butler county integrated development budget project · 2014-06-27 · and testing the value of...

Butler County Integrated Development Budget Project Concept Feasibility Report

Final Report June 27, 2014 Prepared by Sourcing Office/Center for Public Innovation A Catalyst for Public Sector Collaboration and Innovation Prepared for Butler County Economic and Community Development Organizations and The Ohio Local Government Innovation Fund Program Ohio Development Services Agency

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Funded by a State of Ohio Local Government Innovation Fund Grant

Butler County Integrated Development Budget Feasibility Study

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Table of Contents

1. Overview….……………………………………………………………………………….Page 3

2. Feasibility Options and Criteria…………………………………………………………..Page 11

3. Butler County Development Context…………………………………………………….3

4. Public Financial Analysis of Butler County Communities……………………………….Page 58

5. Integrated Development Budget (IDB) Design……………………………………….....Page 77

6. Findings and Conclusions………………………………………………………………...Page 90

7. Appendices………………………………………………………………………………..Page 95


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Section I. Overview A. Introduction This is the final report on the Butler County Integrated Development Budget (IDB) grant project, which was funded by the State of Ohio Local Government Innovation Fund (LGIF) Program within the Ohio Development Services Agency. The Butler County IDB Project tests the feasibility of an innovative and collaborative approach to prioritizing and funding economic and community development in Butler County, Ohio, and potentially in other Ohio counties and communities. By definition, a feasibility study is “an evaluation and analysis of the potential of a proposed project, idea or concept, which is based on extensive investigation and research to support the process of decision making.” Feasibility studies fall along a continuum. On one end is a study that searches for an “all or nothing” conclusion, which means the concept tested is or is not feasible without modification. On other end of the continuum is a study that searches for a conclusion based upon arrayed or defined options. The Butler County IDB feasibility study falls into the second category; that is the study aims to identify an option that could be feasible for adoption and implementation. In any case, the conclusion whether something is or is not feasible is unknown until after the study has been completed. Don Iannone, the Executive Director of Sourcing Office/Center for Public Innovation managed the project and prepared this report with some assistance from Kevin O’Brien, an independent public finance consultant, who also runs the Public Management Program and Environmental Finance Center at Cleveland State University. Mr. O’Brien conducted an analysis of the existing fiscal conditions of the collaborative partners for this project. Robert M. Campbell, the former Butler County Port Director and former County Administrator, served as the local team manager and chaired the Butler County Working Group, which is described later. The LGIF grant was provided to Sourcing Office/Center for Public Innovation, a Cleveland-based council of governments (COG) dedicated to helping public sector entities in Ohio to improve efficiency and effectiveness through the adoption of collaborative and innovative policies, strategies, and practices. The grant funds were designated for use in Butler County, Ohio to test the feasibility of the Integrated Development Budget (IDB) concept for Butler County’s considered implementation, or use by other Ohio counties and municipalities. Several Butler County countywide and community collaborative partners supported the grant application to the State of Ohio. The collaborative partners have played an active role in the project by attending meetings, providing information and data, arranging interviews and contacts, hosting Working Group meetings at their offices, and providing feedback on the interim deliverables prepared by Sourcing Office for the project. The project’s collaborative partners are listed below, along with other entities joining the Working Group after the project started. The Integrated Development Budget (IDB) is a new development financing strategy idea with the potential to help public and private sector economic and community development organizations in three important ways. Potentially, the IDB as a strategy could help these entities by:

1. Providing Full (or Holistic) Accounting: The IDB uses best available data to provide a comprehensive or holistic cross-jurisdictional (across agencies or political jurisdictions) view of public sector investments in economic and community development. Best available data was used to prepare this assessment. The project team discovered that good data is limited in many


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cases and nonexistent in some cases. This difficulty exists because “collaborative budgeting” practices are not utilized frequently by the Butler County partners. Interviews with officials at the Ohio Municipal League and the County Commissioners Association of Ohio indicate collaborative budget practices across jurisdictions tend to be limited to projects like Joint Economic Development Districts (JEDDs), Tax Increment Financing Agreements. (TIFs), and agreements between or among jurisdictions related to road or sewer/water projects. These types of collaborative budgeting efforts are found in Butler County.

2. Setting Shared Investment Priorities: The IDB allows agencies and jurisdictions to set shared (e.g. cross-jurisdictional) investment priorities (between and among collaborative partners) related to economic and community development. Cross-jurisdictional investment priorities are very limited in Butler County, and according to our interviews, they are limited in most Ohio counties. Importantly, collaboration is evident among community and countywide development-related organizations in Butler County. The Butler County Transportation Improvement District (TID) is perhaps the best example of ongoing cross-jurisdictional collaboration to achieve shared public sector investment. For economic and community development purposes, there is evidence that local communities collaborate on a fairly regular basis through Butler County Government and the Butler County Port Authority. Working ties to regional economic development efforts in the Cincinnati and Dayton areas are also evident in Butler County, but they appear somewhat limited. Finally, Butler County Government and local jurisdictions are involved in multi-county planning initiatives undertaken by the OKI Regional Planning Commission. In the latter case, this involvement relates for the most part to transportation and environmental improvement projects in Butler County.

3. Improving Results and Return on Investment: The IDB can help improve the efficiency, effectiveness, and return on investment (ROI) of economic and community development efforts through strategic collaboration. It is evident that the partner organizations are concerned about improving their development efforts, and that basic performance measures are employed by all of the participating organizations to assess their results. Like communities in other Ohio counties, results and return on investment (“success”) in Butler County are judged for the most part on a program (e.g. business attraction or business retention programs) or single jurisdiction basis (county or community).

As a starting point, it is important to recognize that government on all levels (federal, state, and local) has not done an adequate job of measuring the true costs and benefits of its policies, programs, and services in the short and longer terms. These assessments are not easy for many reasons, including the need for better data and analytics. The starting point is for policy makers and practitioners to work together (collaborate) in searching for and testing the value of innovative solutions. Some governments have tried and provided only partial answers. Many have not tried at all because of limited resources and inadequate data and analytical tools. Economic necessity, especially in today’s world, requires that we work harder and smarter in solving problems. A possible major benefit of the Integrated Development Budget (IDB) approach to economic and community development is its insistence that policymakers and economic and community developers do a better job of assessing public investment costs and benefits in a true and complete sense. In this sense, the IDB could become a valuable public sector innovation. By thinking (and working) in a more integrated and holistic manner about the funding of economic and community development, we are more likely to form an understanding of the true costs and benefits of these activities. From that understanding, higher-impact economic and community development strategies can be identified and set in motion.


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B. Feasibility Study Project Objectives This project’s three main objectives were to:

1. Devise an IDB Prototype: Develop a beta version (or a prototype) of an integrated development budget (IDB) for Butler County. IDBs do not exist in Butler County or any Ohio county at this time. In this regard, the project team had to “invent” a conceptual model that embodies the ideas of “collaborative and comprehensive budgeting” and “inter-jurisdictional collaborative investment” in economic and community development. Note: The IDB is a “budgeting strategy” and the IDB is a unique form of a “budget.”

2. Test the IDB Prototype’s Feasibility: Test the feasibility of the IDB approach in Butler County.

The project collaborative partners initially agreed upon three priority areas (workforce development, transportation development, and technology fiber optics infrastructure) as opportunities for test applications.

3. Sharing of Project Learning: Communicate the results of the project to other local governments

in Ohio. A certain amount of this sharing of learning can occur within the project schedule, but a continuing effort will be needed over the longer term to expose public sector decision makers to the IDB concept and how they may benefit from the IDB.

The three biggest constraints or limitations to the project team’s ability to achieve its three objectives were: 1) the availability of good quality data; 2) the lack of a compelling motivation (e.g. a significant enough perceived opportunity or presence of a crisis) to shift to an integrated budgeting approach; and 3) loss of the Butler County Port Authority as the IDB champion because of the transition in the Port from being more independent to a new structure with a closer relationship with Butler County Government. It is always a challenge to acquire the data required to test a new idea. County and community level financial data over the years has been prepared in line with the purposes of the single jurisdictions and not groups of jurisdictions. This creates enormous problems in developing an integrated (or cross-jurisdictional) understanding of budgets and investments. For this reason, much of the study is “conceptual” in nature. The motivation challenge is ever-present in government; that is unless a major crisis exists, public sector innovation and policy and strategy change are not given attention. This is unfortunate because once a crisis exists; it is too late to make improvements. Public sector innovations require champions to succeed. The Port had a vision of how the IDB could both strengthen its role in development finance at the local level and how the IDB could increase the level and quality of collaboration among County Government, the Port, and local jurisdictions to accomplish a shared economic and community development agenda. The Port currently reports up to the County Development Department, which expressed an interest in revisiting the implementation of possible IDB projects six months from now once the role of the Port has been redefined.


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C. Project Deliverables Five sets of deliverables were produced in this project to achieve the three project objectives:

1. Presentations: Interim presentations and final project presentation were prepared and delivered related to the project’s progress. Seven interim presentations have been provided to the Butler County IDB Working Group (BCWG). A final presentation was made to Butler County officials on May 28, 2014, and a presentation about the project results in Columbus with LGIF officials and other development officials from the State of Ohio and local economic and community development representatives from across Ohio on June 23, 2014.

2. Analysis Reports: Analytic reports were prepared and delivered on Butler County’s economic base performance, local and regional economic and community development trends, and the financial condition of the collaborative partner jurisdictions. These reports have been completed and shared with the Butler County Working Group (BCWG).

3. Final Project Report: This report is the final report documenting the overall work process,

outcomes, and learning from the project. Recommendations are made by the Center for Public Innovation on how Butler County stakeholders might proceed with IDB implementation when it is ready to do so.

4. Communication Website or Blog: A blog was used throughout the project providing real-time

information about the project, what has been learned, and the project’s accomplishments. Blog address: http://butlercountyidb.wordpress.com/

5. Final Results Sharing Sessions: A public information-sharing meeting was held on June, 23 2014 about the project results with the State of Ohio and other interested parties in Columbus.

6. Article: An executive-style article about the project results and the value of the IDB was prepared for use by the State of Ohio and other interested parties.

Information and knowledge are fundamental to public sector innovation, especially where political jurisdictions are being asked to work collaboratively. For this reason, this report contains a considerable amount of analysis. Work on the grant project began in December 2012 and project work was completed at the end of June 2014. Since its start, Sourcing Office/Center for Public Innovation (CPI) has worked with a group of countywide and community development organizations in Butler County to give shape to the IDB concept and test its feasibility. Openness and flexibility have been observed throughout this process. The Working Group (BCWG) included: 1) the collaborative partners signing onto the LGIF grant application; and 2) other entities expressing an interest in the project. Collaborative partners are identified below with an asterisk by their name. The involved entities include:

1. Butler County Port Authority (Lead organization/Local project coordinator)* 2. Butler County Department of Development* 3. Butler County Information Services Department


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4. Butler County Transportation Improvement District 5. City of Fairfield Department of Development Services* 6. City of Hamilton Department of Economic Development* 7. City of Middletown Department of Economic Development* 8. City of Monroe Department of Economic Development* 9. City of Trenton Department of Economic Development* 10. Community Design Alliance of Hamilton 11. Greater Hamilton Area Chamber of Commerce* 12. Liberty Township Department of Economic Development* 13. West Chester Township Department of Community Development* 14. Butler County Workforce One 15. Cincinnati State Technical and Community College

The BCWG met on a monthly basis with Sourcing Office/Center for Public Innovation from December 2012 till July 2013, and on an every 2-month basis from August 2013 to the present. The BCWG members have provided information through their participation in meetings, surveys and other activities to give shape to the project. In addition, Sourcing Office/Center for Public Innovation has conferred by phone once or twice per month with the Butler County Port Authority about the project. Note: The Port served as the Local Project Coordinator for this project. D. Project Scope and Methodology Changes Two adjustments were made to the original project scope and methodology about 3 months into the project. The scope change triggered a project methodology/approach change. As the Sourcing Office/Center for Public Innovation project team began to engage the Butler County collaborative partners (the Project Working Group) about the project focus and outcomes, it became apparent that two changes were required to ensure the outcomes of the project would be useful to the collaborative partners. The collaborative partners did not believe the originally envisioned development project case studies would provide a meaningful indication of the usefulness and feasibility of the Integrated Development Budget (IDB) in Butler County. The original scope included these five project case studies:

1. Industrial redevelopment project in one of Butler County’s major cities. 2. Downtown redevelopment project in one of Butler County’s cities. 3. New commercial development project in an unincorporated area of the County. 4. New industrial development project in an unincorporated area of the County. 5. Housing or residential development project illustrating the effects of mortgage foreclosures on a

Butler County neighborhood or community. Their rationale for this change included these valid arguments:

1. The case study projects were not approached originally through an IDB strategy, and therefore very limited information was available on the economics and finances of these projects.

2. The case study projects would provide only limited insight into the value of an IDB approach as a model for the future.


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3. It would be hard to generalize the results of the five case studies to the larger universe of similar projects in Butler County. In other words, there was no defensible way to assess the economic impact of these projects and generalize these findings to the larger project universe since development projects vary considerably.

4. Finally, the Working Group believed other priority issues would lend themselves to cross-jurisdictional collaboration in Butler County. See below.

Instead, the Working Group believed that it would be more beneficial to select three policy areas where cross-jurisdictional collaboration was more likely in Butler County. After some discussion, the group suggested the feasibility study focus on these three economic and community development priorities:

1. Workforce as a critical resource requirement for economic development. 2. Technology infrastructure (fiber optic ring) as a critical resource requirement for economic

development. 3. Transportation infrastructure as a critical resource requirement for both economic development

and community development. All three areas are important “shared” priorities for countywide and community development officials. These officials believed that by working together they could have a greater impact on these priorities. Sourcing Office/Center for Public Innovation did not believe this change would have any negative material impact on the IDB feasibility study. In fact, it is advantageous to work on priorities that are perceived as very important to the partner organizations, the local economy, and Butler County communities. An accompanying shift in the project methodology was required in light of the scope change. Under the original scope, it was anticipated that three university experts (from Bowling Green University, Miami University, and Kent State University) identified in the proposal would prepare the project case studies and the related economic impact analysis. This work was no longer required. These resources were applied to other parts of the project work plan, including work that was performed by Kevin O’Brien (a private consultant also working for Cleveland State University) as a project consultant. In conclusion, the same overall project objectives have guided the feasibility study, and the project team produced the same deliverables. E. Project Methodology The project methodology combined the following elements:

1. Working Group: Which was formed to engage the local collaborative partners, share information and ideas, and set priorities for the project. Status: Completed.

2. Feasibility Option Identification: Which defined a range of options for using the IDB model in Butler County. Status: Completed and described in this report.

3. Demographic, Community, and Economic Analysis: Which was used to understand existing

community and economic development conditions in Butler County and its surrounding area. Status: Completed and in this report.


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4. Fiscal Conditions Analysis: Which provided a baseline on the financial position of the collaborative partners and to identify some future financing ideas within the IDB model. This analysis included an assessment of current economic and community development expenditures. Status: Completed and in this report.

5. Existing Economic and Community Development System Analysis: Which examined the

structure and functions of current system serving Butler County communities. Status: Completed and in this report.

6. Economic and Community Development Survey: Which collected data used in the System

Analysis and the Fiscal Conditions Analysis. Status: Completed and in this report.

7. IDB Prototype Development: Which led to the development of a prototype model that could be tested in the project. Status: Completed in this report.

8. IDB Priority-Setting: Which led to the identification of three top priorities (workforce,

technology infrastructure, and transportation) for Butler County collaborative partners to be used in the testing of the IDB concept. Status: Completed and in this report.

9. IDB Feasibility Assessment: Which tested the feasibility of using the IDB in an overall sense

and in the three priority areas. Status: Completed and included in this report.

10. Report Preparation and Information Sharing: Which was an ongoing aspect of the work process from start to finish. Status: All completed during the project timeframe.

F. History of the Integrated Development Budget Concept The Integrated Development Budget (IDB) is a public accounting and planning tool that provides a full accounting of state and local government expenditures for economic and community development in a local area, such as a county. As developed in Butler County, the IDB is seen as a shared data and analytic tool that can help countywide and community level development officials collaborate to save money and increase the return on investment (ROI) on the funds they invest in economic and community development. It is seen as a forward-looking tool to identify the best future opportunities for collaboration and coordinated investment in economic and community development. State governments have given the greatest attention to the IDB. In a 2001 article, Dick Lavine from the Center for Public Policy Priorities in Austin, Texas, described the problem to which the IDB responds: “In an integrated economic development budget, all state economic development activity would be presented in a single document, regardless of the agency involved. Currently, it is very difficult to determine quickly from an examination of current budget documents how state economic development funds are being allocated.”1 Lavine saw the scattered investments in economic development across Economic Development, Workforce Development, Agricultural Extension, Transportation, and Higher Education as unguided by unified policy or shared expectations on return on investment (ROI) on these state funds. His article described two general types of expenditures (direct appropriations and forgone tax revenues [tax expenditures]) in

1 Lavine, Dick, “An Integrated Economic Development Budget: Putting Apples and Oranges” in the Same Basket, Texas Business Review, February 2001.


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economic development. Tax expenditures, in Lavine’s analysis account for 80% or more of the total public investment in economic development in Texas, Michigan, and North Carolina. The largest source of these development-related tax expenditures was tax abatements and credits given to businesses to invest and grow jobs. The history of the Integrated Development Budget (IDB), which has also been called the Comprehensive Development Budget and the Unified Economic Development Budget, dates back to the early 1990s when concern over the costs of state and local government expenditures on business incentives was very great.2 In 1996, Minnesota Public Radio hosted a two-day conference entitled The Economic War Among the States: A Symposium for National Discussion, at which several speakers called for a fuller accounting on economic development related expenditures because of increased use of government incentives to expand and attract businesses and jobs.3 The Integrated Development Budget was seen as a possible tool to achieve this fuller accounting for government economic development incentives. Since that early time, several states have explored the use of Integrated Development Budget policies, and some implemented these policies, including Texas, Vermont, Kansas, Kentucky, Rhode Island, and the District of Columbia. In 1999, a group of researchers from Cleveland State University, led by Donald Iannone, recommended that the State of Ohio adopt an Integrated Development Budget. While the idea was given serious consideration by the State of Ohio, the recommendations was not adopted by state officials, even though the Cleveland State University study estimated that the State of Ohio spent on average $3 billion per year in direct appropriations and foregone tax revenues on economic development.4 Washington DC-based Good Jobs First, a public policy institute promoting corporate and government accountability in economic development, is an advocate of the IDB and has prepared model legislation for state and local governments to adopt the IDB approach. Good Jobs First estimates that tax expenditures (forgone tax revenues) for economic development are five times greater than appropriated economic development funds at the state level.5 Learning from the experience of states with the IDB approach is logical for Butler County and other local governments willing to consider the new approach.

2 Burstein, M.L., and Rolnick, A.J., “Congress Should End the Economic War Among the States”, Federal Reserve Bank of Minneapolis Annual Report 2004, June 1, 1995. 3 Website: http://news.minnesota.publicradio.org/features/199605/01_wittl_econwar/ 4 Iannone, Donald, “An Assessment of the Economic and Fiscal Impacts of State of Ohio Economic Development Programs”, May 1999. Report to the Ohio Legislature and Governor. 5 Good Jobs First, Model Legislation for Full Economic Development Accountability, Washington, D.C., 2008.


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Section II: Feasibility Options and Criteria A. Introduction The overall purpose of this project was to test the feasibility of the Integrated Development Budget (IDB), a promising public finance policy innovation that was born in the early 1990s. The idea was given some attention by a half dozen state governments and a few major cities, but was put on the back burner because government agencies at the time saw little need to make major changes in how they invested in economic and community development. And while many state and local governments during that period were under pressure to become more transparent and accountable for their development expenditures (especially related to business incentives), no sustained public sector leadership existed for making serious changes in economic and community development finance. Things have changed as economic and financial pressures mount on the governmental sector in today’s world. One example of this change in Ohio is the role being played by the Ohio Attorney General (OAG), through the OAG’s Annual Economic Development Report, which assesses the degree to which state development funds are used responsibly, and whether businesses deliver on their job development promises. The Integrated (or Comprehensive) Development Budget (IDB) encourages public sector development organizations to do three things: 1) think in a comprehensive and integrated way about their role and investment in development; 2) work toward a fuller accounting of their investments across programs, departments, agencies, and jurisdictions; and 3) move to a priority-based strategic investment approach to using public money to encourage and assist community and economic development. In all fairness to state and local officials, change is not easy, especially major changes in how public money is budgeted and used. Budgeting processes are inherently political, and the use of public money until recent years has not been guided to any significant degree by performance measures and return on investment (ROI) expectations, as they have been in the private sector. The table below (Table 1) calls attention to the significant differences in “strategy” in the public and private sectors. This is important as we define how the IDB model (or approach) could be used in Butler County, Ohio. Table 1: Comparison of Public and Private Sector Strategy

Strategic Feature Private Sector Public Sector General Strategic Goal Competitiveness Mission effectiveness General Financial Goals Profit; growth; market share Cost reduction; efficiency

Values Innovation; creativity; good will; recognition Accountability to public; integrity; fairness

Desired Outcome Customer satisfaction Public satisfaction Stakeholders Stockholders; owners; market Taxpayers; inspectors; legislators Budget Priorities Defined by: Customer demand Leadership; legislators; planners

Justification for Secrecy Protection of intellectual capital; proprietary knowledge Public security

Key Success Factors Growth rate; earnings; market share; uniqueness; advanced technology

Best management practices; sameness; economies of scale; standardized technology

Source: Paul Arveson, The Balanced Scoreboard Institute


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The IDB model encourages a new approach--a blend (or hybrid) of public and private sector financial strategy--to using public money for economic and community development. In this hybrid, legitimate public purpose must be at least preserved and hopefully enhanced, which we believe is possible with help from the IDB financing approach. The history of the IDB idea finds the IDB idea to be of interest and worthwhile, but lacking the “demonstrated understanding” and “political will” to achieve its widespread adoption. The economy and public finances were considerably better back in the 1990s than they are today. Perhaps the IDB will find its place in local and state development financing now. This report argues that local governments need “power tools” to spark development (and redevelopment) in these post-recession times. The IDB is one such power tool that, if implemented in the right way, can spark new growth and development, redevelopment, and simultaneously conserve public sector funds and increase the return on investment (ROI) of these funds. One other important point should be made here. The IDB idea is being tested for its feasibility in Butler County, but this study also has been undertaken with other Ohio counties, municipalities, and special districts in mind. Quite importantly, Butler County officials (through the IDB Working Group) have shown a willingness to explore the IDB idea, help give shape to it, and then decide whether and how it might be adopted. Perhaps this is the best we can expect in testing the value of public sector innovations. Butler County officials deserve credit for having an open mind to new ideas. B. Feasibility Options It is important to consider possible feasibility study outcomes, which are presented in Table 2 below. Table 2: Possible IDB Feasibility Study Outcomes Area A. No IDB

Applications B. Some IDB Applications

C. Extensive IDB Applications

I. Butler County: 1. Countywide 2. Groups of Communities 3. Individual Community

Option IA-1 Option IA-2 Option IA-3

Option IB-1 Option IB-2 Option IB-3

Option IC-1 Option IC-2 Option IC-3

II. Other Ohio Counties, Municipalities, and Townships: 1. Countywide 2. Groups of Communities 3. Individual Community

Option IIA-1 Option IIA-2 Option IIA-3

Option IIB-1 Option IIB-2 Option IIB-3

Option IIC-1 Option IIC-2 Option IIC-3

The IDB concept could be used in either a broad or narrow way in Butler County and other places. It could be used to aggregate budgets: 1) across functionally defined development departments in a single


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jurisdiction; or 2) across department or functions across multiple jurisdictions. This point is demonstrated by the array of implementation options identified in Table 2 above. The outcome of this study can also be seen in terms of scenarios that embody identified options in Table 2. The worst-case scenario is that there is no application (Option 1A-1 through Option IIA-3) of the IDB in Butler County or any other Ohio jurisdiction. The best-case scenario (Option IC-1 through Option IIC-3) is that the IDB has wide application in Butler County and other Ohio jurisdictions. The most likely case scenario is that some application (Column B Options) of the IDB occurs in Butler County and other Ohio jurisdictions. This is a feasibility study of the IDB concept. The concept must be “demonstrated” in a real-world sense as a next step. This demonstration would involve creating a real IDB with real budget data and then putting that budget into place and assessing the results in using the IDB approach. Figure 1 below illustrates this process. In a nutshell, these steps are required to set the IDB in place:

• Step 1: (This project) IDB Design and Feasibility Assessment: If feasible, move to Step 2.

