Title
a. Consider approving one of the three recommended options for the Development Set-Aside (DSA) Program; and
b. Consider approving one of the three recommended proposal selection options for the DSA Program.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Consider approving one of the three recommended options for the Development Set-Aside (DSA) Program; and
b. Consider approving one of the three recommended proposal selection options for the DSA Program.
SUMMARY:
The County of Monterey Board of Supervisors established the Development Set-Aside (DSA) Program in 1985 to promote and expand tourism, economic and agriculture development and cultural art activities that strengthen and broaden the County’s economic base. At that time, the Board designated the Monterey County Travel and Tourism Alliance (MCTTA), Economic Development Corporation of Monterey County (EDC), Monterey County Film Commission (MCFC) and the Cultural Council for Monterey County (CCMC) to serve as the County’s partners to implement the Program. The Program underwent revisions in 1994, 2002-2006, and 2007 and involved multiple agencies. The most recent change introduced a formula-based, non-competitive funding approach, aiming to streamline funding and ensure cost-effective delivery of essential services supporting the County’s economic development goals.
The current DSA Agencies are See Monterey (formerly the Monterey County Convention and Visitors Bureau), Arts Council for Monterey County (Arts4MC), Monterey County Film Commission (MCFC), and Monterey County Business Council (MCBC). The four (4) agencies have a 1-year agreement for the current FY2024-25.
At the May 31, 2023, budget hearings, the Board of Supervisors directed staff to work with the Economic Development Committee (EDC) to conduct a comprehensive evaluation of the Development Set-Aside Program and review the funding formula for an opportunity to include additional organizations.
During the November 1, 2023, EDC meeting, an Ad Hoc Committee was developed. The Ad Hoc Committee met three (3) times and a complete review of the program’s background/history and criteria, as well as a review of the 1998 DSA Guidelines were conducted. The Ad Hoc Committee discussed the allocations that each DSA agency had been allocated, along with moving forward with recommendations to the Economic Development Committee for the February 7, 2024, meeting. During the EDC meeting, the Committee moved forward with making two (2) separate recommendations that were to be routed to the Budget Committee (BC) and the Board of Supervisors.
On March 28, 2024, Economic Development staff presented the two EDC recommended options to the BC. The BC directed staff to bring this item along with the recommendations to the Board of Supervisors during the Budget Workshop on April 2, 2024. Staff presented a recommendation from the EDC to the Board for review and approval during the Budget Workshop. The Board requested that staff work with the County Administrative Office (CAO) to provide an option that would reflect the comments of each Board Member and bring back at a later Board of Supervisors meeting date.
On May 7, 2024, Economic Development staff presented revised Development Set-Aside (DSA) guidelines for approval and three (3) options to the Board of Supervisors for approval of new DSA allocations for FY2024-25. During the board meeting an option, referenced below, was selected along with an additional $215,862 being re-distributed to each DSA agency, based on the revised formula share.
The Board of Supervisors selected to move forward with the following option:
• The DSA program is increased from 8.93% to 9.19%.
• See Monterey share of the DSA formula was revised to 4.66%, which translates to $1,775,580. This amount was increased by $137,914 with the re-distribution of remaining DSA funds. The final amount is $1,913,494.
• Arts Council for Monterey County share of DSA formula was revised to 1.47%, which translates to $559,691. This amount was increased by $43,473 with the re-distribution of remaining DSA funds. The final amount is $603,164.
• Monterey County Film Commission share of DSA formula was revised to 0.92%, which translates to $268,842. This amount was increased by $20,882 with the re-distribution of remaining DSA funds. The final amount is $289,724.
• Monterey County Business Council share of DSA formula was revised to 0.46%, which translates to $175,000. This amount was increased by $13,593 with the re-distribution of remaining DSA funds. The final amount is $188,593.
In addition to the option selected above, the Board of Supervisors gave direction to staff to review the DSA formula to add additional organizations/agencies and include an RFP process for the DSA Program.
DISCUSSION:
The three (3) DSA Program options below have been developed by Economic Development staff and County Administrative Office:
1. Option #1
a. Recommend that the DSA program is open to 1 additional industry sector:
i. Tourism
ii. Arts
iii. Film
iv. Small Business
v. Technology & Innovation
Where only one proposal per organization for that industry sector of choice will be accepted; and
b. Recommend that the DSA formula is discontinued, and each organization specifies the amount of funds needed within their proposal.
2. Option #2
a. Recommend the DSA program is open to all industry sectors/organizations
i. Funding for each organization is between $100K - $2M for a five (5) year term.
3. Option #3
a. Recommend the DSA program is open to all industry sectors/organizations
i. The funding for each organization is between $50K-$1M for a five (5) year term.
The three (3) proposal selection options below have been developed by Economic Development staff and County Administrative Office:
1. Recommend that proposals are reviewed and receive a recommendation from the Economic Development Committee to move forward to the Board of Supervisors for final approval; or
2. Recommend that proposals are reviewed by an ad-hoc committee appointed by the Board with one individual from each district serving on the ad-hoc to review and provide recommendations to the Board of Supervisors for final approval; or
3. Recommend that staff bring all proposals to a future board meeting where they are reviewed and approved by the Board.
OTHER AGENCY INVOLVEMENT:
County Counsel has approved the above agreements as to form.
FINANCING:
Funds for the DSA Agreements would be determined by Transient Occupancy Tax (TOT) revenue available each fiscal year.
BOARD OF SUPERVISORS STRATEGIC INITIATIVES:
The Development Set-Aside economic development program provides economic development services that support the Board approved Strategic Initiatives.
Mark a check to the related Board of Supervisors Strategic Initiatives
x Economic Development
_ Administration
_ Health & Human Services
_ Infrastructure
_ Public Safety
Prepared by: Isela Sandoval, Management Analyst, x7514
Reviewed by: Richard Vaughn, Economic Development Manager, x5602
Approved by: Deborah Paolinelli, Assistant County Administrative Officer, x5309
Attachments:
Staff Presentation
DSA Guidelines