Fundamentals of Economic Development 3.0 Speaker Biographies and Presentation Materials

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1 Fundamentals of Economic Development 3.0 Speaker Biographies and Presentation Materials Monday, September 11, 2017 The Student Union, Ballroom A University of Nevada, Las Vegas Main Campus Las Vegas, Nevada University Center for Economic Development Nevada Leadership Program

2 The University of Nevada, Reno, the University of Nevada, Reno College of Business, and the University Center for Economic Development would like to thank the Nevada Governor s Office of Economic Development and the Las Vegas Global Economic Alliance for their generous support of this leadership development program and the Nevada Leadership Program. For more information about the Nevada Governor s Office of Economic Development, please visit their website at: For more information about the Las Vegas Global Economic Alliance, please visit their website at:

3 The University of Nevada, Reno, the University of Nevada, Reno College of Business, and the University Center for Economic Development would like to thank the Nevada Chapter of the American Planning Association for their generous support of this leadership development program and the Nevada Leadership Program. For more information about the Nevada Chapter of the American Planning Association, including information about how to join, please visit their website:

4 Speaker Biographies Thomas Harris, PhD Dr. Thomas R. Harris is a Foundation Professor in the Department of Economics in the College of Business; State Extension Specialists in Community and Economic Development in University of Nevada Cooperative Extension; and the Director of the University Center for Economic Development at the University of Nevada, Reno. Dr. Harris primary areas of teaching, research and extension are rural economic development, economic impact modeling, and feasibility studies. Frederick Steinmann, DPPD Frederick Steinmann currently works for the University of Nevada, Reno and the University Center for Economic Development. He began his professional economic development career with the Reno Redevelopment Agency in the City of Reno, Nevada. Since then, he has worked for the Nevada Small Business Development Center, Bureau of Business and Economic Research, and for the Carson Economic Development Services Department in the City of Carson, California. Frederick has also worked as a Senior Associate for David Paul Rosen & Associates, one of the elite economic development and public policy consulting firms in California. Frederick earned his Doctorate in Policy, Planning, and Development, with areas of study including economic development, public policy, public finance, and real estate development, from the University of Southern California with the successful defense of his dissertation titled, The Twilight of the Local Redevelopment Era: The Past, Present, and Future of Urban Revitalization and Urban Economic Development in Nevada and California. He also earned a Bachelor s of Science and Masters of Science in Economics from the University of Nevada, Reno.

5 Presentation Material

6 Welcome! Nevada Leadership Program Fundamentals of Economic Development 3.0 September 11, 2017 Objectives The Nevada Leadership Program: Main Objective: To create a pool of qualified officials as the difficulty of challenges in Nevada grow; officials who understand the ins-and-outs of government Management and Administration. Secondary Objective: To reduce conflict between staff and elected/appointed officials over procedural matters pertaining to government Management and Administration. The Agenda An exploration of thoughts and skills associated with the fundamentals of economic development and strategic economic development planning: 1. Strategic Economic Development Planning 2. Stronger Economies Together (SET) IV USDA Rural Development Strategic Economic Development Planning Curriculum 3. Economic Development Data and Performing Community and Economic Analysis 4. Assessing Your Community s Economic Base 5. Funding Your Economic Development Plan 1

7 Nevada Leadership Program Fundamentals of Economic Development 3.0 September 11,

8 Strategic Economic Development Planning Nevada Leadership Program Fundamentals of Economic Development 3.0 September 11, 2017 The Importance of Planning Why Plan? By yourself, spend five minutes answering this question. With the people at your table, spend five minutes and come up with a shared answer to this question. As a group, we will discuss your answers. How do we Confront Economic Challenges? The prime issue for state and local economic development leaders is not whether some industries will shrink and others expand The more fundamental issue is how communities confront their economic challenges and how they respond to their situation and environment. - Steven Koven and Thomas Lyons 1

9 Assessment Consider Environmental Factors Economic Base Workforce Physical Capital Energy Availability Financial Capital Tax Structure Culture Geography Climate Topography Research Environment The EXISTING and DESIRED conditions for each factor will help identify Economic Development CHOICES. Action 1. Develop Meaningful and Ultra Specific Goals. 2. Identify Community Opportunities and Constraints. 3. Then Develop Your Economic Development Strategies. Real Estate and Land Reuse Strategies Workforce and Job Training Strategies Small Business and Entrepreneurial Strategies Economic Development Marketing and Attraction Strategies Neighborhood and Community Development Strategies Tech Transfer and Technology Based Strategies Assessment Planning Action Comprehensive Strategic Economic Development Planning Operate and Think Regionally. Operate and Think in both the Short-Term and the Long- Term. Incorporate Property-Based and Non-Property Based Approaches. Start with Assessment, Move toward Action. It s not enough to PLAN, you must also ACT. Constantly Measure and Evaluate your performance Adapt and Change Course as Needed. 2

