FY 2019 PROPOSED BUDGET HIGHLIGHTS General Fund & Tourism Promotion Fund County Board Work Session Monday, March 19, 2018 4:00 PM
Making Arlington a leading community that is vibrant, accessible VISION and Become the Technology resilient, today and in the future. Innovation Center of the U.S. MISSION To continue to develop Arlington County as an economically vital, competitive and sustainable community by providing leadership and services to the business, real estate development and visitors services sectors of the Arlington economy.
Department Overview Business Investment Group BizLaunch Communications FY18 year-to-date: 1.43 million square feet assisted 11,154 total jobs* Retention/Expansion: 19 deals, 1,181,285 square feet New Business: 8 deals, 247,788 square feet *Jobs # includes 8,000 from Deloitte retention-expansion (450,000 s.f.) FY18 year-to-date: Business outreach total: 2,300 45 workshops (75 by yr. end) 438 counseling appointments 100 counseling appointments and 9 workshops in Spanish Key topics: starting a business, marketing, financing and government contracting. Earned Media Impressions: 2.8B Media Value: $147.5 M Social Media: Fans/Followers: 6,538 Impressions: 976k Web Traffic: Sessions 33k, Users 24k, Pageviews 73k 2
Department Overview Arlington Convention & Visitors Service Arlington Cultural Affairs Real Estate Development $119M in state and $89M in local tax receipts (2016) 247M domestic ad impressions to leisure & meetings audiences 150K StayArlington website sessions 26.4K group room nights booked 13K visitors served in person Enriching Lives: Arlington Arts and Culture Strategy progress Cultural Facilities Task Force Create Vision and Principles Artspace Arts Market Study Identify Potential Cultural Facility Projects Arlington Art Truck NEA funded mobile artist-in-residence launch 293 artists paid for arts activities New website launched Initiated studies of current and future commercial market conditions and opportunities in the Columbia Pike and Lee Highway corridors. Construction progressing at Ballston Quarter on schedule for delivery Fall of 2018. 3
Way Forward Updates Marketing Missions Strategy: Nurture pipeline provided by brokers and VEDP while gathering intel on targeted geographies and national competitiveness. Examples: New York Ed Tech, San Diego Cybersecurity, D.C. Broker Outreach Trade Shows Strategy: Brand Arlington as a place where innovation happens and federal funding is available. Lead with content to curate targeted companies through panels, speaking engagements and events. Examples: Consumer Electronics Show Las Vegas, SXSW Austin, Collision New Orleans Lead Generation Activities Strategy: Implement innovate programs through which to collect leads. On average it requires 1,000 leads for two qualified prospects. Examples: Startup Arlington Program, Dongsheng Entrepreneurship Competition 4
Business Retention and Expansion Executive Networking Opportunities Executive Luncheon for C-level executives Arlington Premiere with 500+ attendees Industry events and retention visits with County management Marketing & Promotion Grand openings and ribbon cuttings Joint marketing missions at tradeshows Award nominations Business Intelligence & Research Site selection assistance Customized research and analysis (workforce, demographics, tax rates) Market performance updates Liaison Services Connect businesses to County and community resources Customized workforce assistance Welcome letters (1,600+) 5
Business Investment Summary 181* 32,200 5.4M 16 CLOSED DEALS SINCE JAN 2015 NEW AND RETAINED JOBS SQUARE FEET DEALS USED EDI GRANTS 1776 AIR** APT** Basket Savings** BNA** Eastern Foundry Grant Thornton** GW MFA Lidl** Nestlé** SineWave Axios*** Higher Logic*** Phone2Action*** Stardog*** VideoBlocks*** *127 AED-assisted **COF match ***Gazelle grant 6
Business Investment Summary (continued) Investment in Economic Development Ongoing: One-time: $1.5 million $2.7 million 25% 20% 15% Countywide Vacancy Rate 21.0% 20.0% 16.2% 17.3% 19.4% Total: $4.2 million 10% 12.7% FY 2019 funding meets current commitments Every $1 invested generates $5 5% County Manager's FY 2019 Proposed Budget 7
Summary of Proposed Budget Changes General Fund FY 2018 Adopted FY 2019 Proposed Change % Change Expenses $8,964,571 $8,715,160 -$249,411* -2.8% Revenue $354,165 $197,000 -$157,165-44.4% Staff 56.2 FTEs 52.9 FTEs -3.3 FTEs -5.8% Budget reductions for consideration total approximately $433,000 (3.3 FTEs) (4.8% of FY 2018 Adopted Budget) Revenue decreases due to updated accounting for closure of Spectrum Theatre Facility closed June 2017 *FY19 expenses includes salary and benefit increases as well as CPRO and Lee Highway Alliance funds moved from non-departmental to AED 8
