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The Missouri Municipal

Review

The Official Publication of The Missouri Municipal League

January 2014

Economic Development 2014 In This Issue: • • • •

Tech Titan Growth In Rolla The Missouri Works Program Evolution Of The NID Act Expanding Your Economic Development Tool Box


Missouri Securities Investment Program A Cash Management Program for School Districts, Counties, Municipalities and Other Political Subdivisions

The Missouri Securities Investment Program (“MOSIP”) is a comprehensive cash management program for school districts, counties, municipalities, and other political subdivisions. MOSIP was created in 1991 by the Missouri School Boards Association. MOSIP offers its investors a professionally managed portfolio with competitive money market rates. MOSIP stresses maintaining safety, liquidity and yield as the primary investment objectives.

Administered by: PFM Asset Management LLC Sponsored by: Missouri School Boards Association • Missouri Association of School Administrators Missouri Association of School Business Officials • Missouri Association of Counties • Missouri Municipal League

This information is for institutional investor use only, not for further distribution to retail investors, and does not represent an offer to sell or a solicitation of an offer to buy or sell any fund or other security. Investors should consider the investment objectives, risks, charges and expenses before investing in any of the Missouri Securities Investment Program’s portfolios. This and other information about the Program’s portfolios is available in the Program’s current Information Statement, which should be read carefully before investing. A copy of the Information Statement may be obtained by calling 1-877-MY-MOSIP or is available on the Program’s website at William T. Sullivan, Jr. Maria Altomare Adam Gabriel Barry Ballou www.mosip.org. While the MOSIP Liquid Series seeks to maintain a Managing Director Managing Director Sr. Managing Consultant Sr. Marketing Representative stable net asset value of $1.00 per share and the MOSIP Term 631-806-9470 cell 1-800-891-7910 x3091 1-800-891-7910 x3093 402-705-0350 sullivanw@pfm.com altomarem@pfm.com gabriela@pfm.com balloub@pfm.com portfolio seeks to achieve a net asset value of $1.00 per share at the stated maturity, it is possible to lose money investing in the Program. An investment in the Program is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government 77 West Port Plaza Drive • Suite 220 • St. Louis, MO 63146 agency. Shares of the Program’s portfolios are distributed by PFM 1-800-891-7910 Fund Distributors, Inc., member Financial Industry Regulatory P.O. Box 11760 • Harrisburg, PA 17108-1760 Authority (FINRA) (www.finra.org and Securities Investor Protection 1-877-MY-MOSIP Corporation (SIPC) (www.sipc.org). PFM Fund Distributors, Inc. is a 2 / January 2014 The Missouri Municipal Review www.mocities.com wholly owned subsidiary of PFM Asset Management LLC.

Registered Representatives


The Missouri Municipal

Review

January 2014

VOLUME 79, NO.1

The Official Publication of The Missouri Municipal League

contents

President

Councilmember Jan Marcason Kansas City

4 / President's Report 5/ Director's Report

Vice President

6/ When Visions Align: Tech Titan Growth In Rolla by John Butz

Mayor Bill Kolas Higginsville

10/ Think Like A Retailer by Lynnette Kile

Immediate Past President Mayor Pro Tem Susan McVey Poplar Bluff

14/ Big Opportunities For Small Communities by the Missouri Department of Economic Development

e

MISSOURI MUNICIPAL LEAGUE BOARD OF DIRECTORS Ruth Baker, City Clerk, Manchester; David Bower, Mayor, Raytown; Conrad Bowers, Mayor, Bridgeton; Roger Haynes, Deputy City Manager, Mexico; Bill Johnson, Director of Administration, Fulton; David Kater, Mayor, Desloge; Patrick Kelly, Mayor, Brentwood; Donald Krank, Councilmember, Black Jack; Paul Martin, Attorney, Olivette; *Norman McCourt, Mayor, Black Jack; *Ron Monnig, Councilmember, Slater; Raeanne Presley, Mayor, Branson; John “Rocky” Reitmeyer, Alderman, St. Peters; Randall Rhoads, Mayor, Lee's Summit; Matthew G. Robinson, Mayor, Hazelwood; Frank Roland, Mayor, Hillsboro; Kathy Rose, Mayor, Riverside; *Carson Ross, Mayor, Blue Springs; Tom Short, City Administrator, Carthage; Robert Stephens, Mayor, Springfield; *Gerry Welch, Mayor, Webster Groves; * Kevin Wood, Mayor,

Harrisonville.

*Past President

e

AFFILIATE GROUPS: Missouri City Management Association; City Clerks and Finance Officers Association; Government Finance Officers Association of Missouri; Missouri Municipal Attorneys Association; Missouri Park and Recreation Association; Missouri Chapter of the National Association of Telecommunications Officers and Advisors; Missouri Chapter of the American Public Works Association; Missouri Association of Fire Chiefs. www.mocities.com

18/ What's New In Economic Incentives? The Missouri Works Program — What You Need To Know by Lori L. Bockman, Rishi Diwan and Monica Conners 21/ Evolution Of The NID Act And Neighborhood Improvement District Principles And Practices by Thomas A. Cunningham and Steven R. Kratky 24/ Expanding Your Economic Development Tool Box by Joe Bednar and Craig Davis 28/ A Day In The Life ... Of Missouri Mayors

departments 35 / News From The Bench 36 / Tech Talk: How To Think About Technology In The Work Of Government 38/ Calendar Of Events, Member Accomplishments Laura Holloway, Editor Contributing Editors: Dan Ross and Richard Sheets Missouri Municipal Review (ISSN 0026-6647) is the official publication of the Missouri Municipal League state association of cities, towns and villages, and other municipal corporations of Missouri. Publication office is maintained at 1727 Southridge Drive, Jefferson City, MO 65109. Subscriptions: $30 per year. Single copies: $5 prepaid. Advertising rates on request. Published bi-monthly. Periodicals postage paid at Jefferson City, Missouri. Postmaster: Send form 3579 to 1727 Southridge Drive, Jefferson City, MO 65109. To contact the League Office call 573-635-9134, fax 573-635-9009 or email the League at info@mocities.com. The League’s Website address is: www.mocities.com.

The Missouri Municipal Review

January 2014 /3


President’s Report. . .