10 The Comprehensive Economic Development Strategy (CEDS) U.S. Economic Development Administration US EDA and The Comprehensive Economic Development Strategy (CEDS) CEDS are designed to bring together the public and private sectors in the creation of an economic roadmap to diversify and strengthen Regional economies. The CEDS should analyze the Regional economy and serve as a guide for establishing Regional goals and objectives, developing and implementing a Regional plan of action, and identifying investment priorities and funding sources. - Section Requirements for Comprehensive Economic Development Strategies. CFR Title 13, Part 301 Eligibility, Investment Rate and Application Requirements Subpart C Economic Distress Criteria; Section Economic Distress Levels : 1. An unemployment rate that is, for the most recent twenty-four (24) month period for which data is available, at least one (1) percentage point greater than the national average unemployment rate; 2. Per capita income that is, for the most recent period for which data are available, eighty (80) percent or less of the national average per capita income; or 3. A Special Need, as determined by the EDA. 3

11 CFR Title 13, Part 303 Planning Investments and Comprehensive Economic Development Strategies Section 303.1: Purpose and Scope Section 303.3: Application Requirements and Evaluation Criteria Section 303.7: Requirements for Comprehensive Economic Development Strategies CEDS Component Parts, Section must be part of a continuous process involving the active participation of Private Sector Representatives, public officials, and private citizens Include: (a) analyzing local economies, (b) defining economic goals, (c) determining project opportunities, and (d) formulating and implementing an economic development program that includes systematic efforts to reduce unemployment and increase incomes. CEDS Component Parts, Section Technical Requirements: 1. Background of the region s economic development situation. 2. Economic and community development problems and opportunities. 3. Regional goals and objectives (more employment does not equal a goal or objective; SPECIFIC). 4. Community/private sector participation. 5. Suggested projects and jobs created (SPECIFIC). 6. Identifying/prioritizing VITAL PROJECTS. 7. Regional economic clusters. 8. A plan of action (SPECIFIC Year 1, Year 2, Year 3, etc.; Dollars spent per project; No. of Jobs created; Responsible agency). 9. Performance measures (SPECIFIC). 10. Methodology tying the CEDS with a State Plan. 4

12 Purpose of the Annual Evaluation: The Annual Evaluation To recognize and celebrate the accomplishments of the past year. To develop an actionable set of priority projects for the coming year. To evaluate (and revise if necessary) the current Plan of Action. To evaluate (and revise if necessary) the current Goals and Strategies. The results of the Annual Evaluation are submitted to the U.S. Economic Development Administration. This is not a rewrite or a new CEDS! EXERCISE: An Environmental Assessment and Evaluation of Community Positions and Resources International City County Managers Association, 2010 Evaluating Our Community Community leaders have an obligation to evaluate their community objectively by doing so, they can properly develop short-term and long-term strategies. Complete the provided checklist for evaluating your community: Rank each of the 10 environmental factors and accompanying subfactors as Low (1), Medium (2), or High (3). Once you have scored each subfactor, sum the results for each factor. Complete this exercise by yourself. Once completed, we will then discuss the results as a group. 5

13 Answer these Questions: Evaluating Our Community Is the community generally supportive or antagonistic toward business interests and growth? Why? Is the community generally supportive or antagonistic toward government programs and initiatives? Why? What types of programs do residents generally support redistributive programs or developmental programs? Why? Does the community have a history of public-private collaboration? Recent examples? Is the community willing to sacrifice some of its quality of life to either promote or curtail growth? Are the elite members of the community willing to share power with others? Are the citizens generally accepting of change, or do they resist it? Examples of both? Where do residents and businesspeople stand on issues of environmental sustainability? Evaluating the Impacts of Growth Consider: How strongly the community wants growth? What impact new development and growth will have on the community s way of life. Rural vs. urban tensions, increased suburbanization, traffic, environmental stresses, etc. What strategies will the community support and outright oppose to foster and support new development and growth? What values will the community prioritize in choosing a strategy? Nevada Leadership Program Fundamentals of Economic Development 3.0 September 11,

14 Stronger Economies Together (SET) IV USDA Rural Development Strategic Economic Development Planning Curriculum Nevada Leadership Program Fundamentals of Economic Development 3.0 September 11, 2017 What is SET? The purpose of the Stronger Economies Together (SET) IV planning curriculum is to help communities work together as a regional team in developing and implementing a High Quality Regional Economic Development Plan (HQP) that builds on the current and emerging economic strengths of their region. Producing a High Quality Plan (HQP): The Essential Components Evidence- Based Aligned with Vision & Goals Team s Regional Plan Focused on Regional Economic Development Practical Broadly Supported 1

