Loudoun County, Virginia - April 15, 2013 BOARD OF … · Item #6: REBDS Recommendations Economic Development Committee Meeting April 15, 2013 Page 6 of 7 January 2013-April 2013

Date of Meeting: April 15, 2013

BOARD OF SUPERVISORS

ECONOMIC DEVELOPMENT COMMITTEE

ACTION ITEM

SUBJECT: Rural Economy Business Development Strategy

Recommendation

ELECTION DISTRICT: Countywide

STAFF CONTACT: Tom Flynn, Director, Department of Economic Development

Kellie Boles, Department of Economic Development

REDC CONTACT: Mary Ellen Taylor, Chair, Rural Economic Development

Council

REBDS CONTACTS: Martin Hamberger, Co-Chair, Rural Economy Business

Development Strategy

Doug Fabbioli, Co-Chair, Rural Economy Business


RECOMMENDATIONS:

REDC: The Rural Economic Development Council (REDC) recommends approval and

implementation of the Rural Economy Business Development Strategy (REBDS), to include

commitment to funding phase one of each of the nine (9) recommendations, as outlined in the

REBDS and to include an additional full time equivalent be added in FY14 to the Department of

Economic Development-Rural Business Development team to assist with ongoing and future

rural business development efforts.

STAFF: Staff recommends approval and implementation of the Rural Economy Business

Development Strategy.

BACKGROUND:

At the February 25, 2013 meeting of the Economic Development Committee of the Board of

Supervisors the REDC recommended approval and implementation of the Rural Economy

Business Development Strategy (REBDS), to include commitment to funding phase one of each

of the nine (9) recommendations, as outlined in the REBDS and to include and additional full

time equivalent be added in FY14 to the Department of Economic Development-Rural Business

Development team to assist with ongoing and future business development efforts (Attachment

1).

At the February 25, 2013 meeting of the Economic Development Committee of the Board of

Supervisors the Committee delayed action on the REBDS to allow members more time to read

#6

Item #6: REBDS Recommendations

Economic Development Committee Meeting

April 15, 2013

Page 2 of 7

the final report and to get through the budget process. The Committee forwarded the REBDS

information to Board of Supervisors budget work session.

At the March 11, 2013 budget work session of the Board of Supervisors the Board voted 9-0 to

enhance the DED budget for FY14 to include $30,000 for implementation of the REBDS as

recommended in FY14. Further, the Board of Supervisors voted 5-4 to add an additional FTE to

the Department of Economic Development in FY14 to support the Rural Business Development

Strategy

At the April 3, 2013 meeting of the Board of Supervisors, the Board approved the Loudoun

County FY14 budget, to include $30,000 for implementation of the REBDS as recommended in

FY14 and to include an additional FTE to the Department of Economic Development in FY14 to

support the Rural Business Development Strategy

FISCAL IMPACT:

Implementation of this strategic plan will have an impact on program budgets at the operating

level and will likely effect capital budgeting in the future. The operating budget estimates, which

are summarized in the table below, should be used for guidance only on costs associated with

implementation of the strategic plan and are not a result of a detailed budget analysis. Many of

the initiatives are expected to generate significant grant and private funding and County funds

would be used to supplement or match these grants and private sectors funds. As these projects

are studied further, the Board of Supervisors would review these projects in more detail and

make decisions on county contributions to these projects as part of County budget processes in

FY15 and beyond.

Implementation of phase one (1) of each of the nine (9) recommendations, will require the

following estimated County funding by fiscal year:

*FY14 $57,000 Program Execution

**$63,000 1FTE Enhancement-Program Administration

FY15 $58,000 Program Execution





**$69,000 1FTE Enhancement Program Administration

*$30,000 of the FY14 Program Execution can be funded using the Department’s FY2014

proposed base budget.

**FTE Enhancement and Program Execution funds for FY14-FY17 represents the same FTE and

funding levels; not an additional FTE or funds.



April 15, 2013

Page 3 of 7

The chart below outlines the estimated cost for each recommendation on a fiscal year by fiscal

year basis. For FY14, the total cost to implement phase one of each recommendation is $99,500,

of which, $30,000 has been allocated in the existing FY14 Department of Economic

Development budget to develop an integrated approach to equestrian industry enhancement

through a survey of the equine sector for $20,000 and to enhance the rural business development

message and tools on the biz.loudoun.gov website for $10,000.



