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2019-196 - Contract with Chamber of CommerceDate: December 13, 2019 Report No. 2019-196       INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Economic Development Partnership Agreement between City of Denton and Denton Chamber of Commerce EXECUTIVE SUMMARY: The City of Denton and the Denton Chamber of Commerce share responsibilities related to economic development activities through the Economic Development Partnership. Since 1986, the City and Chamber have entered into an agreement that outlines the division of duties and provides for the City to fund the Office of Economic Development at the Chamber. The FY 2019-20 proposed agreement is being considered at the January 7, 2020 City Council meeting, so this Informal Staff Report was drafted to update City Council on the work that has been undertaken to develop that agreement. BACKGROUND: The City Council and the Denton Chamber of Commerce first entered into an economic development partnership agreement in 1986. Through an annual agreement, the City provides General Fund and Utility Funds dollars for the administration and operation budget of the Chamber of Commerce’s Office of Economic Development. The Office of Economic Development has primarily been responsible for:  Prospect generation activities;  Marketing activities, i.e. trade shows, publishing/printing, website(s) administration, marketing materials; and  Small Business Development Center support. In Fiscal Year 2017-18, the agreement between the City and the Chamber was significantly different from prior years’ agreements in that it included specific goals, deliverables, and metrics for the Chamber’s Office of Economic Development, along with enhanced clauses regarding financial reporting, insurance requirements, and indemnity. The FY18-19 agreement followed the same format as the FY 17-18 agreement, but included the addition of shared strategic initiatives, revised and increased goals, and added a new goal to track new contacts at marketing events. It also increased the amount of funds to be raised through private investors. Proposed FY 2019-20 Agreement With new leadership in place at the Chamber and the City, staff from both organizations agreed the FY 2019-20 agreement was an opportunity to review the partnership and develop an agreement that better addressed both sides’ contributions to and expectations of the partnership. Staff researched similarly situated communities to review innovative ideas and best practices, and reviewed the types of indicators and metrics that were being tracked. In addition, the City contracted with TIP Strategies to conduct an review of the proposed contract and provide an independent assessment of the goals, strategies, objectives, and metrics. Date: December 13, 2019 Report No. 2019-196       The proposed agreement represents significant work by both Chamber and City staff to integrate more clear expectations and shared goals, while allowing each organization to positively contribute to a partnership that benefits the Denton community. The most substantial change to the agreement is the development of a work plan that includes specific definitions, shared goals, key activities for each organization, and various reporting mechanisms and metrics. The majority of the changes in the proposed contract are not based on shifting priorities or new goals, but instead were made to focus on the development and fulfillment of commitments by both organizations in order to fully leverage the unique partnership between the City and the Chamber. Because the Economic Development Partnership organizational relationship is being reviewed as part of the ongoing comprehensive economic development strategic plan, the City and Chamber have agreed to a 9-month contract (October 2019 to June 2020) and will bring forward a new agreement, extension, or agreement amendments following the completion of the strategic plan and based on the recommendations and outcome established during the strategic planning process. In addition to the work to review the partnership, recent staff changes in the City’s Economic Development department have also allowed management to review and analyze changing responsibilities at the City level, with an emphasis on refocusing on the core functions of economic development. Staff intends to factor in staff changes at the Chamber and City, and the forthcoming strategic plan, in deciding how to align staff and divide responsibilities in the next few months. The work to review and develop the proposed agreement extended beyond the expiration of the previous agreement (Sept. 30, 2019), however, the proposed agreement was drafted to be effective Oct. 1, 2019. Key components of the proposed agreement include:  A reduction in City funding to cover only 9 months of expenses ($179,127).  Stronger definitions of “marketing” and “recruitment” to ensure that both sides understand the actions to be undertaken and the intent of the work to be performed.  The assignment and clear delineation of responsibilities under key activities to be performed in the marketing and recruitment efforts of the partnership.  More intensive reporting requirements, including quantitative and qualitative reporting, and the commitment from the Chamber and City to meet regularly to review the work plan and agree to changes or updates as necessary.  The inclusion of metrics that better align with the strategic goals of the partnership.  