• Step: 2: Using feasibility results, demonstrate the IDB concept in real-world application.

• Step 3: Using the demonstration results, devise real-world implementation in chosen areas.

• Step 4: Monitor and assessment results of real-world use of the IDB. Figure 1: Full IDB Process

C. Feasibility Factors and Measures Two sets of yardsticks (criteria) were employed in assessing the feasibility of the IDB in Butler County:

1. Feasibility Study

2. Real-‐World Demonstration Project

3. Real-‐World Implementation (with monitoring)


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1. Overcoming Barriers: Which assesses whether the perceived and real barriers to the adoption and implementation of the IDB model can be avoided, reduced, or overcome. (See Criteria Set 1 below.)

2. Creating Advantages: Which assesses whether the IDB model can provide sufficient advantages or benefits to its users to justify their adoption of the model. (See Criteria Set 2 below.)

Both sets of criteria are discussed next, along with a general assessment of the relative importance and impact of these factors in determining IDB feasibility in Butler County. It is important to identify the most important factors determining whether innovations—in the public or private sector—are adopted and implemented. The findings of this study indicate there are five major ones, which are discussed below along with specific ideas on how the IDB can capitalize on these driving factors and achieve favorable development results for Butler County.

1. Pain and Gain: The pain of staying the current course outweighs the pain of changing courses. Concomitantly, the benefits of the current approach are less than the benefits of the new approach. Our assumption is that public sector finances will continue to be highly strained in the future, and these constraints will produce greater receptivity to new ideas and approaches, especially if they are rewarded. Financial pressures will grow eventually in all Butler County communities, but especially in the older urban communities (older cities), which have experienced greater losses of businesses, jobs, and tax base than the newer growing townships. This “old versus new” dynamic is common to most Ohio counties. Where do things stand relative to this factor in Butler County today? See below.

a. Pain: While budget constraints have grown for the collaborative partners. The pain is

bearable; at least in the next couple years. According to the fiscal analysis completed by Kevin O’Brien, the partners are in somewhat better shape than many jurisdictions and special districts in Ohio. Our analysis of the County’s economic base indicates it is relatively healthy and still growing in terms of businesses, jobs, and population. Will this situation change in the foreseeable future? That depends on whether Butler County continues to grow as it has in the past, whether a damaging national recession returns, whether Butler County do not experience any severe problems such as major business closings, whether the older cities can survive without falling into fiscal crisis, and whether the longer term cost of growth in the newer communities (the growing townships) do not pose serious financial challenges to the townships. In summary, Butler County motivation to adopt the IDB will not be driven by “pain” to any significant degree in the near term. But this may change over time.

b. Gain: It is our assessment that the “gain” motivation (coupled with some pain or discomfort) is a greater driver for adoption of the IDB approach than “pain.” This is the case because: 1) Butler County and its communities have favorable development and redevelopment potential based upon strategic transportation access and regional market location; 2) Butler County’s economic and community developers are concerned about bringing about “quality” growth and development in the County’s urban and rural/suburban locations; and 3) local officials show foresight in their community plans


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and a desire to see development occur in a way that does not burden residents and businesses.

2. Timing: Schedules play a role in the adoption of innovations. The public sector has historically

favored a “phased over time” approach to undertaking planned change. The concept of “disruptive innovation” is much more common in the private sector, and much less common in the public sector. Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. The IDB can be best introduced in an incremental way (or on phased basis) to allow for adaption to change. We believe the incremental or phased approach is logical in Butler County and other Ohio counties. A phased approach to the IDB could be successful in Butler County, if focused on the right issues (e.g. workforce, technology infrastructure, and transportation as critical resource inputs to the local economic and community development process.

3. Results: An innovation must lead to better results or outcomes to be willingly adopted. In that

regard, it is important to define “success,” and identify the most influential factors to attaining positive economic and community development outcomes. While performance measures (or metrics) are finding greater application in economic and community development, they remain relatively new in the field. Development officials in Butler County are using performance measures, and they are using several common ones in their work. These include: job development; job pay level; private sector investment leveraged; and local tax revenues generated. Performance tracking is evolving in Butler County, much as it is in other Ohio counties. The IDB approach could provide the impetus for greater use of performance measures, and it could lead to better economic and community development outcomes in Butler County and other Ohio counties. Development results (outcomes) can be judged from the following standpoints:

a. Getting more of what the area is already getting: Which means expanding sectors of

the local economy that already are growing favorably. Examples in Butler County include: 1) the continuing expansion of manufacturing (which may occur in terms of facility improvements but create limited new jobs); 2) the continuing expansion of retail trade and consumer services (which could create competition for existing older retail centers); or 3) the continuing expansion of wholesale trade and distribution (which could be land-intensive in many cases).

b. Diversifying the local economic base with new industries that can grow successfully in Butler County communities: Many of the target industries being given attention by local economic developers could contribute to this diversification. While industry diversity is important, it is equally important that economic diversity be seen in terms of size of businesses (small, middle market, and large), ownership (locally owned companies versus branch plants and offices and), socially defined diversity (minority and women-owned businesses), and generationally defined ownership (Millennials, Boomers, Retirees, etc.).

c. Raising the quality of development across development targets: The emphasis on

quality is receiving greater attention by economic developers as they focus their sights on higher paying career oriented jobs in industries, developing quality retailers serving


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unique and sustainable market niches, and industries that have a low environmental impact in terms of consuming land, water, and other resources.

The IDB could be used to create programs and investment strategies within and across communities that achieve better results as illustrated by the three examples above.

4. Motivation: Rewards also help spur the development and adoption of innovations in any type organization, including public sector entities. By providing grants for innovation, Ohio’s Local Government Innovation Fund (LGIF) helps to motivate the adoption of new ideas. Local governments can create their own rewards (including financial and personal recognition rewards) to motivate innovative ideas and actions. Application of the IDB would likely increase if Butler County communities had some reward to do so. Use of an IDB approach could be motivated by these actions:

a. Developing “cross-jurisdictional programs” that are planned, financed, managed, and executed by teams of economic and community developers across Butler County jurisdictions. Examples include: 1) a shared existing business retention and expansion program; 2) a shared business attraction program; 3) a shared entrepreneurial development program; 4) a shared workforce development program. Countywide organizations, especially the Port Authority and County Government could be very instrumental in these areas.

b. Creating an economic and community development investment pool, building on the appropriate parts of Montgomery County’s Economic Development/Government Equity (ED/GE) fund. See ED/GE Fund information here: http://www.mcohio.org/services/ed/edge.html (While the Working Group has some concerns about shared financial pools, such a pool could be structured in line with local community values and provide “catalyst funds” for development. The fund could even be called the “Butler County Catalyst Fund.” The Port Authority could provide management of the fund with oversight by County Government and communities.

c. Creating a long-term countywide economic and community development plan to guide future investments made by the Transportation Improvement District (TID) in Butler County. This plan would ensure that future highway investments stimulate the type and quality of development envisioned in the plan. Moreover, the plan could ensure that an equitable financial investment strategy is followed in making transportation improvements. While transportation improvements are made for larger regional transportation purposes, the economic and community development plan would ensure that the impacts on communities are predominantly positive in terms of economic and community development.

d. Creating an economic and community development plan that guides the future

marketing and use of the Fiber Optics Ring in Butler County (BCFOR). This plan would ensure that BCFOR fosters economic and community development in the County in the right ways. This purpose could move negotiations along between County Government and the Port Authority in how they could work in partnership to capitalize on this technology asset for economic and community development.


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e. Creating an integrated “Workforce Development for Economic Development”

strategy for Butler County. While progress has been made in bridging workforce development and economic development in Butler County, the link needs to be forged in a more powerful and direct way to ensure that Butler County employers have the workforce they need to grow and create quality jobs in Butler County communities. This scope of this bridging plan should be to align the major workforce development and educational resources serving the County with the County’s most promising economic development and redevelopment opportunities. The unique aspect of this strategy to provide a competitive workforce for both development and redevelopment.

5. Leadership: Finally, champion leadership plays an important role in motivating innovation.

Champions ensure that good ideas are translated into action and implementation. If Butler County officials choose to champion the IDB innovation, it would promote the application of the idea in Butler County and other Ohio counties. An integrated leadership team is required to set in motion in the IDB approach. This integrated team should include representation from:

a. County Government b. Port Authority c. Hamilton Area Chamber of Commerce d. All the partner communities e. Workforce One of Butler County f. Cincinnati State g. Butler Tech h. Transportation Improvement District i. Others to be identified (Perhaps some regional partners like the Cincinnati USA

Partnership and the Dayton Development Coalition.) This leadership team would play the following roles:

1. Set policy direction 2. Create accountability 3. Advocate for resources 4. Reward and recognize achievements from the IDB approach

Criteria Set 1: Overcoming the Barriers to the Adoption of the IDB The feasibility of the IDB hinges on Butler County’s ability to overcome the primary barriers to public sector innovation. These barriers are not unique to Butler County; they are realities for all counties and cities. Innovation, by its very nature, requires changes in how public entities “do business.” Ohio’s Local Government Innovation Fund (LGIF) Program fully recognizes this need. The objectives of this project are in synch with the LGIF Program’s mission. Many innovations, both large and small, have occurred in economic and community development over the years. The IDB can have a positive impact on these activities at the community, county, and regional levels. The approach could be applied countywide in Butler County, and it could be used by groups of communities and individual communities. Common ground and shared purpose, coupled with


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good ideas and quality information, are fundamental to all these applications of the concept. And the primary barriers to innovation must be overcome in all applications. A review of the literature and interviews with experts indicate there are five obstacles to the adoption of the IDB approach:

1. Political will to promote change is insufficient: For political reasons, many state and local elected officials have not been willing to collaborate at the level required to administer this type approach to economic and community development budgeting and investment. This was the case when the concept was first proposed to State of Ohio officials back in 1999. It was also cited by Greg LeRoy from Good Jobs First and Jeff Finkle from the International Economic Development Council (IEDC) in 2012 interviews.

2. Government structure impedes collaboration and coordination: Historically, economic and community development spending has been spread across government agencies or departments, and mechanisms to link and coordinate these expenditures have not existed. For example, infrastructure agencies are responsible for making highway, sewer and water investments, which impact economic and community development, but these investments are often not coordinated with state and local development priorities. In short, politically defined “silos” drive economic and community development investment.

3. Differences in state and local development priorities: It is not uncommon for different

development priorities to exist at the state and local/regional levels. While many states, including Ohio, have encouraged greater regional cooperation among local jurisdictions for economic development, current public policies (including tax policies) cause many jurisdictions to fend for themselves rather than relying on statewide or regional priority-setting processes. Also, state spending cuts have posed a financial challenge for local governments in many states, including Ohio. These cuts have reduced trust between state and local governments. This issue is an impediment not only to new financing approaches, but in other many areas as well, according to reports by the National League of Cities and the International City and County Management Association (ICMA).

4. Economic development remains largely individual deal-driven: The deal-driven nature of

economic development causes state and local government development budgets to be organized in line with the deal-making purpose, rather than organizing these budgets to make strategic investments in strengthening the overall business or economic climate. This is an observation Don Iannone and other economic development experts have made from across the U.S.

5. Jurisdictional rivalry: Local jurisdictions rival with each other for economic and community

development resources (including funds) and opportunities (including businesses, jobs, and tax revenues), which reduces interest in and the ability to adopt more collaborative approaches to economic development. This issue has been a standing problem with respect to the use of economic development incentives, which have been used to lure businesses and jobs from one political jurisdiction to another. This is one of the major reasons Cuyahoga County Government adopted an “anti-poaching” policy, which has been signed by all 59 cities and villages in the County in the past couple years.

While many states, including Ohio, have seen improvement in these five conditions, these conditions remain barriers to the adoption of IDB-type innovations. Sourcing Office believes that the lingering


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harsh economic and fiscal realities facing municipalities, townships, counties, regions in Ohio could contribute to greater interest in the IDB approach as a strategy to save money and improve ROI. Strategies to Overcome the Barriers to Adoption A review of the literature and interviews suggest the following strategies can be helpful in overcoming the five cited barriers to adoption of the IDB in Butler County, as well as other Ohio jurisdictions: Building Political Will for New Ideas

1. Demonstrate how the new approach could produce greater benefit than the current approach. 2. Publicly recognize elected officials for their willingness to collaborate and innovate. 3. Provide financial incentives for local governments to collaborate and innovate. 4. Develop citizen support for new and better ideas, encouraging elected leaders to innovate. 5. Develop outside support for public innovation among political peers, business, and civic leaders. 6. Work to reduce and mitigate risks associated with innovative new ideas. 7. Create internal staff champions for innovation. 8. Provide leadership development training and coaching that helps elected leaders and public

administrators to take calculated risks with new ideas. Transcending Silos

1. Create inter-departmental or inter-agency teams with shared responsibility and accountability to work across boundaries. Reward and recognize “boundary spanners” who get favorable results.

2. Provide budget and other financial incentives to motivate inter-agency or inter-jurisdictional collaboration and innovation.

3. Provide training on how to collaborate and innovate with new ideas. 4. Make collaboration and working outside silos a priority in strategic and operating plans. 5. Use best practices and metrics employed elsewhere that show how strategic collaboration

produces greater efficiency and effectiveness Building a Shared State-Local Government Agenda

1. Provide opportunities for non-confrontational interaction between state and local officials at the elected and staff leadership levels.

2. Use success stories from within and outside the state that show how shared state-local agendas can lead to stronger results and create needed efficiencies.

3. Create financial incentives for local governments to work cooperatively (both within and across regions) with each other and with state government.

4. Reward and recognize elected and staff leaders that successfully build and accomplish shared agendas related to economic and community development.

5. Use data and analysis to demonstrate how shared agendas make a greater difference. 6. Train public sector leaders in shared agenda building and shared action.

Strategic Approach to Deal-Making

1. Good deals or projects will continue to be essential in economic and community development. The key is to ensure that projects completed or deals done are consistent with strategic plans and overarching policies guiding development.


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2. Reduce the public sector costs associated with economic and community development projects by ensuring that these projects do not promote urban sprawl, or create other unintended costs that local and state government and citizens must pay.

3. Use cost-benefit analysis and performance measures or metrics to determine whether project or deal costs or benefits are greater.

4. Encourage inter-jurisdictional shared service strategies to accomplish economic and community development priorities.

5. Use research and data to demonstrate the importance of coordinated approaches to strengthening public finances and accomplishing economic and community priorities.

6. Train public sector professionals to approach deal making and project development with a careful eye to short and longer-term impacts associated with deals or projects.

Reducing Inter-Jurisdictional Rivalry for Development Opportunities

1. While it is true that competition is a way of life in economic and community development, community and regional sustainability require cooperation and collaboration among jurisdictions to ensure that counties and economic regions remain and grow stronger.

2. Other counties and communities should consider the adoption of anti-poaching policies, like the one adopted in Cuyahoga County, to discourage zero-sum economic development practices.

3. State government and local governments across Ohio should work together to ensure that state and local economic development incentives are aimed at positive-sum economic development, while ensuring that Ohio strengthens its competitive edge in the national and global economic development marketplace.

4. Greater attention should be given to annual the Economic Development Accountability Report produced by the Ohio Attorney General.

5. Success stories in overcoming non-productive inter-jurisdictional rivalry among jurisdictions in Ohio and other states should be examined and shared to help more local jurisdictions increase their collaboration with each other for economic development.

In conclusion, the barriers to public sector innovation can be overcome, and the barriers to adopting the Integrated Development Budget (IDB) approach to economic and community development can be overcome. It is important to clarify the focus of this project at this point. The project has focused on both economic development and community development, but greatest attention is given to economic development activities because of the expressed interests of the Butler County collaborative partners. Economic development and community development are important to each other’s success. A vital local economy that provides opportunities for businesses and employment for residents is essential for positive community building. And community development is vital to economic development by ensuring that communities’ offer a high quality of life and quality public services to residents, workers, and businesses. Criteria Set 2: Creating Sufficient Advantage or Benefit A review of the economic and community development literature and expert interviews indicate there are six positive impacts to work toward in introducing a new public sector innovation in economic and community development. For each, key priorities and strategies are identified below.

1. Quality of Life: Positive impact on community and countywide quality of life for residents. Key priorities and strategies to achieve this impact are:


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a. Housing b. Education c. Cost of living d. Safety e. Shopping/Other amenities f. Transportation g. Recreation

2. Local Government Finances: Positive impact on conserving and enhancing local government

finances (including tax base) and increasing ROI from investments in economic and community development. Key priorities and strategies to achieve this impact are:

a. Saving or conserving local government funds b. Increasing the return (ROI) to the community from economic and community

development investments c. Growing the community tax base

3. “Good Jobs”: Positive impact on the growth of “good” jobs for residents and workers. The key

dimensions of “good” jobs are: a. Living wage level jobs (where are possible) b. Jobs with reasonable health, insurance, and retirement benefits c. Career-oriented jobs with favorable growth potential d. Safe jobs with minimal dangers to workers e. Jobs located within a reasonable daily commute.

4. Business Competitiveness: Positive impact on business competitiveness, which helps them

grow and expand locally. From an economic development standpoint, the priorities and strategies to enhance business competitiveness include:

a. Sites and facilities meeting operating needs b. Workers with the required skills and motivation c. Transportation services and access meeting operating needs d. Other supporting infrastructure and public service (including high speed Internet

access) meeting operating needs e. Reasonable business tax burden f. Reasonable business regulation g. Responsive local government attentive to business needs

5. Patterns of Development in Communities: Positive impact on growth and development levels

and patterns within communities by enhancing the redevelopment of the County’s older cities and promoting manageable growth in newer communities. Key priorities and strategies to achieve this impact include:

a. Create development and redevelopment opportunities for older cities in the County. b. Create development opportunities for newer emerging communities in the County. c. Encourage high quality and sustainable development in both older and newer

communities within the County. d. Reduce sprawl that is costly to communities, residents, and businesses in the County.


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6. Patterns of Development across the County: Positive impact on growth and development levels and patterns on a countywide basis. Key priorities and strategies to achieve this impact include:

a. Create and preserve a valuable mix of communities meeting the different lifestyles and income levels of residents in the County.

b. Encourage positive-sum growth and development and avoid zero-sum growth where one community grows at the expense of its neighbors.

Table 3 below shows the Feasibility Assessment Matrix used to assess the IDB’s feasibility based upon the ability to overcome the identified barriers and capitalize on the identified advantages. Table 3: Butler County IDB Feasibility Assessment Matrix Driving Factor Probability of Overcoming Barriers and

Capitalizing Upon Advantages Related to: Priority Area

1: Workforce Development

Priority Area 2: Technology

Infrastructure

Priority Area 3: Transportation Infrastructure

Barriers to Overcome: 1. Political Will Constraint Constraint 2. Government Structure Major Constraint 3. State-Local Conflict 4. Isolated Deal Making/Weak Strategic Approach Constraint Constraint Constraint 5. Inter-Jurisdictional Rivalry Constraint Advantages to Capitalize Upon: 1. Quality of Life 2.Local Government Finance Major driver Major driver Major driver 3.”Good” Jobs 4. Business Competitiveness 5. Community Pattern of Development Major driver Major driver Major driver 6. County Pattern of Development Major driver Major driver Major driver In summary, the results in Table 3 above indicate that for the IDB to be adopted in Butler County greater attention must be given to increasing “political will,” changing the economic and community development work model from one based on doing individual deals to a more systematic approach with a higher level of teamwork among countywide and community stakeholders, and reducing inter-jurisdictional rivalry within Butler County. Developing a higher level of trust among all communities and county government will help address these three constraints. The continued work of the Butler County Working Group can help to increase this trust in the future. On the positive driver side, local stakeholders must shift to a more proactive “opportunity-driven” approach to development that uses the IDB to conserve and leverage local government revenues, and see how shared countywide development priorities can lead to a more efficient patterns of development within communities and on a countywide basis. The next chapter examines development trends in Butler County. A thorough analysis of the County’s development context is provided, which is an important foundation for giving shape to the IDB in Butler County.


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Section III: Butler County Development Context

A. General Geographic Pattern of Development and Influences This sub-section provides a long-term perspective of development activities in Butler County. In 1803, Butler County was formed from sections of Hamilton County, which was organized in 1790 as the second county in the Northwest Territory. Figure 1: Butler County, Ohio Map

Historically, transportation improvements have played a major role in spurring economic and community development across America. Economic and community development in Butler County and Southwest Ohio has been influenced greatly by transportation resource development. Water transportation played a critical role in the first stage of the industrial revolution in the late 18th and early 19th centuries. The Ohio River and steam navigation on the river played a pivotal role in the original development and later growth of Cincinnati. Similarly, water transportation played a key role in the original development of Butler County. In 1827, the Miami and Erie Canal became operational, connecting Cincinnati and Middletown. The canal reached Dayton by 1828. By 1845, the Miami and Erie Canal had reached to Toledo, connecting the Great Miami River and Lake Erie.