15 SET Core Process Modules The Basics Gearing Up Resources & Goals Moving Into Action Launching SET & Building a Strong Regional Team Identifying the Region s Comparative Advantage Defining Your Regional Vision and Goals Planning for Success Exploring Your Region s Demographics Exploring Potential Regional Strategies Discovering Assets & Barriers Measuring for Success SET Core Process Modules Thinking about and defining the region from a variety of perspectives: ecologically, politically, administratively, policy or data relevance, economically, and geographically. SET specifically focuses on economic regions: Beginning with a group of geographically linked communities that want to work and think regionally. The main focus is on connecting communities that are economically linked through economic clusters. Development of the SET Team Invite people to participate that: Can influence success of the process. Have the necessary skills to be a positive contributor to the process. Have resources (personally and organizationally). Are respected leaders in their community and/or organization. Will encourage buy-in of others. Represent emerging industry sectors. Represent diverse populations within their community. 2

16 The Western Nevada Development District An example of how the SET strategic economic development planning curriculum was used to develop a Comprehensive Economic Development Strategy. Use of SET in Nevada The first (and only to date) use of the SET strategic economic development planning curriculum was 2011 through 2012 for the Western Nevada Development District. Partners for the Nevada SET Executive Committee for the WNDD included: University Center for Economic Development, University Nevada Cooperative Extension, USDA Rural Development, and the Governor s Office of Economic Development. First meeting held November 9 and 10, 2011 in Carson City, NV initial meeting only included the original eight members of the WNDD (Carson City, Churchill, Douglas, Humboldt, Lyon, Mineral, Pershing, and Storey counties). Washoe County, including the cities of Reno and Sparks, joined in time for the sixth meeting. Use of SET in Nevada Successful Completion of the SET Curriculum in the WNDD led to the development of two important documents: An Economic Development Blueprint for the Western Nevada Development District. The current Comprehensive Economic Development Strategy (CEDS) for the WNDD. 3

17 2014 Comprehensive Economic Development Strategy for the WNDD Nevada-Development-District-CEDS pdf Four Regional Capacity Goals: 1. Access to Capital 2. Communication and Networking 3. Infrastructure Improvement 4. Workforce Development 2014 Comprehensive Economic Development Strategy for the WNDD Nevada-Development-District-CEDS pdf Five Regional Economic Sector Goals: 1. Agribusiness 2. Energy 3. Manufacturing 4. Tourism 5. Transportation and Logistics SET in Action SET IV Module 5: Developing Vision and Goals 4

18 Developing a SMART Goal A SMART goal is an observable and measurable outcome that you want to achieve within a specific period of time. Developing a SMART Goal Consider the following elements: Regional data. Example: growing number of small businesses within the regional clusters. Economic strength (locally and regionally). Example: evidence of future growth in the clusters gives opportunity for related small business growth. Potential barriers that would impact the ability to achieve agreed upon goals. Example: lack of a trained and highly talented workforce. Local and regional assets that could be used to achieve agreed upon goals. Example: Small Business Development Center, community college, major research university, etc. Past history and past strategies what worked and what did not work and why. Example: business incubator successfully piloted in one county. Developing a SMART Goal Specific What do you want to achieve? Where will you focus your efforts? Measurable How do you plan to measure progress toward the goal? What is the end result and milestones along the way? Attainable Do you have the resources to achieve the goal? What factors might prevent achieving these goals? Relevant Is this important for your region to pursue? Does this that matter or bring benefit to the region? Time Framed When do you want to achieve your goal? What is the target date for accomplishing the goal? 5

19 Developing a SMART Goal An Example of a SMART Goal: Relevant Specific Increase the survival rate of new business start-ups (less than 5 years old) from 50% to 75% in Region III by December Measurable Time-Framed Attainable Developing a SMART Goal Before we begin our next exercise: Don t get bogged down in detail. Consensus is not necessary yet. GROUP EXERCISE Develop Three SMART Goals for Your Region: 1. In Small Groups at Your Table (15 Minutes): Develop three SMART Goals as a group. - Your goals should be SPECIFIC. - Your goals should be MEASURABLE. - Your goals should be ATTAINABLE. - Your goals should be RELEVANT. - Your goals should be TIME FRAMED. 2. When completed, post your three goals, all written on a single piece of flip chart paper, on the walls. 3. As an individual, use three sticky dots and place them on three goals that you are interested in pursuing (one per goal). 6

20 Nevada Leadership Program Fundamentals of Economic Development 3.0 September 11,

21 ECON0MIC ANALYSIS: PART 1 Tom Harris University of Nevada, Reno Department of Economics University of Nevada Cooperative Extension University Center for Economic Development 1