Joint quarterly reviews by the Chamber President and City’s Director of Economic Development of the efforts Chamber staff to execute the work plan and monthly meetings to ensure goals are being met and metrics are tracked. In addition, this allows for open communication and transparency among the Chamber and City staff. Date: December 13, 2019 Report No. 2019-196       ATTACHMENT(S): Exhibit 1 – Draft Agreement Exhibit 2 – TIP Strategies Partnership Review Memo STAFF CONTACT: Jessica Rogers Director of Economic Development (940) 349-7531 Jessica.Rogers@cityofdenton.com REQUESTOR: Staff initiated PARTICIPTAING DEPARTMENTS: Economic Development STAFF TIME TO COMPLETE REPORT: 1 hour 1    ECONOMIC DEVELOPMENT PROGRAM AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON CHAMBER OF COMMERCE This Agreement is made between the City of Denton, Texas, (“City”) and the Denton Chamber of Commerce (“Chamber”) for the purpose of providing for a program to promote economic development through the joint efforts of the parties hereto, who in consideration of the mutual promises, agree as follows: A. Chamber Office of Economic Development (“Office”). During the term of this Agreement, the Chamber shall maintain an Office of Economic Development managed by the Vice President of Economic Development, who shall perform the duties of the office. B. Support Services and Funding. The Chamber shall provide the office space, equipment, and support staff necessary for the operations of the Office. For Fiscal Year 2019-20, the Chamber shall solicit and contribute private sector funds of at least $75,000 (as outlined in the attached 2019-2020 Economic Development Work Plan), and the City shall provide funding in the amount of $179,127. The City shall provide the funding through a one-time lump sum payment before January 17, 2020, which may be funded from the General Fund, Utilities Funds, or some combination thereof. The balance of any unused City funds shall be returned to the City at the end of the City’s fiscal year on September 30, 2020. Any funds provided by the City pursuant to this Agreement shall be retained in an account separate and segregated from the Chamber’s general operating fund and shall only be used for the purpose provided for in this Agreement. The Chamber and the Office shall keep current and accurate records of all funds received and expended, as well as deliverables and metrics specified herein, which shall be subject to inspection and audit by the City at all reasonable times. All such records shall be subject to the Texas Public Information Act, Tex. Gov’t Code Ch. 552. C. Use of City Funds and Scope of Work. As a condition of the receipt of City funds amounting to $179,127, the Chamber hereby agrees to use and expend all funds pursuant to: 1. All applicable federal, state, and local laws; 2. The Chamber’s proposed budget for the Office attached hereto and incorporated by reference as Exhibit A; and 3. The agreed upon scope of work as outlined in the 2019-2020 Economic Development Work Plan, attached hereto and incorporated by reference as Exhibit B. i. The parties agree that the attached 2019-2020 Economic Development Work Plan is a planning tool, and the City and the Chamber reserve the right to revise the 2019-2020 Economic Development Work Plan with written consent of both parties. D. Reporting Requirements. The Chamber shall provide written reports to the City as follows: 1. A copy of the Chamber’s Profit and Loss Budget Performance Statement shall be provided to the City’s Director of Economic Development quarterly for the periods ending December 31, 2019; March 31, 2020; and June 30, 2020; 2    2. A copy of the Chamber’s annual audited financial reports within 6 months of the end of the Chamber’s fiscal year shall be provided to the City’s Director of Economic Development; 3. A copy of the Chamber’s most recent annual Form 990 shall be provided to the City’s Director of Economic Development; 4. A monthly progress report that includes information, status, and updates on the goals, metrics, key activities, and deliverables as established in the 2019-2020 Economic Development Work Plan shall be provided to the City’s Director of Economic Development; 5. A mid-year report, covering the period of October 1, 2019 to March 31, 2020, that includes information, status, and updates on the goals, metrics, key activities, and deliverables as established in the 2019-2020 Economic Development Work Plan shall be provided to the City Council by April 30, 2020; and 6. A comprehensive annual report that includes information, status, and updates on the goals, metrics, key activities, and deliverables as established in the 2019-2020 Economic Development Work Plan shall be provided to the City Council by November 31, 2020. E. Quarterly Reviews. The City and the Chamber will conduct joint quarterly reviews of the efforts of Chamber staff to execute on the 2019-2020 Economic Development Work Plan. The reviews will include, but are not limited to: 1. Discussion and evaluation of the previous quarter’s monthly reports; 2. Discussion and evaluation of the status of any and all major recruitments or ongoing projects; 3. Discussion and evaluation of any resources or assistance needed from the City to achieve the shared goals outlined in the 2019-2020 Economic Development Work Plan; and 4. Discussion and evaluation of the metrics and targets outlined in the 2019-2020 Economic Development Work Plan. F. Monthly Meetings. The City and the Chamber will conduct monthly staff meetings to review the implementation of Work Plan, ongoing projects, and any projects associated with the City’s Economic Development Strategic Plan or any action plans. These meetings may include the City Manager, Chief Financial Officer, Director of Economic Development, Chamber President, Vice President of Economic Development, and any City Economic Development department staff. G. Independent Status of Office. The Office shall be under the direct supervision and control of the Chamber and all personnel of the Office shall be considered employees or