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The second stage of the industrial revolution in the 19th century was closely linked to the development and implementation of rail transportation systems, which enabled a more flexible inland transportation system beyond what water transportation could offer. Railroads provided a major growth impetus to the Greater Cincinnati area, including Butler County. In 1836, the Little Miami Railroad was chartered. Construction began soon after, to connect Cincinnati with the Mad River and Lake Erie Railroad, and provide access to the ports of the Sandusky Bay on Lake Erie. The 20th century saw the development of road transportation systems and automobiles and trucks, including the development of the national highway system. Construction of the Butler County portion of I-75 was completed in the late 1950’s. I-75 combined with the surrounding highway and road network have shaped the location of population, shopping, educational, and employment activities within Butler County. Butler County occupies a 470-square mile area just north of the City of Cincinnati and Hamilton County and just southwest of the City of Dayton and Montgomery County. Union, Franklin, and Dearborn Counties in Indiana border Butler County to the west. Warren County borders Butler County to the east. Growth and development trends in Butler County are a function of internal (within the county) and external (outside the county) factors and influences. Earlier regional growth studies point to some of these driving trends. The 2004 State of the County Report for Hamilton County by the Hamilton County Regional Planning Commission cities five key trends influencing growth and development trends in Hamilton County.6 These trends are also relevant to Butler County’s growth, and are considerations in the IDB project. These trends include:

• Finding 1: Residential, commercial, and industrial developments are spreading outward into adjacent suburban counties (including Butler County), drawing growth and investments from Hamilton County.

• Finding 2: Land consumption per person within Hamilton County is increasing as housing

buyers choose low-density new developments over compact older communities.

• Finding 3: Growth centers and interstates are shaping commercial and industrial development patterns in Hamilton County and the Cincinnati metropolitan region.

• Finding 4: As growth moves outward, the fiscal capacity of older communities in Hamilton

County is impacted.

• Finding 5: Although total developed land in Hamilton County almost doubled since 1960, industrial areas have remained almost the same, and forests, cropland, and pastures continue to decrease.

According to the OKI Regional Planning Commission, “the eight-county region experienced a steady increase in population, while the overall density of the region decreased significantly. Land within the region is being developed at a pace that is five times faster than the population growth rate. The density of population

6 Hamilton County Regional Planning Commission, State of the County Report: Land Use and Development Framework, 2004


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(the number of people per acre of land) has been declining over the years, while the rate of development of undeveloped land has increased. The OKI region’s land development trend has resulted in a 27 percent decrease in population density.” (Source: OKI Strategic Plan 2005). Butler County land use trends have been similar to the trend that is characteristic of the eight-county region as a whole. Butler County has experienced disproportional growth in land area relative to population. The County has also experienced a decrease in residential density, as a majority of growth is concentrated in suburban townships throughout the County. Butler County is experiencing growth pressures from both the Dayton and Cincinnati regions, as the outmigration of population and jobs continues from the two areas, benefitting the outlying counties in both metro areas. Warren and Butler Counties are significant beneficiaries of this outmigration. Many factors explain these trends. Interstates make it easy for both people and businesses to move outward from built urban centers. Many businesses continue to show a preference for greenfield sites over existing developed areas. Residents move outward in search of newer homes and better schools. Retail centers follow population outward. And as a direct outgrowth of economic development, political jurisdictions compete for people, businesses, jobs, and tax revenues. Once again, these factors exist in most counties and regions; it’s only a matter of degree. Done properly, the IDB could help counties and regions to cope with these problems to reduce the “hollowing out” of existing urban areas and “over-building” of new outlying areas. To Butler County’s credit, comprehensive plans have been adopted in most local communities. The next sub-section looks at demographic trends at the county and community levels in Butler County. B. County and Community Demographic Trends Population The county’s population was 89% urban and 11% rural at the time of the 2010 Census. Butler County’s population has grown from 56,870 in 1900 to 147,203 in 1950 to 368,130 in 2010 to 370,589 in 2012. Table 4 below shows population changes in Butler County and Hamilton and Middletown, its two most populous cities. Table 4: Long Term Population Change, Butler County and the Cities of Hamilton and Middletown Place 1900 1950 2010 1950-2010

Change Butler County 56,870 147,203 368,130 220,927 Hamilton 23,914 57,951 62,447 4,496 Middletown 9,215 33,695 45,994 (in Butler

Co) 12,299

Hamilton + Middletown 33,129 91,646 108,441 16,795 Hamilton + Middletown % Butler 58% 62% 29% -33% Source: U.S. Census Bureau Hamilton and Middletown’s combined population was 58%, 62%, and 29% of Butler County’s population respectively in 1900, 1950, and 2010. The City of Fairfield’s population base has grown


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from 9,734 in 1960 to 30,777 in 1980, and to 42,510 in 2010. The combined population of Hamilton, Middletown and Fairfield in 2010 was 150,095, which represents 40% of Butler County’s population. Table 5 below shows population growth for Butler County’s three largest townships (West Chester, Liberty, and Fairfield). Since 1950, the three townships combined have increased their share of Butler County’s population from 7.9% in 1950 to 32.3% in 2010, which is roughly equal to the loss in share of Hamilton and Middletown during the same time period. See Table 4 above. Table 5: Long-Term Population Changes in Butler County’s Three Largest Townships Place 1900 1950 2010 1950-2010

Change Butler County 56,870 147,203 368,130 220,927 Fairfield Township 4,018 6,853 21,373 17,355 Liberty Township 1,024 2,195 36,494 35,470 West Chester Township 1,743 2,545 60,958 59,215 Three Townships Combined 6,785 11,593 118,825 112,040

% Butler County Population 11.9% 7.9% 32.3% 20.4%

Source: U.S. Census Bureau The Cities of Fairfield, Monroe, and Trenton also are active participants in the IDB feasibility project. These three cities’ population trend data is summarized in Table 6 below. Table 6: Long Term Population Changes in the Cities of Fairfield, Monroe, and Trenton Place 1900 1950 2010 1950-2010

Change Butler County 56,870 147,203 368,130 220,927 Fairfield ND ND 42,510 NA Monroe ND 360 12,442 12,082 (1950-

2010) Trenton 387 987 11,869 10,882 Three Cities Combined NA NA 66,821 NA % Butler County Population NA NA 18.15% NA Source: U.S. Census Bureau In 2010, the three cities together represented 18.15% of Butler County’s total population. 1900 population data for Fairfield and Monroe is not available because they were founded later. Fairfield was not incorporated until 1955 and Monroe in 1907. Monroe’s population has increased from 360 in 1950 to 12,442 in 2010. Trenton’s population has increased from 387 in 1900 to 987 in 1950 to 11,869 in 2010. According to the Economic Modeling Specialists International (EMSI) forecast model, total population in Butler County is expected to grow from its 2010 level of 368,130 to 379,554 in 2015 and 384,109 in


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2018. County population projections prepared by the Ohio Development Services Agency (ODSA) compare favorably with the more recent EMSI forecast. ODAS projects that Butler County’s total population will rise to 378,370 in 2015 and 390,110 in 2020. Housing As of 2010, Butler County housing units totaled 147,758. Of this total, 18.9% was built prior to 1950, 39% between 1950 and 1980, 28.9% between 1980 and 2000, and 13.4% since 2000. Table 7 below presents a profile of housing in the County in 2011, based upon the Census Bureau’s American Community Survey. The County’s homeownership rate averaged about 71% across the 2007-2011-period. Multi-unit housing represented 21.7% of all units. Median household income averaged $55,497 during the period. Table 7: Butler County Housing Profile, 2007-2011 Homeownership rate, 2007-2011 70.9% Housing units in multi-unit structures, percent, 2007-2011 21.7% Median value of owner-occupied housing units, 2007-2011 $160,400 Households, 2007-2011 135,104 Persons per household, 2007-2011 2.62 Per capita money income in the past 12 months (2011 dollars), 2007-2011 $26,397 Median household income, 2007-2011 $55,497 Persons below poverty level, percent, 2007-2011 12.8%

Source: U.S. Census Bureau C. Economic and Business Development Trends Butler County’s economic base has experienced major structural changes in the last 20 to 30 years. Once its economic base was dominated by manufacturing, which remains a vitally important industry sector, but now retail trade and services play a growing role in the county’s economy. This sub-section provides a review of general economic and business development trends in Butler County. Table 8 below summarizes business establishment, employment, and average wage trends during the 2002-2012-period. The total number of business establishments across all industries increased by 861 from 2002 to 2012 for a 13.1% growth rate. Total employment also grew in the County, increasing by 9.9%, and going from 126,287 in 2002 to 138,754 in 2012. Average wages in real dollar terms grew more slowly; by only 0.80% during the 10-year period. Butler County’s average wage has remained consistently below U.S. average wages across the period. At its highest Butler County wages were 90% of U.S. wages in 2003-2004 and currently stand at 86% of U.S. wages.


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Table 8: Butler County Business Establishment, Employment, and Average Wage Trends, 2002-2012

Year Establishments Jobs Average Wage Pct. of U.S. Per Job (Inflation Adjusted) Avg. Wage

2012 7,421 138,754 $42,441 86.10% 2011 7,414 138,752 $42,444 86.60% 2010 7,285 137,975 $43,396 88.20% 2009 7,370 137,461 $42,713 87.60% 2008 7,415 147,072 $42,295 87.10% 2007 7,389 147,056 $43,106 87.60% 2006 7,242 144,391 $42,219 87.20% 2005 7,015 136,387 $42,758 89.40% 2004 6,871 133,269 $43,187 90.30% 2003 6,781 128,615 $42,440 90.10% 2002 6,560 126,287 $42,096 89.70% 10-Year Change 861 12,467 $345 NA 10-Year Percent Change 13.10% 9.90% 0.80% NA

Source: U.S. Bureau of Labor Statistics Table 9 below provides some detail on establishments, employment, and wages in major industry sectors in Butler County in 2012. Butler County has significant business establishment concentrations in several industries with the largest numbers in Retail Trade, Healthcare and Social Assistance, Other Services, Accommodations and Food Services, Professional and Technical Services, Construction, and Wholesale Trade. The County also is the location for 464 Manufacturing business establishments. Total covered employment in the County stood at 138,754 in 2012 with the largest concentrations in Manufacturing, Healthcare and Social Assistance, and Retail Trade. Manufacturing jobs numbered 19,185 in 2012, accounting for 13.8% of all jobs in the County. The highest wages paid in the County are in these industry sectors: Management of Companies and Enterprises, Utilities, Finance and Insurance, Wholesale Trade, Manufacturing, and Professional and Technical Services. In 2012, 7,412 business establishments were located in Butler County; the vast majority of which are private in nature. Table 9: Butler County Establishment, Employment and Wage Data, 2012

Annual Industry Distribution of Jobs

Establishments Jobs

Pct. Distrib.

Annual Average Wage

And Avg. Wage in 2012 (NAICS) in County Per Job

Total Covered Employment and Wages 7,421 138,754 100.00% $42,441 Private 7,152 121,337 87.40% $41,904 Agric., forestry, hunting 11 39 0.00% $23,803


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Annual Industry Distribution of Jobs

Establishments Jobs

Pct. Distrib.

Annual Average Wage

And Avg. Wage in 2012 (NAICS) in County Per Job

Mining 7 143 0.10% $47,428 Construction 650 5,915 4.30% $50,632 Manufacturing 464 19,185 13.80% $58,165 Wholesale trade 626 11,786 8.50% $59,385 Retail trade 965 16,735 12.10% $26,013 Transportation, warehousing 263 7,289 5.30% $42,831 Utilities 24 184 0.10% $75,355 Information 92 1,129 0.80% $46,696 Finance and Insurance 448 7,487 5.40% $64,636 Real Estate, rental, leasing 265 1,248 0.90% $37,256 Professional, technical services 665 3,264 2.40% $53,240 Mgmt. of companies, enterprises 45 1,027 0.70% $183,181 Administrative, waste services 458 8,605 6.20% $27,418 Educational services 164 828 0.60% $25,815 Health care, social assistance 716 18,353 13.20% $39,435 Arts, entertainment, recreation 113 2,092 1.50% $13,749 Accommodation and food services 636 13,260 9.60% $13,812 Other services, exc. public admin. 684 3,842 2.80% $28,140 Public administration 114 3,558 2.60% $49,198

Source: U.S. Bureau of Labor Statistics An industry employment growth projection to 2018 is presented in Table 10 below. The projections were produced through Economic Modeling Specialist Inc.’s (ESMI) model with a 2013 starting year. Total jobs in Butler County are expected to increase by 13,070 jobs during the 2013-2018-period, representing 9.3% growth over the period. The greatest number of new jobs is expected in Healthcare and Social Assistance, Wholesale Trade, Retail Trade, and Administration and Support. Manufacturing is expected to lose 320 jobs during the forecast period. While forecasts are not destiny, these numbers were developed from a very credible and widely used economic forecasting model. All but four industry sectors (Manufacturing, Agriculture, Forestry, Fishing and Hunting, Mining and Related Activities, and Private Educational Services) are expected to see some employment growth to the year 2018. Table 10: Butler County Industry Employment Projections, 2013-2018

NAICS Code Description 2013

Jobs 2014 Jobs

2015 Jobs

2016 Jobs

2017 Jobs

2018 Jobs Chg.

11 Agriculture, Forestry, Fishing and Hunting 36 31 27 24 21 19 (17)

21 Mining, Quarrying, and Oil and Gas Extraction 129 118 109 103 99 97 (32)

22 Utilities 183 201 215 228 240 247 64

23 Construction 5,360 5,288 5,270 5,291 5,340 5,461 101


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Jobs 2014 Jobs

2015 Jobs

2016 Jobs

2017 Jobs

2018 Jobs Chg.

31 Manufacturing 19,701 19,542 19,434 19,362 19,314 19,381 (320)

42 Wholesale Trade 12,142 12,518 12,855 13,165 13,458 13,717 1,575

44 Retail Trade 16,961 17,428 17,852 18,246 18,618 18,942 1,981

48 Transportation and Warehousing 7,084 7,322 7,524 7,702 7,861 7,974 890

51 Information 907 912 922 933 947 965 58

52 Finance and Insurance 7,458 7,507 7,554 7,600 7,645 7,689 231

53 Real Estate and Rental and Leasing 1,168 1,168 1,173 1,182 1,196 1,216 48

54 Professional, Scientific, and Technical Services 3,215 3,220 3,234 3,253 3,278 3,315 100

55 Management of Companies and Enterprises 1,039 1,069 1,092 1,110 1,125 1,130 91

56 Administrative and Support 9,217 9,669 10,098 10,510 10,910 11,273 2,056

61 Educational Services (Private) 852 851 850 849 849 850 (2)

62 Health Care and Social Assistance 18,915 19,814 20,604 21,315 21,971 22,475 3,560

71 Arts, Entertainment, and Recreation 1,825 1,968 2,090 2,196 2,292 2,359 534

72 Accommodation and Food Services 13,495 13,768 14,001 14,207 14,393 14,524 1,029

81 Other Services (except Public Administration) 3,921 4,018 4,109 4,195 4,278 4,358 437

90 Government 17,091 17,265 17,419 17,558 17,686 17,794 703

99 Unclassified Industry 24 19 15 12 <10 <10 --

Total 140,724 143,696 146,446 149,044 151,529 153,794 13,070 Source: Economic Modeling Specialists Inc. (EMSI) Forecasting Model The EMSI model was also used to project industry employment over the 2013-2018-period for the five-county surrounding area, which includes Butler, Warren, Preble, Hamilton, and Montgomery Counties. The results of this analysis are contained in Table 11 below. Overall, regional industry employment is expected to grow by only 16,817 over the period; most of which according to Table 7 above is expected to occur in Butler County. The largest employment growth is expected in Healthcare and Social Assistance, Professional and Technical Services, Accommodations and Food Services, Finance and Insurance, and Educational Services. Manufacturing is projected to lose 11,661 jobs during the period; a small portion of which will occur in Butler County as Table 10 shows. The largest employment losses are expected in Manufacturing, Other Services, Wholesale Trade, and Retail Trade according to the model’s results. Table 11: Five-County Region Industry Employment Projections, 2013-2018


Jobs 2018 Jobs Change

11 Agriculture, Forestry, Fishing and Hunting 722 718 (4) 21 Mining, Quarrying, and Oil and Gas Extraction 326 273 (53) 22 Utilities 2,266 1,834 (432) 23 Construction 32,531 33,564 1,033 31 Manufacturing 105,018 93,357 (11,661) 42 Wholesale Trade 47,101 45,951 (1,150) 44 Retail Trade 95,804 94,409 (1,395)


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Jobs 2018 Jobs Change

48 Transportation and Warehousing 25,538 25,965 427 51 Information 18,170 17,948 (222) 52 Finance and Insurance 47,703 50,143 2,440 53 Real Estate and Rental and Leasing 10,633 10,199 (434) 54 Professional, Scientific, and Technical Services 57,672 62,011 4,339 55 Management of Companies and Enterprises 39,449 40,892 1,443 56 Administrative and Support 65,149 64,906 (243) 61 Educational Services (Private) 19,955 22,172 2,217 62 Health Care and Social Assistance 156,280 175,657 19,377 71 Arts, Entertainment, and Recreation 15,994 16,650 656 72 Accommodation and Food Services 82,558 85,093 2,535 81 Other Services (except Public Administration) 29,363 29,235 (128) 90 Government 107,230 105,396 (1,834) 99 Unclassified Industry 234 141 (93) Total 959,697 976,514 16,817

Source: Economic Modeling Specialists Inc. (EMSI) Forecasting Model Note: Includes: Butler, Warren, Preble, Hamilton, and Montgomery Counties In addition to growth, industry concentration or specialization is an important factor in judging local economic development potential. The Location Quotient (LQ) is a widely used economic analysis method to determine how concentrated or specialized industries are in the local economy (e.g. Butler County) compared to the nation as a whole. An LQ value of 1.00 or greater suggests an industry’s concentration in a local area is greater than the industry’s concentration nationally. An industry with a local LQ value of 5.09 (which is the case for Primary Metal Manufacturing in Butler County) is over 5 times more concentrated or specialized in Butler County than in the nation as a whole. The LQ value of 1.00 or greater also suggests that the local industry is export-based in the sense it sells a significant share of its products or services to non-local markets (anywhere outside of Butler County in this case. Table 9 below provides project LQ values for Butler County’s most export-based industries in the year 2018. This future perspective is important in showing how important these industries are expected to be five years from now. Four Butler County industries are expected to have LQ values above 3.00 in 2018: Primary Metal Manufacturing, Non-store Retailers, Warehousing and Storage, Beverage and Tobacco Product Manufacturing. Eight local industries are expected to have LQ values above 2.00 and below 3.00: Transportation Equipment Manufacturing, Paper Manufacturing, Insurance Carriers and Related Activities, Furniture and Home Furnishings Stores, Plastics and Rubber Products Manufacturing, Merchant Wholesalers Nondurable Goods Merchant Wholesalers Durable Goods, and Textile Mills. Finally, 25 industries are expected to have LQ values greater than 1.00 and less than 2.00.


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Table 12 below provides the data on all export-based industries in Butler County. Table 12: Projected Location Quotient Values for Butler County Most Export-Based Industries, 2018

NAICS Industry Description 2018 LQ 331 Primary Metal Manufacturing 5.09 454 Non-store Retailers 4.69 493 Warehousing and Storage 4.23 312 Beverage and Tobacco Product Manufacturing 3.16 336 Transportation Equipment Manufacturing 2.75 322 Paper Manufacturing 2.62 524 Insurance Carriers and Related Activities 2.53 442 Furniture and Home Furnishings Stores 2.47 326 Plastics and Rubber Products Manufacturing 2.46 424 Merchant Wholesalers, Nondurable Goods 2.46 423 Merchant Wholesalers, Durable Goods 2.24 313 Textile Mills 2.07 335 Electrical Equipment, Appliance, and Component Manufacturing 1.91 484 Truck Transportation 1.91 485 Transit and Ground Passenger Transportation 1.87 325 Chemical Manufacturing 1.67 443 Electronics and Appliance Stores 1.33 623 Nursing and Residential Care Facilities 1.31 811 Repair and Maintenance 1.28 713 Amusement, Gambling, and Recreation Industries 1.27 622 Hospitals (Private) 1.26 332 Fabricated Metal Product Manufacturing 1.22 561 Administrative and Support Services 1.20 314 Textile Product Mills 1.17 444 Building Material and Garden Equipment and Supplies Dealers 1.16 722 Food Services and Drinking Places 1.16 446 Health and Personal Care Stores 1.15 453 Miscellaneous Store Retailers 1.11 339 Miscellaneous Manufacturing 1.05 327 Nonmetallic Mineral Product Manufacturing 1.04 238 Specialty Trade Contractors 1.03 445 Food and Beverage Stores 1.03 448 Clothing and Clothing Accessories Stores 1.02 323 Printing and Related Support Activities 1.01 333 Machinery Manufacturing 1.01 621 Ambulatory Health Care Services 1.01

Table 13 below presents the results of a Shift-Share Analysis, which identifies how a local economy has grown in three dimensions: 1) National Growth: the change in local employment that would have


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occurred for a specific industry had it grown at the national growth rate of all industries combined; 2) Industry Mix: the additional gain (or loss) in local employment that would have occurred for a specific industry (additional to the national growth effect) due to the industry growing faster (or slower) nationally than the rate of all industries combined; and 3) Regional Shift: the additional gain (or loss) in local employment for a specific industry beyond the national growth and industry mix effects resulting from the industry growing faster (or slower) than the same industry nationally. Table 13: Butler County Shift-Share Analysis Results, 2002-2011

National Growth

Industry Mix

Region Shift

Major Industry Percent Net Percent Net Percent Net Farm Employment 6.53 74 -15.73 -179 -12.13 -138 Utilities 6.53 23 -10.38 -37 -20.24 -72 Construction 6.53 858 -16.3 -2,144 -8.17 -1,074 Manufacturing 6.53 1,335 -28.13 -5,755 18.89 3,865 Wholesale Trade 6.53 706 -6.14 -665 27.95 3,025 Retail Trade 6.53 1,225 -8.52 -1,600 7.49 1,405 Transportation and Warehousing 6.53 443 -1.32 -89 25.19 1,712 Information 6.53 70 -20.34 -218 48.2 517 Finance and Insurance 6.53 645 14.24 1,409 1.2 119 Real Estate and Rental and Leasing 6.53 390 31.67 1,895 -7.56 -452 Professional, Scientific, and Technical Services 6.53 443 11.92 809 -13.31 -903 Management of Companies and Enterprises 6.53 16 8.1 19 162.69 387 Administrative and Waste Services 6.53 561 6.72 578 23.12 1,988 Educational Services 6.53 91 26.62 371 57.89 807 Health Care and Social Assistance 6.53 997 16.84 2,574 13 1,986 Arts, Entertainment, and Recreation 6.53 148 11.44 260 35.31 803 Accommodation and Food Services 6.53 760 6.4 745 3.93 457 Other Services (except Public Administration) 6.53 583 -0.73 -66 -4.46 -399 Federal Civilian 6.53 36 0.24 1 1.01 6 Military 6.53 62 -6.62 -63 0.73 7 Other Industries 6.53 1,381 -0.07 -15 -3 -635 Total Employment 6.53 10,850 -1.3 -2,169 8.07 13,410

National Growth: This component is the most straightforward. It calibrates the growth in Butler County employment that may be attributed to overall national conditions and trends. If the industry composition and growth of employment had been the same locally as nationally, then Butler County’s employment growth over 2002-2011 would have matched the overall national rate of 6.53%. Industry Mix: The industry mix component seeks to answer the question: "Did Butler County employment growth of 13.29% outpace the overall national average (6.53%) because employment was more concentrated toward slower growing industries when compared to the nation?" That is, did Butler


