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NOTICE OF PUBLIC MEETING PHOENIX CITY COUNCIL

FINANCE, EFFICIENCY AND ECONOMY SUBCOMMITTEE Pursuant to A.R.S. Section 38-431.02, notice is hereby given to the members of the FINANCE, EFFICIENCY AND ECONOMY SUBCOMMITTEE and to the general public, that the FINANCE, EFFICIENCY AND ECONOMY SUBCOMMITTEE will hold a meeting open to the public on December 18, 2013, at 10:30 a.m. located in Phoenix City Hall, Assembly Rooms A, B & C, 200 W. Washington Street, Phoenix, Arizona. One or more members may participate via teleconference. The agenda for the meeting is as follows:

1. Call to Order Chairman Gates

2. Approval of November 20, 2013 Minutes Subcommittee

Item 3 is for information only. No presentation or discussion is planned, but Council Members may ask for further information.

3. INNOVATION AND EFFICIENCY TASK FORCE – 2013 SAVINGS REPORT This report provides an update on the Innovation and Efficiency Task Force’s savings achieved during 2013 and announces that the total savings level has reached $90.7 million. The City is well on track toward achieving the goal of $100 million in savings by December 2015. This item is for Information Only.

Mario Paniagua, Budget And Research Director Ginger Spencer Special Assistant to the City Manager 1

Items 4 – 7 are for Discussion and Action.

4. ASU GLOBAL INSTITUTE OF SUSTAINABILITY RECOMMENDATIONS This report requests that the Subcommittee recommend Council approval to enter into an Intergovernmental Agreement with Arizona State University Global Institute of Sustainability to assist the City in defining technologies and development plans for a future Center for Resource Intelligence. Developing waste diversion technologies through the Center will enhance the City’s ability to achieve the City Council adopted 40 percent waste diversion goal by the year 2020. This item is for Discussion and Action.

Neil Mann, Public Works Director Page 23

5. 2012 GREENHOUSE GAS EMISSIONS UPDATE This report presents the results of the City of Phoenix 2012 Greenhouse Gas Emissions Inventory Comprehensive Report and requests the Subcommittee recommend City Council approval to set a new GHG reduction target and for the City to coordinate regional stakeholders in development of a regional GHG emissions inventory. This item is for Discussion and Action.

Philip McNeely, Environmental Programs Manager 7

6. ECONOMIC DEVELOPMENT STRATEGY UPDATE This report provides information and recommendations to the Subcommittee on the City’s economic development programs and proposed strategies to enhance Phoenix’s competitive position in the global, national and regional economy. This item is for Discussion and Action.

John M. Chan, Community and Economic Development Director Page 29

7. APPROVAL TO ISSUE RFP FOR RISING PHOENIX YOUTH SUMMER YOUTH EMPLOYMENT PROGRAM This report requests the Subcommittee recommend City Council authorization to issue the “Rising Phoenix Youth Summer Youth Employment Program” Request for Proposal (RFP) and any related subsequent information as needed and begin negotiation with recommended proposer. This item is for Discussion and Action.

John M. Chan, Community and Economic Development Director Page 37

Items 8 – 9 are for Information and Discussion.

8. ENERGIZE PHOENIX INITIATIVE UPDATE This report updates the Subcommittee on outcomes of the Energize Phoenix Program, a community energy efficiency initiative to save energy and money for residents and businesses along a 10-mile stretch of the light right corridor. This item is for Information and Discussion.

Neil Mann, PE, Public Works Director Page 39

9. INSPECTIONS SMART PHONE PILOT PROGRAM This report provides information to the Subcommittee regarding recent efforts by the Planning & Development Department to use technology to enhance customer service and improve productivity. This item is for Information and Discussion.

Alan Stephenson, Acting Planning and Development Director Page 43

10. Call to the Public Chairman Gates

11. Future Agenda Items Chairman Gates

12. Adjournment Chairman Gates

For further information, please call Sam Feldman, Management Assistant II, City Manager’s Office at 602-534-3916. Persons paid to lobby on behalf of persons or organizations other than themselves shall register with the City Clerk prior to lobbying or within five business days thereafter, and must register annually to continue lobbying. If you have any questions about registration or whether or not you must register, please contact the City Clerk’s Office at 602-262-6811. For reasonable accommodations, call Sam Feldman at Voice/602-534-3916 or TTY/602-534-5500 as early as possible to coordinate needed arrangements. December 13, 2013

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CITY OF PHOENIX CITY COUNCIL FINANCE, EFFICIENCY, and ECONOMY SUBCOMMITTEE

SUMMARY MINUTES November 20, 2013

Assembly Rooms A, B, and C Phoenix City Hall 200 West Washington Street Phoenix, AZ 85003 Council Members Present Councilman Bill Gates, Chair Councilman Daniel Valenzuela Councilman Michael Nowakowski City Staff Present Kimberly Faust Stan Flowers Kathya Hidalgo Diane Brossart Tom Magrini Jesus Sapien Maria Hyatt Cheryl Griemsmann Chris Hallett Dimitrios Laloudakis Edith Baltierrez Christine Smith Rob Sweeney Jason Harrell Tom Remes Kacie Howard Mario Paniagua Melissa Sweinhagen Sam Feldman Public Present Dianne Barker

1. Call to Order Chairman Bill Gates called the meeting to order at 10:06 a.m. with Councilman Daniel Valenzuela and Councilman Michael Nowakowski present. 2. Approval of Minutes of the September 18, 2013 Meeting Councilman Michael Nowakowski moved approval of the September 18, 2013 meeting minutes. Councilman Daniel Valenzuela seconded the motion, which was approved unanimously.

3. Innovation and Efficiency Task Force Update This item was for information only. 4. FY 2013-13 Citywide Grant Activity This item was for information only. 5. Savings from Telephone Port Reductions and Circuit Emulation This item was for information only. 6. Housing Department Rightsourcing Initiatives This item was for information only.