agents of the Chamber and not of the City. The Chamber shall be responsible for the processing of all benefits or payment liabilities of such employees or agents, including the withholding or payment of personal income or social security taxes, as provided by applicable law, and the payment of worker’s compensation premiums. H. Insurance. The Chamber shall maintain policies of insurance for the duration of the Agreement, as outlined in Attachment A, to protect against liability arising from the operation 3    of the Office. The Chamber must provide a copy of the Certificate of Insurance showing the City added as an insured within a reasonable time of execution of this Agreement and each time there is a change in coverage or carrier, a copy must be provided to the City of Denton’s Director of Economic Development. I. INDEMNITY. THE CHAMBER AGREES TO DEFEND, INDEMNIFY, AND HOLD HARMLESS THE CITY, ITS ELECTED OFFICIALS, OFFICERS, AGENTS, EMPLOYEES, AND REPRESENTATIVES FROM ANY AND ALL CLAIMS, SUITS, OR LIABILITIES ARISING FROM OR RELATED TO ANY ACT OR OMISSION OF THE CHAMBER, ITS OFFICERS, DIRECTORS, OFFICIALS, EMPLOYEES, OR REPRESENTATIVES IN THE PERFORMANCE OF THIS AGREEMENT. THIS INCLUDES PROPERTY DAMAGE, PERSONAL INJURY OR DEATH AND ALSO COVERS COSTS OF SUIT AND ATTORNEYS FEES. J. Term of Agreement. This Agreement shall be effective from October 1, 2019, through June 30, 2020. K. Termination. Either party may terminate this Agreement by giving written notice to the other party thirty (30) days in advance of the termination date, in which case any unexpended funds provided by the City shall be returned to the City within fifteen (15) days from the date the written notice is mailed to the Chamber. If the Chamber fails to meet the deliverables or metrics required under this Agreement, and it results in termination of the Agreement by the City, then the Chamber will not be eligible for any future funding from the City for a one (1) year period. L. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes any previous agreements, oral or written. This Agreement may only be modified by the subsequent mutual written agreement executed by the City and the Chamber. M. Waiver. Any waiver by the City of any provision or condition of this Agreement shall not be construed to be a waiver of any other provisions or conditions of this Agreement. N. Governing Law. This Agreement shall be governed by the laws of the State of Texas. The City expressly does not waive any defenses to any claims of any sort by virtue of this Agreement, including its Sovereign Immunity, and states that this is an economic incentive only and not subject to the provisions of Chapter 271 Tex. Loc. Gov’t Code, Subchapter I. O. Severability. Should any provision of this Agreement be adjudged illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall not affect the legality, validity of enforceability of the Agreement as a whole or any sections, subsections, sentences, or clauses herein. 4    EXECUTED this the _______________ day of ________________, 2020. CITY OF DENTON ______________________________ CHRIS WATTS, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY BY: _________________________________ THIS AGREEMENT HAS BEEN BOTH REVIEWED AND APPROVED As to financial and operational Obligations and business terms. ____________________________  Signature ____________________________  Title ____________________________  Department Date Signed:__________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: ___________________________________ 5    DENTON CHAMBER OF COMMERCE By:______________________________ Its: ______________________________ 6    Attachment A INSURANCE REQUIREMENTS STANDARD PROVISIONS: Without limiting any of the other obligations or liabilities of the Chamber, the Chamber shall provide and maintain until the agreement has been terminated, the minimum insurance coverage as indicated hereinafter. All insurance policies proposed or obtained in satisfaction of these requirements shall comply with the following general specifications, and shall be maintained in compliance with these general specifications throughout the duration of the Contract, or longer, if so noted:  Each policy shall be issued by a company authorized to do business in the State of Texas with an A.M. Best Company rating of at least A or better.  Any deductibles or self-insured retentions shall be declared in the proposal. If requested by the City, the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its officials, agents, employees and volunteers; or, the Chamber shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.  Liability policies shall be endorsed to provide the following: o Name as Additional Insured the City of Denton, its Officials, Agents, Employees and volunteers. o That such insurance is primary to any other insurance available to the Additional Insured with respect to claims covered under the policy and that this insurance applies separately to each insured against whom claim is made or suit is brought. The inclusion of more than one insured shall not operate to increase the insurer's limit of liability. o Provide a Waiver of Subrogation in favor of the City of Denton, its officials, agents, employees, and volunteers.  Cancellation: City requires 30 day written notice should any of the policies described on the certificate be cancelled or materially changed before the expiration date.  Should any of the required insurance be provided under a claims made form, Chamber shall maintain such coverage continuously throughout the term of this contract and, without lapse, for a period of three years beyond the contract expiration, such that occurrences arising during the contract term which give rise to claims made after expiration of the contract shall be covered.  Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit providing for claims investigation or legal defense costs to 7    be included in the general annual aggregate limit, the Chamber shall either double the occurrence limits or obtain Owners and Chambers Protective Liability Insurance.  Should any required insurance lapse during the contract term, requests for payments originating after such lapse shall not be processed until the City receives satisfactory evidence of reinstated coverage as required by this contract, effective as of the lapse date. If insurance is not reinstated, City may, at its sole option, terminate this agreement effective on the date of the lapse. SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS: All insurance policies proposed or obtained in satisfaction of this Contract shall additionally comply with the following marked specifications, and shall be maintained in compliance with these additional specifications throughout the duration of the Contract, or longer, if so noted: [X] A. General Liability Insurance: General Liability insurance with combined single limits of not less than $1,000,000.00 shall be provided and maintained by the Chamber. The policy shall be written on an occurrence basis either in a single policy or in a combination of underlying and umbrella or excess policies. If the Commercial General Liability form (ISO Form CG 0001 current edition) is used:  Coverage A shall include premises, operations, products, and completed operations, independent contractors, contractual liability covering this contract and broad form property damage coverage.  Coverage B shall include personal injury.  Coverage C, medical payments, is not required. If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition and ISO Form GL 0404) is used, it shall include at least:  Bodily injury and Property Damage Liability for premises, operations, products and completed operations, independent contractors and property damage resulting from explosion, collapse or underground (XCU) exposures.  Broad form contractual liability (preferably by endorsement) covering this contract, personal injury liability and broad form property damage liability. [X] Automobile Liability Insurance: Chamber shall provide Commercial Automobile Liability insurance with Combined Single Limits (CSL) of not less than $500,000 either in a single policy or in a combination of basic 8    and umbrella or excess policies. The policy will include bodily injury and property damage liability arising out of the operation, maintenance and use of all automobiles and mobile equipment used in conjunction with this contract. Satisfaction of the above requirement shall be in the form of a policy endorsement for:  any auto, or  all owned, hired, and non-owned autos. 9   EXHIBIT “A” 10    EXHIBIT “B” 2019-2020 ECONOMIC DEVELOPMENT WORK PLAN A. MARKETING 1. Definition. For the purposes of this work plan, Marketing shall mean the proactive and effective promotion of the city of Denton to prospective and current businesses as a place that is attractive to businesses and their workforce. Marketing shall include the use of traditional and non-traditional advertising, connections, and relationships to inform businesses, site selectors, brokers, or other stakeholders about opportunities to locate, relocate, or expand their business in Denton. 2. Goals. The City and the Chamber have the following goals for Marketing in 2019-2020: a. Continue development and promotion of a Denton brand that enhances business recruitment, retention, and expansion and workforce development activities. b. Align marketing expenditures and strategies to focus on targeted business sectors (defined in Section B.2.a of this Work Plan). c. Research and use various methods of marketing and advertising and use industry- specific technologies to communicate effectively with targeted audiences and stakeholders. d. Communicate to stakeholders that Denton is an attractive place to live and work. e. Establish new contacts at marketing events that further Denton’s efforts to attract businesses in targeted sectors. 3. Key Activities. The Chamber will: a. Prepare and submit a marketing plan that outlines: i. Planned marketing trips and how they achieve the shared goals. ii. Strategies and timelines for print and digital ad buys. iii. Schedule for updates to Economic Development Partnership website. b. Operate and maintain the Economic Development Partnership website (www.dentonedp.com). c. Operate and maintain any social media accounts necessary to reach and engage with targeted audiences and stakeholders. d. Update and distribute annually both print and digital marketing materials in cooperation with the City. e. Connect with brokers, site selectors, or other stakeholders that work with or in the targeted sectors. 11    The City will: a. Provide direction and feedback on the Chamber’s marketing plan to assist in ensuring marketing plan meets shared goals. b. Assist and provide content and information to update the Economic Development Partnership website. c. When appropriate, provide content for posting to Economic Development Partnership social media accounts. d. Assist with the preparation of print and digital marketing materials. e. Be available to meet with Chamber staff to review strategies, materials, or information to assist the Chamber in meeting the marketing goals. The Chamber’s obligation to perform the requirements of the Agreement are not contingent on the City performing any responsibilities outlined in this work plan. 4. Metrics a. Audience reach and ROI of any print or digital ad purchase. i. Target: Reporting metric only. No target needed. b. Percent breakdown of marketing dollars by targeted sectors. i. Target: Reporting metric only. No