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County's employment growth over 2002-2011 underperform the nation simply because its industry mix was weighted more heavily toward industries that experienced slower growth at the national level? The results are derived by multiplying local employment in each sector for 2002 by the difference between the national growth rate for each sector and the total national employment growth rate (6.53%). The industry mix results report positive values for those industries that experienced employment growth above the 6.53% national average, while negative values are posted for those industries that grew at rates less than 6.53%. The most crucial result from the industry mix calculation is the "total" derived from summing over all industries. The negative value reported reveals that the industry composition employment for Butler County was tilted toward slower growing industries. Positive results would have indicated just the opposite. Regional Shift: The third shift-share component, tagged the "Regional Shift", computes the gain (or loss) in local employment from an industry growing faster (or slower) than the same industry nationally. When employment in a local industry grows faster (or declines less) than its counterpart nationally there occurs a positive "shift" in the net "share" of national employment captured by that industry locally. The "total" reported for the regional-shift component is 13,410, showing that Butler County employment grew an additional 8.07% because a larger proportion of industries grew more quickly locally than nationally. Summary: Butler County's employment growth over 2002-2011 of 13.29% surpassed the 6.53% growth of employment nationally by 6.76%. Accounting for this difference was an industry mix inclined toward industries that experienced slower growth, coupled with the fact that a large share of local industries outperformed their counterparts nationally. Business Investment in Butler County, 2000-2012 This section presents a summary of business investments in Butler County communities during the 2000-2012-period. The data used in this analysis was provided the Office of Strategic Research within the Ohio Development Services Agency (ODSA). The summary is based upon actual project data collected by the ODSA. For many projects, the job creation data is not available. The key variables analyzed include:

1. U.S. versus international business investments. 2. Existing business facility expansions versus new business facility investments. 3. Investments by general type industry 4. Jobs created. 5. Dollars invested 6. Community location of investment

The business investment data gives a grounds-up view of economic development in Butler County. It is best available data on actual existing business expansions and new business investments within the County. Similar data are available for Ohio counties. In the absence of pre-established performance


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metrics, it is not possible to conclude whether these business investment results are good or bad. In an overall sense, the results strike Sourcing Office/Center for Public Innovation as reasonably good. Chart 1: U.S. Versus International Business Investments in Butler County, 2000-2012

Observation: By far, investments in Butler County by U.S. companies outnumbered those by international companies. This is characteristic of most Ohio counties from what Ohio’s business investment statistics reflect in Site Selection Magazine’s annual reports. Chart 2: Business Expansions Versus New Investments in Butler County, 2000-2012

323

33

0

50

100

150

200

250

300

350

U.S. International

158

198

0

50

100

150

200

250

Business Expansions New Investments


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Observation: A healthy mix of investments by existing and new businesses occurred in Butler County during the analysis time period. The significant number of new investments indicates that newer, more modern facilities are required by companies investing in Butler County. Chart 3: Butler County Business Investments by General Type Industry, 2000-2012

Observation: Manufacturing and Distribution investment projects accounted for over 70% of all business investments in the County. Based upon the consulting team’s work in other Ohio counties, Butler County has fared especially well in manufacturing investments. Spec (speculative) building investments are facilities created by real estate developers and real estate investment funds to increase the supply of new business space. Table 14: Butler County Job Creation and Dollar Investments, 2000-2012 Industry Job Creation Dollar Investment Manufacturing 5,230 $2.38 billion Distribution 4,874 $620 million Spec Buildings N/A $519 million Office 1,179 $218 million Hotel 50 $95 million Health 1,410 $731 million R&D 135 $89 million Other 865 $136 million Totals 13,743 $4.788 billion Observation: Job creation data is the least accurate of all data contained in the State of Ohio’s business investment database. The numbers are estimates and should be viewed as such. Over the period, 13,743

3

6

8

16

27

44

115

137

0 20 40 60 80 100 120 140 160

Other

R&D

Health

Hotel

OfJice

Spec Buildings

Distribution

Manufacturing


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new jobs were created as a result of the $4.79 billion invested in business equipment and facilities in Butler County. Table 15: Number of Business Investments in Butler County Community, 2000-2012 Community Number Business Investments West Chester Township 167 Fairfield 53 Hamilton 51 Middletown 40 Monroe 28 Liberty Township 6 Trenton 5 Oxford 5 Madison Township 1 Totals 356 Observation: These numbers again are based upon business expansions and new investments reported to the State of Ohio from the state’s own sources and local sources. The numbers show that West Chester Township had a commanding share (47%) of business investments during the 2000-2012-period. The next sub-section provides insights from land use/comprehensive plans adopted by Butler County communities. D. Local Land Use/Comprehensive Plans All Butler County communities involved in the IDB Project have land use and/or comprehensive plans in place; some are more up to date than others:

• Middletown: 2005-2010 plan prepared in 2003-2004 • Hamilton: Vision 2020 prepared in 2008 • Fairfield: 20-Year Comprehensive Plan updated in 2009 • Trenton: Comprehensive Plan 2025 adopted in 2005 • West Chester Township Comprehensive Land Use Plan updated in 2013 • Liberty Township Vision Plan 2030 updated in 2013 • Monroe Comprehensive Plan update in 2010 • Oxford Comprehensive Plan adopted in 2008

Insights from Butler County Community Plans This section contains selected quotes from the various community plans that point to issues with which the Integrated Development Budget (IDB) approach could provide assistance. City of Middletown Plan “The City of Middletown created the 2005 – 2010 Master Plan in its continuing efforts to provide a high quality of life and excellent business environment for its residents and employers.”


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“Vision 2020 strives to achieve three overall goals:

• Goal A: Diversify and modernize our local economy. • Goal B: Turn Current Liabilities into Future Assets. • Goal C: Improve Our Community Image”

“Residential. The results of the Cost of Service analysis show that for the average existing single family home value ($91,600), the City is spending $473 more per year to provide services than it is receiving in local and state share revenue. This figure is not unusual and is, in fact, at the low end of the scale for older Ohio communities. New single family with an assumed value of $260,000 actually produces a positive cash flow of $234 per unit. The current break-even point for the City is a home value of $235,000. The City has limited land available for new residential development. Attempts should be made to ensure that new housing developed on one of the few remaining suitable “greenfields” is constructed at the cost of services break even value point.” “Office/Commercial. Modern office complexes represent a positive cash flow of $6,703 per acre per year. This high level of net revenue per acre is attributed to higher wages paid to professionals working in office environments. The Cost of Service study supports the Master Plan goal to diversify the local economy (Goal A) and attract high-tech, high paying jobs. High tech jobs are highly sought after by all communities in the region and nation for the same reasons cited here. Middletown’s absence of modern office park land availability must change before “new economy” jobs can be realized. “Big Box Retail. Big box retail represents more of a break-even scenario due to increased usage of emergency services, lower salary scales, and higher road maintenance costs. This analysis suggests that the use of tax abatements, tax increment financing approaches or public participation in infrastructure costs is inappropriate for large-scale retail development on undeveloped land. The financial benefits derived by TIF and abatements do not compensate for the lost property tax revenues. This is particularly true due to the transient nature of retail in today’s retail market. The one exception to this would be the use of TIF for a mixed-use redevelopment project in the downtown or at Towne Mall.” “Industrial. The industrial development in Middletown is contributing to relatively modest revenue per acre cash flows on a per acre basis. However, this is due to the overwhelming spatial requirements of AK Steel. Using the parameters of a new office/industrial park as suggested in the GEM Market Study, an acre of new office and industrial could produce a positive cash flow of over $11,000/acre for the City even with full property tax abatement. However, GEM study assumes 24 employees per acre. Studies conducted by SPP for new industrial parks suggest that the employment rate would be closer to 10 employees per acre, which would reduce the positive cash flow to $3,402 per acre with full tax abatements. If the City offered sites, which included road improvements to be paid off over 10 years, a 50-acre new industrial office park would show a $30,000 deficit cash flow for the first 10 years. After the road costs were paid, a 50-acre site would represent a $170,000 positive cash flow per year.” City of Hamilton Plan “The Comprehensive Plan for the City of Hamilton serves as a guide for the promotion of high quality and livable built environments that will promote and enhance the City of Hamilton’s image by integrating land use planning, transportation, public facilities, housing, education, economic development, and the environment.”


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“The future of the City of Hamilton will be influenced by a variety of factors. Some will occur on a large scale, such as shifts in the global economy. Other factors will be more immediate, such as changes in local development trends. The City’s Comprehensive Plan provides direction as it relates to short and long-term goals, and it will also prepare Hamilton to adapt to changes brought on by external factors.” Fairfield Plan “The City of Fairfield Comprehensive Plan provides a strategic long-term vision, basic goals, objectives and policies to help guide the City's future growth and development. Usually of a general nature, with a long-range outlook, it considers both separately and collectively, all factors affecting growth, development and economic prosperity. The Plan is not only an educational tool, but it also serves as a guide to public and private decision-making.” “As developable land sites become scarce, especially large tracts, the City will need to focus on Joint Economic Development Districts (JEDDs). The City has also changed its approach to tax incentives to encourage the utilization of land for high-wage producing development projects. In addition, business retention and building expansion will be commonplace as green fields develop and older buildings need renovation.” City of Trenton Plan “This Comprehensive Plan serves as a guide for the City of Trenton to shape its future. The plan provides direction for improving the quality of life as well as directing the community’s physical growth and development over the next twenty years.” “Trenton is a 3.3 square mile incorporated area surrounded by area in three township jurisdictions. The city annexed 562.5 acres between 1995 and 2005, which is nearly one square mile, or about one quarter of its present land area. These annexations have supported the spurt of residential development and population growth that has occurred in Trenton since 1990 and will help sustain future growth and development.” “The city’s recent and current growth trends and future outlook indicate that development will continue into the foreseeable future. The expectations for additional growth are supported by the facts that Trenton has available land suitable for development, an advantageous location with good access, and many amenities that make it attractive for residential, industrial, and commercial development.” West Chester Township Plan “West Chester has a strong commitment to planning, and its condition is no coincidence. The community has envisioned success for itself through planning, while simultaneously developing a framework to manage its growth and change. The community has actively planned its future, beginning with the 2012 Vision Plan, which was adopted in 1992. Many of West Chester’s finest accomplishments can be found first envisioned in a plan.” “As population and commercial investment continue to grow, West Chester’s success as a residential community and industrial/business competitor depends upon planned development. Toward this end, West Chester Township adopted local zoning in November of 1989. Since that time, Township officials and residents have exercised a stronger voice at the local level regarding development issues. With that voice comes a commitment to ensure orderly development. To guide land use and growth decisions, the Township initiated a land-use planning program, resulting in this document as


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supplemented by the plans referenced above. The overarching goal of planning in West Chester and in general is to consider future growth and land development decisions objectively and consistently with an overall scheme, rather than taking reactive measures as the market brings proposals forward.” Liberty Township Plan “The Comprehensive Plan Steering Committee evaluated the Cost of County Community Services (average net fiscal impacts of existing land uses on local budgets) as part of the review and analysis during the preparation of the Land Use Plan. The data used to evaluate the Cost of County Community Services came from a study prepared by the American Farmland Trust (AFT) for Butler County that compared the net fiscal impacts of farm/open land uses to residential and commercial/industrial land uses. AFT analyzed the revenues generated by each of these land uses and compared them to the expenditures with county services. The study was prepared in October 2004. County services include education, public health and safety, public works, local government and courts. The findings of the Cost of County Community Services Study presented a snapshot in time of revenues versus costs of providing services to major land uses. The findings how:

• 85 percent of county revenue was generated by residential land uses, 13 percent by commercial/industrial land uses, and 2 percent by farm/open lands.

• 93 percent of expenditures were used to provide services to residents, 6 percent for services to

the commercial/industrial sector and 1 percent for farm/open lands.

• For every $1 of revenue generated by the residential sector, $1.12 was spent to provide county-level services to residents.

• For every $1 of revenue generated by commercial/industrial land uses, 45 cents was spent to

provide county-level services to businesses and industries.

• For every $1 of revenue generated by farm/open lands, 49 cents was spent to provide county-level services to farm and undeveloped lands.

The findings show that farm/open and commercial/industrial land uses are important to fiscal equilibrium. Together these uses offset the shortfall associated with providing county-level services to residential development. The findings suggest that decisions that retain and enhance commercial, industrial and agricultural land uses can help improve the long-term fiscal stability of the community.” City of Monroe Plan “This 2010 Comprehensive Plan updates the City of Monroe’s 2004 document and its completion comes at a time when the City is experiencing tremendous economic growth. This document will help guide future development over the next 5 to 10 years and assist the administration and Council with land use, transportation, and zoning decisions.” “Growth: Monroe has grown from a village of 4,490 in 1990 to a City of 12,178 in 2008 (Census projection 2008), a 163% increase. The projected 2012 population is 13,151 and for the year 2025 approximately 18,000. Monroe has also grown geographically, from 9.3 square miles in 1990 to 16 square miles. With the major widening of I-75 and the completion of the Cincinnati Premium Outlet Mall, Monroe will no doubt experience continued growth in the future.”


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“City Services: It is the desire of the city to provide efficient and cost effective service to its residents and to provide quality of life amenities.” E. Butler County Economic and Community Development System Analysis This sub-section examines the existing economic and community development system in place in Butler County. Geographic Service Levels Economic and community development are encouraged, promoted, and assisted on four levels in Butler County:

1. Community Level: In some form, each local government jurisdiction (city, village, township) in the County gives attention to economic and community development.

2. Countywide Level: The Butler County Department of Development, Butler County Port Authority, and the Greater Hamilton Area Chamber of Commerce provide economic and community development services across the County.

3. Multi-County Regional Level: The Cincinnati USA Regional Chamber, Dayton Development Coalition, Butler County Workforce, Cincinnati State Technical and Community College, Miami University, and electric power and natural gas companies serving the area provide economic development services to Butler County and its communities.

4. State Level: JobsOhio and the Ohio Development Services Agency provide economic and community development services to all 88 Ohio counties, including Butler County.

Community Level Services Communities play many roles in economic and community development, and tend to play the lead role in existing business development, local deal-making, community promotion, local area and district development, supporting site location requests by new businesses, and local government approvals and services (including infrastructure). Butler County communities include 13 townships and 13 cities and villages, which are listed below. The seven largest communities in Butler County are involved in this LGIF project. An “*” indicates the community is a collaborative partner for this project Townships (Unincorporated Areas):

1. Fairfield Township 2. Hanover Township 3. Lemon Township 4. Liberty Township* 5. Madison Township 6. Milford Township


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7. Morgan Township 8. Oxford Township 9. Reily Township 10. Ross Township 11. St. Clair Township 12. Wayne Township 13. West Chester Township*

Cities/Villages (Incorporated Areas):

1. College Corner village 2. Fairfield city* 3. Hamilton city* 4. Jacksonburg village 5. Middletown city* 6. Millville village 7. Monroe city* 8. New Miami village 9. Oxford city 10. Seven Mile village 11. Sharonville city 12. Somerville village 13. Trenton city*

The primary services delivered at the community level include:

1. Existing business retention and expansion 2. New business attraction 3. Small business development 4. Downtown development 5. Economic development marketing 6. Infrastructure financing 7. Tourism promotion 8. Economic development financing/incentives 9. Business advocacy 10. Business networking 11. Governmental infrastructure and public services 12. Community development services 13. Planning, zoning, and permit services

County Level Services County level organizations tend to support communities on economic development projects and often take the lead role on infrastructure financing, business expansion financing, community development, tourism promotion, workforce development, and business advocacy and business climate improvement. The county level collaborative partners for his project include:


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1. Butler County Government 2. Butler County Port Authority 3. Greater Hamilton Area Chamber of Commerce 4. Butler County Transportation Improvement District 5. Workforce One of Butler County (Butler-Warren-Clermont Counties)

The primary services delivered at the county level include:

1. Existing business retention and expansion 2. New business attraction 3. Small business development 4. Tourism promotion 5. Workforce development (most services are regional) 6. Economic development marketing 7. Economic development financing/incentives 8. Infrastructure financing 9. Business climate improvement 10. Business advocacy 11. Business networking 12. Governmental infrastructure and public services 13. Community development services 14. Planning support to unincorporated areas

Regional Level Services Regional organizations tend to play the lead role on new business attraction, regional marketing, workforce development, entrepreneurial development, and business advocacy and business climate improvement. No regional organizations are collaborative partners for this project, however Cincinnati State Community and Technical College is active in the project. The primary regional services delivered include:

1. Economic development marketing 2. New business attraction 3. Entrepreneurial development 4. Venture and seed capital financing 5. Workforce development 6. Technological innovation services 7. Business climate improvement 8. Business advocacy 9. Business networking

State Level Services JobsOhio plays a primary role in new business attraction, economic development marketing, and supports business climate improvement efforts and existing business retention and expansion efforts. The Ohio Development Service Agency provides financing for economic and community development, assists with workforce development, plays a major role in technological innovation, promotes tourism,


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entrepreneurial development, and provides a wide range of community development and energy development services. The primary state level services include:

1. Economic development marketing 2. Economic development financing/incentives 3. New business attraction 4. Entrepreneurial development 5. Venture and seed capital financing 6. Workforce development 7. Technological innovation services 8. Business climate improvement 9. Business advocacy 10. Infrastructure financing 11. Tourism promotion

Collaborative Partner Development Roles, Priorities, and Spending Survey Results A survey of collaborative partners was completed to define the roles and responsibilities of these entities and to estimate budget spending on economic and community development activities in Butler County. The main survey results are presented in this section. Primary Role and Employment Staff Size by Function of Partner Organizations Table 16 below identifies the employment staff size by functional area for the project’s partner organizations. Note: The numbers do not indicate the total number of staff members working in these various activities. Table 16: Partner Organization Employment Staff Size, 2012

Functional Area Part of

1 Person

1 Person

2 People

3 People

4 People

5 People

More than 5 People

Responses

Economic Development 3 3 0 0 0 0 1 7 Community Development 2 0 0 0 1 0 1 4 Planning 0 5 1 0 0 0 0 6 Public Works or Infrastructure 0 1 1 0 0 1 2 5

Gas, Electric, Water, and Wastewater Service 0 0 0 0 0 0 1 1

Building Services and Permits 1 0 1 1 0 0 1 4

Technology/Information Technology Infrastructure (Fiber/Broadband)

1 1 0 1 0 0 1 4

Philanthropy 1 1 0 0 0 0 0 2 Other (Workforce Development) 1


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Staffing patterns across the partner organizations reflect small staff size. They also reflect that personnel must be flexible and work in teams to accomplish their job responsibilities. Discussions at the Butler County IDB Working Group (BCWG) meetings suggest that these personnel fall into two categories: 1) administrative unit heads and project managers who provide departmental and project management services to a variety of development activities in any given year; and 2) technical personnel that plan, analyze, advise and counsel, and prepare information that is important to making decisions about development projects. Table 17: Partner Organizations Development Roles

Development Functions Primary Role

Secondary Role

No Role Totals

Existing Business Retention and Expansion 6 1 1 8 New Business Recruitment (Both Domestic and International) 6 1 1 8

Small Business Assistance 2 4 2 8 Seed, Venture, and Growth Capital Provider 0 2 6 8 New Venture Start-Up and Entrepreneurial Assistance 1 1 6 8 Minority Business Development 1 2 5 8 Business Sites and Buildings Assistance (Real Estate) 6 1 1 8 Downtown Development and Promotion 3 1 4 8 Neighborhood Development 3 1 4 8 Economic Development Incentives (Financing, Tax Incentives, Other) 6 0 2 8

Business Advocacy (Public Policy) 1 4 3 8 Area Marketing and Promotion 4 3 1 8 Infrastructure, Utility, and Public Service Assistance 2 5 1 8 Export Assistance (International Trade) 0 3 5 8 Tourism Promotion/Convention and Visitors Bureau 0 3 5 8 Business-Business Networking 0 5 3 8 Workforce Training (Classroom or On the Job) 1 1 6 8 Employment Services (Employee Testing, Screening and Selection) 0 0 8 8

Labor Market Information Provider 1 3 4 8 Business Site Selection Data and Information Provision 6 1 1 8 Grant Provider (Philanthropic) 0 2 6 8 Community Planning 3 4 1 8 Countywide Planning 1 4 3 8 Development Site Planning 4 2 2 8 Land Use Planning 4 4 0 8 Zoning Assistance 4 2 1 7 Building Permit Provider 3 1 3 7 Grant Information or Assistance (State or Federal Government or Private Philanthropy) 3 2 3 8


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As a group, the partner organizations’ primary development roles are these:

1. Existing business retention and expansion 2. New business recruitment or attraction 3. Business sites and buildings assistance to companies 4. Business site selection information and data provision 5. Area marketing and promotion 6. Development site planning 7. Land use planning 8. Zoning assistance

Several secondary roles are also important to the partner organizations. These include:

1. Small business assistance 2. Business advocacy 3. Infrastructure, utility, and public service assistance 4. Business to business networking 5. Community or countywide planning

The partner organizations play no role in the following areas, which are performed by non-partner county level multi-county development organizations:

1. Seed and venture capital 2. New venture startup assistance 3. Minority business development 4. Export trade assistance 5. Tourism development 6. Workforce training and employment services (Butler County Workforce One plays a major role

here along with Cincinnati State Technical College) 7. Grant provider

Target Industry Priorities for Partner Organizations Focusing economic development efforts on target industries and industry clusters is a common practice in Ohio and across the country. Table 18 below identifies those industry targets to which Butler County development organizations give attention. While none of the partner organizations devote 100% of their efforts to target industries, they do commit significant effort to their target industries. Table 18: Target Industries Given Attention by Partner Organizations

Industries or Sectors Major Attention

Some Attention

No Attention

Response Count

Old-Line Heavy Manufacturing (Example: steel, metalworking) 3 3 2 8

Newer Advanced Manufacturing (Example: 4 3 2 9


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Industries or Sectors Major Attention

Some Attention

No Attention

Response Count

electronic industrial controls) Light Manufacturing (Example: electronic assembly operation) 4 2 2 8

Agriculture (Example: farming, agricultural services) 1 3 4 8

Arts, Entertainment and Amusement (Example: private art galleries, movie theaters, amusement parks)

1 3 4 8

Hospitality (Example: hotel or motel services) 1 5 2 8 Educational Services (Example: College or University) 3 2 3 8

Healthcare/Medical Services (Example: hospitals, allied health, nursing homes, hospice, doctors practices)

4 3 2 9

Warehousing and Distribution (Example: consumer or industrial products) 3 3 3 9

Transportation Services (Example: trucking, shipping services) 3 4 1 8

Oil and Gas Drilling 1 1 6 8 Construction Services (Example: home-building, industrial construction) 2 3 3 8

Retail Trade Services (Example: grocery stores, clothing, home furnishings, auto dealerships)

4 2 2 8

Consumer Services (Example: dry cleaning or home repair) 4 1 3 8

Computer and Information Technology Services (Example: IT consulting or design) 3 4 2 9

Professional Business Services (Example: legal or accounting) 3 3 2 8

Financial Services (Example: banking and insurance) 3 4 2 9

Technical Services (Example: engineering services, lab testing services, architectural services)

3 3 2 8

If those industries to which the partner organizations give “some” and “major” attention are combined, the following industries stand out as most important:

1. Old-line manufacturing 2. Newer advanced manufacturing 3. Light manufacturing 4. Hospitality 5. Healthcare services


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6. Warehousing and distribution 7. Transportation services 8. Retail trade 9. Computer and information technology 10. Professional business services 11. Financial services 12. Technical services

If this industry list is compared to the location quotient values on the industries in Table 12 above, we see that for the most part the partner organizations are focusing their attention on export-based industries that have good growth potential in Butler County. This is a good thing. It is important to note that a good portion of the retail trade sector in Butler County appears to be export-based in the sense that it is drawing outside (non-resident) shoppers and dollars into the county. Retail shopping has three roles in economic development. The first is to meet the shopping needs of residents (and to some degree businesses) in the County. The second is that create jobs for residents of Butler County and its surrounding area. The third is to bring new income and taxes into the County from non-residents shopping at Butler County malls, shopping centers, and stores. Development Operating Budget Spending Chart 4 below shows economic development operating budget information for 2010-2012 for the six partner organizations answering this question on the survey. The numbers show a reduction in operational spending by $70,000 over the period. Economic development operating budgets (Chart 4 below) are significantly smaller than community development operating spending (Chart 3 above). Chart 4: Economic Development Operating Budget Spending, 2010-2012 (Current Dollars)

Chart 5 below shows community development operating budget data for the partner organizations responding to this question on the survey.