7. Approval of Draft Local Workforce Investment Area Business Plan for Program Year 2014-16 Councilman Daniel Valenzuela moved approval of staff’s recommendation and Councilman Michael Nowakowski seconded the motion, which passed unanimously. 8. 2013 Valley Forward Crescordia Awards Special Assistant to the City Manager Ginger Spencer introduced the item explaining the city has partnered with Arizona Forward, formerly Valley Forward, since 1990. She added the city of Phoenix was fortunate to be presented with 11 merit awards and two of the top Crescordia awards going to the Aviation Department’s Phoenix Sky Train and the Neighborhood Services Department’s Neighborhood Stabilization Program. Arizona Forward Executive Director Diane Brossart explained the Environmental Excellence Awards is in its 33rd year and the city of Phoenix has won the most awards out of any other city. She congratulated the city for being a leader in environmental excellence and looks forward to continuing the longstanding partnership. Councilman Daniel Valenzuela thanked Ms. Brossart for being in attendance and stated he is very proud of the city which has such talented people. Ms. Brossart indicated the Environmental Excellence Awards is her favorite program because it showcases what cities are doing right and provides models for others to follow. Councilman Michael Nowakowski opined it is a great example of how the city demonstrates team work and the great outcomes achieved. Chairman Bill Gates thanked Ms. Brossart for the recognition and lauded Arizona Forward for achieving a balance between environmental concerns and encouraging economic development. 9. Co-location of Maricopa County Services at City Hall Acting Planning & Development Director Alan Stephenson provided a presentation which included information on the efforts to streamline the development process. He explained what the current process is like, the proposed plan and the timeline. Councilman Daniel Valenzuela stated this program is a great way to provide excellent customer service and allows the city and county to be more efficient and work smarter. Councilman Michael Nowakowski said this is one stop shopping for municipal customers and really appreciates staff thinking outside the box. Chairman Bill Gates explained this is the type of service people in the development community look for and it will make it easier for them to do business with the city.

Councilman Nowakowski moved approval of staff’s recommendation and Councilman Valenzuela seconded the motion, which passed unanimously. 10. City Manager’s Performance Dashboard Rollout Special Assistant to the City Manager Ginger Spencer introduced the item and described the features of the performance dashboard. She described the 26 indicators and the meaning of the different labels. She explained the purposed is to provide residents transparency and it will be available to the public in January 2014. Budget and Research Director Mario Paniagua thanked the members of the Subcommittee and the Innovation and Efficiency Taskforce for providing input which resulted in the final product. He added the sales tax indicator will help the city respond to any decrease in revenue. Councilman Michael Nowakowski stated he would like to see a dashboard with each city department’s budget, month to month, to get a visual on expenditures compared to budget. Mr. Paniagua responded an indicator on the dashboard is for overall General Fund expenditures and staff can communicate on a department basis what expenditures are like throughout the year. Councilman Daniel Valenzuela likes the dashboard for its simplicity and thinks this is a further example of transparency for city residents. Councilman Nowakowski asked if the dashboard will be available online. Ms. Spencer replied it would be available and it will also have links to more detailed reports. Chairman Bill Gates inquired where on the city’s website the dashboard would be available. Ms. Spencer replied on the City Manager’s web page. Acting City Manager added it would also be available on the city homepage. Chairman Gates requested a link to the dashboard added on each City Council webpage. He asked how often the indicators would be reviewed. Mr. Zuercher responded the indicators would be reviewed annually and staff would return to the Subcommittee with updates. Mr. Paniagua commented the dashboard would be reviewed after receiving feedback from the public, the City Council and city employees.

Councilman Nowakowski requested as the years progress with the dashboard that trends, especially a five year trend, be added to the dashboard to help with forecasting. 11. Update on Virtualization and Consolidation of ITS Resources Chief Information Officer Rob Sweeney introduced the item and stated private cloud services will help the city become more efficient and effective in its operations. He added this program would not be possible without the support of City Council and the citizens when they approved the 2006 bond program. Deputy Chief Information Officer Tom Magrini provided a presentation which included an explanation of what cloud computing is, private versus public cloud services and project deployment. Councilman Michael Nowakowski asked what the advantages of private over public cloud services are. Mr. Magrini responded that although both services are similar the main advantage is security. Councilman Nowakowski inquired if staff looked at cost savings for each option. Mr. Magrini responded staff has looked into that and included in cost saving options is a hybrid public/private option. Mr. Sweeney commented the city currently uses many public application systems but to ensure federal laws are followed a private cloud ensures data is store on U.S. soil. Councilman Nowakowski asked if there is cost to the amount of data stored in the private cloud. Mr. Sweeney responded costs will be allocated through a citywide cost allocation with charges based on utilization to the appropriate fund sources. Chairman Bill Gates requested an update on efforts to move the city email to the cloud and any cost savings associated with doing so. 12. Reserve-A-Ride Outsourcing Update Interim Public Transit Director Maria Hyatt provided a presentation which included a history of the program, outsourcing options and results of the pilot program. She stated since the program was completed outsourced costs have mirrored what was anticipated. Ms. Hyatt described how the program operates and provided details of costs to the participants. She concluded the first four months of the program have been successful and has saved approximately $800,000 to the general fund.