April 15, 2013

Page 4 of 7

Budget Implications

FY2014 FY2015 FY2016 FY2017

FOUNDATION STRATEGIES

A. Assess the need for a

Loudoun Agriculture

and Rural Business

Accelerator

$50,000/$25,0

00

TBD TBD

B. Develop an Integrated

Approach to Equestrian

Industry Enhancement

$25,000/$20,0

00

$0 TBD TBD

C. Conduct a Regular

Rural Business Owners

Survey

$10,000/$8,00

0

$10,000/$8,00

0

$10,000/$8,00

0

D. Create a Formal

Rural Business Peer-to-

Peer Consulting and

Research Network

$50,000/$15,0

00

$50,000/$15,0

00

$50,000/$15,0

00

PROGRAM STRATEGIES

A. *Re-design

Loudounfarms.org and

biz.loudoun.gov

Websites to Add a

Greater Level of

Business Support

Information

$12,000/$12,00

0***

TBD TDB TBD

B. Encourage the

Formation of a Loudoun

County Trails

Associations

$15,000/$2,50

0

$15,000/$2,50

0

C. Enhance Marketing

Programs to Improve

Linkage Between Rural

and Urban Economies

$5,000 TBD TBD TBD

D. Create a Branded

Rural Business

Awareness Program

$17,500/$5,00

0

$20,000/$10,0

00

$20,000/$10,0

00

$20,000/$10,0

00

E. Develop a

Consolidated, Year-

Round Farmers Market

in Loudoun County

$40,000/$20,0

00

TBD TBD TBD

Note: Figures in Blue represent total estimated expenditure. Figures in Black represent

total estimated County contribution. TBD: To be determined based on program

development and implementation feedback.



April 15, 2013

Page 5 of 7

The $30,000 FY14 funds approved as part of the FY 14 DED budget will pay for $5,000 to

create a branded rural business awareness program, $20,000 for market analysis and feasibility

study to develop a consolidated, year-round farmers market in Loudoun County and an

additional $2,000 toward the $10,000 in the existing FY14 DED budget to enhance the rural

business development message and tools on the biz.loudoun.gov website.

Staff has identified the following potential funding sources to leverage County funding: Virginia

Department of Agriculture and Consumer Services, Agriculture and Forestry Industries

Development Planning Grant program, the United State Department of Agriculture, Value-

Added Producers Grant and Farmers Market Promotion Program Grant and through the Visit

Loudoun Marketing Leverage Program.

Execution Summary

May 2013-June 2013 Begin to secure additional outside funds through Visit

Loudoun, VDACS, USDA and SBA.

Draft requests for proposals to: survey equine owners, to

provide a market analysis and feasibility study to develop a

consolidated, year-round farmers market and enhance the

rural business development tools and message on

biz.loudoun.gov.

July 2013 Advertise to fill Rural Business Development Assistant

position.

Release requests for proposals for: equine survey, and

market analysis and feasibility study to develop a

consolidated, year-round farmers market.

August 2013 Hire FTE.

September 2013-November 2013 Conduct equine owners and event attendees survey.

Conduct feasibility study and market analysis to develop a

consolidated, year-round farmers market.

November 2013 Release requests for proposals to enhance the rural business

development tools and message on biz.loudoun.gov.

*Currently in process.

*** Work already begun and funded in FY13, DED Operating Budget



April 15, 2013

Page 6 of 7

January 2013-April 2013 Enhance the rural business development tools and message

on biz.loudoun.gov.

Ongoing FY14 Enhance marketing programs to improve linkage between

rural and urban economies.

Integrate a product focused branded rural business

awareness program.

REBDS Program Progress and Successes

As previously noted, due to the formation of the Loudoun County Equine Alliance (LCEA), staff

has been able to work directly with the equine sector to facilitate the development of the

mechanism to conduct a regular rural business owner’s survey, which will be the foundation step

to developing an integrated approach to equestrian industry enhancement. The LCEA has been

working closely with DED, Visit Loudoun and the Weldon Cooper Center for Public Service to

finalize the “Horse Event Attendance Survey” and the “Equine Event Managers Survey”. In

order to move forward within the 2013 equine event season, the LCEA, Visit Loudoun and the

Weldon Cooper Center for Public Service partnered to surveyed 340 attendees at the Piedmont

Races in Upperville, VA on March 23, 2013.