MML President Councilmember Jan Marcason Kansas City

W

e all hear a great deal this time of year about change. Some of the most common New Year’s resolutions nationwide are to eat healthier, exercise more, learn a

new skill or become more organized. Those are worthy personal goals, but what would you like to accomplish as an elected official in 2014? As local governments, we can always benefit from new skills, ideas, input and new development. The beginning of a new calendar year is the perfect time to look for ways we can bring in some fresh input to help our communities achieve even greater success. This issue of the MML magazine is a special economic development issue that ties in well with the idea of fresh starts and new opportunities. For success, input from all perspectives is crucial. As representatives of your city, it is more important than ever to find ways to gather ideas from local citizens and benefit from the perspectives of those closest to your community. As this new year rolls in, I challenge you to seek a new way to reach out in your community. Try a different event or venue to bring citizens in touch with local government. Find a unique way to show the services you have always provided and demonstrate your value to the community. Kansas City recently hired a Chief Innovation Officer who

has brought new ways to engage citizens through social media. In this economic development issue, you’ll see examples where communities have had success with new ventures. The issue provides tips you can use for development in your city, and provides examples of what is possible when a community works together. As it sparks ideas for your own municipality, don’t underestimate the power of community participation, partnerships and citizen input. Of course, as you plan your year, don’t forget the valuable services the League offers to assist you in your goals. The next upcoming event is the annual Legislative Conference, Feb. 11-12 in Jefferson City. It’s an ideal time to network with other municipal officials, educate yourself about the most pressing legislative issues and visit face-to-face with your legislator. I’m so happy to serve as your League president as the MML celebrates 80 years. I look forward to seeing the great work happening across the state to grow and strengthen Missouri communities.

MML Welcomes New Members to the Board of Directors

T

he city of Lee's Summit Mayor Randall Rhoads and the city of Manchester's City Clerk Ruth Baker were appointed to serve on the Missouri Municipal League's Board of Directors. Rhoads and Baker were appointed at the MML Board of Director's meeting Dec. 10, 2013, in Columbia. Both fill vacancies on the board -- Rhoads will serve until the fall of 2014 and Baker will serve until 2015. Rhoads was elected as mayor on April 6, 2012, after serving as a Lee's Summit councilmember for 12 years and as mayor pro tem for nearly two years. His first experience in municipal government was serving on the Lee's Summit Public Safety Advisory Board from 1987-1998 and the Charter Commission from 1995-1996. After growing up in Kansas City, Mayor Rhoads attended the University of Missouri - Rolla where he obtained his BS in mechanical engineering. He 4 / January 2014

later received his master's in public administration f r o m t h e University of Missouri - Kansas City. Baker is a native eastern Missourian who joined the City of Manchester in City of Manchester City of Lee's Summit 1999. She is serving City Clerk Ruth Baker Mayor Randall Rhoads her second term as the Eastern Division Director of the Executive Board of City Clerk from the MOCCFOA, and the Missouri City Clerks and Finance Certified Municipal Official from the Missouri Municipal League. She serves Officers Association. Baker holds a Bachelor of Arts in as the Chair of the eastern division Management from the National Louis scholarship committee and as a member University College of Management and of the nominating committee and the Business – Chicago, and has earned the outstanding city clerk committee. designations of Certified Municipal Clerk from the International Institute of Municipal Clerks, Missouri Registered The Missouri Municipal Review

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Director's Report. . .

Dan Ross Executive Director

M

ML is celebrating a milestone birthday in 2014, as we begin our 80th year of service to Missouri municipalities. Our staff has had a fun time over the last couple of months looking back at old photos, conference programs and early publications. We have copies of some of the very first MML Review magazines, and you’ll find some pieces reprinted

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cities gathering at Lowry Hall at the University of Missouri – Columbia. By the following year, a publication launched that evolved into the Missouri Municipal Review Magazine CO M D E T F I O N R 80 Y E A RS M UNITI ES U you read today. We will also celebrate our 80th Annual Conference this fall, eight decades throughout our 2014 issues. You will after the first annual meeting of the also find that the MML logo is slightly Missouri Association of Mayors and revised for this year to reflect 80 years Other Municipal Officials at the Tiger of united communities. Hotel in Columbia in May 1935. Today’s Missouri Municipal Today, we are 675 municipalities League is actually the third association strong. The League continues to serve as of municipalities to be established in a united voice for Missouri cities, while Missouri. Even though there was general assisting with thousands of inquiries on agreement that a united voice would topics from administration to zoning. benefit municipalities, early attempts I’m proud to lead this organization in 1908 and the 1920s to maintain such during this 80th year, and be a part of an organization proved difficult. Part- the growth MML has experienced. Our time leadership, work responsibilities, staff is always ready to assist your municipal duties and travel proved to city however we can, whether through be commonplace problems across the trainings, networking opportunities, nation that impacted the formation and l e g i s l a t i v e a l e r t s , r e s e a r c h o r b y stability of state municipal leagues. providing sponsored programs to In 1934, the first formal meeting of leverage your municipal resources. the Missouri Municipal Association of Your MML is here to work for Mayors and Other Municipal Officials you, and we appreciate you allowing was held. It included 28 officials from 18 us to serve.

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January 2014 / 5


When Visions Align: Tech Titan Growth in Rolla by John Butz

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Brewer Science and Missouri boast the growth of a high-tech giant without a Silicon Valley address.

olla, Mo., located at the intersection of MO 63 and I-44, has earned a global reputation for producing some of the world’s best scientists, engineers and technologies. Located 2,000 miles from Silicon Valley, Rolla has been the home of Brewer Science since it’s beginning in 1981. Employing 300 high-tech employees, Brewer Science is producing advances in technology that rivals the great innovations of technology giants and startup companies in northern California. Also located near Rolla, and acquired by the City in 1967 is the 1,200-acre Rolla National Airport. With limited room to expand at the current Brewer Science headquarters, Brewer Science and the city of Rolla are set to realize their aspirations for growth by expanding together at a seemingly unlikely location. The key to realizing this cooperative work has been the recognition of an aligned vision and the great leadership, respect and trust shown between several contributing parties.