Councilman Michael Nowakowski thanked staff for their hard work and acknowledged it was not easy due to participants resisting the change at first but now they now love it. Councilman Daniel Valenzuela agreed with Councilman Nowakowski. He stated the program gives participants more time to do activities they enjoy, saves the city money and makes the city better. Chairman Bill Gates commented this program is a great example of why the city needs to continue to look at its practices to find ways to be more effective. 13. Solar Update Public Works Director Neil Mann stated the city has various sustainability goals and projects involving renewable energy, greenhouse gas reduction and energy efficiency improvements in day to day operations. He said the solar update related to renewable energy and contributes to being on track to meet the target goal of five percent use by 2015. He added the larger target is set for 2025 and will involve other projects including digester gas, landfill gas or continued solar. Chairman Bill Gates asked if all the renewable energy projects involve solar energy. Mr. Mann responded currently all projects involve solar energy. He introduced Deputy Public Works Director Dimitrios Laloudakis to provide the solar update presentation. Mr. Laloudakis presented detailed information on the various solar projects throughout the city including large, small, and residential projects. Councilman Daniel Valenzuela thanked staff for their efforts. Councilman Michael Nowakowski stated he noticed solar blankets at the grand opening of the Skip Rimsza Pathway and requested a future agenda item on implementing them throughout the city. Chairman Gates praised staff for their hard work and encouraged continuing partnerships with APS to further solar energy projects. 14. Call to the Public Dianne Barker encouraged the city to continue solar power efforts and thanked the city for making it so easy for residents to find their City Council representative. 15. Future Agenda Items Councilman Michael Nowakowski stated in regards to item six on the agenda, he would like to see a report on public housing maintenance rightsourcing options and suggested looking at non-profit organizations for ideas. He requested a future agenda item to report if adding solar blankets to all city light poles would be cost effective or not.

Acting City Manager Ed Zuercher stated two additional items are city email cloud services and a review of dashboard indicators. 16. Adjournment Chairman Gates adjourned the meeting at 11:15 a.m.

Respectfully Submitted, Mayra Z. Baquera Budget and Research Department

Finance, Efficiency and Economy Subcommittee, December 18, 2013, Item 3

CITY COUNCIL REPORT

TO: Ed Zuercher

Acting City Manager

FROM: Mario Paniagua

Budget & Research Director/

Co-Chair, Innovation & Efficiency Task Force

Ginger Spencer

Special Assistant to the City Manager/Co-Chair, Innovation & Efficiency Task Force

SUBJECT: INNOVATION AND EFFICIENCY TASK FORCE – 2013 SAVINGS REPORT

This report provides an update on the Innovation and Efficiency Task Force’s savings achieved during 2013 and announces that the total savings level has reached $90.7 million. The City is well on track toward achieving the goal of $100 million in savings by December 2015. This report is for information and discussion only; no Council action is required. Overall Savings Generated

The Innovation & Efficiency Task Force was established in December 2009 with the charge to develop and implement innovative solutions that would result in the most efficient delivery of services at the most effective cost. The first year goal of the Task Force was to reach savings of $10 million. To date, the Task Force has generated $90.7 million in annual savings; $39.8 million to the General Fund and $50.9 million to non-General funds. The changes have helped reduce costs substantially while maintaining or enhancing the City’s delivery of services. These savings have been critical to the City’s strengthened fiscal health. See Attachment 1 for the complete Savings Report.

$100 Million Goal

In October 2012, a new total savings goal of $100 million was established to be achieved by December 2015. In January 2013, the Innovation & Efficiency Task Force reported to the City Council that a total of $62.7 million in annual savings had been implemented at that time. The Task Force has continued to be very successful and has now achieved $90.7 million in savings to date. The success of this effort has been accomplished through the leadership of the Mayor and City Council, the Finance, Efficiency, and Economy Subcommittee, and the ongoing diligence of many dedicated individuals, both staff and community representatives that have served on the Task Force.

Savings Accomplishments

As reported previously to the Finance, Efficiency, and Economy Subcommittee, the focus of the workgroups was revised in 2013 to develop innovation and efficiency measures in four key areas:

1. Multidepartment Initiatives

2. New Idea Generation & Evaluation

3. Public-Private Partnerships

4. Right-Sourcing Opportunities During 2013, the four workgroups looked at best practices, process improvements, evaluated existing and new technologies, systems, and service delivery methods to identify further opportunities to innovatively enhance city services at the lowest possible cost. Highlighted accomplishments in 2013 include:

1. Organizational Review Process – The City Manager’s annual Organizational Review process continued in 2013. The fourth year Organization Review savings totaled over $7.3 million annually, of which $1.8 million is to the General Fund. Of the $90.6 million reported in total innovation and efficiency savings, $20.2 million is from savings achieved through the four annual Organizational Review processes. The Organizational Reviews also resulted in the elimination of 220 positions.

2. Bus Service Route Efficiencies - Public Transit efficiencies will result in $311,000 savings.

3. Parks Irrigation Efficiencies – By improving water consumption reports, using standard irrigation schedules, increasing water management training, using technology when possible and monitoring weather conditions, the Parks Department realized $500,000 in annual savings.

4. Health Insurance Efficiencies – A total of $2 million in annual savings will be realized across all funds.

5. Reserve-A-Ride Cab Voucher Outsourcing – Transitioning the Reserve-A-Ride Program to the Senior Center Shuttle and Senior Center Group Trips programs will result in a total cost savings of $823,000 for 2013-14.

6. Fire Contractual Efficiencies and Other Savings – The Fire Department efficiencies will result in over $1.7 million in annual savings.

7. Library Inventory, Technology and Other Operational Efficiencies – An annual savings of $541,000 is expected.

8. Police Air Support Unit Operations and Maintenance Savings - The Police Department is expected to realize an annual savings of $629,000.

9. Community Center Janitorial Services - Outsourcing of janitorial services at the remaining seven community centers will result in $375,000 in annual savings.

The Task Force appreciates the leadership and direction of the FEE Subcommittee and full City Council and will continue to work with City Management to identify solutions to increase innovation and efficiency within the organization. Recommendation This report is for informational purposes only; no Council action is required.