Rural Business Development Team Workplan Updates

Implementation of the Strategy is expected to result in an increase in the Department business

development metrics. The monthly Director’s report will reflect progress of the Strategy through

an increase in the number of current active prospects in the pipeline, number of visits to existing

businesses to build new/renew relationships, project ombudsman assistance provided, percentage

of existing business issues resolved, unique website user sessions, members of DED-supported

rural associations/groups and number of rural business development educational events.

The Strategy Update will continue to be supported by the Rural Economic Development Council

and will be reported on monthly at REDC meetings Subsequently, the REDC will provide

quarterly updates to the ED Committee on progress and implementation milestones if the

Committee so desires.

DRAFT MOTIONS:

1. I move that the Economic Development Committee recommend to the Board of

Supervisors approval and implementation of the Rural Business Development Strategy.



April 15, 2013

Page 7 of 7

-OR-

2. I move an alternate motion.

ATTACHMENTS:

1. February 25, 2013 REBDS Action Item to the Economic Development Committee of the

Board of Supervisors

Date of Meeting: February 25, 2013

BOARD OF SUPERVISORS

ECONOMIC DEVELOPMENT COMMITTEE

ACTION ITEM

SUBJECT: Rural Economic Development Council Update-Rural Economy

Business Development Strategy Recommendations

ELECTION DISTRICT: Countywide

STAFF CONTACT: Tom Flynn, Director, Department of Economic Development

Kellie Boles, Department of Economic Development

REDC CONTACT: Mary Ellen Taylor, Chair, Rural Economic Development

Council

REBDS CONTACTS: Martin Hamberger, Co-Chair, Rural Economy Business


Doug Fabbioli, Co-Chair, Rural Economy Business


REDC RECOMMENDATION: The Rural Economic Development Council (REDC)

recommends approval and implementation of the Rural Economy

Business Development Strategy (REBDS), to include commitment

to funding phase one of each of the nine (9) recommendations, as

outlined in the REBDS and to include an additional full time

equivalent be added in FY14 to the Department of Economic

Development-Rural Business Development team to assist with

ongoing and future rural business development efforts.

STAFF RECOMMENDATION: Staff recommends approval and implementation of the

Rural Economy Business Development Strategy and that the Board

of Supervisors considers funding an additional staff to support the

Rural Business Development Strategy as part of the Board’s FY14

Budget Review process.

BACKGROUND:

In 2000, the Loudoun County Board of Supervisors created the Rural Economic Development

Council (REDC), a public/private partnership responsible for promoting rural economic

development in the County and advising the Board on items of import on rural economic

development.

#3

ATTACHMENT 1

Item #3: REDC Update-

REBDS Recommendations


February 25, 2013

Page 2 of 6

At the January 4, 2011 meeting of the Rural Economic Development Council, the Council voted

to recommend that the Board authorize the REDC to develop a Rural Economy Business

Development Strategy (REBDS), for consideration by the Board of Supervisors.

On April 19, 2011, the Board of Supervisors moved to authorize the REDC to prepare a Rural

Economy Business Development Strategy which will identify what a vibrant rural economy for

Loudoun County should be in the future and describe the tools necessary for the rural economy

to get there.

The REBDS will serve as a blueprint for REDC to recommend new strategies for supporting the

rural economy through:

the implementation of new and improved marketing strategies,

research and education,

evaluation of existing and new financial tools to support entrepreneurs entering or

expanding within the rural economy,

resources needed to reach the level of support required public policy development.

The REBDS committee, a sub-committee of the REDC, consists of fifteen (15) sector leaders

and two co-chairs tasked with broad outreach to sectors of the rural economy.

At the November 6, 2012 meeting of the Rural Economic Development Council, the Council

voted to approve presentation of Preliminary Recommendations of the REBDS Sub-Committee

to the Economic Development Committee of the Board of Supervisors for review. The

Preliminary Recommendations of the REBDS were presented to the Economic Development

Committee as an Information Item on November 19, 2012 (Attachment 1).

Following the November 19, 2012 presentation to the Economic Development Committee, the

REBDS Committee presented the preliminary recommendations to various Loudoun County

stakeholders. Recommendations of the REBDS were presented to the Loudoun County Chamber

of Commerce, the Loudoun County Farm Bureau, Visit Loudoun Board of Directors, the

Purcellville Town Council, the Economic Development Commission, Middleburg Town Council

and others. The REBDS was well received by all of the organizations and formally endorsed by

many (Attachment 2).