Brewer Science

When Dr. Terry Brewer first founded Brewer Science 32 years ago, he located the company in the country’s heartland, where he could find and develop the workforce needed to

6 / January 2014

realize his dream of commercializing his invention of groundbreaking antireflective coatings that would change the world. For technology leaders and influencers around the globe, Rolla is increasingly becoming known as the home of Brewer Science. Located just north of Interstate 44, its headquarters are nestled along TECH 44, the emerging high-tech corridor where the company is creating technology that has helped enable the creation of the miniaturized components found inside smartphones, tablets, LED televisions, laptops, cameras, electronic games, car displays, sensors and other electronic devices. Because of the innovative technology at Brewer Science, it is possible for electronic products to complete more intricate and complex tasks with increasingly miniaturized components allowing these devices to become smaller, thinner and more powerful.

Rolla National Airport

For 45 years, the city of Rolla has operated the Rolla National Airport and always considered it “a diamond in the rough.” After it was decommissioned as a military training site, the airport has been an effective general aviation facility for south- central Missouri consisting of two 5,500’ runways, fullservice fueling, and home to some 82 based aircraft. Unfortunately the infrastructure was military vintage The Missouri Municipal Review

from the 1940’s, wholly inadequate for today’s industrial prospects.

The Need

Brewer Science has expanded multiple times, but required an additional manufacturing facility to provide business continuity and to keep pace with the growing market demand for its products. Mike Mathews of Brewer Science was charged with conducting a new building site search and reached out to the city of Rolla, the Rolla Regional Economic Commission, the Meramec Regional Planning Commission (MRPC) and the Missouri Department of Economic Development (MoDED) to begin a dialogue for finding ways to expand that made sense for Brewer Science, the customers of Brewer Science, the community, the region and the state of Missouri. In response, Ms. Cyndra Lorey, executive director of the Rolla Regional Economic Commission, proposed Brewer Science consider the benefits for their company and the Phelps/Maries County area if their facility could be accommodated at Rolla National Airport. Located 15 miles north of Rolla, Brewer Science agreed to include the airport location in their analysis provided the site could

Photo (above): Artist rendering of the Brewer Science Facility.

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compete financially with incentives provided from other communities. The Company was looking to lease 10 acres of property at minimal cost and required state-of-the-art utilities.

Proposal

Early in 2011 Rolla city officials met with representatives of the Maries County Commission, Intercounty Electric, the Meramec Regional Planning Commission, the Maries County Water District and the Rolla Regional Economic Commission. City Public Works Director Steve Hargis, PE became the project manager. It was Steve’s passion for the airport and the continued development of the community that attracted partners, so a feasibility study was funded. Integrity Engineering, Inc., of Rolla, performed the infrastructure assessment and planning document that ultimately became instrumental in engaging the support for the MoDED and the US Department of Agriculture Economic Development Administration. With

enthusiastic support from a region-wide support network and letters of interest from three prospective industries, the MRPC ultimately submitted a substantial grant to the Economic Development Administration (EDA) that was awarded to the city of Rolla.

Economic Development Administration

“I am extremely pleased that this grant has been approved because it means more jobs and greater opportunities for hard-working Missourians,” Congressman Luetkemeyer said. “This is a great example of local and federal officials working together on behalf of Missouri families.” At the state level, Missouri’s Department of Economic Development also approved $1.1 million as part of the Quality Jobs initiative. Missouri Gov. Jay Nixon voiced support of the state incentive package. “The expansion by Brewer Science in Rolla, and creation of 65 new high-tech jobs, will expand the state of Missouri’s high-technology and

manufacturing sector footprints, which is a big win for our state’s economy,” Gov. Nixon said. Understanding utility requirements was the first step in performing an industrial infrastructure needs assessment. Integrity Engineering, Inc., worked diligently with Brewer Science and other prospects to clearly identify critical requirements needed to support a high-tech, eco-friendly manufacturing facility, as well as future opportunities. Since conveying the airport to the city of Rolla officials from the FAA and MoDOT became critical players in the planning process. JViation, the City’s airport consultant, became an invaluable link in obtaining land-use and air-space clearances. Plans included a completely new water distribution system; an upgrade of one primary water well; a 300,000 gallon elevated water tower; a completely new sewer collection system; an onsite treatment system; and improved roadway access.

As of December 2013, the water tower and water and sewer systems have been completed and placed online.

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The Missouri Municipal Review