22 TOPICS TO BE COVERED Location Quotients Shift Share ASAP INDUSTRIAL TARGETING EMPLOYMENT CHANGE WHITE PINE COUNTY, 2006 to 2016 Description 2006 Jobs 2016 Jobs % Change Change Crop and Animal Production % Mining, Quarrying, and Oil and Gas Extraction 741 1, % Utilities % Construction (117) (46%) Manufacturing (6) (16%) Wholesale Trade (1) (2%) Retail Trade (225) (36%) Transportation and Warehousing % Information (16) (38%) Finance and Insurance (8) (9%) Real Estate and Rental and Leasing % Professional, Scientific, and Technical Services (33) (26%) Management of Companies and Enterprises % Administrative and Support and Waste Management and Remediation Services (55) (37%) Educational Services % Health Care and Social Assistance % Arts, Entertainment, and Recreation (6) (12%) Accommodation and Food Services (17) (3%) Other Services (except Public Administration) (28) (15%) Government 1,502 1,343 (159) (11%) Unclassified Industry % TOTAL 5,058 5, % 2

23 LOCATION QUOTIENT LOCATION QUOTIENT 3

24 ANALYSIS WITH LOCATION QUOTIENTS STAR sector is where 2016 location quotient is equal to or greater than 1 and value increasing from 2006 to MATURE sector is where 2016 location quotient is equal to or greater than 1 and value decreasing from 2006 to EMERGING sector is where 2016 location quotient is less than 1 and value increasing from 2006 to TRANSFORMING sector is where 2016 location quotient is less than 1 and value decreasing from 2006 to WHITE PINE COUNTY LOCATION QUOTIENT ANANLYSIS Description 2006 Location Quotient 2016 Location Quotient PERCENTAGE CHANGE TYPE Crop and Animal Production % STAR Mining, Quarrying, and Oil and Gas Extraction % STAR Utilities % STAR Construction % TRANSFORMING Manufacturing % EMERGINIG Wholesale Trade % TRANSFORMING Retail Trade % TRANSFORMING Transportation and Warehousing % EMERGINING Information % TRANSFORMING Finance and Insurance % TRANSFORMING Real Estate and Rental and Leasing % EMERGINING Professional, Scientific, and Technical Services % TRANSFORMING Management of Companies and Enterprises % EMERGINING Administrative and Support and Waste 0.48 Management and Remediation Services % TRANSFORMING Educational Services % EMERGINING Health Care and Social Assistance % TRANSFORMING Arts, Entertainment, and Recreation % TRANSFORMING Accommodation and Food Services % MATURE Other Services (except Public Administration) % TRANSFORMING Government % MATURE Unclassified Industry % EMERGINING 4

25 Shift-Share Analysis 5

26 National Growth Effect Measures growth in the economy if employment grew at the same rate as the overall national economy Industry Mix Effect Industrial mix employment measures the extent a local economy is in fast growing or slow growing national sectors. 6

27 Competitive Share Effect and Overall Change Measures the ability of local sectors to capture an increasing (decreasing) share of a particular sector s growth. Sometimes referred as competitive advantage Sometimes the National Growth and Industry Mix are summed to be The Expected effect or Change. Total Change is summation of National Effect plus Industrial Mix plus Competitive Effect 7

28 White Pine County Shift-Share Results Description National Growth Effect Industrial Mix Effect Expected Change Competitive Effect Total Change Crop and Animal Production 22 (7) Mining, Quarrying, and Oil and Gas Extraction Utilities 4 (3) Construction 26 (52) (26) (90) (116) Manufacturing 3 (7) (4) (2) (6) Wholesale Trade 7 (3) 4 (5) (1) Retail Trade 63 (42) 21 (247) (226) Transportation and Warehousing Information 4 (5) (1) (15) (16) Finance and Insurance (25) (9) Real Estate and Rental and Leasing Professional, Scientific, and Technical Services (60) (33) Management of Companies and Enterprises Administrative and Support and Waste Management (74) and Remediation Services (56) Educational Services Health Care and Social Assistance (38) 11 Arts, Entertainment, and Recreation (18) (6) Accommodation and Food Services (131) (17) Other Services (except Public Administration) 19 (2) 17 (44) (27) Government 152 (129) 23 (181) (158) Unclassified Industry TOTAL (585) 145 ANALYSIS WITH LOCATION QUOTIENTS and SHIFT-SHARE ANALYSIS STAR sector is where 2016 Location Quotient is equal to or greater than 1 and Competitive Effect is positive. MATURE sector is where 2016 Location Quotient is equal to or greater than 1 and Competitive Effect is negative. EMERGING sector is where 2016 location quotient is less than 1 and Competitive Effect is positive. TRANSFORMING sector is where 2016 location quotient is less than 1 and Competitive Effect is negative. 8