CITY COUNCIL REPORT

TO: Rick Naimark

Deputy City Manager

FROM: Neil Mann

Public Works Director

SUBJECT: ASU GLOBAL INSTITUTE OF SUSTAINABILITY RECOMMENDATIONS

This report requests that the Finance, Efficiency and Economy Subcommittee recommend City Council approval to enter into an Intergovernmental Agreement (IGA) with Arizona State University Global Institute of Sustainability (ASU) for a one-year period with up to three additional option years. The IGA will assist the City of Phoenix in defining technologies and development plans for a future Center for Resource Intelligence (CfRI). Developing waste diversion technologies through a CfRI will enhance the City’s ability to achieve the City Council adopted 40 percent waste diversion goal by the year 2020. THE ISSUE The City established a goal to divert 40 percent of municipal solid waste by the year 2020. Upon the establishment of a waste diversion goal, the Public Works Department initiated a strategic review of the City’s solid waste program in an effort to develop recommendations focused on meeting the diversion goal. The strategic review conducted by SAIC Energy, Environment & Infrastructure, LLC (SAIC), recommended implementation of four programs for residential customers that would result in an increase of the current waste diversion rate to approximately 22 percent. In order to realize a 40 percent waste diversion rate by 2020, SAIC recommended greater investment in infrastructure for a mixed waste and/or other solid waste diversion technologies. These technologies will help divert additional recoverable material in the municipal solid waste stream from going to the landfill. OTHER INFORMATION On March 18, 2013, the City entered into a one-year intergovernmental agreement (IGA) with ASU to assist in identifying concepts which address and explore regional waste reduction methods beyond the SAIC recommended solid waste program changes. Since March 2013, a series of workshops co-hosted by Public Works and ASU were conducted. The workshops were attended by a variety of valley cities and other regional agencies. As a result of the workshops, ASU identified several projects to further research and help the city achieve its diversion goal. The Center for Resources Intelligence (CfRI) is expected to provide a wide variety of research, development, education, and solution services to help realize more effective management of resources and create economic value. The CfRI will serve regional public and private entities by supporting the intelligent management of resources and flows in industries ranging from energy, water, resource extraction, product design,

manufacturing, and recycling. The CfRI collaboration will be between the City, ASU, private sector affiliates and other cities and universities. The collaboration will merge interests that will contribute market and information needs, as well as leverage knowledge and financial resources. The projected costs and financial impact of the CfRI over the four years are projected in the table below:

Project

Product

Phoenix

ASU

Projected Private

Projected Total Investment

Operations Projects $ 818,401 $1,121,155 $ $ 1,939,556 Food Scraps

Compost,

Fuel, Electricity

$ 200,000

$ -

$ 550,000

$ 750,000

Multi-Family Recycling Assistance

Recyclable Materials

$ 55,500

$ -

$ 77,000

$ 132,500

Industrial Recycling


$ 10,000

$ -

$ 130,000

$ 140,000

Waste to Energy

Electricity

$ 100,000

$ -

$ 4,940,000

$ 5,040,000

Waste to Oil

Oil

$ 100,000

$ -

$ -

$ 100,000

Waste to Soil

Biochar

$ 75,000

$ -

$ 3,425,000

$ 3,500,000

Composting


$ 90,000

$ -

$ 50,000

$ 140,000

Regional Collaboration System

Economic

Development

$ 32,000

$ 468,000

$ -

$ 500,000

Education

Economic

Development

$ 125,000

$ 75,000

$ 258,750

$ 458,750

Other Diversion Technologies & Practices

Wide Variety of Products

$ 394,099

$ -

$ -

$ 394,099

Projected Total

$2,000,000

$1,664,155

$ 9,430,750

$ 13,094,806

FINANCIAL IMPACT The estimated cost for the first year of the IGA with ASU shall not exceed $500,000. The City’s investment in the CfRI will focus on creating value, economic opportunity and jobs out of waste streams. Through research and development with CfRI and partnership with the private sector, staff projects an additional 10 to 25 percent diversion of solid waste beyond current levels resulting in approximately $1-3 million of savings per year. This will help the City achieve its diversion goal. The City’s first year investment of $500,000 is a part of the initial projected costs and remaining investments

are expected to come from ASU and other regional and private partners. The success of the investment will be demonstrated through an increase in the City’s waste diversion rate, and the market’s overall economic impact from related programs and technologies. The target start date for the CfRI is first quarter of 2014. Funds are available in the Public Works Department budget. RECOMMENDATION This report requests that the Finance, Efficiency and Economy Subcommittee recommend City Council approval to enter into an Intergovernmental Agreement (IGA) with Arizona State University Global Institute of Sustainability (ASU) for a one-year period, for an amount not to exceed $500,000, with up to three additional option years. The aggregate cost over the life of the contract will not exceed $2 million.

.



CITY COUNCIL REPORT

TO: Rick Naimark

Deputy City Manager

FROM: Philip McNeely

Environmental Programs Manager

SUBJECT: 2012 GREENHOUSE GAS EMISSIONS UPDATE

This report presents the results of the City of Phoenix 2012 Greenhouse Gas Emissions Inventory Comprehensive Report (Report). The Report is an update to the City’s 2005 greenhouse gas (GHG) emissions inventory and presents a status of the City’s progress toward meeting its current GHG reduction target. Staff requests that the Subcommittee recommend City Council approval to set a new GHG reduction target and for the City to coordinate regional stakeholders in development of a regional GHG emissions inventory. THE ISSUE In 2008, the City Council adopted a goal to reduce GHG emissions from City operations to 5 percent below 2005 levels by the year 2015. The Office of Environmental Programs (OEP) contracted with the non-profit organization ICLEI to assist the city in performing a GHG Emissions Inventory for the baseline year of 2005, and a Climate Action Plan (CAP) adopted by the City Council on December 17, 2008 for City operations. The CAP identified ten reduction measures in energy efficiency, transportation and solid waste to achieve this goal. In 2012, Council authorized OEP to enter into an intergovernmental agreement with ASU for consulting services to calculate 2012 GHG emissions based on 2012 energy, fuel and other raw data provided by the City. In conjunction with the emissions inventory, ASU reviewed data provided by the city on CAP measures to calculate emission reductions through 2012 to ensure the city is on target to meet the 5 percent reduction goal by 2015. The Report states that in 2012, the city achieved a 7.2 percent decrease from 2005 GHG emissions, exceeding the goal three years early. The most significant GHG reduction programs included:

• advanced methane capture systems at city-owned landfills; • biodiesel and ethanol alternative fuels; • energy-efficient streetlights, traffic signals, water and wastewater upgrades; • energy efficiency measures in more than 45 city buildings; and • various city solar power projects.

The Report concluded that the City is on track to achieve a 12 percent GHG reduction by 2015 if it continues with implementation of the following programs:

• Better Building Challenge - 45 facilities have already been upgraded with energy efficiency improvements. The city’s Energy Capital Improvement budget includes funds for additional upgrades to meet its commitment of a 20% building energy use reduction from 2009 levels by 2020. All new city buildings must meet minimum U.S. Green Building Council (USGBC) Leadership in Energy & Environmental Design (LEED) Standards.

• Alternative Fuel Program Expansion - All fleet vehicles are now converted to biodiesel. Public Works and Aviation departments have a total of 5 E85 (Ethanol) tanks dedicated to the city fleet. By the end of 2015, Public Works plans to convert 85 city solid waste trucks from biodiesel to CNG and all contracted solid waste haulers from diesel to biodiesel.

• Streetlight and Traffic Light Retrofitting - 100% of new and 74% of existing traffic signals now use LED bulbs. By 2015, all remaining traffic signals and 2,489 street lights will be converted to LEDs.

• Phoenix Sky Train to Sky Harbor - Sky Train construction has been completed from the 44th Street/Washington Light Rail stop to Terminal 4. Free 24-hour service began in April 2013. Construction is continuing with Stage Ia connecting Terminal 4 and 3 expected to be completed in 2015. Stage II (start date to be determined) will then connect the airport and car rental center and complete the Sky Train Project.

• Additional Solar Projects - Add 1.2 MW of new solar projects located on the roofs of the downtown parking garages (currently under construction) to the 24 existing projects.

The full report is available at: http://phoenix.gov/webcms/groups/internet/@inter/@dept/@env/documents/web_content/106458.pdf RECOMMENDATION Since Phoenix has already achieved the goal set in 2008, staff requests that Subcommittee recommend City Council approval to establish a new goal to reduce GHG by 15 percent by 2015 compared to 2005 emission levels for City operations, and for the City to coordinate regional stakeholders in development of a regional GHG emissions Inventory to include not only City operations, but also residential, commercial and industrial sources.


CITY COUNCIL REPORT

TO: Paul Blue

Senior Executive Assistant to the City Manager

FROM: John M. Chan

Community and Economic Development Department Director

SUBJECT: ECONOMIC DEVELOPMENT STRATEGY UPDATE

This report provides information and recommendations to the Finance, Efficiency and Economy Subcommittee on the City’s economic development programs and proposed strategies to enhance Phoenix’s competitive position in the global, national and regional economy. BACKGROUND The City’s primary economic development goal is to raise personal net income by growing export-based employment opportunities readily accessible to Phoenix residents. Increasing the income of our residents drives nearly all the future positive outcomes we desire for Phoenix including: increased resources/tax base for public safety, parks, open space, arts, public transportation and social services; new investment in neighborhoods; and expanded quality commercial uses and development. There are four key strategies Phoenix uses to pursue this goal:

• Help existing employers grow and attract new employers to Phoenix in high-impact, high-growth export-based sectors;

• Pursue international trade, investment and tourism; • Support the growth of entrepreneurs and young companies; and • Encourage redevelopment of existing sites and buildings.

Operationally, there are a number of programs and services that the Community and Economic Development Department utilizes to support these strategies. These programs are outlined in Attachment A.

During the 1990’s and through the middle of the last decade, Phoenix successfully captured a significant proportion of region’s economic and employment growth for two primary reasons:

• Construction of the regional freeway system was immature until the late 1990’s which provided buildings and sites located along Phoenix’s transportation corridors the best access to the existing labor force and drove employers to those locations.

• Phoenix benefited from a robust inventory of vacant office and industrial properties that were built in a speculative market. In addition, the City’s investment in transportation and utility infrastructure allowed Phoenix to have a

major competitive advantage in terms of available buildings/sites, labor market access and speed to market.

These competitive advantages began to progressively diminish as new freeway segments around the region began opening. This resulted in suburban population growth occurring at a faster rate than Phoenix and the substantial development of commercial and industrial real estate outside of Phoenix. While Phoenix no longer has a labor availability advantage relative to suburban locations, the educational attainment of Phoenix residents has also lagged the suburbs as outlined in Attachment B. When Phoenix has no better access to the regional labor pool, a lower share of total population and our population has a lower educational attainment, Phoenix sites are less competitive for labor when employers compete regionally for talent. OTHER INFORMATION When competition does emerge between cities vying for new employment there are many reasons companies select one site over another. However, one certain fact does emerge: suburban communities in the Greater Phoenix region are making specific public investments to attract and support these types of employers, whether in public infrastructure, job training or other types of support. Summary examples of economic development investments made by other communities in the Greater Phoenix region are provided in Attachment C. For a number of reasons, Phoenix has not actively used these investment strategies in the recent past. As a result, the City has no formal policy outlining when or how to consider making these investments and the City has not formally aligned the broader Capital Improvement Program with our job creation efforts. THE ISSUE This lack of investment, when combined with regional freeway development and labor demographics results in situations where Phoenix sites are at a competitive disadvantage compared to suburban alternatives. Further, the level of competition and difficulty in competing for new employment opportunities has never been greater. In response, staff recommends that the City formalize a competition strategy for attracting employment located convenient to Phoenix residents and begin allocating resources to support that goal. Simply put, the City needs to enhance the product we are selling and better sell the attributes of our product in order to strengthen Phoenix’s relative competitive position. Staff has evaluated the best practices of our competitive set at the national and local level and we recommend that the City begin investing in a number of new strategies and tactics as described below. Staff does not suggest that we pursue a bidding strategy for jobs. Staff does recommend principally investing in assets that are owned by the City (infrastructure) or remain in Phoenix (training of our citizens) in order that site locations convenient to Phoenix residents become competitive for new employment.