January 2014 / 7


Negotiation

t he cont ract ed ph a ses of construction. While always amenable, City sewer crews and negotiations required engineering staff began cooperation from both Brewer installation of the water and Science and the city of Rolla sewer lines in June 2013. to align the requirements The City solicited bids for of all parties. Ultimately construction of the elevated Brewer Science received a nowater tower in April 2013. In cost land lease thanks to the May 2013, the City solicited local economic development bids for the modernization organization. Stepping of the well and materials outside their traditional role, for construction of a well the organization agreed to house. The City committed to fund the first 20 years of lease providing full infrastructure payments required by FAA. access to Brewer Science The lease arrangement is a in the ground lease by the 35-year lease with options completion of their new to extend to 75 years that is City of Rolla Mayor William Jenks III (left) stands with Brewer high-volume manufacturing predicated upon construction Science President and Chief Executive Officer Terry Brewer. facility by the end of 2013. and job creation. As of December 2013, the water tower high-tech and advanced manufacturing Total new infrastructure c o s t s i n c l u d i n g e n g i n e e r i n g a n d fields, and this new facility continues and water and sewer systems have administration (not including the to advance our shared goal of creating been completed and placed online. electric distribution system upgrade and keeping good-paying, high-skilled Brewer Science’s building project is well underway with an estimated provided by Intercounty Electric) jobs statewide.” completion date of February 2014. totaled $2.4 million. While the City The new 25,000 square-foot had committed to provide the basic m a n u f a c t u r i n g p l a n t w i l l e x p a n d infrastructure for Brewer Science, the M i s s o u r i ’ s a d v a n c e d t e c h n o l o g y Success To truly be a success, all of the City was unable to provide the funds footprint and create 65 new high-tech to support the total upgrade of aviation jobs for the state. The construction of players/partners need to share in infrastructure facilities including future the Brewer Science facility is an initial the workload and then benefit by the industrial expansion opportunities. An step in a broader plan to transform Rolla project completion. Rolla National application to EDA in September 2012 National Airport into a manufacturing Airport benefits from the complete upgrade of a 70-year-old infrastructure resulted in a critical announcement and transportation hub. and the platting and development of in November 2012 of a $1,044,000 Dr. Terry Brewer said he was proud grant. Aided by direct contributions to maintain its global headquarters in the 70-acre Rolla National Airport from local funding partners to the the region as the company has grown Technology & Research Park. Maries tune of approximately $100,000, a and expanded. “Our new facility will County benefits from a world-class $600,000 water system lease, city in- help make possible the next generation manufacturing facility, employment kind construction services of $650,000, of smart phones, tablet computers and and future potential for job creation, and a $450,000 cash infusion from the additional high-tech innovations still and the city of Rolla benefits from both City’s general fund, airport fund and to come to market,” Dr. Brewer said. the development of the airport itself sewer fund, the city was ultimately “We are excited about the future of but more importantly in the success of able to finance the project – not only for technology and Brewer Science’s future securing a long-time, entrepreneurial Brewer Science but for future industrial in Missouri. We are grateful to the local, company for many years to come with a wonderful community track record prospects. state and federal officials with us today and vision for future growth. who support Missouri manufacturing Announcement And Celebration and the research and development that John Butz has served as the city administrator F o l l o w i n g d i s c u s s i o n s a n d is the lifeblood of Brewer Science.” for the city of Rolla for more than 16 years. commitments of support, Brewer Information for the article was contributed Science announced Rolla National Construction by Cyndra Lorey, Rolla regional economic Airport in Vichy as the site for The city of Rolla worked very commission executive director, Mr. Doyle their new expansion, and hosted a closely with Integrity Engineering to Edwards, Brewer Science business development groundbreaking ceremony for the break construction into nine separate director and Jack Mentink, principal, Integrity new site on April 30, 2013, that was projects, of which the city of Rolla will Engineering. attended by many local, state and complete five projects and contractors federal officials including U.S. Sen. will complete four. The City’s portion Roy Blunt (R-Mo.) and Congressman of construction includes five separate Blaine Luetkemeyer, who lauded the m a t e r i a l s u p p l y c o n t r a c t s . T h e expansion. “The expansion of Brewer separation of construction and supply Science is good for private sector job contracts allowed the city of Rolla creation and economic opportunity in to maximize its in-kind contribution Missouri,” said  Sen. Blunt. “Brewer and significantly lowered the cost of Science is consistently at the forefront of 8 / January 2014

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Aaron G. March, James C. Bowers, Michael T. White, Shannon M. Marcano, Patricia R. Jensen, William B. Moore, Brian E. Engel, Mark S. Bryant, Kimberley S. Spies

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The Missouri Municipal Review

January 2014 / 9


THINK LIKE A RETAILER

What Communities Need to Know About Retail Site Selection Decisions by Lynnette Kile

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etail recruitment and retention is important to most municipalities, and as the economy continues to recover it will become even more important. While quality of life factors certainly play a role in a city’s decision to develop its retail sector, the primary drivers are typically economic.

Show Me The Numbers

Perhaps the primary driver of retail recruitment efforts is sales and use tax collection that has played an important role in making up for shortfalls in other revenue streams. Missouri state general sales tax revenue, net of refunds, is projected to climb steadily from approximately $1.8 billion in FY 2012 to $1.9 billion in FY 2014, just slightly under pre-recession levels. Job creation is another important economic consideration for retail recruitment. According to the U.S. Bureau of Labor Statistics, retail trade is the largest non-farm employment sector nationwide. The retail sector is showing strong job growth, with a 10 percent year-over-year increase in retail jobs nationwide during the spring months of 2013. In Missouri, retail directly and indirectly supports one in four jobs, for a total of 859,441 jobs.

location plays a significant role in the ultimate success and profitability of a store, retailers painstakingly evaluate many variables and potential sites before making a final decision. How can you start to think like a retailer and position your community for retail success? The following guide, based on four insights identified in a past National Retail Federation report on the retail location process, is a good place to start:

Insight #1: Site Selection Is An Elimination Procedure

An average of 10 sites is analyzed for every one selected. The initial screening process is normally based on market potential and communities are often unaware that they are being considered or eliminated at this stage.

Insight #2: Finding Sites With Growth Opportunities Is A Struggle

Get In Their Head

With all the reasons for communities to actively recruit retailers, it is no surprise that competition for retailer investment is fierce. How can a community stand out from a crowded list of municipalities vying for a retailer’s attention? The answer is surprisingly straightforward: communities that understand retail location drivers will be able to better position themselves to win new retailers and retain existing retailers. Site selection for a store or restaurant is the most critical strategic decision a retailer has to make. Because

10 / January 2014

The Strategic Community Response: • Define trade areas the way retailers do. There is a gap between how most communities and retailers define their trade areas. In order to effectively present a location for consideration, you need to speak the retailer’s language. Ring studies, license plate surveys, customer-level data analysis and drive-time analysis are all ways to define a trade area the way retailers do – with the most impactful being drive-time analysis. • M a r k e t y o u r c o m m u n i t y ’ s generators. Retailers often need to be near generators (big box stores, malls, downtown areas, etc.). Make it easy for them to find the best location by preparing materials with traffic counts/traffic flows, workforce concentrations and transportation hubs. • Acknowledge existing competition. While it may be tempting to hide references to existing stores, it’s actually best to outline the locations of competitors. The retailer will appreciate this as it may present clustering opportunities that drive sales.

Finding retail sites that capture all available traffic, yet minimize cannibalization to existing stores, is difficult. Most rejections at this stage are due to access or visibility concerns, and real estate and energy costs – factors that communities have little, if any, control. The Strategic Community Response: • S h o w t h e m t h e i r c u s t o m e r s . Retailers looking for growth opportunities need to be near people who are either existing customers or match the profile of

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existing customers. Make it easy for them by having consumer profile information available on your citizens. Components to include are geographic variables, demographic variables, interview and survey results, and a segmentation analysis covering both psychographic and lifestyle characteristics. Segmentation analysis is especially powerful; it shows the differences that exist between two persons who have the same demographics but completely different shopping habits. • Show them the opportunities by day and by night. Daytime population is an incredibly important variable for expanding retailers because people tend to shop near where they work. Restaurants in particular rely heavily on daytime population concentrations as a predictor of success. • S h o w t h e m t h e u n e x p e c t e d opportunities. Many largefootprint retailers have started experimenting with smallerfootprint concepts. This presents tremendous opportunity for

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communities to recruit new grocery stores and big-box chains to areas that previously would

The countdown clock for time to market starts when a property is acquired and ends when the store opens for customers.

have been considered unrealistic, like the Target and Wal-Mart stores opening in highly urban downtown areas across the country. It has the potential to benefit underserved

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areas, particularly when it comes to grocery outlets.