552,762

494,371

481,165

$440,000

$460,000

$480,000

$500,000

$520,000

$540,000

$560,000

2010 2011 2012


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For the six partner organizations responding to this survey question, community development operating expenditures increased by $700,000 from 2010 to 2011 and then declined by $500,000 from 2011 to 2012. These changes are largely driven by fluctuations in Community Development Block Grant (CDBG) dollars available to Butler County and the cities of Hamilton and Middletown. Chart 5: Community Development Operating Budget Spending, 2010-2012 (Current Dollars)

Economic Development Incentive Use by Partner Organizations All of the partner organizations use economic development incentives to promote and assist economic development. Table 19 below identifies the extent to which various types of incentives are used by these organizations. The numbers show strictly local dollars and do not include state incentive investments in Butler County. Table 19: Local Economic Development Incentive Spending, 2012 Incentive Type 2012 Dollar Amount Tax abatements $1,800,000 Tax credits $0 Tax increment financings N/A Joint economic development district N/A Loans $100,000 Loan guarantees $150,000 Workforce grants $1,150,000 Community development grants $2,550,000 Total $5,750,000 Chart 6 below shows the amount spent by partner organizations for development related infrastructure (roads, sewers, water, etc.) in the 2010-2012 period. Due to variations in the number and size of development projects, these numbers fluctuate during the period.

$3,500,000

$4,200,000

$3,700,000

$3,000,000

$3,200,000

$3,400,000

$3,600,000

$3,800,000

$4,000,000

$4,200,000

$4,400,000

2010 2011 2012


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2010 was a big year for development related infrastructure investment, totaling $28.5 million. See Chart 6 below. Both 2011 and 2012 were modest investment years. In all three years, transportation related investments accounted for the lion’s share (75% or more) of the spending. Most of the transportation investments were made through the Butler County Transportation Improvement District (TID). Truly accurate estimates of the dollar value of infrastructure investment in the County designed to spark economic and community development are very hard to make. These are starting estimates of those investments that intended to facilitate or accommodate economic and community development. Chart 6: Development Related Infrastructure Spending by Partner Organizations, 2010-2012

Chart 7: Performance Metrics Used by Partner Organizations

$28,515,816

$8,451,767 $11,278,100

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

2010 2011 2012


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Chart 7 above identifies the performance measures used by partner organizations. Performance measures are used by all partner organizations but quantitative record keeping occurs on a project basis only. Thus far, sharing of performance measure data among partner jurisdictions does not occur. Across the partner organizations, many of the same performance metrics are used. The most often used metrics are: 1) job creation or retention; 2) payroll generation or retention; and 3) local tax generation and retention; and 4) pay level of jobs created or retained. State of Ohio Economic Development Investments in Butler County The State of Ohio is required to prepare and submit a number of annual reports on its economic development expenditures to the Ohio Legislature. These reports relate specifically to spending by the former Ohio Department of Development (now the Ohio Development Services Agency of ODSA). These reports do not include development related infrastructure investments by the Ohio Department of Transportation and other state agencies with public works and infrastructure responsibilities. Our team reviewed several of the available development expenditure reports, including:

1. Ohio Job Creation Tax Credit Program data. 2. Ohio Development Grants and Loans data. 3. Ohio Attorney General’s Annual Economic Development Compliance Report data.

Because of the great amount of effort required to draw out Butler County data from these reports, we offer only summarized observations about the data. As a note, the State of Ohio does not follow an Integrated Development Budget (IDB) or Comprehensive Development Budget (CDB) format, and therefore it is not possible in the context of this feasibility study to measure the total state dollar investments in economic and community development in Butler County or any Ohio county. Much like the Butler County data presented earlier, it is very sketchy. Ohio Job Creation Tax Credit Data Table 20 below shows the Butler companies (economic development projects) awarded tax credits. Specific data on these projects were not available to our team. No accurate measurement of the amount of spending and its impact on jobs, taxes, and payrolls in Butler County is possible at this point. Table 20: Butler County Companies Receiving Ohio Job Creation Tax Credits, 2008-2013 Recipient Name County Tax Incentive Type

ADS Manufacturing Ohio LLC Butler Job Creation Tax Credit

Advance Pierre Foods, Inc. Butler Job Creation Tax Credit

Avure Technologies, Incorporated Butler Job Creation Tax Credit


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Recipient Name County Tax Incentive Type

Barnes Aerospace Division of Barnes Group Inc. Butler Job Creation Tax Credit

Contingent Network Services, LLC Butler Job Creation Tax Credit

Control Concepts and Design, Inc. Butler Job Creation Tax Credit

Ellman International, Inc. Butler Job Creation Tax Credit

Eurofins QTA, Inc. Butler Job Creation Tax Credit

Hayneedle, Inc. Butler Job Creation Tax Credit

Honeymoon Paper Products, Inc. Butler Job Creation Tax Credit

Humana Insurance Company Butler Job Creation Tax Credit

Koch Foods of Cincinnati LLC Butler Job Creation Tax Credit

LEM Products, LLC Butler Job Creation Tax Credit

Masters Pharmaceutical, Inc. Butler Job Creation Tax Credit

Metal-Matic, Inc. Butler Job Creation Tax Credit

MHC Medical Products, LLC Butler Job Creation Tax Credit

Middletown Coke Company, LLC Butler Job Creation Tax Credit

Middletown Coke Company, LLC Butler Job Creation Tax Credit

NCI Group, Inc. Butler Job Creation Tax Credit

PAC Worldwide Corporation Butler Job Creation Tax Credit

Pilot Chemical Company of Ohio Butler Job Creation Tax Credit

Protection Devices, Inc. Butler Job Creation Tax Credit

Sugar Creek Packing Co. Butler Job Creation Tax Credit

Systecon Inc. Butler Job Creation Tax Credit

Systecon, Inc. Butler Job Creation Tax Credit


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Recipient Name County Tax Incentive Type

ThyssenKrupp Bilstein of America, Inc. Butler Job Creation Tax Credit

Valeo Climate Control Corp. Butler Job Creation Tax Credit

Ohio Development Grants and Loans Appendix 1 contains data on economic and community development grants and loans provide to Butler County projects during the 2008-2013 period. The total value of these awards was just under $46 million. E. Butler County Development Context Analysis: Summary of Findings This section synthesizes the analysis in Section II of the report. A series of summarizing observations are made: Development History

1. Butler County’s development history goes back to the early 19th Century during which major water and rail transportation developments set the stage for development in the County.

2. Major highway development during the mid 20th Century had a major impact on County

development patterns.

3. The County’s transportation developments have had a continuing on the level and type development occurring in the County.

Land Use and Population Trends

1. In more recent years, land consumption on both a per capita and per job basis has increased, which is a reliable indicator of sprawl type development.

2. The County’s population base increased by 2.5 times its 1900 population between 1900 and

1950 and again by 2.5 times between 1950 and 2010.

3. Hamilton’s population base increased by 2.4 times its 1900 population between 1900 and 1950 and grew by only 7.8% between 1950 and 2010.

4. Middletown’s population base increased 3.6 times its 1900 population between 1900 and 1950

and grew by 36.5% between 1950 and 2010.

5. The combined population of Hamilton and Middletown represented 58% of Butler County’s population in 1900, 62% in 1950, and only 29% in 2010. While both cities have seen some population growth, their share of the County’s population has declined dramatically.


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6. Fairfield Township population increased by 70% between 1900 and 1950 and then increased by over 211% between 1950 and 2010.

7. Liberty Township’s population increased by 114% between 1900 and 1950 and boomed by

1562% between 1950 and 2010.

8. West Chester Township’s population increased by 46% between 1900 and 1950 and it exploded by 2295% between 1950 and 2010.

9. Theses three townships increased their combined share of Butler County’s population from

7.9% in 1950 to 32.3% in 2010.

10. Because of their newer status, population data for the cities of Fairfield and Monroe is not available for 1900. However, Fairfield’s population grew by 190% from 14,680 in 1970 to 42,510 in 2010. Monroe’s population increased by 3356% between 1950 and 2010.

11. Trenton’s population increased 155% between 1900 and 1950 and 1103% between 1950 and

2010.

12. The combined population of Fairfield, Monroe, and Trenton represented 18.15% of the County’s population in 2010.

Business and Economic Trends

1. Total business establishments in Butler County increased by 861 during 2002-2012 for a 13.1% growth rate.

2. Total employment in Butler County increased by 12,467 in 2002-2012 for a 9.9% growth.

3. Manufacturing employment in Butler County held steady between 2002 (19,178) and 2012

(19,185), and it only dipped slightly from 1998 (20,067) compared to many other Ohio counties.

4. Butler County’s largest industries in terms of employment in 2012 were: Manufacturing (19,185); Healthcare (18,353); Retail Trade (16,735); Hospitality (13,260); and Distribution (11,786).

5. Between 2013 and 2018, the following changes are expected in employment in Butler County’s

largest industries: Manufacturing (-320); Healthcare (+3560); Retail Trade (+1981); Hospitality (+1029); and Distribution (+1575). Another growing industry in the next five years will be Administrative Operations (including back-office activities) (+2056 jobs).

6. Butler County is expected to gain competitive strength (and grow in concentration as measured

by location quotients) in these industries in 2018: Primary Metal Manufacturing; Non-store Retailers; Distribution; Beverage Manufacturing; Transportation Equipment Manufacturing; Paper Manufacturing; and a host of other manufacturing industries.


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7. During the 2000-2012 period, 356 business investments were recorded in Butler County; of which 323 were by U.S. companies and 33 by international companies. These 356 total projects had a combined total investment of $4.79 billion and they created 13,743 jobs (conservatively).

8. 158 existing business expansions occurred and 198 new business investments occurred in the

County in 2000-2012.

9. Manufacturing and distribution investments combined accounted for over 70% of all business investments during 2000-2012.

Existing Economic and Community Development System Assessment

1. All of the collaborative partners for this project have some type comprehensive or master plan in place. These plans vary in their detail and how up to date they are.

2. Butler County is well served by economic and community development organizations at the

community, county, regional, and state levels. The State of Ohio has made over 200 investments in economic and community development (including workforce development) projects in Butler County since 2008. The data are not sufficient to accurately tabulate the dollar investment of these projects or how many jobs were retained or created by these investments.

3. Butler County Government has made over 100 investments in local community development

and economic development projects since 2008. The data are not sufficient to determine the overall dollar value or impact of these investments on Butler County communities.

4. While economic and community development staffing and operating budget data was provided

by the some of the collaborative partners, some were not able to provide this data. The data is uneven and does lend itself to reliable tabulation. Based upon what was reported, it appears that economic development operating budgets totaled $553,000 in 2010 and $481,165 in 2012, and community development operating budgets were $3.5 million in 2010 and $3.7 million in 2012.

5. Local business incentives were reported at just under $17 million across the collaborative

partners in 2010-2012. This would seem to be an underestimate of this dollar value.

6. Development-related infrastructure spending was reported to be $28.5 million in 2010, $8.4 million in 2011, and $11.3 million in 2012.

7. Butler County economic and community development organizations follow the target industry

development strategy and there is a fairly high degree of alignment across organizations in terms of their top target industries, which are:

• Old-line manufacturing • Newer advanced manufacturing • Light manufacturing • Hospitality • Healthcare services


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• Warehousing and distribution • Transportation services • Retail trade • Computer and information technology • Professional business services • Financial services • Technical services

Chart: Butler County Industry Clusters (Source: Harvard Cluster Mapping Project)


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The chart directly above shows Butler County’s industry clusters based upon the Harvard Business School’s Cluster Mapping Project. The table below shows the County’s top nine clusters showing local employment in the cluster and the County’s national rank (compared to all other U.S. counties). Table: Butler County Top Industry Clusters

Top Butler County Industry Clusters 2012 Employment National County Rank Distribution and Electronic Commerce 13,656 78 Insurance Services 7,975 53 Automotive Manufacturing 2,861 61 Upstream Metal Manufacturing 2,060 52 Plastics Processing 1,748 90 Lighting and Electrical Equipment 925 81 Aerospace Vehicles and Defense 750 70 Downstream Chemical Products 650 76 Biopharmaceuticals 375 71

As Butler County development officials assess the best opportunities for the IDB, some attention should be given to how an IDB approach could be used to make investments in the development resources (workforce, transportation and water and sewer infrastructure, and technology infrastructure (fiber optics ring) to strengthen businesses and jobs in some or all of these clusters.


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IV. Public Financial Analysis of Butler County Communities A. Introduction The fiscal analysis is an important element of the Butler County Integrated Development Budget Feasibility Study. As an aid to readers, a glossary of technical terms used in the public finance field is located at the end of Section IV of this report. The Integrated Development Budget (IDB) concept will require priorities, action plans, and cooperation across the participating agencies. If the collaborative partners agree to implement the IDB study recommendations, a coordinated economic and community development budget plan could be developed that is multi-jurisdictional in composition and unified in the strategy across Butler County.7 The IDB approach urges the efficient allocation of increasingly scarce fiscal resources to support development activities. The IDB approach could allow the collaborative partners to understand the full extent of their development activities and resources (direct spending and foregone tax expenditures) to support these activities. The IDB approach offers an information-based and action-oriented approach to creating and sustaining a competitive advantage for Butler County communities. Development activities are currently not guided by a strategic plan. While some communities within the County have been successful in adding businesses and jobs, especially the townships and newer municipalities, others (older cities) have enjoyed less success. This is a reality in a large number of Ohio counties, where older urban areas lag their younger neighbors in terms of growth and development. Many factors contribute to this situation, including business decisions to build and locate on new sites In a state, county, or municipal government budget, legislators, county commissioners, and mayors and city council members appropriate funding and approve incentives for economic development activities in dozens of line items that rarely get attributed back to a collective economic development impact. While the line items, in the form of direct appropriations and tax expenditures/incentives, are assumed to promote or stimulate economic growth, the impact of the aggregate funding is virtually untraceable due to the decentralized nature of the investments, the prioritization of the investments, and the coordination of the programs once in the field. Since the late 1980’s, the Ohio Department of Taxation has produced a biennial Tax Expenditure Report that captures the 12 state tax incentives currently accounted for in the state budget process. While this volume only covers tax incentives and the resultant revenue foregone, there is not a report that captures the State’s economic development appropriations and tax expenditures in entirety. There are numerous economic development (often disparate) line items in the state’s 1,000+-page budget document. The fragmentation of economic and community development related expenditures and programs occurs as each of the individual jurisdictions has their own plans and priorities based on their individual sense of purpose and market advantages. In the absence of a program budget approach, the economic and

7 Note: The collective budget plan for the IDB is not an operating budget for the individual partner jurisdictions but a plan for defining the

collective priorities of the IDB partnership.


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community development line items are disbursed throughout a jurisdiction’s budget (let alone throughout the budgets of each of the partner jurisdictions). This hinders the ability to conduct a comprehensive program evaluation, an impact analysis, or a strategic approach to management across all economic and community development related expenditures in Butler County. An integrated development budget allows for informed decision making across programmatic and jurisdictional lines. The IDB also provides for greater access, accountability, and transparency in identifying the efficiency and effectiveness of economic and community development appropriations and priorities. The IDB can build on the program budget format to bring the seemingly disparate high priority (prospective) economic and community development investments into one planning and reporting document. By its basic design, the Butler County Transportation Improvement District (TID) incorporates some of the basic concepts of the Integrated Development Budget into its mission. It fosters collaboration between public and private transportation interests in planning financial arrangements, facilitating construction, and operating transportation improvement projects. Following its default in December 1978, the City of Cleveland and Cuyahoga County put in place a public-private planning process to restore the region’s capital infrastructure to a level that could assist in Greater Cleveland’s economic and community development. With representation of the region’s road and bridge, water, sewer, and transit infrastructure agencies and private sector leadership, Build Up Greater Cleveland (BUGC) was formed to define goals and objectives, prioritize investment projects, define existing/in-place local, state and federal funding available to accomplish the projects, to identify the gap in funding need, and to lobby in Columbus and Washington, D.C. for supplementary funding to accomplish the capital plan. BUGC in a way could be seen as an early form of an Integrated Development Budget. The success of BUGC and the resultant improvement in regional infrastructure capacity played a significant role in the economic and fiscal recovery of Cleveland and its metropolitan area. BUGC utilized the program budget approach to bring together the priority capital projects from eight public infrastructure agencies (in Cuyahoga County) in four service areas. This approach can help to inform the development of the IDB strategy, developing a portfolio of priority economic and community development investment projects in Butler County. Research from the Federal Reserve Banks of Chicago and Cleveland in the early 1990’s identified the close relationship between investment in infrastructure and private business and economic growth. Public infrastructure investment attracts new private development and investment. The resultant private investment in sites, buildings, equipment, and employment and the creation of wealth are key outcomes of economic and community development. They also are a contributing force of tax base enhancement for local governments. This is yet another reason to consider the IDB approach to economic and community development. B. Fiscal Position of Butler County IDB Collaborative Partners The fiscal position of the IDB partners serves as a baseline of their current performance, and provides a measure of the capacity of the partners to fund economic and community development in Butler County. The fiscal scan includes these Butler County public sector entities:


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• Butler County • City of Fairfield • City of Hamilton • City of Middletown • City of Trenton • City of Oxford • West Chester Township • Liberty Township • City of Monroe

In addition, these institutional partners are examined to a more limited extent:

• Butler County Port Authority • Hamilton Area Chamber of Commerce • Workforce One, Butler County • Cincinnati State, Skill Commerce Center

The fiscal scan utilized these data variables and metrics: revenues, expenditures, debt, operating position, capital, and community wealth. The data and indicators are looked at in aggregate to allow a beginning level evaluation of fiscal conditions; providing a “lite” version of a credit rating agency analysis. The Assessed Valuation (community wealth)8 base of Butler County expanded by a modest 6.76 percent over the past decade. The County’s Assessed Valuation (AV) is the taxable value of all real property within their borders, and also serves as the security (collateral) on General Obligation Bonds. The concept of “community wealth” is that the AV of a jurisdiction is a significant balance of resources that can be utilized as collateral, or as a method of enhancing the credit on borrowed funds, such as bonds, bond-type mechanisms (certificates of participation, lease purchase agreements, etc.), loans, and other financing arrangements. From this standpoint, the AV growth trend is a key indicator of the current and future fiscal health of political jurisdictions. Note: The initial fiscal analysis is conducted without the inclusion of the special districts, including the Transportation Improvement District, the Port Authority, and the technology and workforce activities. They will be included at the end of this section. Table 21 below depicts the results in the 10-year growth of Assessed Valuation in the IDB jurisdictions. The AV trend in Butler County mirrors the metro areas of the state with growth in the 2003 to 2007/2008 period, followed by a decline precipitated by the 2007 recession and the August, 2008 Mortgage Backed Securities derivative crash. Typically, an annual AV growth rate of 3 percent (or more) is in the healthy range. The 3 percent indicator is typically regarded as an indicator of keeping pace with annual inflation.

8 O’Brien, Kevin. The Creation and Movement of Community Wealth: the Shifting of the Resource Base of Ohio’s Metropolitan Areas.

Ohio Urban University Program Fall Forum, Columbus, Ohio. October 9, 1997.


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Table 21: Growth in Assessed Valuation in IDB Butler County Partner Jurisdictions Area 10-Year Growth in AV9 AV Per Capita10 Butler County 6.76% $21,399 Fairfield -0.38% $23,859 Hamilton -0.86% $14,951 Middletown -31.31% $18,558 Trenton 88.16% $14,796 West Chester Township. 1.9% $28,698 Liberty Township. 11.44% $24,316 Oxford 33.06% $11,974 Monroe 14.63% $26,502 Table 21 also shows the AV per capita figures for the partner jurisdictions, which ranged from a low of $11,974 to a high of $28,698. The median value of the partners per capita AV is $21,400. These figures give an indication of the complexity of the local jurisdiction’s share of the regional economy, such as commercial and industrial properties, wage level of jobs, residential property values, and resident incomes. AV is an indicator of a community’s investments in plant and equipment, new commercial development, new residential development, and investments in public amenities (parks, recreation centers, schools, libraries, etc.). An additional (and significant) factor is the collective wealth of the residents. Prior to the recession of 2007, the Butler County partner jurisdictions experienced a wide range in growth AV growth, from 1.11 percent to 95.9 percent. The post-2007 period is marked in many communities by declining Assessed Valuations. The partner jurisdictions have experienced a healthy range of growth of governmental fund (GF) revenues. This growth is the result of increases in both grant funds and restricted (dedicated) revenues: e.g. federal or state grants, gas taxes, license tag fees, etc. The average annual growth of Governmental Fund revenues ranged from 4.7 percent to 203.1 percent over the 10-year period.11 Each end of the revenue growth range exceeded the 2.31 percent average rate of inflation in the 2003 – 2013 period.12 This reflects strong revenue growth in non-General Fund revenues. These funds (Special Revenue Fund, Capital Projects Fund, etc.) are for dedicated capital items from building city halls to water and sewer systems, to paving streets. While community operations are run through their General Fund, the activities within the Governmental Funds provide a good perspective on the operating and capital budgets and investments of the communities. Table 22 below shows somewhat modest annual growth in revenues and contained growth in expenditures. The average annual growth in General Fund revenues is 4.41 percent (the median is 3.34 percent), which exceeds the annual rate of inflation. Note: Nearly all of the Butler County partner communities exhibited an expansion of General Fund Revenues through 2007/2008, followed by a declining AV through 2012. The recession and the housing finance derivative crash reduced AV 9 AV growth 2003 – 2012 10 Average Per Capita AV over 2003 – 2012 period 11 Government Fund revenues were used to include all of the dedicated capital spending items that are most often contained outside of the

General Fund. 12 From US Inflation Calculator, Coinnews Media Group at US Inflation Calculator.com


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(community wealth) and revenues. Other impacts included declines in the security on G.O. Bonds, property tax base, employment and therefore income taxes, and employment sales tax revenues. Expenditure growth in most Butler County partner jurisdictions has lagged revenues. It is helpful to remember that a 25.5 percent increase in revenues over 10-years equates to an annualized rate of 2.5 percent, which is a modest annual rate of growth. Table 22: Revenue and Expenditure Growth in IDB Butler County Partner Jurisdictions

10-Year Avg. Annual Increase 10 year Avg. Annual Increase in General Fund Revenue in General Fund Expenditures

Butler County 0.64% 0.36% Fairfield 3.34% 2.68% Hamilton 0.5% 0.52% Middletown 1.8% 0.4% Trenton 3.43% 3.62% West Chester Twp. 8.84% 1.86% Liberty Township 7.63% 15.46% Oxford 0.58% 1.80% Monroe 11.08% 1.44% Each of the partner jurisdictions has maintained a moderate to strong General Fund Balance. As illustrated in Table 23 below, the range extends from a modest rate of 12.83 percent of General Fund Revenues to a significant rate of 232.23 percent of General Fund Revenues. Moody’s Investors Service has historically looked for a General Fund Balance rate of 10 to 20 percent of General Fund Revenues. While undesignated cash on hand is hardly a negative trait, a fund balance that is significantly large can attract the attention of citizens who may consider a local government’s savings account to be at the expense of tax-paying residents. Table 23: Average General Fund Balance of IDB Butler County Partner Jurisdictions Avg. General Fund Balances Butler County 12.83% Fairfield 44.5% Hamilton 203.4% Middletown 32.4% Trenton 54.6% West Chester Township 105.0% Liberty Township 232.23% Oxford 52.5% Monroe 48.12% The partner jurisdictions have sparingly utilized General Obligation (GO) debt. The credit rating industry finds that local governments nationwide experienced a fairly wide range of growth in government fund revenues, from low growth (4.7 – 16.4 percent) to significant growth (82.04 – 203.1 percent) over the past decade.