target needed. c. Number of leads generated from marketing trips. i. For the purpose of this section, lead shall be defined as a connection with a business or representative of a business that is actively seeking to expand or locate a facility. ii. Target: 10. d. Percentage of leads generated from marketing trips with business prospects in the targeted sectors. i. Target: 50%. e. Number of new contacts made on marketing trips that are associated with the targeted sectors. i. For the purpose of this section, new contacts shall be defined as a connection with a broker, site selector, or business prospect or representative of which the City or Chamber has not worked with on a project for the last 120 days, is not a representative of a business that is currently located in the City of Denton, and is not a broker, site selector, or business that has been listed as a connection in the past 120 days. ii. Target: 1 new targeted sector contact per marketing trip. 5. Reporting. a. As part of the monthly progress report, the Chamber will provide: i. Updated information on progress related to the metrics described in Section A.4 of this Work Plan. 12    ii. A narrative report of the outcome and benefits of any marketing trips taken during the previous month. iii. A narrative report of the benefits of any print or digital ads published in the previous month. b. As part of the mid-year and comprehensive annual report, the Chamber will provide: i. A comprehensive report on the total return on investment and audience reach of print and digital ad buys, including any contacts or leads generated from those ads. ii. A comprehensive report of the outcome and benefits of all marketing trips taken during the reporting period being covered in the report. iii. A detailed list of any inquiries, leads, prospects, proposals, and site visits and to which marketing trip they related. B. RECRUITMENT 1. Definition. For the purposes of this work plan, Recruitment shall mean the proactive pursuit of business with the intent to locate or relocate in the City of Denton and the response to requests for information or leads originating from sources other than the Texas Governor’s Office of Economic Development and the Dallas Regional Chamber. 2. Goals. The City and the Chamber have the following goals for Recruitment in 2019- 2020: a. Recruit prospective companies in Denton’s target industry sectors of: i. aviation/aerospace, ii. advanced manufacturing, iii. renewable energy, iv. research and development, v. information technology, vi. supply chain for existing primary employers, and vii. significant consumers of municipal utilities by attending target industry trade shows, consultant’s forums, and select conventions/business meetings/special events and responding to leads or requests from information. b. Generate new avenues for prospect development, including proactive outreach strategies to business prospects, site selectors, brokers, or other stakeholders. 3. Key Activities. The Chamber will: a. Connect with brokers, site selectors, or other stakeholders that work with or in the targeted sectors. b. Maintain access to a database of available sites and properties in Denton. 13    c. Maintain relationships with local brokers and solicit feedback on the best ways to promote their properties to leads and business prospects. d. Respond to leads originating from sources other than the Texas Governor’s Office of Economic Development and the Dallas Regional Chamber and from any planned recruiting or marketing trips or established relationships with brokers or site selectors. The City will: a. Connect with brokers, site selectors, or other stakeholders that work with or in the targeted sectors. b. Maintain relationships with local brokers and solicit feedback on the best ways to promote their properties to leads and business prospects. c. Respond to leads originating from the Texas Governor’s Office of Economic Development, the Dallas Regional Chamber, and those contacting the City directly. d. Assist the Chamber as needed to provide any City-related or incentive information requested by a lead, site selector, broker, or other stakeholder. The Chamber’s obligation to perform the requirements of the Agreement are not contingent on the City performing any responsibilities outlined in this work plan. 4. Metrics. a. The number of requests for information and/or leads received and responded to. i. Reporting Metric: 60 leads/RFIs received. ii. Reporting Metric: 90% leads/RFIs responded to. b. The number of requests for information and/or leads responded to in the targeted sectors. i. Target: 100% of qualified leads/RFIs. c. The number of site visits resulting from any marketing or recruitment activities. i. Target: 10. d. The number of site visits from companies in the targeted sectors. i. Target: 1 site visit from a company in every targeted sector. 5. Reporting. a. As part of the monthly progress report, the Chamber will provide: i. Updated information on progress related to the metrics described in Section B.4 of this Work Plan. ii. A list of all leads and requests for information received by the Chamber in the previous month and including the following information: 1. Source of lead (including the name/contact information of the company, site selector, broker, or developer); 2. Company type; 14    3. If in a targeted sector, indicate which targeted sector the company is in; 4. Project name; 5. Site needs; 6. Capital investment; 7. Jobs to be created; 8. Whether a proposal was submitted; 9. Conversion of proposals into further requests for information or site visits; iii. A summary report and a list of all site visits from the previous month, including the company type. 1. If the company is in a targeted sector, the report should indicate which targeted sector the company is in. b. As part of the mid-year and comprehensive annual report, the Chamber will provide: i. A comprehensive report on the outcome and progress of all leads, requests for information, and site visits. c. If established during the term of this contract, the Chamber will use a consolidated lead tracking system in coordination with City staff. C. PRIVATE INVESTMENT 1. Definition. For the purpose of this work plan, Investment shall mean the dollars paid by organizations or individuals to the Denton Economic Development Partnership to support the Partnership’s mission. Investment dollars shall not include public dollars provided as part of this Agreement. 