At the February 12, 2013 meeting of the Rural Economic Development Council, the Council

voted to approve the presentation of the final REBDS (Attachment 3) to the Economic

Development Committee of the Board of Supervisors with a recommendation to the Board for

approval and implementation, to include commitment to funding phase one (1) of each of the

nine (9) recommendations and to include an additional full time equivalent for the Economic

Development-Rural Business Development team to assist with ongoing and future rural business

development efforts.




February 25, 2013

Page 3 of 6


Foundation Strategies

Foundation strategies are a collection of recommendations and suggested implementation

actions upon which solid rural economic development efforts can be based. The four

recommended Foundation Strategies are:

A. Assess the need for a Loudoun Agriculture and Rural Business Accelerator

B. Develop an Integrated Approach to Equestrian Industry Enhancement

C. Conduct a Regular Rural Business Owners Survey

D. Create a Formal Rural Business Peer-to-Peer Consulting and Research Network

Programmatic Strategies

The five Programmatic Strategies that follow are designed to address specific economic

development, business development, and marketing needs, as defined through the REBDS

process. These strategies are:

A. Redesign/Enhance the rural business development component of biz.loudoun.org and

loudounfarms.org to add a greater level of business support information

B. Encourage the formation of a Loudoun County Multi-User Trails Associations

C. Enhance Marketing Programs to Improve Linkage Between Rural and Urban

Economies

D. Create a Branded Rural Business Awareness Program

E. Develop a Consolidated, Year-Round Farmers Market in Loudoun County

Net Cost of Community Services (NCOCS) Study

On July 21, 2012, the REDC presented to the Economic Development Committee, as an

Information Item, the initiative of the Council to undertake the project of a “Net Cost of

Community Services Study” (Attachment 4). The study is an attempt to further determine the

net fiscal contribution of open space, agricultural operations and forestal lands.

The REDC subcommittee’s preliminary findings show that rural farmland and open space in

Loudoun County provide more revenue to the County budget than are returned in the cost of

services and programs. The conclusion was reached by comparison of taxes paid ($15,472,783)

by residents of rural farmland and open space to expenditures ($11,108,820) from the FY11

County budget.

The subcommittee first completed the expenditure review side of the equation by taking a

conservative approach in assigning expenditures to rural farmland and open space on a per capita

basis. Next, the subcommittee captured the real property revenue to the County for rural

farmland and open space. The NCOCS Study is currently evaluating additional revenue sources

to the County from rural farmland and open space outside of real property.




February 25, 2013

Page 4 of 6

The REDC is prepared to make a full presentation to the Economic Development Committee in

April 2013, following the completion of the revenue determination and the final review and

approval of the NCOCS Study by the Rural Economic Development Council.

Return on Investment

To address comments received from the Economic Development Committee, the REBDS

Committee evaluated the expected returns to the County through investment into the rural

economy via the initiatives in the Strategy (Attachment 5). A few highlights of this return on

investment analysis are:

1. The recommendation to “Develop an Integrated Approach to Equestrian Industry

Enhancement” is based on the large populations of performance and recreational horses

currently in the County, which drive a diverse but vibrant rural economy. For each

performance horse added to the County’s inventory, annual rural economy sales of

$7,000 can be expected and new investment in real property of $42,500 per horse can be

expected. The real property component of the investment translates directly to revenue

generated for the County. The County has an equine population estimated at 15,500 and

is a nationally recognized center for performance horses.

2. Based on the model of the Cobb International Farmers Market in Smyrna, GA or the

Roots Market in Worcester, OH, developing a year-round destination market can support

annual sales of $3,000,000 and create at-place employment for sixteen (16) individuals in

Loudoun County.

3. The payback from development of trails, which generally occur through indirect

expenditures. Based on recent research on the economic benefit of trails to a community

by use, it was found that the average in-jurisdiction horse owner will spend $566.20 per

equine ($29.80 per day) in trail use annually which equates to nearly $8.8 million in

annual revenue given Loudoun’s current equine population. However, studies indicate

that horse owners are eclipsed in trail spending by mountain bike riders who spend an

average of $142 per trail day in-jurisdiction.

REBDS Program Progress and Successes

The process of developing a strategy for Loudoun’s rural economy has served as motivation for

sectors of the rural economy to become organized to act as a catalyst to implement final strategy

recommendations. In addition to newly organized business sector groups, the Department of

Economic Development has also initiated progress on the recommendations summarized below.