29 WNDD LOCATION QUOTIENT and SHIFT-SHARE ANALYSIS Description 2016 Location Quotient Competive Effect TYPE Crop and Animal Production STAR Mining, Quarrying, and Oil and Gas Extraction STAR Utilities STAR Construction TRANSFORMING Manufacturing TRANSFORMING Wholesale Trade TRANSFORMING Retail Trade TRANSFORMING Transportation and Warehousing EMERGINING Information TRANSFORMING Finance and Insurance TRANSFORMING Real Estate and Rental and Leasing EMERGINING Professional, Scientific, and Technical Services TRANSFORMING Management of Companies and Enterprises EMERGINING Administrative and Support and Waste 0.29 Management and Remediation Services -74 TRANSFORMING Educational Services EMERGINING Health Care and Social Assistance TRANSFORMING Arts, Entertainment, and Recreation TRANSFORMING Accommodation and Food Services MATURE Other Services (except Public Administration) TRANSFORMING Government MATURE Unclassified Industry EMERGINING Use of Location Quotient and Shift-Share Results Competitive and Non Competitive Sectors Why Sector Is Competitive and How to Maintain Competitiveness Clusters Use Competitive Sectors Why Sector Is Not Competitive What Can Be Done For a Non Competitive Sector: Strengthen Management Capabilities Business Growth from Alternative Capital Sources Knowledge of New Technology Improve Workforce Improve Business Efficiency Through Infrastructure and Access to Non Local Markets 9

30 THANK YOU QUESTIONS? 10

31 8/31/2017 ECONOMIC ANALYSIS: PART 2 Tom Harris University of Nevada, Reno Department of Economics University Center for Economic Development BACKGROUND Completed Location Quotient Completed Shift-Share Completed Location Quotient and Shift-Share Targeting 1

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35 8/31/2017 Top Sectors by DI and CI 5

36 8/31/2017 WHAT IS THE NEXT STEP? INVESTIGATE ASSETS High Speed Internet Housing Finance GIS Workforce SECTOR TARGETING Export Enhancement Import Substitution IMPORT SUBSTITUTION GAPS Importing Commodity but no Local Sector to Produce It DISCONNECTS Specification Problem National Contract Small Local Industry No Knowledge of Potential Local Supplier 6

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38 8/31/2017 Top Twenty-Five White Pine County Economic Sectors by Value of Imports. 8

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43 8/31/2017 TELECOMMUNICATIONS STATS Wired Telecommunications Carriers White Pine County: 1 establishment with 7 employees Clark County: 64 establishments with 2,181 employees Wireless Telecommunications Carriers White Pine County: 0 establishments with 0 employees Clark County: 26 establishment with 257 employees Satellite Telecommunications White Pine County: 0 establishments with 0 employees Clark County: 9 establishments with 156 employees WHITE PINE COUNTY STATISTICS According to report by Connect Nevada, 28.9% of White Pine County households has access to broadband speeds of 3Mbps or greater. Also study found that 2.31% of White Pine County residents had access to broadband speeds of 6Mbps. Most U.S. households have access to broadband speeds of 10 Mbps. Morning before Ely meeting, Salt Lake City carrier offering 40 Mbps. 13

44 8/31/2017 Thank You QUESTIONS 14

45 Funding Your Economic Development Plan (Part I) Nevada Leadership Program Fundamentals of Economic Development 3.0 September 11, 2017 Public Sector Involvement in Funding Economic Development Initiatives Public sector solutions are meant to leverage private lenders and investors to ensure that access to capital is extended to entities that are credit-worthy, but are not considered good risks in traditional commercial terms. What would make a private entity credit-worthy but not considered a good risk in traditional terms? Public Sector Involvement in Funding Economic Development Initiatives Role of the Public Sector: to invest in ventures or projects where the economic and social benefits outweigh the risk of financing. Examples? Consider the impact of the investment and completion of the venture or project on job creation potential, neighborhood development, and potential tax revenues. 1

46 Funding Economic Development Some General Public Sector Approaches Reducing the Cost of Borrowing and Risk Investment Programs Loan Packaging Direct Lending Technical Assistance Economically Targeted Investments (EIT s) Reducing the Cost of Borrowing and Risk Lowering the Cost of Borrowing: the public sector subsidizes the difference between the market and the discounted rate thereby reducing the interest rates the borrower must pay a lender. Direct Financing Low Interest Loans Linked Deposit Programs Use of Tax-Exempt Bonds (Redevelopment, SAD s, GID s, TIA s, etc.) Lowering Risk: the public sector guarantees a percentage of a private sector loan against possible default; thereby making the loan more secure and a more attractive investment for the lender. Investment Programs Investment Programs: the public sector establishes lending programs that address the special need of under-served groups. Start-up Loans Small Working Capital Loans Microloans Seed and Venture Capital Funds Export Loans Small Business Investment Companies 2