2. Goals. The City and the Chamber have the following goals for Investment in 2019-2020: a. Pursue investment dollars to further support and enhance the ability of the Chamber to carry out activities outlined in this work plan. b. Increase the percent of the Chamber’s Office of Economic Development funding that is provided by private investors. 3. Key Activities. The Chamber will: a. Develop an actionable strategy that demonstrates value and return to organizations and businesses that invest in the Chamber. b. Maintain the Investor Relations Committee to recruit new investors and retain existing investors. 4. Metrics. a. The number of new investors. i. Target: 2. b. The number of returning investors. 15    i. Target: 90%. c. The dollars of private investment raised. i. Target: $75,000. d. The percentage of total operating expenditures for the Chamber Office of Economic Development funded through private investment. i. Target: 25% of $300,000 total operating expenditures. 5. Reporting. a. As part of the monthly progress report, the Chamber will provide: i. A summary report of any investment related activities, including details of activities of the Investment Committee and any Investor events held. ii. A list of any new investors recruited or existing investors retained in the previous month. b. As part of the mid-year and comprehensive annual report, the Chamber will provide: i. The total amount of private investment dollars raised to date. ii. A list of all investors, including whether the investor is new or a retained investor. iii. A summary report of how the private investment funds were spent and the outcome and benefit of those expenditures, including to what goals outlined in the Work Plan that the expenditures relate to. WWW.TIPSTRATEGIES.COM ● 2905 SAN GABRIEL ST, STE 309, AUSTIN, TX 78705 ● 512-343-9113 PAGE | 1 MEMORANDUM DATE: October 10, 2019 TO: Jessica Rogers FROM: Tom Stellman and Jaclyn Le RE: Review of contract between City of Denton and Denton Chamber of Commerce BACKGROUND Partnerships between cities and their chambers of commerce can be important to economic development efforts across different communities. By partnering, cities and chambers can leverage unique assets, incentives, and connections to attract businesses, improve quality of place, and transform cities into thriving communities. Denton, like many other cities, relies on a partnership agreement between its city government and its chamber to jointly generate and promote economic development. The working relationship between the City and Chamber spans many years. Periodic reviews of the partnership are a necessary practice to ensure both parties continue to benefit from the agreement and to maximize effectiveness in achieving joint goals for economic development in Denton. The purpose of this memo is to review both the existing and the draft partnership agreements between the City and Chamber. The focus of this review is to ensure the 2019-2020 agreement is structured in accordance with best practices in work plans; however, the agreement and metrics could change in the future, as these elements will be directly influenced by the forthcoming strategic plan. METHODOLOGY FOR REVIEW TIP Strategies has worked with a range of clients to develop innovative, publicly supported economic development strategies. Our team members have produced numerous strategic economic assessments, economic base analyses, workforce analyses, and target sector analyses, all with input from clients, stakeholders, community leaders, business owners, and residents. We have worked in several communities with economic development partnership agreements between cities and chambers of commerce. Our experience in guiding cities and chambers to jointly promote economic development goals informs our review of Denton’s existing partnership agreement. In addition, we had conversations with both City and Chamber staff to gather their insights on the evolution of the partnership and their input on the existing agreement. We conducted a review of City and Chamber documents, including:  The 2018-2019 contract between the City and Chamber  A City presentation from September 2018 about the partnership agreement MEMORANDUM TIP STRATEGIES PAGE | 2  The City’s Economic Development Director’s assessment of the 2018-2019 contract  A sample activity and metric report from the Chamber for August 2019  An audit of economic development from the City Auditor’s Office from September 2019  The 2019-2020 draft partnership agreement between the City and Chamber We also compared Denton’s partnership agreement to similar agreements between cities and chambers in Irving, New Braunfels, and Abilene, Texas. We reviewed the core purposes, parties involved, metrics, and reporting requirements across partnership agreements in these three communities. The diversity across these communities and the longstanding partnerships between their cities and chambers provide an important comparison against which we can evaluate Denton’s existing partnership agreement. Our review of partnership agreements, coupled