1. Invest in strategic land use planning and make capital infrastructure improvements in major employment corridors to enhance the inventory of ready-to-build employment locations:

• Identify planning and zoning entitlements needed to support employment generating uses in strategic employment corridors and sites. Pursue the entitlement of these locations in advance of site selection processes or prospective user evaluation.

• Evaluate capital infrastructure needs at existing and future growth/employment corridors to ensure these key areas have adequate water, sewer and street infrastructure in place to enhance our competitiveness. With these priorities understood, consistently allocate capital funds each year to incrementally construct these improvements.

2. Commit resources to job training:

• Establish a performance-based, locally funded, job training program to support the training needs for new jobs created by existing or new Phoenix employers. Eligibility criteria and volume of training support would be based on creating jobs in key industry sectors that pay higher than average wages.

3. Cultivate entrepreneurship and emerging enterprises:

• Over the past decade, a majority of the new job creation in the U.S. has been driven by entrepreneurs and young companies. However, it is rarely possible to determine which of these enterprises will be successful. As a result, we recommend pursuing a sales strategy that builds up the density of young companies/entrepreneurs in Phoenix. As a result, when job growth does occur at the most successful of these enterprises, that activity is more likely to occur in locations that are accessible and convenient to Phoenix residents.

Staff recommends focusing on the development of: a) knowledge infrastructure that will support growing more entrepreneurs and; b) place infrastructure that helps create more locations in Phoenix where these entrepreneurs can be located.

o The City has taken a significant first step in actively supporting

entrepreneurship by joining the ASU Alexandria Co-working Network. The Alexandria Network provides dedicated discovery and collaboration space for Phoenix entrepreneurs and innovators and is being built in the Burton Barr Library in Downtown. Staff recommends expanding this knowledge support program to all Phoenix public branch library locations over the next two to three years.

o Staff proposes to develop collaborative public-private partnerships with

higher education partners and commercial property owners along the light rail corridor to a) identify and develop new co-working, incubator and accelerator sites in central Phoenix and b) build the organizational capacity of these support organizations so that Phoenix will have a ready supply of locations and operators ready to just-in-time meet market demand when it occurs and be competitive to attract the operations and entrepreneurs to Phoenix.

4. Pursue redevelopment at strategic site locations throughout the City:

• Over time, growth and population shifts have eroded economic vitality and investment in strategic areas of the City that were once vibrant hubs of activity. These locations are uncompetitive for many reasons, but most importantly, redevelopment sites are extraordinarily difficult to attract new employers vs. competing site alternatives. This is because of the significantly greater time involved for users/developers to understand and implement solutions to the redevelopment challenges that exist at these Phoenix locations. Suburban sites just develop faster and cheaper

• Staff believes a strategy of supporting predevelopment of these strategic site locations and helping them become ready-to-go development sites/building will help put these Phoenix location into a competitive position vis a vis the suburban alternatives.

• Identify these key site locations City-wide and encourage property owners to consider participating in this new redevelopment approach.

• Staff recommends using private sector-led teams with development expertise to evaluate, reposition, and accelerate the time required to ordinarily cause these strategic sites and buildings to be market ready. The strategy would culminate in marketing these prepared/ready-to-go sites to end users and the real estate community at large.

5. Develop new marketing strategies to sell Phoenix:

• Significantly increase the engagement of our elected officials and key business leaders by having them directly participate in making calls on existing employers and to support the direct selling to prospective employers.

• Create an integrated marketing, branding and communications strategy that promotes and leverages the strengths and market advantages that are unique to the City of Phoenix. The strategy will focus on direct marketing and messaging to prospective employers, consultants, targeted industries, real estate brokers and developers.

• Develop a plan to leverage industry specific conferences and trade shows at the Convention Center as a business attraction tool where we market Phoenix as a location to prospective companies as a part of their industry meetings.

• Create a business-focused Phoenix Economic Development website to support the marketing strategy.

We believe to be competitive, the City will need to invest between $10 million and $15 million annually in these programs, principally driven by the volume of infrastructure and job training activity that is undertaken. An additional four staff positions would be necessary to support implementing these efforts. RECOMMENDATION Staff requests the Finance, Efficiency and Economy Subcommittee recommend to the full City Council the approval of these broad concepts and require staff to return within 90 days with a more detailed program of work, phasing schedule, funding strategy, and related performance metrics.