47 Loan Packaging Loan Packaging: the public sector helps entities obtain financing; acting as a conduit by facilitating and coordinating the loan process. Identifying and Screening Loan Applicants Promoting Private Sector Participation in the Lending Process Targeting of Specific Industries or Market Segments Income Maximum and Equity Requirements Requirement of Private Sector Capital and/or Involvement Direct Lending Direct Lending: the public sector can act as the direct, subordinate, or primary lender, using its own funds or a special fund controlled by the public sector entity. Source of Capital may include Federal or State Grants, Local Revenue Appropriations, Investment Portfolios, or Private Sector Investments (Pension Funds) Revolving Loan Funds Seed and/or Venture Capital Funds Establish Quasi-Public Organizations to Manage the Lending Program(s) Should only provide GAP financing or leverage private sector financing. Economically Targeted Investments (ETI s) Economically Targeted Investments: designed to direct funds to opportunities that earn a competitive financial return while producing economic development benefits. Pension Funds may be invested in Loan Programs for Small Businesses or to Modernize Facilities Expanded Pension Fund ETI s from housing and real estate projects to small and minority-owned businesses, community development financial institutions, revolving loan funds, and infrastructure projects. Must invest in projects that generate market rates of return. 3

48 Funding Economic Development Some Approaches Specific to Nevada Redevelopment (NRS 279) General Improvement Districts (NRS 318) Special Assessment Districts (NRS 271) Tax Increment Areas (NRS 278C) Tourism Improvement Districts (NRS 271A) Local Improvement Districts (NRS 309) Private Activity Bonds (NRS 348A) Local Improvement Districts Nevada Revised Statute Chapter 309 Local Improvement Districts NRS : No districts may be organized under the provisions of this chapter after May 1, But in the 2017 Nevada Legislative Session SB 471 Committee on Government Affairs authorizes the creation and governs the management of a local improvement district for the construction of a power plant and the distribution of energy therefrom or the construction of a sewer system or the construction or acquisition of a water system. 4

49 Local Improvement Districts Section 1 of SB : The Special District Control Law applies to any special district whose formation is initiated by a board of county commissioners and any petition for the formation of any proposed special district filed with an board of county commissioners. Any water district, sanitation district, water and sanitation district, municipal power district, mosquito abatement district, swimming pool district, television maintenance district, weed control district, general improvement district or any other quasi-municipal corporation excluding all housing authorities. Local Improvement Districts Prior to SB , NRS 309: NRS : may at any time incur an indebtedness not exceeding in the aggregate the sum of $5,000, nor in any event to exceed $1 per acre, and may cause warrants of the district to issue therefor, bearing interest at a rate or rates which do not exceed by more than 3 percent the Index of Twenty Bonds which was most recently published before the bids are received or a negotiated offer is accepted, and the board may levy an assessment of not more than $1 per acre on all lands in the district for the payment of such expenses. NRS : the board may levy an assessment, annually, in the absence of assessments therefor under any of the other provisions of this chapter, of not more than 20 cents per acre on all lands in the district for the payment of the ordinary and current expenses of the district, including the salaries of officers and other incidental expenses. Such assessments must be collected as provided in this chapter for the collection of other assessments. Local Improvement Districts Prior to SB , NRS , Types of Permissible Securities include: Short-term notes, warrants and interim debentures. General obligation bonds and other general obligation securities payable from general (ad valorem) property taxes. General obligation bonds and other general obligation securities payable from general (ad valorem) property taxes, the payment of which securities is additionally secured by a pledge and lien on net revenues. Revenue bonds and other securities constituting special obligations and payable from net revenues, but excluding the proceeds of any general (ad valorem) property taxes or other special assessments, which payment is secured by a pledge of and lien on such net revenues. Any combination of such securities. 5

50 Local Improvement Districts SB : Revises provisions governing the merger, consolidation or dissolution of certain general improvement districts. Repeals the Nevada Improvement District Act (which prohibited new districts under NRS 309 being created after May 1, 1967). Creates the Douglas County Lake Tahoe Sewer Authority and a new Board of Trustees. Abolishes the Douglas County Sewer Improvement District No. 1. Local Improvement Districts Section 30 of SB , 18 Unique Powers: 1. Administer all activity and business related to the collection and treatment of sewage and wastewater in the service area and the transportation and disposal of sewage and wastewater both within and outside of the service area. 2. Fix, alter, charge and collect rates, rentals and other charges for the use of facilities controlled by the Authority for the purpose of providing for the payment of the expenses of the Authority, the construction, improvement, repair, maintenance and operation of its facilities and properties, the payment of the principal of and interest on its obligations and to fulfill the terms and provisions of any agreements made with the purchasers or holders of any such obligations, and to make such rates, rentals and other charges a lien upon the property using such facilities, and provide for a method of enforcing collection of such rates, rentals and other charges. Local Improvement Districts Section 30 of SB , 18 Unique Powers: 3. Borrow money, make and issue negotiable notes, bonds and other evidences of indebtedness or obligations of the Authority. 4. To acquire, purchase, hold, lease as lessee and use any franchise, property, real, personal or mixed, tangible or intangible, or any interest therein, within or without the boundaries of the service area, necessary or desirable for carrying out the purposes of the Authority, and to sell, lease as lessor, transfer and dispose of any property or interest therein, at any time acquired by it. 5. Acquire by purchase, lease or otherwise, and to construct, improve, maintain, repair and operate projects within or without the service area. 6