Insight #3: Speed To Market Is Critical

The countdown clock for time to market starts when a property is acquired and ends when the store opens for customers. Any time shaved off the process goes directly to the bottom line. One company reported that the costs saved by cutting 15 months from the permitting process paid for the new store’s construction. When you add up the time required to select a site (typically 6-12 months) and prepare it for business, the investment for retailers can be substantial. The Strategic Community Response: • Take control of the compliance process. Communities can do themselves a huge favor by using t heir cont rol over c o mpl i a n ce requirements to attract retailers. Lengthened permitting processes, time-consuming zoning and regulatory requirements, and restrictive regulations are compliance nightmares that

January 2014 / 11


can result in a community being screened out and another community selected. • Prepare ready-for-business sites. Assembling sites and making them available for immediate development is another way communities can shave time off the retail recruitment process. Making the investment to ensure these sites are clean, safe and well-lit goes a long way in attracting new retailers.

Insight #4: Site Economics Is Everything

Site economics refers to the ability of a store at a given location to support the costs of land, building or rent, equipment and inventory, and to provide an acceptable profit and return on investment. Retailers calculate an ROI, factoring in their companyspecific hurdle rate, to compare sites under consideration. At this stage in the process, specific locations are either given a green light to proceed,

designated for more analysis and negotiations, or eliminated from consideration. The Strategic Community Response: • Prove your market potential. It’s not enough to talk about the intangible qualities of your community. Think like a retailer and present them with fact-based research to back up the argument that your community is the right fit for their brand. • Use incentives wisely. Incentives have long been popular tools for economic development, with many states spending hundreds of dollars per capita on incentives. The New York Times estimates that Missouri spends at least $96.5 million per year on incentive programs that is actually one of the lowest percap it a amount s in t he nat ion. While incentives may not be as popular in Missouri as elsewhere, communities that use them need to be aware of the risks involved and

understand that incentives must be carefully developed, implemented and monitored. Communities can minimize the risks of incentives by defining public purpose and eligibility criteria, doing duediligence, conducting cost/benefit analyses, requiring a performance contract, and monitoring both the company and contract.

Beat The Odds

To attract new retailers, you have to think like a retailer. Understanding the importance that retailers place on site selection will help your community gain a competitive advantage and improve the odds of being the one in 10 selected for a new store.

As a director of Buxton’s Public Sector division, Lynnette Kile advises municipalities on economic development and planning initiatives through community analytics. Based in Fort Worth, Texas, Lynnette can be reached at lkile@buxtonco.com.

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Joplin Mayor Colbert Kean Elected Second Vice President of the National League of Cities Joplin Mayor Melodee Colbert-Kean was elected second vice president of the National League of Cities at the annual Congress of Cities and Exposition Nov. 16 in Seattle, Wash. Colbert-Kean is the first Missouri city official to be named to top leadership with NLC in more than 50 years. She will serve a one-year term in this role that traditionally leads to one year terms as first vice-president, then president of the organization representing more than 19,000 cities and towns. Missouri has had two other mayors in NLC leadership. Mayor Raymond R. Tucker, St. Louis, served as president in 1960 and Mayor W.F. Kemp, Kansas City, was president in 1954. All NLC officers are selected by a 15-member nominating committee and are elected by NLC’s membership. Mayor Colbert Kean A lifelong Joplin resident, Mayor Colbert-Kean is president of Prayerful Portion, LLC, a small business consulting firm, and is a Missouri Licensed Realtor with Charles Burt Realtors. Colbert-Kean has served as an elected official since 2006 with the city of Joplin and as an active board member with NLC. She also serves as chair of the MML Natural Resources and Urban Development Board, and is a Governors Appointee to the Missouri Women's Council.

Kansas CITY SAYS GOODBYE TO AN ERA OF TECHNOLOGY BY SWITCHING OFF ITS 18-YEAR-OLD MAINFRAME The city of Kansas City, Mo., Information Technology Division switched off its 18-year-old legacy mainframe Dec. 31, 2013, during a media event that celebrated the City’s successful efforts to adapt to modern technologies. The 3x3x6 foot mainframe once housed all of the City’s 50+ applications and processes. By moving off of this mainframe, the City will achieve its goal of being entirely server- and cloud-based. “Turning off the mainframe is a major accomplishment for the city of Kansas City,” said Mary Miller, the City’s chief information officer. “Many other cities are unable to migrate applications off of their mainframes due to the vast amount of information stored on them. The City recognized the importance of modern technology, so we made it an effort to upgrade our applications to servers and the cloud.” Among the 50+ applications previously stored on the mainframe included revenue, payroll, financial, permitting, special assets, real estate, birth/death records and more. The City slowly began phasing out the mainframe in 1998, starting with its www.mocities.com

permitting programs and ending with its revenue system this year. The City decided to switch off its mainframe because modern servers and cloud-computing can support more applications, provide better interfaces, searches and flexible virtualization. For example, flexible virtualization occurs if one server is not being used and another is being overused. In this case, the unused server can intuitively provide backup support. This technology was not possible with the mainframe. The event was held in time to not only say goodbye to the year 2013, but also to an era. Carlos Valenciano, an IT senior analyst, has worked for the City’s information technology division for 50 years. He celebrated and turned on the mainframe when it debuted in the City’s “computer room” in 1995. Fittingly, he switched it off during the event. “I’ve been fortunate to witness many of the City’s technological advances over the years, including the mainframe’s launch and, now, retirement,” Valenciano said. “I’m excited to see how the City’s technology will continue to evolve into the future. The Missouri Municipal Review

When it comes to technology, always be prepared for the future, but never forget what you’ve learned in the past.” Individuals who attended the event also experienced a walk down memory lane. IT staff placed some of its technologies of yester-year on display, including old punch cards, reel tapes, old cartridge tapes, dumb terminals and keyboards, microfiche, green bar paper, form books for the mainframe printers and IBM 9034 converters.