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Table 24 below illustrates the limited use of General Obligation Debt and the significant level of debt capacity within the Butler County partner jurisdictions. That is not to say that any jurisdiction would utilize the entire debt capacity at its disposal, yet it underscores the resources available based on the security that the jurisdiction’s AV provides; in this case the excess debt capacity is $572.5 million. Debt use by local governments has its greatest efficiencies in two areas: Intergenerational equity and the time value of money. Intergenerational equity is the consideration of who will consume the capital installation (e.g. sewer improvement) being constructed through bond financing and what is the useful life of the capital investment. This means if a local government finances a capital item (let’s use storm sewer pipes for the example) “out of pocket” from a single year’s budget, the people and businesses in the city in year 1 pay for the pipe. The pipe has a long useful life (48-inch concrete pipe has a useful life of 90 years), and therefore it will be consumed by future residents and businesses. Those residents and businesses between year 2 and year 90 do not contribute to paying for the pipe. Out of pocket financing of capital items with long useful lives can be an inefficient method of financing capital projects. All consumers of the capital asset should, from an intergenerational fairness perspective, assist in paying for the asset. The “time value of money” considers the impact of inflation on the annual bond payments over the amortization period. In matching the useful life of a capital asset to the amortization period (the period in which you pay off bonds), the payment period is usually 20 years, but also 30 and 40-year payment periods are possible. With a 40-year amortization period, on day 1 a dollar is at its highest value: 100 cents in current currency value. In year 40, after indexing annually for inflation, a dollar is worth 38 cents. Paying back debt with 38 cents on the dollar is more efficient than at full value. Table 24: Debt Use and Capacity in IDB Butler County Partner Jurisdictions 10-Year Avg. Gen. Obligation 10 Year Avg. Legal Debt Burden Debt Margin Butler County 0.79% $147,967,872 Fairfield 1.91% $ 78,560,837 Hamilton 3.44% $ 67,773,843 Middletown 2.79% $ 70,326,001 Trenton 0.37% $ 17,837,13013 West Chester Township. 2.74% $149,664,255 Liberty Township. 1.32% $ 66,083,345 Oxford 1.1% $ 25,059,524 Monroe 2.07% $ 19,578,506 Table 24 also illustrates the low to moderate level of General Obligation debt utilized by the Butler County partner jurisdictions. The credit rating industry identifies a safe range of collateralized debt use as measured by the outstanding balance of General Obligation debt being around 10 percent of a jurisdiction’s Assessed Valuation, which is also referred to as the “debt burden.” The average debt

13 One year of data available


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burden of the partner jurisdictions is well below the 10 percent level, with the median being 1.91 percent. The low to moderate use of debt provides capacity for financing capital items. The wealth indicators for the IDB partner jurisdictions are widely distributed across these three categories: Per Capita Income, Payroll Per Employee (by business establishments in each jurisdiction14), and Real Property Assessed Valuation. Table 25 below illustrates the levels of community wealth in the IDB partner jurisdictions. Per Capita Income is the measure of wealth per resident in a community. The jurisdictional measurements in Table 22 can be compared the 2012 Ohio Per Capita Income level of $25,618 and the U.S. level of $27,915. The Payroll Per Employee is a measure of private sector wealth as measured by the ES-202 Quarterly Census of Employment & Wages from the Ohio Labor Market Division of the Ohio Department of Job and Family Services. The ES-202 data reports by zip code these three variables: the number of business establishments, number of employees, and the payroll for the establishment. The data in Table 22 is aggregated to the jurisdictional level (all businesses in the jurisdiction). Payroll Per Employee is a measure of all workers employed in the jurisdiction. It gives a sense of the wages generated within the jurisdictions, which is influenced by the type of businesses and jobs in the jurisdiction. The payroll data can be examined over time to estimate changes in the average wages by employee in a jurisdiction. The Assessed Valuation data reflects the taxable value of all real property (residential, commercial, industrial, and agricultural) in the jurisdiction. As mentioned earlier, AV also serves as the security or collateral behind the “Full Faith and Credit” pledge that the community makes when it offers General Obligation Bonds to underwriters and investors. AV per capita gives a relative sense of the taxable value of a city per resident. Note: In 2010, the AV per capita across the State of Ohio was $20,653.15 Table 25: Wealth Indicators of IDB Butler County Partner Jurisdictions Per Capita Annual Payroll Assessed Annual Income Per Employee Value/Capita Butler County $34,369 $10,118 $21,399 Fairfield $33,833 $ 9,903 $23,859 Hamilton $34,369 $ 9,033 $14,951 Middletown $19,860 $ 9,046 $18,558 Trenton $22,311 $ 7,256 $14,796 West Chester Township. $32,116 $12,291 $28,698 Liberty Township. $28,905 $ 7,429 $24,316 Oxford $12,290 $ 8,915 $11,974 Monroe $25,007 $10,060 $26,502 Fiscal Position of IDB Special District Partners This fiscal scan considers the IDB special district partners, which include the: • Butler County Transportation Improvement District (TID) • Butler County Port Authority 14 Data drawn from ES-202 Establishments, Employees, and Payroll Data from the State of Ohio Department of Jobs and Family Services,

Labor Market Information 15 Ohio Department of Taxation, Tax Analysis Division (GLEFC Metric Calculation)


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The Butler County Transportation Improvement District (TID) fosters collaboration among public and private interests in planning, financing, construction and operation transportation projects in Butler County. The TID has operated over the past 10 years with an average annual Governmental Revenue base of $10.6 million in operating and capital funds. Annual funding has fluctuated between a low of $2.7 million and a high of $19.1 million. A majority of funding comes in Intergovernmental Funds from federal and state sources. The TID annual Government Fund expenditures average $15.6 million, with a range of $5.0 - $22.7 million. The TID has maintained an average fund balance of 41.8 percent of Governmental Fund Revenues, in a range of 17.9 percent to 123.3 percent. TID utilizes Special Obligation Bonds to finance capital projects, with agreements with local jurisdictions for the repayment of the bonds. The TID has averaged $94.7 million outstanding in Special Obligation Bonds over the 2003 – 2012 period. TID had a total bond-financing portfolio of $946.6 million over the 10-year period. The Butler County Port Authority collaborates with public and private sector partners to encourage economic development in Butler County and Southwest Ohio. The goal is to promote and facilitate community development while enhancing economic development and the quality of life in Butler County. Since 2004, the Port has provided creative financing options for medium and large-scale projects in Butler County. The Port is financed with local contributions, administrative fees, and other operating revenue (including grants) to directly and indirectly finance and/ manage community D. Financing Economic and Community Development Techniques This section reviews the range of financing techniques that are either have been used in Butler County or could be considered for the future. Financing community and economic development has risen to the level of an art, in that innovation often requires creating cash flow out of, what had been up to this time, nothing (EB-5 financing for instance). Note: EB-5 financing is a new and unique strategy to encourage foreigners to invest in the United States and create American jobs in exchange for a U.S. green card. Yet many of the traditional methods of financing remain as the staple of economic development efforts across the country. Debt Financing Many economic and community development projects in the private, public, or not-for-profit sectors involve debt financing. Private development projects often have access to financing for infrastructure to support the access to or public services for development sites, including road and bridge construction, allowing transportation access to the site, water and sewer connections to the site, and at times, transit access. These are often financed with (public) access to municipal bond markets, both (tax free) General Obligation and Revenue Bond debt and through state, county, or local government. Indirect access to bond financing for not-for-profit organizations, including hospitals, theatre districts, non governmental organizations, and not-for-profit service providing organizations can come through county government. County government can act as an intermediary financier for revenue bonds that are financed with funds from the borrowing organization.


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A third alternative is for businesses accessing taxable bond financing through intermediaries. In Ohio, Port Authorities have been successful in financing economic development activities with revenue bonds, such as private sector headquarters or factories. A third party entity (such as a Port), takes ownership of the facility (and keeps it off the balance sheet of the private business). The bonds are defeased through rental payments for the facilities. Local Tax Base Alternatives Many local jurisdictions finance small and medium sized community and economic development projects out of ongoing operating revenues on an out of pocket, pay as you go, or lease purchase basis. These strategies are adequate for small projects, but as the cost and the useful life of the asset increases, their utility wanes. The revenues are drawn from local taxes, including property, income, sales, and special taxes, fees for services, and assessments. Fees for service and assessment-derived revenues are drawn from entities that directly share in the benefits accrued from the resultant investment; otherwise the fee/assessment would be considered a tax. Many jurisdictions, including those in Butler County, carry excess financial, credit, and debt capacity that can serve as a supplementary financing alternative. Low use of debt, large and expanding assessed valuation capacity, and large amounts of revenue carried in undesignated fund balances can also serve a potential sources of short and long-term financing. Over the past 25 years, tax base-sharing has emerged as a potentially innovative economic and community development financing strategy for those areas that can reach consensus on the investment priorities of a given geography. While there are a limited number of successes in Ohio, the Economic Development/Government Equity Fund (ED/GE) in Montgomery County has provided a foundation for inter-local agreements to provide services or share revenue across areas with similar visions and goals for economic development. While the concept of tax sharing often puts fear in the eyes of local government officials (fearing the Robin Hood syndrome), the potential benefits may be rewarding if structured property. External Sources of Financing There are several sources of external funding for economic and community development projects that are often competitive or formula based intergovernmental sources. Federal agencies provide access to grants, most often on a competitive basis: e.g. EPA for brownfield remediation, Department of Labor for workforce related, Department of Transportation for road and bridge projects (transit projects are available and are sometimes formula based). The Department of Commerce provides economic development funding through the Economic Development Administration (EDA) and its regional planning organizations. EDA provides annual funding opportunities that are most often in the infrastructure and workforce related programs in economically distressed areas. EDA investment priorities direct their grant programs: • Collaborative Regional Innovation • Public/Private Partnerships • National Strategic Priorities • Global Competitiveness


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• Environmentally-Sustainable Development: job creation and economic prosperity • Economically Distressed and Underserved Communities State direct funding and grants play a large role in funding in local and regional economic development activities, directly (direct from state to developer/business), or indirectly through a county, a local jurisdiction or a not-for-profit organization. The State has reorganized and prioritized its workforce training investment programs as part of the overall state economic development strategies. The state Jobs Ohio program provides funding for workforce development through regional Workforce Investment Boards. The former Ohio Department of Development (now the Ohio Development Services Agency) has held grant competitions to assist inter-governmental cooperation initiatives aimed at local government collaborative service delivery agreements. In fact, the Butler County Integrated Development Budget Project is the recipient of a Local Government Innovation Fund (LGIF) grant to conduct this feasibility study. Private foundation funding has proven to be an important supplementary funding source for economic and community development initiatives. The role of community foundations in proving investment capital to new initiatives has proven to be critical. Economic development investments in regional innovation, technology, and workforce are common for foundations. The community foundations throughout Ohio have actively participated in local and regional economic development strategies, although on a limited basis. The exception is Northeast Ohio’s Fund for the Economic Future, which is a dedicated revenue stream to promote innovative approaches to regional economic development strategies in Northeast Ohio. In recent years, innovative economic development financing has extended to international financing for large-scale local projects in the form of EB-5 project financing, with immigrating entrepreneurs. E. Initial Priorities for an Integrated Development Budget in Butler County Many public, private, and not-for-profit organizations participate in furthering the economic and community development mission of Butler County. While many of these activities do not get recognized in the typical public forums, such as local budgets, or are guided by a central strategy, the Integrated Development Budget process could include these efforts. Dick Lavine of the Texas Business Review suggests that: ”all these agencies participate in activities that can legitimately be considered to further economic development. Still, nowhere in any state planning or budget document are theses activities brought together in one place for even a simple comparison of relative costs.”16 Through the Butler County’s IDB Working Group, three priorities were selected for initial attention related to the IDB:

1. Workforce development 2. Transportation development 3. Fiber optic capacity and services

16 Lavine, Dick. An Integrated Economic Development Budget: Putting Apples and Oranges in the Same Basket. Texas Business Review.

Austin, Texas, February 2001.


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While these priorities are discussed more extensively elsewhere in this report, some of the financial considerations related to these priorities are discussed here. Each of these priorities has multiple (public, not-for-profit, and/or private sector) participants that may or may not formally or informally share data and information in he context of the IDB Project. Transportation development, for the purposes of this report, is defined as the road and bridge activities of the participating agencies in Butler County. Technology is related to the existing County-owned fiber optic ring and its other owners in Butler County. Workforce development activities are the job training and employment development investments made through the state’s Butler County Workforce One Initiative, area community colleges, and other workforce development advocacy and training organizations in Butler County. Transportation Improvement: 2003 – 2012 Many of the transportation related functions are coordinated through the Butler County Transportation Improvement District (TID), a special district created by State Statute and an action of the Butler County Commissioners in 1994. The TID represents communities in Butler County on transportation projects funded by the federal, state, and local governments. The TID was formed to provide coordination to the building and improving of Butler County roads, through a consensus-building model. Since 2003, the Butler County IDB partners have invested $429.3 million in road and bridge related construction.17 The average annual $42.9 million investments have fueled the development-related road projects in Butler County.18 Butler County has 11.25 miles of Interstate Highways, 46.45 miles of U.S. Highways, 178.54 miles of State Highways, and 1,768.57 miles of County, Township, and Municipal roads. Technology: Butler County Fiber Optic Ring Butler County has a fiber optic backbone of nearly 120 miles connecting several cities with 96 strands of fiber distributed throughout the county. The cost to initially create the fiber optic network was approximately $8-$10 million. Butler County invested $5.7 million toward the development of the network. The County has an outstanding debt balance of $3-$4 million (owed). Of the 96 fiber strands, the County owns 24 strands and leases 12 strands to Miami University for approximately $300,000 annually. The County also donated 6 strands to Miami University. The County utilizes 12 to 14 strands for its phone system and 800-megahertz emergency communications system. The County’s remaining 10 strands are for economic and community development purposes or marketed for lease or sale. Duke Energy owns 4 strands; Cincinnati Bell owns 38 strands; and SFT owns 8 strands. KDL, a Butler County based private concern, is listed as the owner of a few strands.19 The fiber optic backbone travels through West Chester, Hamilton, Fairfield,

17 Including Butler County, Butler County TID, Butler County Port, Liberty Township., Fairfield, Hamilton, Middletown, Trenton, West

Chester Township, and Oxford. 18 This includes Butler County Public Works expenditures at 50%, West Chester Township Capital Outlay expenditures at 50%, and TID

Capital Outlay. 19 Conversation with Mike Campbell of the Butler County Port Authority on September 10, 2013.


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Trenton, Middletown, Oxford, and Evendale. The County contracts for network maintenance with Cincinnati Bell for $200,000+ per year. The fiber optic backbone can be a significant asset in attracting technology-oriented companies to a Butler County location. Sandia National Labs in Albuquerque, New Mexico created a 300-acre Science & Technology office park just outside of the gates of the labs. The key to the success of the office park is the fiber optic communications backbone, which provides fiber optics: the fastest transmission medium commercially available; state-of-the-art technology with ring architecture and digital facilities; quick and easy fiber optic access to Park tenants; and video, voice, and data service from alternate providers. The Science & Technology office park has attracted 33 companies in 18 buildings and 900,000 square feet of office space. The fiber backbone was constructed with a $2.85 million grant from the U.S. Department of Commerce, Economic Development Administration grant. Workforce Investment and Development Workforce One of Butler County is the local representative of the Workforce Investment Board (or WIB) in Southwest Ohio, providing one-stop operation connecting job seekers with employers. Workforce One of Butler County offers and array of services to businesses, which include: • Recruitment assistance • Large selection of qualified applicants • Invaluable labor market information • Outsourcing and outplacement help And services to job seekers, including: • Access to all types of job openings • Resume help • Interview training • Support during layoffs Workforce One of Butler County receives funding, administrative and program funding, through the Ohio Department of Job and Family Services (ODJFS), with funding that emanates from both the State of Ohio and pass-through funding from the federal government: Federal Revenue, State General Fund Revenue, General Services Revenue, and State Special Revenue. For example, Workforce One of Butler County received $1.1 million in economic stimulus/American Recovery and Reinvestment Act (ARRA) funding in 2009 to fund a Summer Youth Employment Program, employing 300 participants in ages 16 to 24. The ODJFS funding comes to Workforce One of Butler County in eight programmatic areas: Workforce Investment Act (WIA), Employment Services, Veterans Programs, Labor Market Information, One Stop Services, Workforce Program Management, WIA Dislocated Workers, and ARRA Stimulus. Workforce One is now more employer focused with direct services linking the employers to job seekers, with an emphasis on Manufacturing, advanced manufacturing, health care, and logistics.


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Workforce One of Butler County collaborates with Butler Tech and Cincinnati State to provide to provide direct services to job seekers and employers, to provide workshops, and operating space to attract job-training seekers. Table 26 below provides some general service data on Workforce One of Butler County. Table 26: Workforce One of Butler County: Annual Job Services Interaction20 Action 2011 2010 2009 2008 2007 2006 2005 Total Customer Visits

19,235 18,301 32,561 21,422 10,305 13,366 13,366

Unique Customers

7,507 5,141 10,988 4,088 529 1,683 1,683

Job Orders 427 201 289 177 558 926 926 Worker Commuting Patterns: An Indication of a Regional Labor Market Butler County employers draw their workers from the regional labor market. According to survey data from the U.S. Census Bureau’s American Community Survey (ACS), in 2010 147,004 workers were employed at jobs in Butler County. Of this total, 34% (50,027) resided outside Butler County and commuted daily to jobs in Butler County. The other 66% of people working in Butler County were Butler County residents. By comparison, 32% (43,246) of those working in the County in 2000 resided outside Butler County. In 2010, Butler County had 168,999 employed (working) residents, and 42.6% (43,246) of these working County residents commuted daily to jobs outside Butler County. The other 57.4% of employed residents worked in Butler County. In 2000, Butler County had 160,314 working residents and 69,833 (43.6%) of this total commuted daily to jobs outside the County. In summary in 2010, Butler County had 21,995 more working residents who out-commuted than non-residents in-commuting to jobs in Butler County. In 2000, Butler County had 26,587 more working residents that out-commuted to jobs outside Butler County than non-residents in-commuting to jobs in Butler County. These numbers attest to the regional nature of the labor market for Butler County employers and working residents. They also indicate that Butler County has actually closed the gap a bit in terms of working residents traveling to out of county jobs; that is dropping from 26,587 in 2000 to 21,995 in 2000. This indicates that more jobs and better paying jobs are available in Butler County than in surrounding counties comprising the regional labor market. Economic Development Incentives: 2010 – 2012 Butler County jurisdictions offered over $17 million in economic development incentives in the three-year period from 2010 through 2012.21 The economic development incentives were offered in a variety 20 Workforce One, Annual Reports, 2005 - 2011. 21 Iannone, Donald. Butler County IDB Project Team Meeting Report, February 13-14, 2013.


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of federal, state, and local resources, including tax abatements, Joint Economic Development District benefits, loans, loan guarantees, Community Development Block Grants, and other grants. Butler County jurisdictions programmed an additional $24.4 million in economic development and community development spending: economic development $4.4 million, and community development $20.0 million. Additional data on local and state economic development incentives in Butler County was presented earlier in this report. As mentioned, while tracking of incentives has improved at the state and local levels has improved, it is not sufficient to provide comprehensive data on incentive investments over time and the impact of these incentives. The adoption of the ODB approach in Butler County would benefit its communities and also set a positive example to other Ohio counties and communities. F. Financing Strategy Ideas the Butler County Integrated Development Budget This section reviews some financing strategy ideas that Butler County may wish to consider in formulating and growing an IDB in the future. Integral to the IDB is the strategic (purpose-driven) attraction of federal and state funding, as well as the application of local funding sources (potentially beyond the current level of commitment). An IDB capital investment plan could serve as the roadmap for federal and state agencies detailing the capital, training, and program priorities of the IDB partners. Key financing recommendations include:

1. A cost-saving strategy for financing infrastructure assets with long-useful lives is “useful life financing.” Financing infrastructure with traditional amortization periods (of 20 years) when the useful life of an asset may exceed the amortization period by a factor of 2 or 3, is less productive and more costly than extending the amortization period to more closely match the useful life of the asset.

2. As discussed earlier, the IDB partner jurisdictions have utilized tax supported or General Obligation debt judiciously, in the low to moderate debt burden range.22 The average debt burden across the 8 jurisdictions is 1.81 percent. This indicates a sizable level of debt capacity available to the jurisdictions for capital purposes. By a minor increase in debt burden, by 50 to 100 basis points, additional revenue could be produced to fund a collective pool, a county infrastructure bank, or revolving loan fund.

3. Currently there exists a significant surplus of undesignated General Fund “Fund Balances” in

Butler County, ranging from 12.83 percent to 232.23 percent. The credit industry suggests 10 to 20 percent of General Fund Revenues on hand is a safe range. In all but one case, the amount of Fund Balance of the jurisdictions exceeds this standard, and most often by a significant margin. This is a potential source of additional revenue.