51 Local Improvement Districts Section 30 of SB , 18 Unique Powers: 6. Pledge, hypothecate or otherwise encumber all or any of the revenues or receipts of the Authority as security for all or any of its obligations. 7. Contract with public entities, including, without limitation, a general improvement district organized under NRS Chapter 318 (General Improvement Districts). 8. Install and maintain sewer and effluent pipelines, together with all related or necessary improvements along, under or upon public highways, roads, streets and alleys, and to build and erect sewage treatment or disposal facilities and improvements, either within or without the service area, and to compel all property owners within the service area to connect their sewer systems with such system or sewers of the Authority. Local Improvement Districts Section 30 of SB , 18 Unique Powers: 9. Acquire by eminent domain proceedings, either the fee or such right, title, interest or easement in such lands and premises, within the service area, as the Authority may deem necessary for any of the purposes mentioned in this act. 10. Make bylaws for the management and regulation of its affairs. 11. Employ or contract with such persons as it deems necessary and hire and retain officers, agents and employees, including, without limitation, fiscal advisors, engineers, attorneys or other professional or specialized personnel. 12. Seek, apply for and otherwise solicit and receive from any source, public or private, such contributions, gifts, grants, devises and bequests of money and personal property, or any combination thereof, as the Authority determines is necessary or convenient for the exercise of any of its powers. Local Improvement Districts Section 30 of SB , 18 Unique Powers: 13. Participate with relevant agencies of the United States, the State of Nevada and other entities on issues concerning the disposal of wastewater and sewage. 14. Make and enforce all necessary and proper regulations for the collection of sewage, and to make all other sanitary regulations in connection therewith. 15. Sue and be sued, implead and be impleaded, complain and defend in all courts. 16. Adopt, use and alter at will a corporate seal. 17. Except as otherwise provided in section 33.5 of this act, merge or consolidate with a general improvement district organized under chapter 318 of NRS. 18. Perform such other functions conferred on the Authority by the provisions of this act. 7

52 Private Activity Bonds Nevada Revised Statute Chapter 348A Private Activity Bonds Typically are tax-exempt bonds issued by a local government (county or municipality) for the purpose of providing financing for qualified projects. Proceeds of a Private Activity Bond can be used to finance private development. Grew in popularity as the result of the Federal Government s cancelation of Federal Urban Renewal programs and projects. Have generally declined in popularity since the early 2000 s nationally. In Nevada, NRS Chapter 348A governs the creation, administration and use of Private Activity Bonds. In Nevada, local governments must seek approval for the use of Private Activity Bonds from the Nevada Department of Business and Industry, Office of Business Finance and Planning. Private Activity Bonds NRS 348A.020: Allocation means the principal amount of private activity bonds which is reserved and assigned to state and local government agencies authorized by law to issue private activity bonds. NRS 348A.080: Local population share means: (1) for each incorporated city and Carson City, a percentage calculated for each calendar year by dividing the most recent state estimate of the population of the city by the most recent state estimate of the population of the State, (2) for each county, a percentage calculated for each calendar year by dividing the most recent state estimate of the population of the unincorporated area of the county by the most recent state estimate of the population of the State. NRS 348A.100: Project means any construction, planned expenditure, program or other activity intended to be financed by a private activity bond which is described in sufficient detail to determine eligibility for financing. NRS 348A.160: Determination of volume cap for local government. The local population share of a local government in this State will be used to determine the volume cap for that government (incorporated city or county) at the beginning of each calendar year. 8

53 Private Activity Bonds Private Activity Bonds and the Nevada Department of Business and Industry, Four Unique Programs: 1. Industrial Revenue Development Bonds (IDRB s): tax-exempt bonds used to finance development of industrial facilities, research and development facilities, commercial, civic and cultural enterprises, accredited institution and healthcare facilities. 2. Renewable Energy Bonds: tax-exempt bonds used to finance the development of renewable energy facilities. 3. Exportation of Goods Bonds: tax-exempt bonds used to finance the production of goods for export or the expansion of the production of goods for export. 4. Venture Capital Bonds: tax-exempt bonds used to provide an attractive opportunity for the investment of venture capital within the state of Nevada. Nevada Leadership Program Fundamentals of Economic Development 3.0 September 11,