January 2014 / 13


Big opportunities for small communities Content provided by the Missouri Department of Economic Development

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i s s o u r i ’ s metropolitan areas, like Kansas City, St. Louis and Springfield, are booming with reports of new expansions, attractions and retentions of both large and small-scale businesses happening each month. They do have a lot to offer businesses, such as a large labor pool, airport and U.S. highways, nearby limitless infrastructure and site locations, and brands that do not take much explaining. However, small and mid-sized cities have benefits for businesses. When a business sets up shop in a small town, they become part of something bigger. No matter the size, the business becomes intertwined in the fabric of the local community and its people, offering an unparalleled sense of loyalty and pride in the business. In addition, smaller towns tend to have a lower cost of living, and an abundance of under-utilized natural resources. They also feature original attractions, scenic beauty and many have historical significance.

Affordability Affordability is a great selling point. In fact, Missouri has the 11th lowest cost of living in the country. For smaller towns or cities, the cost of living is even lower. For example, Fulton is a great place for business growth, as the cost of living is 20 percent lower than the national average. This mid-Missouri

14 / January 2014

Natural Resources

town has a population just under 13,000, is less than 25 minutes from Missouri’s capital in Jefferson City, and just over 23 miles from Columbia, another of central Missouri’s metropolitan hubs. Fulton also has immediate access to a readily available, skilled labor pool due to its close proximity to several local universities. The town is home to two private colleges, Westminster College and William Woods University, and is within 30 miles of several major universities, including the University of Missouri-Columbia, Lincoln University and Linn State Technical College (ranked by Bankrate as the sixth best community college in the nation). Fulton and the surrounding area is already home to several large corporations, two of which experienced enough growth that they expanded operations in the community. Danuser Machine Company, headquartered in Fulton since 1910, recently invested $3 million in its facility and brought 10 new jobs to the area. Last year, Pro Foods Sytems, Inc., headquartered only miles away in nearby Holts Summit, created 43 new jobs with a $6 million investment in the mid-Missouri area.

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The readily available natural resources also are a key for businesses looking to expand or relocate. Located in northwest Missouri, the town of Rock Port boasts the title of the nation’s first community powered 100 percent by wind. Although Rock Port’s population is a little more than 1,300 citizens, it was able to attract the attention of the large corporation John Deere, who partnered with local entrepreneurs and town leaders to create the Wind Capital Group and install four wind-power generators capable of producing the entire town’s energy needs. The community is now powered by a constant source of renewable energy that has led to significant financial savings for the City and its residents. Wind Capital Group also is able to sell any excess wind power not used by the City on the open market.

Quality Of Life Low costs, a strong workforce, and ample energy resources are just a few things businesses take into consideration when they are deciding where to grow. They also want to make sure their employees are comfortable, feel at home, and have things to do with friends and family. Many of Missouri’s smaller towns have treasure troves of historical attractions. One example is Kearney, famed for being the birthplace of

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notorious American outlaw Jesse James. The town has converted his boyhood home into a museum dedicated to the Town’s most famous resident, and also hosts a recreational fair, the Jesse James Festival, every September. Kearney is located north of Kansas City, an area that continues to attract huge companies like Freightquote, BIME Analytics and Aviation Technical Services. For the new employees who prefer more of a laid-back style of life, they can find calm and comfort in Kearney. Kearney also is extremely close to the town of Liberty that has experienced its own economic stimulus lately. Liberty has reported several large expansions, including a June 2012 expansion of LMV Automotive Systems, a project that brought 156 new jobs to the area and a July 2013 expansion of Holland 1916 that added 62 new jobs to the local economy. The town of Mansfield is a major tourist destination in Missouri, as the site of the Laura Ingalls Wilder House. This historic museum, the former home of the author of the Little House on the Prairie series, attracts more than 30,000 fans each year from all 50 states and nearly 20 different countries. Similar to Kearney, the area surrounding Mansfield received attention lately for several large expansion projects. In June 2011, the nearby town of Marshfield, 30 miles northwest of Mansfield, saw an expansion of Architectural Components Group, Inc., that brought 70 new jobs to the area. One year prior, 3G Processing in Mountain Grove, 18 miles east of Mansfield, announced an expansion project totaling $6 million that included the addition of 90 new jobs for the local economy. Smaller towns in Missouri offer unique, one-of-a-kind experiences with pristine surroundings. One of Missouri’s major tourist attractions is the city of Branson, located in Missouri’s breathtaking Ozark bluffs. Branson, known as the “Live Music Show Capital of the World,” is considered small by population standards – a little more than 7,000 citizens, but draws nearly 8 million visitors every year. The towns surrounding Branson also benefit from the influx of tourists each year, providing a perfect opportunity for businesses to set up shop in a town close to a major tourism destination but without the hustle and bustle of a large city center. Branson is surrounded www.mocities.com

big-city experience. smAll-town vAlues.

816-525-7881 jlAuber@lAubermunicipAl.com www.lAubermunicipAllAw.com

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by many such small towns, including the community of Hollister. Because of its proximity to Branson, (it is located just two miles south) Hollister has seen increasing interest from developers looking to locate businesses in recent years, leading the town to create a unique “developer friendly” economic development culture. Hollister also is ideally located within 40 miles of Missouri’s thirdlargest metropolitan area, Springfield, that has seen several large expansions in recent years. Additionally, Hollister is only 30 miles south of the community of Ozark that saw an investment of $1 million by HealthMedX in June 2011 that brought 65 new jobs to the area. The existing presence of thriving local industries is a huge draw for businesses searching for locations to set up shop. Some of Missouri’s smallest communities are home to global companies, demonstrating that Missouri’s small towns are fully capable of providing a workforce necessary to sustain a large business. The mid-Missouri community of California, with a population of a little more than 4,000 individuals, is one such community. This town is the headquarters of Burgers’ Smokehouse, the nation’s largest producers of old-fashioned country hams, as well as many other smoked and cured meats. The community also is home to The Missouri Municipal Review

several additional large manufacturers, including AeroSonics and Arkansas Valley Feather, Inc. To help your community have a better understanding of your regional strengths, the Missouri Department of Economic Development will be producing quarterly, regional economic development reports featuring recent business expansions, job postings, regional rankings and other data. The first regional report, featuring information from Central Missouri is shown on page 16.