22 Debt Burden is a credit industry metric to define the level of tax supported debt that a jurisdiction has outstanding. They suggest a safe zone

is up to 10 percent of Assessed Valuation outstanding


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4. It is worth carefully exploring tax sharing as a potential method for expanding funding for economic and community development. Look to the Montgomery County ED/GE program and the tax-sharing proposal in Northeast Ohio that is being advocated by the Regional Prosperity Initiative (RPI). Tax sharing, along with funding pools or shared funds, can provide working capital for IDB type financing arrangements.

5. Expand the funding potential of the Ohio Infrastructure Bank. With the Butler County TID

having accessed Ohio Infrastructure Bank funding, the potential for use by the IDB is compelling.

6. Pursue grant funding from the U.S. Department of Commerce, Economic Development

Administration. The EDA process is a very competitive and somewhat bureaucratic alternative for supplementary funding. EDA funding is largely targeted at infrastructure projects and workforce training. Note: Having influential members of Congress is helpful to the process.

7. Regional and community foundations have begun to play a significant role in funding

innovative economic development initiatives (e.g. NE Ohio’s Fund for the Economic Future). They are most likely to offer non-recurring grant opportunities. Butler County Community foundations include: The Community Foundation of West Chester, Liberty Fairfield Community Foundation, the Hamilton Community Foundation, the Middletown Community Foundation, and the Oxford Community Foundation.

8. Traditional economic development funding opportunities continue to exist at the state level

from the Ohio Department of Development. They are also a significant facilitator of state economic development and tax incentives.

9. Consider the Butler County Port Authority to host the IDB process and program management.

10. Consider the EDA for funding any expansion of the IDB technology function: broadening the

role of the fiber optic backbone in Butler County. Look to the success of the Sandia National Labs Technology & Science Office Park as a potential model.

11. The IDB can take on an additional role in educating the members of the Southwest Ohio

Congressional delegation, Ohio General Assembly, Executive, and Executive agency staff on the mission of the organization and on the need for ongoing support.

G. Glossary of Public Finance Terms Public finance is a complex technical field, and for that reason a glossary of terms is included in the body of the report to ensure these terms are accurately understood and used. Amortization of Debt: The process of paying the principal amount of an issue of securities by periodic payments either directly to security holders or to a sinking fund for the benefit of security holders. Assessed Valuation: The appraised worth of property as set by a taxing authority for purposes of ad valorem taxation. It is important to note that the method of establishing assessed valuation varies from state to state, with the method generally specified by state law. For example, in certain jurisdictions the


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assessed valuation is equal to the full or market value of the property; in other jurisdictions the assessed valuation is equal to a set percentage of full or market value. Audited Statement: A financial statement which has been examined by an auditor and upon which the auditor has expressed or disclaimed an opinion. Bond: Evidence of the issuer’s obligation to repay a specified principal amount on a date certain (maturity date), together with interest at a stated rate, or according to a formula for determining that rate. Bonds are distinguishable from notes, which usually mature in a much shorter period of time. Bonds may be classified according to maturity structure (serial vs. term), source of payment (general obligation vs. revenue), method of transfer (bearer vs. registered), issuer (state vs. municipality vs. special district) or price (discount vs. premium). Bond Counsel: An attorney (or firm of attorneys) retained by the issuer to give a legal opinion that the issuer is authorized to issue proposed securities, the issuer has met all legal requirements necessary for issuance, and interest on the proposed securities will be exempt from federal income taxation and, where applicable, from state and local taxation. Typically, bond counsel may prepare, or review and advise the issuer regarding authorizing resolutions or ordinances, trust indentures, official statements, validation proceedings, and litigation. Bonded Debt: The portion of an issuer’s total indebtedness represented by outstanding bonds:

• Direct Debt or Gross Bonded Debt—The sum of the total bonded debt and any short-term debt of the issuer.

• Net Direct Debt of Net Bonded Debt—Direct debt less sinking fund accumulations and all self-supporting debt

• Total Overall Debt or Total Direct and Overlapping Debt—Total direct debt plus the issuer’s applicable share of the total debt of all overlapping jurisdictions

• Net Overall Debt or Net Direct and Overlapping Debt—Net direct debt plus the issuer’s applicable share of the net debt of all overlapping jurisdictions.

• Overlapping Debt—The issuer’s proportionate share of the debt of other local governmental units, which either overlap it or underlie it.

Capital Market: The market for equity securities (stocks) and debt obligations with maturities in excess of one year. Coupon

• A detachable part of a bond which evidences interest due. The coupon specifies the date, place and dollar amount of interest payable, among other matters. Coupons may be redeemed by detaching them from bonds and presenting them to the issuer’s paying agent for payment or to a bank for collection.

• The term is also used colloquially to refer to a security’s interest rate. Debt Service Coverage: The ratio of pledged revenues available annually to pay debt service to the annual debt service requirement. Pledged revenues are usually calculated as net income before the deduction of interest, depreciation and amortization expenses.


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Coverage= Pledged Revenues Debt Service Requirement Debt Burden: The metric that examines the amount of General Obligation debt relative to the pledge of collateral, Assessed Valuation. Debt Limit: The maximum amount of debt which an issuer of municipal securities is permitted to incur under constitutional, statutory or charter provisions. The debt limit is usually expressed as a percentage of assessed valuation. Debt Margin: The metric that identifies that remaining balance of General Obligation debt available under state statute. Debt Ratios: Comparative statistics showing the relationship between the issuer’s outstanding debt and such factors as its tax base, income, or population. Such ratios are often sued in the process of determining credit quality of an issue, primarily on general obligation bonds. Debt Service: The amount of money necessary to pay interest on an outstanding debt, the principal of maturing serial bonds and the required contributions to a sinking fund for term bonds. Default: Breach of some covenant, promise, or duty imposed by the bond contract. The most serious default occurs when the issuer fails to pay principal, interest, or both, when due. Other “technical” defaults result when specifically defined events of default occur, such as failure to perform covenants. Defeasance: Termination of the rights and interests of the bondholders and of their lien on the pledged revenues in accordance with the terms of the bond contract for an issue of securities. Defeasance usually occurs in connection with the refunding of an outstanding issue after provision has been made for future payment through fund provided by the issuance of a new series of bonds. General Obligation Bond: A bond which is secured by the full faith and credit of an issuer with taxing power. General obligation bonds issued by local units of government are typically secured by a pledge of the issuer’s ad valorem taxing power; general obligation bonds issued by states are generally based upon appropriations made by the state legislature for the purposes specified. In the event of default, the holders of general obligation bonds have the right to compel a tax levy or legislative appropriation in order to satisfy the issuer’s obligation on the defaulted bonds. Governmental Accounting Standards Board (GASB): A standard-setting body, associated with the Financial Accounting Foundation and comparable to the Financial Accounting Standards Board, which prescribes standard accounting practiced for governmental units in maintaining their financial records and releasing financial data to the public. Government Finance Officers Association (GFOA): An organization of state and local government finance officers formed to improve professional standards of government fiscal and debt administration. The organization was formerly named the Municipal Finance Officers Association (MFOA). Investment Grade: The broad credit designation given bonds, which have a high probability of being paid and minor, if any, speculative features. Bonds rated BBB or higher by Standard and Poor’s


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Corporation or Baa or higher by Moody’s Investors Service, Inc., are deemed by those agencies to be “investment grade.” Banking law requires that certain types of securities acquired by bank portfolios must be both marketable and “investment grade.” Issuer: A state, political subdivision, agency or authority that borrows money through the sale of bonds or notes. Liquidity: The quality of being readily convertible into cash without substantial transaction costs; the liquidity of a particular investment would also be affected by any discrepancy between the investment’s acquisition cost and its current market value. A municipal security’s liquidity is a function of both maturity and marketability: a “liquid” municipal security is generally both short-term and highly marketable. Manager: The member (or members) of an underwriting syndicate charged with primary responsibility for conducting the affairs of the syndicate. The manager generally takes the largest underwriting commitment. Mill: One-tenth (0.1) of one cent or .001 of one dollar. Rates of taxation of assessed valuation are often expressed by mills. Millage: The rate used in calculating taxes based upon the value of property, expressed in mills per dollar or property value. Moody’s Investors Service, Inc.: An independent service subsidiary of Dun & Bradstreet Corp., which provides ratings for municipal securities and other financial information to investors. Net Revenues: The amount of money available after subtracting from gross revenues such costs and expenses as may be provided for in the bond contract. The costs and expenses most often deducted are operations and maintenance expenses. Per Capita Debt: The amount of an issuing municipality’s debt outstanding divided by the population residing in the municipality. This is often used as an indication of the issuer’s credit position since it can be used to compare the proportion of debt borne per resident with that borne by the residents of other municipalities. Rating Agencies: The organizations that provide publicly available ratings of the credit quality of security issuers. The term is most often used to refer to the two nationally recognized agencies, Moody’s Investors Service, Inc., and Standard and Poor’s Corporation. Ratings: Evaluations of the credit quality of notes and bonds usually made by independent ratings services. Ratings are intended to measure the probability of the timely repayment of principal of and interest on municipal securities. Ratings are initially made before issuance and are periodically reviewed and may be amended to reflect changes in the issuer’s credit position. The information required by the rating agencies varies with each issue, but generally includes information regarding the issuer’s demographics, debt burden, economic base, finances and management structure.


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Revenue Bond: A bond which is payable from a specific source of revenue and to which the full faith and credit of an issuer with taxing power is not pledged. Revenue bonds are payable from identified sources of revenue, and do not permit the bondholders to compel taxation or legislative appropriation of funds not pledged for payment of debt service. Pledged revenues may be derived from operation of the financed project, grants and excise or other specified non-ad-valorem taxes. Tax-Exempt Bond: Another term for a municipal bond. Interest on municipal securities is exempt from federal income taxation pursuant to Section 103 of the Internal Revenue Code, and may or may not be exempt from state income or personal property taxation in the jurisdiction where issued. If the bond is exempt from state income tax, it possesses “double exemption” status. “Triple exemption” bonds are exempt from municipal or local income taxes, as well as from federal and state income tax. Underwriter: A dealer that purchases a new issue of municipal securities for resale. The underwriter may acquire the securities either by negotiation with the issuer or by award on the basis of competitive building.


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Section V: Integrated Development Budget (IDB) Design

A. Introduction The IDB is a public sector innovation. Its success hinges on creating the right design and action plan, leadership, and political will to adopt and implement it. All these ingredients have been discussed earlier in this report. One of the most important factors is the actual design of the IDB as a work process and information tool for Butler County and other Ohio counties with an interest in the idea. The Butler County IDB Working Group meetings have helped to give shape to these ideas. In the most basic sense, the IDB is a shared (inter-agency or inter-jurisdictional) public budget, which is defined as a financial plan that details the government’s projected revenues and expenditures for a defined period of time. Local governments typically have operating budgets and capital budgets. An operating budget is a plan of current (annual) spending and the means to pay for it (taxes, fees, etc.). A capital budget contains long-term spending for the acquisition of assets and the means to pay for them, including borrowing.

B. Vision and Mission Statements and Goals Vision Statement Create a future environment in which high quality growth and development occurs in Butler County communities, resulting in increased high-wage job creation, broad-based prosperity, business and industry competitiveness, and sustainable community-building with a favorable return on public and private funds invested. Mission Statement and Goals The Integrated Development Budget (IDB) will increase the efficiency, effectiveness, and beneficial impacts of public and private sector investments in economic and community development projects in Butler County by achieving these four general goals:

1. Strengthen teamwork and collaboration among economic and community developers in Butler County for the purpose of increasing positive economic and community development results for communities and the entire county.

2. Increase the return on investment (ROI) of countywide and community economic and community development investments and efforts in Butler County.

3. Reduce the unintended long-term costs associated with public sector investments that increase sprawl (spread development over too large a land area) and otherwise make unproductive use of public sector resources.

4. Increase Butler County’s long-term economic competitiveness as a location for high quality businesses and jobs.

Value-Added Within this vision and under these goals, the Butler County IDB will add new value by:


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1. Providing useful new financial and economic analysis tools and data to support improved investment decisions by countywide and community development-related organizations.

2. Providing new mechanisms for collaboration, information sharing, analysis, and coordinated investment by countywide and community development organizations.

3. Providing new innovative financing strategies for economic and community development projects in Butler County.

C. IDB as a Process and Tool

This vision, mission, and goals will be achieved by translating the IDB concept into a working tool that can help Butler County and other Ohio counties and communities. The IDB is envisioned as a:

• Collaborative work process by which Butler County’s partners can work together to set future economic and community development investment priorities for their communities and across the County.

• Practical Web-based budget and investment data management and sharing, research, and planning tool that local practitioners and policymakers can use to create an environment in which high quality and sustainable growth and development occur in Butler County.

IDB as a Strategic Planning and Action Process The IDB could be structured to serve local stakeholders in three ways:

1. Individual community application. 2. Small group (or cluster) of communities (2 or more) application. 3. Countywide application.

Individual Community Application A single community (jurisdiction) could use the identified process and tools to increase collaboration between and among organizations and organizational units within the community to achieve the four goals listed above. For example, economic development, community development, planning and zoning, public works, finance, and the community manager (e.g. city manager or township administrator) could form a team to work across unit boundaries to create and implement an integrated development budget. Many of the barriers discussed at the beginning of this report will need to be overcome for this collaboration to occur. For starters, the elected leaders (e.g. mayor and council or township trustees) will need to authorize the collaborative budget process and work to ensure its accountability once adopted and implemented. Agreement must reached that the IDB will be developed and managed by a team of unit managers, and that the jurisdiction’s legislative body will follow an integrated process in developing its annual operating and multi-year capital budget.


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Individual communities in Butler County with an interest in creating an IDB for economic and community development may wish to think of an IDB with the five components identified in the graphic below. Single Community IDB for Economic and Community Development

Small Group (Cluster) of Communities A group of 2 or 3 communities could decide to use the IDB approach to achieve their shared development priorities. For example, the group could form an agreement to jointly develop and market a shared business park, and then share the tax revenues generated by the park. Similarly, community recreational facilities, such as sports facilities, could be developed and shared. The IDB in this case could take the form of a shared service arrangement among participating communities. It is also possible that Tax Increment Financing (TIFs) and Joint Economic Development Districts (JEDDs) could provide the legal and administrative structures for the shared service or resource. As financial resources shrink, shared service arrangements of this type make good sense. Elected leaders must agree to permit these types of shared arrangements, ensuring that the benefits outweigh the costs and that both benefits and costs are shared fairly. The barriers to inter-jurisdictional collaboration must be overcome, which is the case in all three configurations. A group of communities in Butler County may wish to create an IDB for economic and community development. The six elements identified in the graphic below should be given consideration.

Economic Development

Community Development and Planning

Shared Services Public Works

Budget and Finance


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Multi-Jurisdictional IDB for Economic and Community Development

Countywide and Inter-County Organizational Consortium This grant’s collaborative partners could form a countywide or inter-county consortium to pursue identified development financing strategies. Additional partners could be added in the future to any IDB initiative. A countywide or regional (multi-county) IDB for economic and community development could be created in line with the graphic immediately below.


Community Development and

Planning

Development Funds (State. Federal,

Foundations, Other)

Workforce Development

Development Infrastructure

Shared Services


Community Development and

Planning

Development Funds (State. Federal,

Foundations, Other)

Workforce Development

Development Infrastructure

Shared Services

Technological Innovation


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IDB as an Information, Planning, and Management Tool As a tool, the IDB is envisioned as containing three key elements:

1. A budget information management and sharing tool for individual jurisdictions, groups of jurisdictions, or even all collaborative partners on countywide basis.

2. An analytical tool for studying alternatives and projecting or forecasting future outcomes. 3. Accounting and reporting tool to demonstrate outcomes and accountability.

All three are designed to promote and assist collaboration and teamwork among stakeholders whether in a single or multiple jurisdictions. Top-Ranking Initial IDB Priority Areas The Butler County IDB Working Group has identified three “resource development”23 priorities as a place to start in working with the IDB:

1. Workforce Development Competitiveness: The focus is to work together to ensure an adequate supply of trained and qualified workers to support current and future business growth and foster high quality job creation in the County. Four workforce competitiveness priorities have been discussed:

a. Improving the quality of real-time workforce data and information to help employers and job seekers.

b. Strengthening the alignment between supply and demand in the Butler County portion of the Southwest Ohio labor market.

c. Accelerating the skill development process to more quickly and effectively meet employer existing job upgrading and new job creation.

d. Strengthening the workforce development-economic development connection in Butler County.

2. Technology (Fiber Optic Broadband) Infrastructure Competitiveness: The focus is to ensure

that businesses, communities, and residents have access to high quality high-speed Internet services at a reasonable cost. The fiber optic (FO) ring in Butler County is the initial priority. The Working Group believes the presence of this capability is an advantage for economic and community development, and the enhancement and expansion of these services is required. As part of a team approach, Sourcing Office/Center for Public Innovation has recently completed a “Broadband-Sharing Project” in Summit County, Ohio, using a State of Ohio LGIF grant. While different in nature, the Summit County project offers some useful ideas to Butler County officials. These will be discussed in the next phase of this feasibility study. These technology infrastructure priorities have been discussed:

23 Resource development in economic development is defined as the strengthening of essential resources required to stimulate business expansion and attraction, job retention and upgrading, and new job creation. Such resources include: sites and buildings, infrastructure and public works, workforce skills, and communication and information technology infrastructure.


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a. Expanding services to existing users (communities, businesses, and institutions). b. Extending services to new users (communities, businesses, and institutions) c. Innovating with new value-added services (including content) to benefit existing and

new users. d. Exploring new management and financial arrangements to accomplish 2a-2c.

3. Transportation Infrastructure Competitiveness: The focus is to ensure that Butler County

businesses and communities are served by high quality highways and roadways. The TID, as mentioned earlier, has been productive in gaining collaboration and assembling the financing to accomplish many important transportation improvements across the County. These three transportation improvement priorities have been discussed:

a. Successful completion of projects currently in the planning and development process. b. Selection and development of the next set of TID projects that will increase the

competitiveness of Butler County communities for economic and community development.

c. Competing for additional State of Ohio and Federal transportation funds to complete these new and existing projects.

It is important to note that community and countywide officials may decide to add other priorities in the future. Additional collaborative partners may also be added. Defining the IDB Model Chart 8 below provides a general schematic of the Butler County IDB model. Chart 8: General IDB System Design

Butler County IDB System Model

Work Process Model

Information Utility Tool

Improved Economic and Community Development Outcomes


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In the most general sense, the IDB serves as a new work process and information utility that could help Butler County policymakers and economic and community developers achieve improved economic and community development outcomes, which are attained hopefully at:

1. Lower costs in the short and longer terms. 2. With a higher return on investment (ROI) in the initial three policy areas (workforce, tech

infrastructure, and transportation infrastructure). 3. Higher quality development in terms of jobs and tax base. 4. More efficient growth throughout the County that avoids or reduces urban sprawl. 5. Development that promotes high quality community building, where in this sense economic

development and community development support each other. Meeting New Development and Redevelopment Needs The IDB must meet the needs of both older and newer communities in Butler County. It must provide an advantage to each, and hopefully in a way that the one does not come at the expense of the other. Table 27 below illustrates this idea. The idea is illustrated just in terms of the three priority areas selected by the Working Group. Table 27: IDB Role in Developing and Redeveloping Areas IDB Priority

I. Developing Communities

II. Redeveloping Communities

Workforce Development: Create a Workforce Development “Accelerator” as a strategy to meet workforce needs faster, cheaper, and better. Parameters of the Accelerator to be defined in the final report.

A. Providing existing and new employers with the qualified and trained workforce they need B. New job creation through business retention, expansion, attraction, and startup C. Existing job upgrading through skill training and other enhancements D. Increased job access in community of residence and nearby communities

A. Providing existing and new employers with the qualified and trained workforce they need B. New job creation through business retention, expansion, attraction, and startup C. Existing job upgrading through skill training and other enhancements D. Increased job access in community of residence and nearby communities

Technology Infrastructure (F/O) Create an economic and community development plan to guide the use of this technology infrastructure in the short and longer terms.

E. Expanding services to existing users (communities, businesses, and institutions) F. Extending services to new users (communities, businesses, and institutions) G. Innovating with new value-added services (including content) to benefit existing and new users.

E. Expanding services to existing users (communities, businesses, and institutions) F. Extending services to new users (communities, businesses, and institutions) G. Innovating with new value-added services (including content) to benefit existing and new users.


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IDB Priority

I. Developing Communities

II. Redeveloping Communities

H. Exploring new management and financial arrangements to accomplish the above objectives

H. Exploring new management and financial arrangements to accomplish the above objectives

Transportation Improvements Create an economic and community development plan to guide the use of this technology infrastructure in the short and longer terms.

I. Successful completion of projects currently in the planning and development process J. Selection and development of the next set of TID projects that will increase the competitiveness of Butler County communities for economic and community development K. Competing for additional State of Ohio and Federal transportation funds to complete these new and existing projects

I. Successful completion of projects currently in the planning and development process J. Selection and development of the next set of TID projects that will increase the competitiveness of Butler County communities for economic and community development K. Competing for additional State of Ohio and Federal transportation funds to complete these new and existing projects

Table 28 below presents a framework for developing the IDB to achieve the Butler County Working Group’s top three priorities. Table 28: Building the IDB to Achieve the Butler County’s Strategic Priorities Strategic Thrusts Strategic Investments in

Workforce Development Strategic Investments in Technology F/O Infrastructure

Strategic Investments in Transportation Infrastructure

I. Growing Competitive Target Industries: A. Advanced Manufacturing B. Technology Businesses C. Healthcare and Med-Tech D. Technical and Professional Services E. Distribution and Logistics F. Diverse New Startups G. Locally Branded Small Businesses

X X X X X X

X X X X X X

X X X X X X


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X

X X

II. Strengthening Community Locations: A. Developing Communities B. Redevelopment Communities

X X

X X

X X

IDB as an Information Utility Tool As an information management (information utility) tool, the IDB is conceived as having four (4) interrelated elements. These are:

1. Databases: A database comprised of individual and shared accounts for Butler County local governments (county, municipalities, and townships), and their institutional partners (port, transportation improvement district, chamber of commerce, and workforce resources.) For common data elements, standardized formats should be developed and used. Four types of data accounts would exist in the database:

a. Individual jurisdiction or organization: Each of the project collaborative partners would have their own account, allowing them to upload and download data on economic and community development programs, projects, budgets and investments. Through sharing agreement, partners would decide which data and information would remain accessible to only them, and which would be shared. This brings us to the second type of account.

b. Shared accounts: These accounts contain data and information (in summary or detailed form) that can be accessed, analyzed and used by the IDB collaborative partners.

c. Business user accounts: Given the economic development applications of the IDB, it may be beneficial to create accounts for business managers and executives and site selection consultants to access defined data elements associated with the IDB.

d. External partner accounts: It may be worthwhile thinking about granting defined access to defined data and reports to external economic development, community development, and workforce development partners.