with our economic development expertise, informed our observations and recommendations stated in this memo. TAKEAWAYS FROM SIMILAR CITY-CHAMBER PARTNERSHIPS Partnerships between cities and chambers of commerce are a common way in which cities carry out economic development activities. Agreements can vary in several ways, ranging from scope of agreement, to funding levels, to length of contract. We analyzed agreements across the three communities stated above and considered best practices from client communities across the country. We then compared our findings with Denton’s partnership agreement. Our review of city-chamber partnerships like Denton’s found a few important takeaways that can inform the structure of Denton’s partnership agreement, both in the short term and in the future. • CORE ECONOMIC DEVELOPMENT ACTIVITIES SHARED ACROSS COMMUNITIES. While communities may differ in program specifics, most utilize partnership agreements between cities and chambers to deliver common marketing, recruitment, and retention activities. Most city-chamber partnerships focus on a core set of economic development activities and services, such as implementing marketing plans, hosting prospecting tours and visits, and providing support to small businesses. Denton’s partnership agreement is like those of the comparison communities in its core purpose and the key activities for which the Chamber is responsible. • PERIODIC REPORTING AND REVIEWS BETWEEN CITIES AND CHAMBERS. Given the funding relationship between cities and chambers, it is no surprise that most contracts require periodic reporting from chambers to cities about progress made toward partnership goals, including leads generated, site visits conducted, and jobs created. The frequency with which reports and presentations are delivered varies from every quarter to once a year; however, reports from the chambers are typically paired with meetings with city leadership and/or presentations to city council members about progress made toward economic development goals. • SPECIFIC, GOAL-ALIGNED TARGETS AND METRICS. Though the number of metrics tracked in city- chamber partnerships varies, best practice indicates that metrics and targets can be more meaningful and measurable when they are specific and goal-aligned. Some communities choose to have only a few metrics focused on the outcomes that matter most to them, such as per capita income, number of new employers, and number of new jobs each year. Others track a longer list of performance measures but indicate how each measure aligns to a goal. For example, tracking the number of site visits made to existing employers is in service of a broader strategy to demonstrate appreciation for existing businesses and to increase the likelihood of MEMORANDUM TIP STRATEGIES PAGE | 3 retention from year to year. Communities with strong city-chamber partnerships choose metrics that directly relate to broader strategies and goals so that each tracked metric feeds their understanding of progress made and improvements needed. OBSERVATIONS OF DENTON’S PARTNERSHIP AGREEMENT Overall, the changes made to the partnership agreement by the City and Chamber for 2019-2020 show a marked improvement over the contract from the previous year. Though the focus of the partnership may change after a comprehensive strategic planning process, this contract, with a few adjustments outlined in the next section, will be sufficient for guiding the work of the City and Chamber over the next year. Our observations of the most substantial changes made between the 2018-2019 and proposed 2019-2020 contract include: • QUARTERLY REVIEWS BETWEEN THE CITY AND CHAMBER. Implementing quarterly reviews between the City and the Chamber to discuss and evaluate the agreed upon work plan is a positive development in the partnership agreement. Periodic reviews focused on evaluating progress toward shared goals and identifying course corrections as needed can facilitate more effective collaboration and smooth project management between the City and Chamber. Best practices among other communities include periodic reviews that bring together staff and leadership from the City and Chamber to track metrics, evaluate progress, and discuss significant economic development activities. The addition of quarterly reviews to the agreement between the City and the Chamber should not be about only shared accountability for the work plan but also about more effective communication and coordination across both parties. • EXPANDED FOCUS ON RETENTION, EXPANSION, AND WORKFORCE DEVELOPMENT. Creating a task force to facilitate partnerships with community partners can be an important way to convene and align a broad group of stakeholders around common economic development goals. The proposed list of organizations and industries in Section C.3 of the agreement includes broad, cross-sector representation across the public sector, education and workforce organizations, and targeted sectors. As the Chamber kicks off the task force, it is important to be clear about the purpose and goal of the partnership. The more specific the City and Chamber are in defining their intention for convening the task force, the more likely it is that the task force can identify shared goals and define a work plan and metrics to accomplish those goals. Language in the draft agreement is vague about the purpose of the task force and can be improved by adding more specific details about what kinds of issues the task force will be expected to take on (e.g., workforce development, attracting new employers to the region, retaining existing businesses, etc.). Identifying a narrower focus and set of activities for the task force may better engage members and increase the effectiveness across collaborative activities. • MORE