Upcoming Edition: Tools for Big Business To help assist small towns with recruiting and retaining large businesses, the state of Missouri has numerous incentives and assistance programs available for towns to utilize. In our next article for the Missouri Municipal Review, we will explore how one Missouri town, devastated by the one of the largest tornadoes in history, bounced back from this tragedy to become a hotspot of economic development activity through the Certified Work Ready Communities initiative that used national aptitude tests to validate and qualify the local workforce to businesses nationwide.

January 2014 / 15


REGIONAL LABOR REPORT CENTRAL

Counties: Audrain, Boone, Callaway, Camden, Cole, Cooper, Crawford, Dent, Gasconade, Howard, Laclede, Maries, Miller, Moniteau, Morgan, Osage, Phelps, Pulaski, Washington

2013 EXPANSIONS

Morris Converting Missouri University of Science & Technology Danuser Machine Company Marine Electrical Products Meramec Electrical Products Brewer Science Hubbell Power Systems Central Bank Fluid Power Support

Jefferson City Rolla Fulton Lebanon Cuba Rolla Centralia Jefferson City Mexico

Colleges/Universities (Main Campus)

25 Jobs 15 Jobs

$3 Million Investment $3 Million Investment $749,000 Investment $5.7 Million Investment $20 Million Investment $8 Million Investment $1.6 Million Investment

October September August June May April March February February

Rankings:

University of Missouri, Columbia Columbia College, Columbia Stephens College, Columbia William Woods University, Fulton Westminster College, Fulton Central Methodist University, Fayette Lincoln University, Jefferson City Linn State Technical College, Linn Missouri S & T, Rolla

Colleges/Universities (Branch Campuses) East Central College, Rolla Southwest Baptist University, Salem Webster University, Rolla Park University, Ft. Leonard Wood Drury University, Rolla Drury University, Lebanon Drury University, Ft. Leonard Wood Columbia College, Jefferson City Columbia College, Rolla Columbia College, Ft. Leonard Wood Columbia College, Osage Beach

Linn State Technical Collage (Linn) – No. 6 Best Community College in the U.S., Bankrate Memorial Stadium, Columbia – Best Place to see College Football, AAA Best of the Midwest Jefferson City – Most Beautiful Small Town in America, Rand McNally’s Best of the Road Lake of the Ozarks – Best Weekend Escape, AAA Best of the Midwest Lake of the Ozarks – Best Golf Trail, AAA Best of the Midwest Lake of the Ozarks – Top Midwest Getaways & Top Midwest Travel Spots, Flipkey.com (Trip Advisor) Spa Shiki Lodge of Four Seasons, Lake Ozark – Reader’s Choice Award: Best for GF Getaways/Bachelorettes; Best for affordability, Spafinder Wellness 365 Columbia – Best Cities for Young Entrepreneurs (No. 2), Under30CEO Columbia – Best Performing Small Cities, Milken Institute

Employment Educational Requirement (Number of Ads) Graduate/Professional Degree, 244 Bachelor’s Degree, 632 Post-secondary/AA Degree, 221 High School/GED, 916

27 Jobs 100 Jobs 12 Jobs 15 Jobs 47 Jobs 65 Jobs

Columbia – Top 10 College Towns 2013 (No. 4), Livability

Energy Sources: Bagnell Dam (Lakeside – Miller County) [Hydroelectric Power Plant] Callaway Nuclear Plant (Fulton – Callaway County)

Prepared by Missouri Department of Economic Development. www.ded.mo.gov 16 / January 2014

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January 2014 / 17


WHAT’S NEW IN ECONOMIC INCENTIVES? THE MISSOURI WORKS PROGRAM – WHAT YOU NEED TO KNOW by Lori L. Bockman, Rishi Diwan and Monica Conners

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issouri municipalities have long sought to foster economic development in order to bolster the economic health of their communities. Often this process has involved coordinating with the state of Missouri (State) to offer various economic incentives to businesses. This is still the case, but four of the former state-level economic development incentive programs have now been replaced with the new Missouri Works Program that was enacted by House Bill 184 and signed into law by Gov. Jay Nixon on July 11, 2013. Below is an overview of the new Missouri Works program. The new Missouri Works program (Missouri Works or Program) replaces the former programs commonly known as Missouri Quality Jobs, Enhanced Enterprise Zones, Development Credits and Rebuilding Communities Credits. Missouri Works is administered by the Missouri Department of Economic Development (DED) and is designed to simplify and streamline the process of conferring benefits on qualified companies to spur economic growth and increase career opportunities for Missourians. A unique aspect is that the new Program includes discretionary job retention, as well as job creation incentives. Missouri Works also enables a wider variety of businesses to receive benefits. Both for-profit and non­- profit businesses are able to participate in the Program’s five sub-programs that allow a qualified business to retain the state withholding tax that would otherwise be due for the new jobs gained, and/or to obtain state income tax credits. The tax credits are refundable, transferable and/or saleable. To obtain such benefits, qualified companies are required to meet the Program’s minimum new job threshold and average wage and health insurance requirements. The amount of benefits that a qualified company can 18 / January 2014

receive is based on a percentage of the payroll of the new jobs created by the business. In many cases, Missouri Works provides lower average wage and job creation thresholds than the previous Missouri Quality Jobs program. While no limit exists on the total amount of retained withholding taxes allowed to qualified companies under the Program annually, tax credits granted under the Program are subject to an overall cap of $106 million for the upcoming 2014 fiscal year (that increases to $111 million for the 2015 fiscal year and $116 million thereafter).