Summary of Proposed Budget Changes Tourism Promotion Fund FY 2018 Adopted FY 2019 Proposed Change % Change Expenses $1,519,200 $1,546,700 +$27,500 +1.8% Revenue $1,519,200 $1,546,700 +$27,500 +2.2% Staff 7.0 FTEs 7.0 FTEs +0 FTEs +0% Revenue includes $246,700 ongoing General Fund transfer Proposed budget reflects anticipated revenue from Transient Occupancy Tax surcharge reauthorization VA General Assembly Budget Bill with 3-year sunset currently pending approval (Mid- April for Governor s signature) 9
Detail: Proposed Reductions Eliminate the Strategic Partnerships Director/BIDs Partnerships Executive Liaison Function Service Impacts Duties of this position will be permanently reassigned to one Business Investment Group (BIG) staff person (1.0 FTE) resulting in 30% less time available for their primary responsibilities (e.g. addressing commercial vacancy rate) Budget Impact Change: -$143,231 Staff Impact -1.0 Partnerships Director (vacant) Partnerships Liaison role will be permanently reallocated to Director s Office staff. BIDs will receive fewer staff resources (e.g. to attend meetings or facilitate internal discussions with County staff) from AED than in prior years 10
Detail: Proposed Reductions Eliminate Funding for the Greater Washington Hispanic Chamber of Commerce Service Impacts Discontinues AED s formal annual funding to GWHCC Will require revisiting the partnership arrangement and discussing alternatives for managing an ongoing relationship with GWHCC Budget Impact Change: -$6,000 Staff Impact N/A 11
Detail: Proposed Reductions Decrease the Ongoing Commitment to Arlington Sister Cities Association by 10%, from $50,000 to $45,000 Service Impacts Reduces ASCA s current budget by approximately 4% Also updates the agreement with ASCA to increase the matching component of the grant from $10,000 to $15,000. Non-matching component will consist of $30,000. Budget Impact Change: -$5,000 Staff Impact N/A Will require the organization s reallocation of resources and reprioritization of its existing program goals. The organization will need to increase fundraising or cut/modify existing programs. 12
Detail: Proposed Reductions Eliminate the Connect Arlington Marketing Program and Associated Business Development Staff Service Impacts Vision of Connect Arlington as an Economic Development catalyst will not be fully realized AED will not undergo any significant marketing or outreach to businesses specifically targeted for potential earlyadopters or likely users of the high-speed dedicated fiber network, and sector specific business development activities targeted to fiber users will not be offered. Budget Impact Change: -$165,964 Staff Impact -1.0 AED Specialist (vacant) 13
Detail: Proposed Reductions Eliminate Connection Grants Funding (one-time) Service Impacts Connection grants will no longer be offered as a potential business investment tool for recruiting businesses. A review of the program s business model is currently underway with recommendations due to the Manager and the Board this spring. Budget Impact Change: -$250,000 Staff Impact N/A 14
Detail: Proposed Reductions Eliminate the Cultural Affairs Humanities Program Service Impacts The following programs will be cancelled or altered: Moving Words: Juried poetry competition with winning poems displayed on ART buses Little Saigon: Oral history project documenting Vietnamese community in Arlington Legacy businesses: Oral history project documenting historic businesses on Lee Highway and Nauck Halls Hill Legacy Makers: Portrait project documenting Halls Hill High view Park community leader Poet Laureate: The Poet Laureate serves as an advocate for poetry and the literary arts The Poet is in: Mobile poetry pop-up creating customized original poems for Arlingtonians. Community Gardens: Oral history project documenting the diverse cultural make-up of Arlington Budget Impact Change: -$77,172 Staff Impact -0.8 Humanities Programmer (vacant) 15
Detail: Proposed Reductions Eliminate the Cultural Affairs New Media Program Service Impacts The following programs will be cancelled: Full Dome Projections: Original new media work commissioned for David M. Brown Planetarium How to Video Festival: Juried competition to create entertaining instructional videos Outdoor Digital Projections: Original projection commission to celebrate Dia de los Muertos event County Wandering Tours: Artist led walking tours highlighting and reimagining the planning and evolution of the community. Budget Impact Change: -$36,225 Staff Impact -0.5 New Media Programmer (vacant) 16
Key Budget Considerations Steady improvement in the vacancy rate (17.3% in Q2 2017) was set back by the NSF departure and new office deliveries (19.4% in Q4 2017) Support for business development to sustain overall program momentum Continued funding to meet anticipated performance on incentive projects Maintain tourism investment to leverage anticipated TOT surcharge renewal 17