Attachment A

City of Phoenix Summary of Key Economic Development Programs and Services

Business Development o Business Attraction Program

o Domestic and International Sales Missions

o International Trade and Investment o Foreign Trade Zone Program

o Employment Centers

o Phoenix Film Office

o Collaborative partnerships with ACA, GPEC Business Retention and Expansion

o Business Visitation and Outreach Program

o Small business assistance programs o Technical and Development Assistance

o Phoenix Business and Workforce Development Center

o Talent Acquisition - Recruitment, Candidate Screening, Job Fairs, Job Postings

o Training Programs

o Labor Market Information o Healthcare Sector Partnership

o Manufacturing Sector Partnership

o Collaborative partnerships with local Chambers of Commerce Workforce Development

o Phoenix Workforce Connections One-Stop Career Centers

o Adult Services

o Dislocated Worker o Rapid Response

o Youth Programs

o Partnerships with training and educational providers

Community Development o Downtown Redevelopment Area

o Housing Development

o Phoenix Biomedical Campus o ASU Downtown Phoenix Campus

o Transit Oriented Development

o Discovery Triangle

o Arizona Biomedical Corridor

o New Market Tax Credit/Business Financing Programs

o Collaborative partnerships with DPI, DPP and community based organizations

Attachment B Educational Attainment and Per Capita Income

Location 2012 Population College Degree Income

Scottsdale 223,514 51.9% $48,742

Chandler 245,628 39.0% $31,404

Gilbert 221,140 38.9% $30,254

Peoria 159,789 26.7% $27,802

Tempe 166,842 40.8% $25,357

Surprise 121,287 28.6% $23,618

Mesa 452,084 23.5% $23,387

Phoenix 1,488,750 26.0% $23,091

Avondale 78,256 20.2% $20,179

Glendale 232,143 21.7% $21,614

Tucson 524,295 24.3% $19,935

Arizona 6.5 million 26.7% $24,602

United States 311.6 million 28.6% $27,385

Source: U.S. Census Bureau, American Community Survey, 2010-2012

City Company Industry Estimated Jobs

Capital Investment

Local Incentives Funding Source Total Cost Local Incentives

Chandler eBay, Inc./PayPal Electronic Commerce

3,000 $40M Plan Review/Permit Fees Impact Fees

Job Creation/Job Training

Not Disclosed

$5M

Goodyear Dick’s Sporting Goods

Retail Distribution 300 $55M Plan Review/Permit Fees Infrastructure Assistance

-Water/Sewer/Streets Job Creation

Sales Taxes & Franchise Fees

From Utility Payments;

Const. Sales Tax

$1.47M

Suntech Arizona, Inc.

Solar Module Manufacturing

150 $16M Plan Review/Permit Fees Job Creation Job Training

General Funds

$665K

Schoeller Arca Systems, Inc.

Manufacturing 164 $31M Plan Review/Permit Fees Job Creation

General Funds $350K

Mesa First Solar Solar Panel Manufacturing

600 $300M Infrastructure Installation - Water/Sewer/Streets

2008 Bond Funds $10M

Peoria Maxwell Technologies

Energy Storage Manufacturing

200 $26M Job Creation Relocation Allowance

TBD

$1.5M

Tempe Silicon Valley Bank Commercial Banking (IT and

Operations Center)

100+ $2M+ Permit Fees General Funds $27K

Surprise Gestamp Solar Steel

Solar Device Manufacturing

300 $60M Plan Review/Permit Fees Infrastructure Assistance

-Any required improvements

General Funds and/or Bond Funds at City’s Discretion

$1.8M

Southwest Product Corp.

Engine Manufacturer

100 Not Avail. as of yet

Permit Fees Reimbursement of Impact

Fees Joint Job Fair

General Fund

$220K

Rioglass Solar Specialty Glass Manufacturing

202 $90M Plan Review/Permit Fees Infrastructure Assistance

- Any required improvements

General Funds and/or Bond Funds at City’s Discretion

$1.2M

Attachment C


CITY COUNCIL REPORT

TO: Paul Blue

Senior Executive Assistant to the City Manager

FROM: John M. Chan

Community and Economic Development Director

SUBJECT: APPROVAL TO ISSUE REQUEST FOR PROPOSAL FOR RISING PHOENIX YOUTH SUMMER YOUTH EMPLOYMENT PROGRAM

This report requests the Finance Efficiency and Economy Subcommittee recommend City Council authorization to issue the “Rising Phoenix Youth Summer Youth Employment Program” Request for Proposal (RFP) and any related subsequent information as needed and begin negotiation with recommended proposer. THE ISSUE The City of Phoenix’s Community and Economic Development Department (CEDD), Business and Workforce Development Division, is seeking offers from youth-serving community organizations, faith-based organizations and public entities to provide summer youth employment services to youth ages 16-21, within the city of Phoenix. Request for Proposal applications will be available beginning January 16, 2014 through February 13, 2014. To be eligible for review, offerors must attend a mandatory pre-proposal conference scheduled January 30, 2014 at 9:00 AM; sealed proposals must be received by 2:00 PM MST on February 13, 2014. In Fiscal Year 2013-2014, $250,000 was authorized in the department’s budget to administer the program for 133 youth participants. Pending City Council adoption of the Fiscal Year 2014-2015 budget, contracting for the next summer youth program would commence in May 2014. RECOMMENDATION Request the Finance Efficiency and Economy Subcommittee recommend City Council authorization to issue the Rising Phoenix Youth Summer Youth Employment Program Request for Proposal (RFP) and any related subsequent information as needed and begin negotiation with recommended proposer.