54 Funding Your Economic Development Plan (Part II) Nevada Leadership Program Fundamentals September 11, 2017 Federal Government Involvement in Funding Economic Development Initiatives The federal government provides a number of significant sources for financing economic development activities there are also a number of federal programs geared toward financing programs, planning, and implementation of economic development activities. Federal Government Involvement in Funding Economic Development Initiatives Three Primary Federal Government Sources: The U.S. Small Business Administration (SBA) The U.S. Economic Development Administration (EDA) The U.S. Department of Agriculture (USDA) 1

55 The U.S. Small Business Administration The U.S. Small Business Administration 7(a) Regular Loan Program: the U.S. SBA general loan program; typically a zero subsidy loan program financed through fee income to SBA from borrowers and lenders. Community Express Loans: loans up to $25,000 offered to small businesses that qualify as Historically Underutilized Business Zones (HUBZones). Patriot Express Loans: for veterans, service-disabled veterans, active duty service members eligible for the Transition Assistance Program, Reservists and National Guard members, current spouses or widowed spouses of any of the aforementioned groups. Funds can be used for start-up costs, equipment purchases, businessoccupied real estate purchases, infusing working capital, managing a business, expansion, setting up to sell goods and services to the government, or recovery from declared disasters. The U.S. Small Business Administration International Trade Loans: provides long-term financing to help small businesses compete more effectively and significantly expand or develop export markets. Must meet all the general requirements of the general 7(a) loan guarantee program. Plus the loan proceeds must significantly expand existing export markets or develop new ones. Or the applicant s business must be adversely affected by import competition. 2

56 The U.S. Small Business Administration Community Adjustment and Investment Program: created in tandem with NAFTA (1993), it is designed to provide credit to new or expanded businesses in communities with significant job losses due to changes in trade patterns with Canada and Mexico. MicroLoan for Entrepreneurs: funds may be used for the purchase of machinery and equipment, furniture and fixtures, inventory purchases, supplies, and working capital. Must demonstrate the following Eligibility Requirements: (1) Good Character, (2) Enough Management Expertise and Commitment for a Successful Operation, and (3) Reasonable Assurance that the Loan with be Repaid. The U.S. Small Business Administration Small Business Innovation Research (SBIR): designed to fund high-risk research and development efforts with excellent commercial potential. Purpose: to (1) stimulate technological innovation, (2) bring small businesses into the federal research and development process, (3) encourage participation by disadvantaged and minority persons in technological innovation, and (4) increase private sector commercialization of federal research and development. Eligibility Requirements: (1) be at least 51% American owned and independently operated, (2) be located in the United States, (3) be for-profit and employ no more than 500 employees, and (4) have the principal researcher s primary employment be with the small business during the project. Participating Federal Departments: USDA, Department of Commerce, Department of Defense, Department of Education, Department of Energy, Department of Health and Human Services, Department of Homeland Security, Department of Transportation, Environmental Protection Agency, National Aeronautics and Space Administration, and the National Science Foundation. The U.S. Small Business Administration Participating SBIR Federal Departments: USDA: US Dept. of Commerce: US Dept. of Defense: US Dept. of Education: US Dept. of Energy: US Dept. of Health and Human Services: US Dept. of Homeland Security: US Dept. of Transportation: EPA: NASA: NSF: 3

57 The U.S. Economic Development Administration The U.S. Economic Development Administration Economic Adjustment Assistance Program ( these program funds are primarily used to support the following types of programs: Projects that build on or create new industry clusters that enhance the competitiveness of a region. Projects that support technology-led development. Project that support or advance community and faith-based social entrepreneurship in redevelopment strategies for regions of chronic economic distress. The U.S. Economic Development Administration These (Economic Adjustment Assistant Program) grants are meant to enhance private investment in distressed communities to make them ore competitive economically. Strategy grants help organize and carry out planning processes, resulting in a Comprehensive Economic Development Strategy (CEDS), tailored to the community s specific economic problems and opportunities. 4

58 The U.S. Department of Agriculture sda/usdahome The U.S. Department of Agriculture All USDA Rural Development Programs, Rural Business Cooperative Service Rural Housing Service Community Facilities Rural Housing Service Multi-Family Housing Rural Housing Service Single-Family Housing Rural Utilities Service Electric Programs Rural Utilities Service Telecommunications Programs Rural Utilities Service Water & Environmental Programs Business and Industry Guaranteed Loans, Rural Energy for America Program (REAP), USDA Rural Development Intermediary Relending Program, The U.S. Department of Agriculture Rural Economic Development Loan & Grant Program, USDA Rural Development - Rural Business Development Grant (RBDG), USDA Rural Development - Value Added Producer Grants, USDA Rural Development Rural Community Development Initiative Grants, USDA Rural Development Economic Impact Initiative Grants, 5

59 Nevada Leadership Program Fundamentals of Economic Development 3.0 September 11,