program was not applied. There were no proposals submitted from veteran-owned small business Respondents for this contract; therefore, the Veteran-Owned Small Business Preference Program was not applied.
The consultant will assist EDD develop recommendations to the 2019-2020 Tax Abatement Guidelines by supporting three segments of work and related community outreach:
1. National Best Practices: Identify national best practices in the use of economic development incentives and workforce development investment to secure new jobs and investment while supporting balanced growth through targeted geographies under an inclusive growth strategy.
2. Impact to Competitiveness: Identify and project the positive or negative impact of utilizing economic development incentives as the tool for an inclusive growth strategy to overall job growth and community competitiveness in a site selection process.
3. Tax Abatement Policy Recommendations: Make recommendations for updates to the City of San Antonio’s Tax Abatement Policy and other tools in response to findings and next steps in increasing the impact of the inclusive growth strategy.
Each segment will include community feedback with a variety of stakeholders such as the local Chambers, SAEDF, COPS/METRO, the Real Estate Council of San Antonio, and Southside First. Final policy recommendations will be presented to the Economic and Workforce Development Committee for feedback and policy congruence in the fall and to full City Council in December.
ALTERNATIVES:
City Council could reject a contract with Economic & Planning Systems, Inc. (EPS) which would extend the completion of needed quantitative research and qualitative analysis in the development of an Inclusive Growth Framework and Strategy.
FISCAL IMPACT:
Funding in the amount of $100,000 is available in the Economic Development Incentive Fund FY 2018 Budget.
RECOMMENDATION:
Staff recommends approval of a contract with Economic & Planning Systems, Inc. (EPS) of up to $100,000 to begin work on an Inclusive Growth Framework in partnership with Economic Development Department. This contract is procured by means of Request for Proposals. The Contract Disclosure Form is attached.