Data Types: This will be defined in more detail in the final project phase, but we envision the following types of data being included: budget data; investment data; business and industry database; sites and buildings; workforce resource and skills data; demographics; and infrastructure data (for both projects and programs); contact information; and community site location data.

2. Analytics: Which consists of the statistical and other analytical tools available to the partners to conduct template-based and customized analysis of their individual account data and/or shared account data. The following analytics are envisioned:

a. Standard statistical analysis tools. (e.g. to run regression analysis.)


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b. Forecasting and projection tools. (e.g. to revenue paybacks from business incentives.) c. Cost-benefit and economic impact analysis tools. (e.g. to analyze the fiscal costs and

benefits of a proposed development project to a community.) d. Report and study formats and templates. (e.g. to prepare a quarterly update report on

IDB finances for local legislative bodies). e. GIS mapping tools. (Would build on existing GIS tools available where possible.)

3. IDB Scoreboard: The IDB would be setup to support three types of scoreboards:

a. Countywide scoreboard metrics for both economic development and community development.

b. Community scoreboards for both economic development and community development. c. Aggregate scoreboard combining economic and community development.

4. Indicators: Four sets of indicators are envisioned. In each case, 4-5 lead indicators will be used

that permit the tracking of progress over time:

a. Countywide economic and community development lead indicators. b. Community level economic and community development lead indicators. c. Business and industry competitiveness indictors. d. Worker/workforce lead indicators.

Countywide Integrated Development Budget (IDB) Organizational Options Three organizational models for a countywide IDB are proposed for consideration by the project collaborative partners. These are:

1. The Butler County Port Authority organizes and manages the IDB: Throughout the project planning process this was viewed as the preferred administrative home for the IDB. However, in recent months the status of the Port has changed with the reorganization of the Port, including a new board and executive director, with closer ties to Butler County Government. For the time being, the Port is being guided by the County’s Department of Development, while a longer time plan for the Port has been developed and implemented.

2. A Council of Governments (COG) could organize and manage the IDB: There are two options to consider in this regard: a) A new COG could be formed for this specific purpose; or b) Sourcing Office/Center for Public Innovation (which is a COG) may be willing to discuss the possibility of serving as the administrative home for the IDB. In either case, a supervisory group comprised of participating Butler County entities would be formed to provide oversight to the IDB.

3. Butler County Government could act to create a similar entity to the Butler County

Transportation Improvement District (TIB) to organize and manage the IDB: The TID has proven to be a successful model for intergovernmental cooperation and shared action in Butler County.

Key criteria in selecting the most appropriate organizational vehicle for the IDB include:


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1. Legal authority that enables the organization to perform the various roles and responsibilities of

the IDB, including the ability to accept and utilize both public and private funds. 2. Politically neutral body that is not seen as a threat to participants. 3. Public finance and development finance expertise and experience. 4. Economic and community development expertise and experience. 5. Expertise and experience in intergovernmental and interagency cooperation and collaboration. 6. Grant writing and development skills and experience: Raising non-operating funds for

economic and community development projects in Butler County. 7. Large database management and data sharing expertise and experience. 8. Fiscal impact, economic impact, and cost-benefit analysis expertise and experience, or the ability

to contract for these services from private and university experts. 9. Strategic planning expertise and experience involving multiple jurisdictions. 10. Ability to provide or create a supervisory or governing body that is representative of all

participating entities. 11. Ability to fund startup and ongoing operations through such financial mechanisms as member

or subscription fees, fees for service, and government and foundation grants. All three organizational options in theory can meet the requirements of Criterion 1 and 2. The other 8 criteria must be applied to a specific organizational recommendation to determine its ability to perform the required functions of the IDB. The IDB can be organized as an ongoing project or initiative that exists to serve its member needs related to budgeting and investing in strategic economic and community development projects in Butler County communities. Chart 9 below provides an example of how it could be governed and managed. Chart 9: Countywide IDB Governance and Management

IDB Governing or Supervisory Body

Director

Project Manager

Contract IT, Data, and Analysis Services


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Regional IDB Organizational Model If sufficient interest exists by other Southwest Ohio counties, a regional (multi-county) IDB could be organized to provide the same services as a countywide IDB. In this case, it could make the most sense to organize “county modules” within the regional IDB. The regional approach could create greater economies of scale for IDB services where a regional entity is serving multiple counties in a region. Inter-county collaborations could be supported through the regional model. A regional IDB could provide budgeting and investment assistance on many of the same type of projects as a countywide IDB:

1. Regional workforce development 2. Regional infrastructure development 3. Regional economic development marketing 4. Regional industry cluster development projects 5. Regional sustainability projects. 6. Regional sprawl reduction project.

Funding Options A sustainable funding model is essential for the IDB to work. Here are some starting ideas on how to fund the operation of the IDB:

1. Participating Entity Membership or Subscriber Dues: The IDB could be funded by dues paid by its members or participants. Annual dues to support core member or subscriber services could be structured based upon member or participant annual budget size whereby larger entities pay more dues than smaller ones.

2. Special Project Funds: Project work that falls outside the core services category, such as a special fiscal impact study for the community, would be best funded by the entity benefitting from this service. Third-party grants and funds, including foundation grants, could be used to meet this need.

3. Governmental and Foundation Grants: These funds, including state grants, could be used to

support work by the IDB.

4. Cost-Savings Percentage: The IDB could raise operational funds from cost-savings resulting from the IDB’s work for its members. Members could authorize the payment of a defined percentage of these cost-savings to the IDB to help support its operations.

5. Third-Party Users: On occasion, the IDB may perform work under a paid contract for non-

members working to serve a public purpose in Butler County. This work could serve as a supplementary revenue source to the IDB.

Phased Project Development and Budgeting Approach (Starting Example Only) It is expected that the IDB’s workload and capabilities will grow somewhat over time. One approach could be to develop the IDB over a 3-year period:


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Year 1 (Start-Up):

• Fulltime Director: Total compensation ($80,000 salary + $20,000 benefits = $100,000) • IT services for database development and analytic tools: $50,000 • Office expense and travel: $16,000 • Total: $166,000 • Per Capita Cost (371,272 Butler County residents): $.447/resident • Per Job Cost: (138,754 Butler County jobs): $1.19/job

Year 2:

• Fulltime Director: $103,000 total compensation • IT services (expanded tools and data): $100,000 • ½ FTE Project Manager: $32,500 total compensation • Office expense and travel: $20,000 • Total: $255,500 • Per Capita Cost (371,272 Butler County residents): $.677/resident • Per Job Cost: (138,754 Butler County jobs): $1.81/job

Year 3:

• Fulltime Director: $106,090 total compensation • IT services (slightly expanded): $120,000 • 1 FTE Project Manager: $72,000 total compensation • Office expense and travel: $22,000 • Total: $320,090 • Per Capita Cost (371,272 Butler County residents): $.862/resident • Per Job Cost: (138,754 Butler County jobs): $2.307/job


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Section VI: Findings, Conclusions, and Recommendations A. Findings

1. The IDB is feasible in Butler County, if approached in a phased way, allowing leaders and managers to learn and grow the new approach. The barriers (hurdles) discussed in the report must be overcome and the “gain” or advantage must be clearly seen. The first step is to inform leadership (county and community elected officials and private sector leaders) about the IDB and gain leadership support for implementation of the IDB in Butler County.

2. Based upon what we see and know right now, a real-world demonstration of the IDB will be required to clearly show the new approach’s problems and benefits. We believe Butler County officials are most ready to undertake this demonstration in the Workforce Development area because of pressures to find a better solution to employers’ workforce development needs. Yet, with the right motivation and leadership, we believe demonstrations in the Technology and Workforce areas could be organized. In all cases, additional funding will be required by the collaborative partners to organize and conduct these demonstrations project, which should run at least one year each. The demonstration projects will allow for better data to be developed and used in the IDB.

3. The extensive analysis in this report should give confidence to Butler County leaders and their

managers in taking the next step with the IDB. The concept must be seen as a way of gaining a competitive edge for future economic and community development, and not as a critique of past and present approaches. This is a chance for Butler County to be a leader and set a positive example as an innovator using new strategies and tools to reach their community and countywide economic and community development priorities.

4. It is our understanding that Butler County officials are willing to commit to small action steps

as a result of this project: 1) Keep the working group in place and meet on a regular basis to discuss economic and community development priorities, share information about these issues, and if necessary and possible work together in addressing these issues; and 2) explore one or two small demonstration project ideas over the next six months

5. Butler County officials are not prepared at this time to make a major commitment to the IDB

because of other major demands on their time and resources at countywide and community levels.

6. Because of changes in the Butler County Port Authority with County Government playing a stronger role in the Port, priorities for the Port are being redefined. Because the Port was the champion for the IDB, these changes jeopardize the Port’s ability to be able to take a leadership role related to IDB implementation at least through the reminder of 2014.

7. “Political will” and a sufficiently collaborative and trusting development culture do not exist in

Butler County to support Butler County officials’ ability to pursue any large-scale demonstration of the IDB at the present. Earlier in this report a number of strategies wee identified to strengthen political will and collaborative ability to set the IDB innovation in motion.


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8. Other readiness factors, including teamwork, shared vision and plan, money, organizational

capacity, etc. must be addressed because a large- scale application of the IDB can be undertaken.

9. Major innovations are often implemented to respond to a major crisis. At the present time, no such crisis exists in Butler County sparking an aggressive implementation of the IDB. It is unfortunate that it takes a crisis to promote change in the public sector, but that often is the case.

10. Finally, there is insufficient support at the present time in Butler County to explore a proactive

adoption of the IDB in the absence of a crisis; that is to adopt the innovation based upon the future opportunities it could create.

B. Conclusions

1. Feasibility: The IDB is feasible in Butler County if approached on a phased basis starting with small applications of the approach at the countywide or community level. It is best to start small and grow into larger applications of the IDB.

2. Commitment: For the reasons described above, it does not appear that Butler County officials are ready to make any significant commitment to the IDB as a new tool to support local economic and community development. The Butler County Working Group has asked for additional time to consider opportunities to use the IDB and other ideas growing out of this feasibility study.

C. Recommendations The Center for Public Innovation/Sourcing Office (CPS) makes the following three (3) recommendations based upon the study’s findings and conclusions: Recommendation 1: Butler County officials should continue to work on their ideas on how to best apply the IDB approach at the countywide and community levels. One or two quick small-scale applications of the IDB should be set in motion so Butler County can refine its own approach to using the IDB. These should be seen as pilot applications of the IDB. Once these pilot projects have been completed, work should begin on Recommendations 2 and 3. Recommendation 2: Create a Workforce Development Accelerator (WDA): Which provides an integrated and accelerated response to the workforce needs of Butler County employers in target industries or industry clusters. To be successful, the workforce development accelerator (WDA) must be given leadership by both the public and private sectors. It is especially important that employers drive this initiative. Public sector workforce development programs can play a helpful role in the accelerator, but the role will be limited by the requirements these public programs are constrained by in terms of clients served and outcomes. The following actions should be taken:


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1. Form an Employer Advisory Board: Comprised of leaders of the County’s large, medium, and smaller employers. The role of the board would be to give direction to the Accelerator and ensure it meets employer needs:

2. Form a Service Provider Task Force: Comprised of Workforce One of Butler County, Cincinnati State, Butler Tech, Miami University, area vocational schools, representatives from area K-12 systems, and private training providers.

3. IDB Role: The IDB model should be used to:

a. Create industry cluster training accounts for employers, which allows employers to pool resources and achieve economies of scale in training workers in the target industries or clusters.

b. Arrange public funding across all sources to provide the workforce development service response in each industry cluster. Make these funds available in an integrated and accelerated manner.

c. Help employers to budget their portion of the training programs to accomplish their portion of the workforce development service package.

d. Create employer accounts allowing employers to access the funds they need to efficiently prepare a competitive workforce for the future.

4. Accelerator: Which aligns the various service providers with workforce development needs of

Butler County employers in the County’s target industries. Current target industries are identified in Chapter III of this report. Key ones are those in the table below.

Top Butler County Industry Clusters 2012 Employment National County Rank Distribution and Electronic Commerce 13,656 78 Insurance Services 7,975 53 Automotive Manufacturing 2,861 61 Upstream Metal Manufacturing 2,060 52 Plastics Processing 1,748 90 Lighting and Electrical Equipment 925 81 Aerospace Vehicles and Defense 750 70 Downstream Chemical Products 650 76 Biopharmaceuticals 375 71

Source: Harvard Clustering Mapping Website, June 24, 2014

5. Key Accelerator Roles: a. Identify the training needs in each cluster, and prioritize the most important needs. b. Organize an integrated service delivery response to these needs, working in partnership

with employers. c. Work with employers to use the workforce services and then evaluate the impact of the

services on business performance.


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Recommendation 3: Develop a Guiding Countywide Development Strategy Work with local communities to create a countywide development strategy that builds on existing community plans and works to encourage and assist efficient economic and community development across the county that:

1. Is efficient and reduces and avoids costly sprawl within Butler County in the future.

2. Sets priorities for development-related infrastructure improvements that support both new development and redevelopment in local communities.

3. Encourages the growth of middle and high skilled jobs within Butler County. The workforce

development accelerator (WDA) is essential to achieving this goal.

4. Guides future transportation improvements funded by the Transportation Improvement District (TID) and the Butler County Engineer, including the installation of water and sewer infrastructure for new development and redevelopment projects.

5. The IDB approach should be used in arranging an integrated funding strategy for development

infrastructure in the small, intermediate and long terms. This should strategy should tie together all sources of local, state and federal funds used to pay for these improvements. The Butler County Port could play the organizing role in this funding strategy, if this is made one of the major priorities of the Port in the future.

The County’s Development Department should play the lead role in facilitating the preparation and implementation of the countywide plan. This whole process must be done in a highly collaborative way with local communities. D. Initial Observations and Recommendations on Making the IDB Model Available to Other Ohio Communities, Counties, and Regions

1. On June 23, 2014, a presentation on the Butler County IDB Project was made in Columbus for the Ohio LGIF staff and representatives of other development and governmental groups. Initial feedback was positive, but participants want to know more about how the IDB model works. This report will answers some of the group’s questions, but those interested in the concept must be willing to help develop the model for application.

2. Additional statewide and regional presentations and information sharing sessions should be organized perhaps through the County Commissioners Association of Ohio, the Ohio Municipal League, the Ohio Township Trustees Association, and the Ohio Economic Development Associations.

3. The Ohio LGIF Program may wish to look at the various projects it has funded to see if any of

these projects could benefit by following the IDB approach.

4. Interested regional groups should be informed about the IDB, including the regional JobsOhio offices and regional planning and development groups.


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5. While a great deal was learned from the Butler County IDB feasibility study, additional

development work related to the IDB model is required, especially in creating applications for specific priority areas. For those jurisdictions with an interest in working with full IDBs, close attention should be given to the budgets and formats used by the District of Columbia, which has used the approach for several years. These can be accessed at this website address: http://cfo.dc.gov/page/unified-economic-development-reports


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Section VII: Appendices Appendix 1: State of Ohio Development Grants to Butler County, 2008-2013 Recipient Name Division or Office Fiscal

Year Loan or Grant

Award Amount Source of Funds

SUPPORTS TO ENCOURAGE LOW

Community Development

2014 Grant $281,250.00 HOME ENERGY ASSISTANCE BLK GRT



2014 Grant $51,158.00 COMMUNITY SERVICES BLOCK GRANT




BIZTECH CENTER Office of Business Assistance

2014 Grant $8,167.00 GENERAL REVENUE



















UNITED PERFORMANCE METALS INC

Strategic Business Investment

2013 Grant $2,616.50 OHIO WORKFORCE JOB TRAINING

AVURE TECHNOLOGIES INC


2013 Grant $30,000.00 ECONOMIC DEVELOPMENT SUPPORT

AVURE TECHNOLOGIES INC



MIDDLETOWN TUBE WORKS INC



MTR MARTCO LLC Strategic Business Investment


CONTROL CONCEPTS & DESIGN INC






MCCLOY ENGINEERING LLC

Office of Business Assistance

2013 Grant $1,172.63 FEDERAL SPECIAL REVENUE

MCCLOY ENGINEERING LLC


2013 Grant $130.29 GENERAL REVENUE




TIPCO PUNCH INC Strategic Business Investment


INTERSCOPE MANUFACTURING INC



SHEPHERD COLOR COMPANY



ATRICURE INC Strategic Business Investment


DECEUNINCK NORTH AMERICA LLC



INTERSCOPE MANUFACTURING INC




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Recipient Name Division or Office Fiscal Year

Loan or Grant


AKERS PACKAGING SERVICE INC



KAIVAC CLEANING SYSTEMS








MIDDLETOWN CITY OF


2013 Grant $700,000.00 ROADWORK DEVELOPMENT



AMYLIN OHIO LLC Strategic Business Investment


MIDDLETOWN CITY OF



MERCY FRANCISCAN SOCIAL


2013 Grant $124,200.00 LOW- & MODERATE-INCOME HOUSING

HOPE HOUSE RESCUE MISSION INC









WILD BERRY INCENSE INC



WILD BERRY INCENSE INC














CONNECTOR MANUFACTURING CO


2013 Grant $17,200.00 ENERGY SECTOR TRAINING GRANTS















BIZTECH CENTER Entrepreneurship and Small Business


INNOVATIVE LABELING SOLUTIONS

Workforce & Talent 2012 Grant $30,000.00 GENERAL REVENUE







BUTLER COUNTY HOUSING & HOMELESS






97


Loan or Grant












SERVE CITY INC Community Development










MCSWAIN MANUFACTURING CORP

Workforce & Talent 2012 Grant $138,828.00 ENERGY SECTOR TRAINING GRANTS

ATRICURE INC Technology 2012 Grant $1,000,000.00 THIRD FRONTIER RSRCH & DVLPMNT

GRAPHIC PACKAGING INTERNATIONAL INC

Ohio Energy Resource Division














AMYLIN OHIO LLC Workforce & Talent 2012 Grant $45,000.00 GENERAL REVENUE

THYSSEN KRUPP BILSTEIN OF AMERICA INC

Technology 2012 Grant $500,000.00 THIRD FRONTIER RSRCH & DVLPMNT

MIDDLETOWN CITY OF






ADS MANUFACTURING OHIO LLC


2011 Grant $20,000.00 JOB DEVELOPMENT INITIATIVES

INTERNATIONAL BROTHERHOOD OF ELECTRICAL


2011 Grant $139,046.00 ENERGY EFFICIENCY REVOLVING LN

GENERAL ELECTRIC CO

Workforce & Talent 2011 Grant $172,750.00 WORKFORCE DVLPMNT INITIATIVES

MIDDLETOWN COKE COMPANY LLC


SUGAR CREEK PACKING CO


NCI GROUP INC Strategic Business Investment












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Loan or Grant



2011 Grant $8,167.00 STATE SPECIAL PROJECTS



EXTREME AUDIO & VIDEO INC






INSPIRAMENTAL CO Ohio Energy Resource Division








SVP CASTLE 2 LLC Ohio Energy Resource Division











JOHN R JURGENSEN CO












MOREL VENTURES LLC


2011 Loan $900,000.00 FACILITIES ESTABLISHMENT




CONFIGURABLE MANUFACTURING SYSTEMS



BUTLER COUNTY TRANSPORTATION



SUGAR CREEK PACKING CO






ADVANCED DRAINAGE SYSTEMS INC


FISCHER INVESTMENTS SOUTHWEST



BUTLER COUNTY PORT AUTHORITY

Urban Development 2010 Loan $750,000.00 FEDERAL SPECIAL REVENUE

SMART PAPERS HOLDINGS LLC



INTELLIGRATED INC Strategic Business Investment

2010 Loan $6,000,000.00 LOGISTICS & DISTRIBUTION INFRA










BAE SYSTEMS SURVIVABILITY



99


Loan or Grant


SYSTEMS LLC




CINCINNATI PRECISION INSTRUMENTS CORP







SUNESIS CONSTRUCTION CO


2010 Grant $97,669.00 DIESEL EMISSIONS GRANT






2010 Loan $1,500,000.00 RESEARCH & DEVELOPMENT LOAN



2010 Loan $1,500,000.00 FACILITIES ESTABLISHMENT




CONNECTOR MANUFACTURING CO





EXTREME AUDIO & VIDEO INC















BUTLER COUNTY HOUSING & HOMELESS



CENTURY MOLD CO INC


CINCINNATI INSURANCE CO

Workforce & Talent 2010 Grant $132.00 GENERAL REVENUE



E-TECHNOLOGIES GROUP


OMNICARE INC Workforce & Talent 2010 Grant $5,000.00 WORKFORCE DVLPMNT INITIATIVES




BAE SYSTEMS SURVIVABILITY SYSTEMS LLC


WAUSAU PAPER CORP Workforce & Talent 2010 Grant $9,000.00 WORKFORCE DVLPMNT INITIATIVES

READING ROCK INC Workforce & Talent 2010 Grant $6,000.00 WORKFORCE DVLPMNT INITIATIVES

READING ROCK INC Workforce & Talent 2010 Grant $3,000.00 WORKFORCE DVLPMNT INITIATIVES

AMYLIN OHIO LLC Workforce & Talent 2010 Grant $31,792.00 WORKFORCE DVLPMNT INITIATIVES

AMYLIN OHIO LLC Workforce & Talent 2010 Grant $138,219.00 WORKFORCE DVLPMNT INITIATIVES





100


Loan or Grant


BUTLER COUNTY Strategic Business Investment


JOHN R JURGENSEN CO


2009 Grant $298,121.00 DIESEL EMISSIONS GRANT

MIDDLETOWN CITY OF





WAUSAU PAPER CORP Strategic Business Investment


OMNICARE INC Strategic Business Investment











MIDDLETOWN COKE COMPANY LLC






VAIL RUBBER WORKS INC






READING ROCK INC Strategic Business Investment








READING ROCK INC Strategic Business Investment





























SYSTECON INC Workforce & Talent 2008 Grant $77,500.00 WORKFORCE DVLPMNT INITIATIVES

VICTOR E DYKE JR Community Development


GENERAL MOTORS CORPORATION



GENERAL MOTORS CORPORATION


2008 Grant $200,000.00 JOB DEVELOPMENT INITIATIVES

E-TECHNOLOGIES GROUP


BAE SYSTEMS SURVIVABILITY




101


Loan or Grant


SYSTEMS LLC

MILLER BREWING COMPANY









QUAKER CHEMICAL CORP



MIDDLETOWN CITY OF



QUAKER CHEMICAL CORP


2008 Loan $3,500,000.00 FACILITIES ESTABLISHMENT


Urban Development 2008 Grant $1,800,000.00 CLEAN OHIO REVITALIZATION

HARRY THOMAS MURPHY JR






SOJOURNER RECOVERY SERVICES








SKYLINE CHILI INC Community Development











OHIO DEVELOPMENT SERVICES AGENCY

Minority Business Development

2008 Loan $10,000.00 CAPITAL ACCESS LOAN PROGRAM






























2008 Loan $500.00 CAPITAL ACCESS LOAN PROGRAM




Totals $45,698,884.25

butler county integrated development budget project · 2014-06-27 · and testing the value of...

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