CITY COUNCIL REPORT

TO: Rick Naimark

Deputy City Manager

Lisa Takata

Deputy City Manager

FROM:

Neil Mann, PE Public Works Director Chris Hallett Neighborhood Services Director

SUBJECT: ENERGIZE PHOENIX INITIATIVE UPDATE

This report provides an update to the Finance, Efficiency and Economy Subcommittee on the outcomes of the Energize Phoenix Program (EPHX), a community energy efficiency initiative to save energy and money for residents and businesses along a 10-mile stretch of the light right corridor. This report is for information and discussion. No action is required. THE ISSUE The City of Phoenix has been committed to energy efficiency as a best management practice for over 30 years. During this timeframe, the City has realized significant operating cost savings and/or avoidance. The Mayor and Council recently elevated the City’s commitment to energy efficiency by joining the federal Better Buildings Challenge Program and adopting an energy efficiency goal to reduce energy use 20 percent below 2009 levels by 2020. In 2010, the City of Phoenix was awarded a $25 million federal competitive grant to catalyze energy efficiency in the community through the implementation of EPHX, a 3-year energy efficiency pilot program. EPHX provides energy efficiency upgrades for residential, commercial and industrial buildings along a 10-mile stretch of the Light Rail Corridor, generally bounded by Camelback Road to Washington Street, 7th Avenue to 40th Street. EPHX is a public private partnership between the City of Phoenix, Arizona Public Service (APS), Arizona State University (ASU) and National Bank of Arizona (NBIAZ). In addition to these partners, over 175 contractors were involved in driving demand and performing the energy efficiency retrofits. EPHX set ambitious and challenging goals to: provide energy upgrades to 30 million square feet of commercial space; 1,700 residential units; generate overall energy savings for the community of at least 15 percent (110 million kWh); and generate

approximately 1,000 direct/indirect jobs while stimulating the local economy. Long-term goals included embedding energy efficiency into the culture and effectuating behavioral change to save money and save energy. OTHER INFORMATION EPHX was designed to leverage existing utility (APS) incentives by providing matching rebates to encourage and accelerate energy efficiency retrofits in the EPHX corridor. Residential projects included single and multifamily residential units for energy upgrades such as air sealing, duct sealing, insulation, HVAC upgrades and tune-ups, sunscreens and solar water heaters. Commercial facility projects included small and large businesses as well as schools, churches and non-profits for energy upgrades such as lighting, chiller replacements, HVAC tune-ups, daylighting controls, motors and variable speed drives. As EPHX closes out its activities, the program has met and exceeded its goals. The tables below indicate EPHX program close-out results. EPHX Commercial Upgrades ($12.1 million Budget)

Projects Number Square Feet Completed 811 33,350,506*

* exceeded goal by 11 percent (33.35 million vs. 30 million sq. ft.) EPHX Residential Upgrades ($6.6 million Budget)

Projects Qualified/Audit Upgrades Multi Family Rental 2,075 1,722 Single Family-Low-Moderate Income

80 72

Single Family-Rebate 299 220 Totals 2,454 2,014**

**exceeded goal by 18 percent (2,014 vs. 1,700 residential units) EPHX experienced robust demand in the commercial sector for retrofits with residential activity picking up during the last 18 months. A revolving loan fund, originally intended to sustain EPHX beyond its pilot phase, was part of the original program strategy. It proved not to be viable due to local and national market conditions. However, six (6) commercial projects totaling $1,023,285 were financed by NBIAZ leveraging, $316,000 in EPHX funding. Once repaid, the $316,000 will be returned to the City for additional energy efficiency programming. The City will work with DOE to structure a strategy for utilization of these future funds by November 2014. A formal evaluation of EPHX has been conducted by ASU. The program's economic impact was analyzed by ASU's W.P. Carey School of Business. This study, using the REMI regional forecasting model, has determined that EPHX provided $31 million of economic activity to the local community. The final evaluation will be shared by the City with the DOE and data will be compiled with other grantees across the country. In addition, the study indicates that commercial and residential energy savings will reach

17 percent and 12 percent respectively. This translates into over 135 million kWh of energy and over $12.5 million of energy cost avoidance for the community. This also exceeded program projections by at least 20 percent. EPHX has successfully created energy efficient buildings along a 10-mile stretch of the Light Rail Corridor. The $25 million program is expected to be fully spent by December 2013 with loan repayment funds to be programmed for future energy efficiency activities as approved by DOE. The program met and exceeded performance goals in upgrading commercial and residential units. It achieved a community energy savings of $12.4M million and provided $31 million to the local economy. Hundreds of residents and businesses have saved money and saved energy, and the economic impact in the region has been significant. The City’s partners, APS and ASU as well as the financial institution NBIAZ helped make the EPHX program a success. RECOMMENDATION This report is for information and discussion only. No action is required.


CITY COUNCIL REPORT

TO: Rick Naimark

Deputy City Manager

FROM: Alan Stephenson

Acting Planning and Development Director

SUBJECT: INSPECTIONS SMART PHONE PILOT PROGRAM

This report provides information to the Finance, Efficiency and Economy (FEE) Subcommittee regarding recent efforts by the Planning & Development Department (P&D) to use technology to enhance customer service and improve productivity. THE ISSUE P&D conducts approximately 700 construction inspections per day throughout the city. Inspectors work from a “mobile office,” using a laptop and cellular phone to receive assignments and enter inspection results from the field. The department is now exploring the use of smart phones to further advance the remote inspector program.

During a three month pilot program recently completed by P&D, 13 inspectors tested six different types of smart phones. Many different construction applications were also investigated and a customized web application was developed to allow simplified data entry to the department’s KIVA computer system.

The pilot program received positive feedback from the inspectors, other city staff, and the development community. The web application allowed inspectors to enter results quickly while on the jobsite, and the text to voice feature enabled comprehensive notes to be included with each inspection. There were a number of construction mobile applications that replaced current inspection tools, and others facilitated review and approval of field changes. Communication was enhanced through easier email access and improved monitoring and response to voicemail and text messages. The phones also increased efficiency through the use of GPS navigation and the on-board cameras. OTHER INFORMATION The initial cost to equip approximately 100 inspectors with smart phones is estimated at $24,000. Adding data to existing phone plans will add $2,400 per month. These costs will be more than offset by the increase in productivity that will allow the group to perform 30 to 40 additional inspections per day while improving communication and customer service for the development community. Funding is available in this year’s budget.

RECOMMENDATION This report is for information and discussion only.

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