1. One of the primary tools that the DED Rural Business Development Team uses to recruit

new companies in targeted sectors and expand, retain and grow existing businesses, small

businesses and entrepreneurship is by maximizing networks of common business

clusters. As a result of the REBDS project, two new producer organizations have been

formed: the Loudoun County Equine Alliance and the Middleburg Arts Council.

2. As a result of the formation of the Loudoun County Equine Alliance, staff has been able

to work directly with the equine sector to facilitate the development of the mechanism for

the second Foundation Strategy: conduct a regular rural business owner’s survey.




February 25, 2013

Page 5 of 6

3. Phase 1 of the first Program Strategy Recommendation: re-designing loudounfarms.org

and biz.loudoun.gov websites has been completed. The re-designed loudounfarms.org

website went live on January 28, 2013. Phase 1 of the project was to remove the business

development message from the site and enhance the look and feel of the site to better

engage Loudoun citizens in the rural economy. Phase 2 of the project will be the transfer

of all of the rural business development information to the biz.loudoun.gov site and the

enhancement of the rural business development messaging to provide a greater level of

business support information attract, retain and expand existing businesses.

4. The Rural Economic Development Council has formed an Agriculture and Rural Affairs

Steering Subcommittee in order to take a more proactive role in bringing forward

recommendations to the full REDC regarding rural policy updates and issues.

5. As the first step to implement the fourth Program Strategy Recommendation, the creation

of a branded rural business product awareness program, staff is in the final stage, along

with a subcommittee of the REDC, in redesigning a Loudoun Grown product logo.

Anecdotally, Department staff has engaged in many conversations with likely partner

organizations on the potential of moving projects forward as described in the REBDS, including

Visit Loudoun, Morven Park, Piedmont Epicurean Arts Center, Virginia Tech, Virginia

Department of Agriculture and Consumer Services and the Town of Purcellville, to name a few.

FISCAL IMPACT:

Implementation of this strategic plan will have an impact on program budgets at the operating

level and will likely effect capital budgeting in the future. The operating budget estimates, which

are summarized in Attachment 6, should be used for guidance only on costs associated with

implementation of the strategic plan and are not a result of a detailed budget analysis. Many of

the initiatives are expected to generate significant grant and private funding and County funds

would be used to supplement or match these grants and private sectors funds. As these projects

are studied further, the Board of Supervisors would review these projects in more detail and

make decisions on county contributions to these projects as part of County budget processes in

FY15 and beyond.

Implementation of phase one (1) of each of the nine (9) recommendations, will require the

following estimated County funding by fiscal year:

*FY14 $57,000 Program Execution

$63,000 1FTE Enhancement-Program Administration








February 25, 2013

Page 6 of 6


$69,000 1FTE Enhancement Program Administration

*$30,000 of the FY14 Program Execution can be funded using the Department’s FY2014

proposed base budget (please note that only 1 FTE is being requested over the four year fiscal

period listed above)

Funding and support must be sought on a project-by-project basis and will require significant

investment in grant writing and relationship building. These activities alone are likely to require

additional staffing resources within the Department of Economic Development, even without the

additional administrative burden of expanding web resources, supporting programs such as

mentor-protégé, and staffing additional marketing events. Combined, these additional

administrative and project management functions will require an additional full-time equivalent

position within the Department of Economic Development (as shown above) in order to

implement the strategic plan within the time frames recommended by the REDC and the

consultant. Absent this additional staff, plan implementation will take significantly longer.

DRAFT MOTIONS:

1. I move that the Economic Development Committee recommend to the Board of

Supervisors approval and implementation of the Rural Business Development Strategy

and that the Board of Supervisors consider funding an additional FTE to support the

Rural Business Development Strategy as part of the Board’s FY14 Budget Review

process.

-OR-

2. I move an alternate motion.

ATTACHMENTS:

1. November 19, 2012 REBDS Update to the Economic Development Committee of the Board

of Supervisors

2. Letters of Stakeholder Support

3. Rural Economy Business Development Strategy

4. July 21, 2012 REDC and REBDS Update to the Economic Development Committee of the

Board

5. Conceptual Program Returns 6. Budget Implications Summary Chart

Documents

Loudoun County, Virginia - April 15, 2013 BOARD OF … · Item #6: REBDS Recommendations Economic Development Committee Meeting April 15, 2013 Page 6 of 7 January 2013-April 2013