DRIVING A STRONG ECONOMY COMMITTEE

Report

September 22, 2003

Members Present: Chair Forrest Williams, Vice-Chair Terry Gregory, Councilmember Chuck Reed, Councilmember Judy Chirco

Staff Present: Mark Linder, Paul Krutko, Ed Moran, Stephen Haase, Joe Horwedel,

Katy Allen, Phil Prince, John Lang, Nanci Klein

Others: Jim Tucker, Gerry de Young, Jeffrey Luney

The meeting was convened at 1:32 p.m.

1. Report on the Development Services Study (Planning, Building & Code Enforcement)

Stephen Haase, Director of Planning, Building and Code Enforcement, Joe Horwedel, Deputy Director of Planning, Building and Code Enforcement, presented the staff report. Joining staff was Jim Tucker, Silicon Valley Chamber of Commerce, Gerry de Young, Ruth and Going Inc., and Jeffrey Luney, Jet Black Consulting. Director Haase reported that on September 8, 2003, the City’s development services partner departments met with the San Jose Chamber of Commerce Development Review Committee to discuss issues and improvements to the development process, following completion of the Zucker Development Services Study. The following joint goals were then presented:

· Make San Jose the Best Place in America to do Business

· Facilitate Development by Improving Processing Times and Predictability

· Establish Fiscal Stability for the Development Fee Program

· Provide Options to Customers for Enhanced Services

· Establish a Continuous Dialog with Development Industry Customers.

Staff has created an ‘Implementation Work Plan’ to address issues related to the development process, and how to facilitate change. The Work Plan organizes the Zucker Study recommendations into four categories for implementation:

1. Integration between Service Areas

2. Cycle Times and Performance Standards

3. Service Delivery

4. Information Management

It was noted that many of the Zucker recommendations have been implemented and are complete. Development process issues identified in the recent “Getting Families Back to Work” study sessions were incorporated and helped to prioritize the Zucker study recommendations.

Councilmember Reed requested staff to maintain the momentum on implementing changes to the development process and asked staff if any work related to permitting will be the responsibility of City staff. Councilmember Reed inquired if cost recovery for vacant fire inspections was going directly to the Fire Department. Staff replied that fees are applied to the General Fund that then reimburses the fee program. Vacant fire positions to be filled insuring performance standards will be met and this will enable a consistent level of service be provided throughout the various departments.

Vice-Chair Gregory asked for the status of recommendation #116. Staff explained the information on the report attachment was incorrect and should read as ‘on-going’. Vice-Chair Gregory asked what type of policy was being planned for recommendation #149. Staff replied this was the implementation of an automated system to identify inactive permits and drop them out of the system by a certain deadline. Vice-Chair Gregory asked that for the wording of the second goal to be amended to read: Facilitate Development by Improving Processing Times, Consistency, and Predictability. Staff agreed to make this amendment.

Chair Williams suggested that it would be helpful to create flow charts of processes to identify problem areas, and how a particular recommendation would resolve the problem.

Vice-Chair Gregory supported the idea of opening the One-Start Center at City hall but felt that this should be a pilot effort first.

Upon motion of Vice-Chair Gregory, seconded by Councilmember Reed, the Committee accepted staff’s report “Development Services Study”.

2. Discussion on the Economic Strategy (Office of Economic Development) [Request for Deferral]

Upon motion of Vice-Chair Gregory, seconded by Councilmember Reed, the Committee accepted staff’s request for deferral of “Discussion on the Economic Strategy”.

3. Discussion on San Jose’s major sales tax generators (Office of Economic Development)

Paul Krutko, Director of Office of Economic Development, and John Lang, Principal Analyst of the Office of Economic Development, led the discussion for this agenda item. Sales tax is the largest source of the City’s General Fund revenues. Staff reviewed with the committee historical sales tax data prior to the 1999-2000 economic boom through the current downturn. Staff described the types of taxes that are collected, and provided an overview of the six types of sales categories:

· Business-to-Business

· General Retail

· Transportation

· Food Products

· Construction

· Miscellaneous

Several recently completed projects such as Santana Row, Westfield Valley Fair and Beshoff Motors, have helped increase tax revenue, and current projects in the queue are, Oakridge Mall, Eastridge Mall, and Lowes. Discussion also included the importance of business-to-business sales relative to retail sales. The Business-to-Business tax sales category is the largest single category, representing approximately 30% of total revenue. Sales in this category include office equipment, electronic equipment, business services, and leasing and energy sales, to name a few.

Councilmember Reed asked about the different General Fund amounts from page 2 to page 3. Staff replied that the page 3 amount was General Fund amounts from sales only verses all sources.

Chair Williams asked what kind of construction was occurring in Fresno. Staff replied that housing, downtown upgrades, health facilities and convention center expansion, were some of the construction projects taking place. Staff explained the Economic Development Strategy would include information to help identify underserved areas of our community, and what type of business growth is needed.

Vice-Chair Gregory asked what San Jose’s per capita revenue was during the economic boom. Staff did not have the information available and would follow up directly with the Vice-Chair’s office.

Councilmember Reed suggested that staff contact the auditor’s office to ensure all possible tax dollars were being collected. Staff said they would follow up.

Upon motion of Chair Williams who so moved to adjourn the meeting and no objections being heard, the meeting was adjourned.

4. Oral Petitions

None

5. Adjournment

The meeting was adjourned at 2:30 p.m.

Forrest Williams, Chair

Driving a Strong Economy Committee