TARGETED METRICS FOCUSED ON CORE ACTIVITIES. The proposed metrics in the draft 2019- 2020 agreement are better aligned with the marketing, recruitment, and retention goals and activities outlined in A through C of the work plan than the metrics used in the 2018-2019 contract. Best practices in tracking and reporting metrics across city-chamber partnerships indicate that metrics defined in the contract should be clear, concise, and aligned to strategies and/or goals. Though the metrics could be streamlined even further, the proposed metrics for 2019-2020 are better aligned to desired outcomes, such as recruitment of prospective companies in Denton’s seven target industry sectors (outlined in Section B.2). Focused metrics, such as marketing dollars spent, leads generated, and request for information (RFIs) received in targeted sectors, keep the work plan and reporting better aligned to overall City and Chamber goals. MEMORANDUM TIP STRATEGIES PAGE | 4 RECOMMENDATIONS FOR FURTHER IMPROVEMENTS The City and Chamber have made significant progress in refining the partnership agreement for 2019-2020. Though the focus of the partnership and contract may change after the strategic planning process, the proposed agreement is a suitable contract between the City and the Chamber for the next year. In addition, there are several ways in which the partnership agreement can be strengthened in the short term. 1. ALIGNMENT BETWEEN REPORTING REQUIREMENTS AND QUARTERLY REVIEWS. Our review of similar partnership agreements in other communities indicates that the frequency of reporting requirements varies from quarterly to annually; however, the delivery of reports typically aligns with a meeting to review progress toward goals or a presentation to city council members. Aligning reporting with work plan reviews between the City and the Chamber streamlines requirements and ensures both parties have a chance to review and discuss the information provided in each report to the City. While the 2019-2020 agreement includes quarterly reviews of the work plan, reports from the Chamber are still required on a monthly basis. We recommend shifting the frequency of reports from monthly to quarterly, which will also align with the quarterly reviews between the City and Chamber. This will both streamline reporting requirements in alignment with best practices and will ensure an opportunity exists to discuss each report in greater depth during the quarterly review meetings. 2. CREATING A PROJECT-LEVEL COMMITTEE FOCUSED ON LEAD GENERATION AND SUPPORT. Based on our experience working with other cities on economic development efforts, we find that project-level committees with representatives from both cities and chambers are better able to coordinate activities to generate leads and to respond to those leads and to RFIs. This committee is responsible for executing and overseeing business recruitment, retention, and expansion strategies. While quarterly reviews of the work plan focus on the progress toward the overall goals of the partnership between the City and Chamber, a project-level committee can help staff from both organizations better communicate and collaborate with one another and with other economic development efforts in the region and the state. As implemented in other communities, a monthly project-level meeting between project managers and other staff allows for more seamless coordination on joint activities and smoother cultivation of leads and relationships with target industry businesses. 3. TRACKING BROADER SOCIAL AND ECONOMIC INDICATORS. The forthcoming strategic planning process may generate other metrics and indicators that should be tracked through the partnership between the City and Chamber. While we do not know exactly what those additional metrics will be, we recommend considering a few broader social and economic indicators to better understand the economic health and vitality of Denton. Innovative cities often look beyond traditional business retention and expansion metrics to other indicators that tell a story about the overall economic health and quality of place in their city. The City-Chamber partnership may have an indirect influence over some of these broader indicators, but we believe tracking these metrics can be helpful to the work of the partnership, to other economic development stakeholders, and to the broader community. To the extent possible, we recommend considering adding some or all the following metrics to the 2019-2020 work plan. a. Educational attainment levels among residents (i.e., percentage with only a high school diploma/GED, some college but no degree, associate degrees, bachelor’s degrees, and graduate degrees) MEMORANDUM TIP STRATEGIES PAGE | 5 b. Postsecondary enrollment and completion rates among Denton ISD graduates c. Opportunity youth (ages of 16 and 24 who are neither in school nor working) d. Unemployment rate e. Poverty rate f. Median household income among residents g. Percentage of residents employed in high-wage occupations h. Access to diverse transportation options i. Percentage of residents without access to broadband internet CONCLUDING THOUGHTS In the short term, the City and Chamber can strengthen their existing partnership by aligning reporting and review requirements, creating a project-level committee focused on lead generation and support, and adding broader social and economic indicators to the agreement. With the adjustments suggested, the partnership agreement between the City and Chamber will provide solid guidance for shared economic development efforts over the next year. We anticipate the forthcoming 6-month strategic planning process will identify different goals, strategies, and metrics that could influence the partnership agreement in future years.