Business Eligibility Unlike the old Missouri Quality Jobs program, under Missouri Works, both for-profit and non-profit businesses are eligible, as well as the headquarters, administrative offices, and research and development facilities of otherwise excluded businesses if the facilities serve a multistate territory. A qualified company must provide health insurance to all full-time employees of all its facilities located in the State and pay at least 50 percent of such premiums to maintain eligibility. No benefits are available, however, if the company performs significant, project-specific site work, acquires machinery or equipment for the project, or publicly announces its intention to make new capital investments at the project facility before receiving a State proposal or approval of benefits. Some ineligible business classifications include: • Gambling establishments, • Some store front consumer-based retail trade establishments, • Food and drinking places, • Public utilities, • Educational services, • Religious organizations, • Public administration, The Missouri Municipal Review

• • •

Ethanol distillation or production, Biodiesel production, and Healthcare and social services.

Program Eligibility Once a qualified company enters a written agreement with the State, the Missouri Works program provides benefits for both new and existing companies that are either creating or retaining in-state jobs. DED considers several factors, including the project’s fiscal benefit for the State, as well as the overall size and quality of the proposed project, in order to determine the appropriate amount of credits for each eligible business. The new Program establishes five sub-programs that have been named Retention Works, Zone Works, Rural Works, Statewide Works and Mega Works. Each subprogram differs based on the number of jobs created, wages, geography and minimum capital investment. All five sub-programs (Retention Works, Zone Works, Rural Works, Statewide Works, and Mega Works) require qualified companies to offer health insurance to all full-time employees and pay at least 50 percent of the associated costs. All sub-programs offer tax credit benefits of up to 6 percent of new payroll (except Mega Works that allows 7 percent in certain situations) for a period of up to five years from the creation date of the new jobs (six years if the company is an existing Missouri business), with the exception of Retention Works that provides tax credit benefits for up to 10 years. Retention Works is a new, firstcome, first-served job retention subprogram with funding capped at $6 million per year. Retention Works requires businesses to maintain a minimum of 50 full-time jobs paying 90 percent of the county average wage at the project facility for 10 years, with a minimum capital investment www.mocities.com


Bridging Business and Government We know economic development. Whether it’s advising the City of Chesterfield in negotiating two new outlet malls that have generated new jobs and revenue, assisting CORTEX in creating a dynamic bioscience district, or negotiating an intergovernmental cooperation agreement to form the largest State of Missouri transportation development district, our lawyers have the experience to help your community compete effectively.

314.621.5070 armstrongteasdale.com The go-to law firm for redevelopment, public financing and municipal issues. JAMES MELLO | JOHN DIEHL | LORI BOCKMAN | ROBERT KLAHR | DANIEL BURKE

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that exceeds 50 percent of the benefit received under the Program. Whereas the old Quality Jobs program required companies to create at least 40 jobs in a two-year period, the Statewide Works sub-program reduces that requirement to only 10 jobs in a two-year period in metropolitan areas, and only two jobs coupled with a $100,000 investment in rural locations (under the Rural Works sub-program) or in special zones (under the Zone Works sub-program). This will allow smaller projects to receive assistance and encourage development where the State identifies greater need. These changes also may help bring out-ofstate development into Missouri by providing more attractive benefits than its neighboring states. For instance, Kansas currently requires businesses to create 10 jobs in metropolitan areas or five jobs in rural areas in order to receive any tax incentives. Nonetheless, Missouri businesses still have the opportunity to choose between the old Quality Jobs program and the new Missouri Works program for future phases of a project if it is already www.mocities.com

enrolled in the old Quality Jobs program and the project has multiple phases. For large employers, the Mega Works sub-program allows a qualified company that creates 100 or more jobs to retain 6 percent of new payroll for a period of five years from the date the new jobs were created, so long as the average wage of the new payroll equals or exceeds 120 percent of the county average wage where the project is located. Further, a qualified company may retain up to 7 percent of new payroll over a period of five years if it creates 100 or more jobs and the average wage of the new payroll equals or exceeds 140 percent of the applicable county average wage. Under all sub-programs, the DED must approve a Notice of Intent for benefits. A Notice of Intent must be filed prior to hiring employees for the new jobs in order to maintain eligibility. The DED is to respond to the notice within 30 days. After receiving approval, the qualified company will have two years to meet the minimum thresholds of the applicable sub-program.

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Program incentives are tied to the payroll generated by new job creation or job retention and are determined by a variety of factors. In determining the amount of incentives, the DED will consider: • The significance of the qualified company’s need for Program’s benefits, • The amount of projected net fiscal benefit to the State and the period in which the State would realize such benefit, • The overall size and quality of the proposed project, • T h e f i n a n c i a l s t a b i l i t y a n d creditworthiness of the qualified company, • The level of economic distress in the area, • The competitiveness of alternative locations for the project facility, and • The percent of local incentives committed. The Program’s benefits are limited

January 2014 / 19


to the projected net fiscal benefit to the State, as determined by DED, and will not exceed the least amount necessary to obtain a commitment by the company to initiate the project.

Program Restrictions If a qualified company’s average wage is below the applicable percentage of the county average wage, the number of jobs is below the number required, the company has not maintained the mandatory health insurance, or the company fails to meet any other commitments delineated in their agreement with the State, the company will not receive tax credits and will not be allowed to keep the withholding tax for the balance of the project period. In addition, any qualified company awarded benefits under the Program that knowingly hires individuals who are not allowed to work legally in the United States will be required to immediately forfeit such benefits and repay the State an

20 / January 2014

amount equal to any tax credits already redeemed and any withholding taxes already retained. Note that a qualified company cannot earn benefits for the same capital investment or the same jobs for the Development Tax Credits program, the Enhanced Enterprise Zone program, the Manufacturing Jobs program, the Quality Jobs program, or the Rebuilding Communities program. In addition, special conditions apply when Missouri Works is used at the same time as other programs that affect State withholding taxes (Missouri Training, State TIF, MODESA, etc.). The benefits available for a specific project under other state programs that utilize withholding tax from the company’s new or retained jobs must first be credited to the other state program before the Missouri Work’s withholding retention level will begin to accrue. Similar to the old Missouri Quality Jobs program, the State retains the ability to withhold benefits in one year and allow a company back into the Program in a subsequent year. 

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In summary, while programs have existed for many years as tools for Missouri municipalities to use in encouraging businesses to locate or remain in their communities and provide jobs, the rules have changed and more favorable incentives are now available to incentivize economic development under the Missouri Works program. Lori L. Bockman is co-leader of the Public Law & Finance practice group and a partner of the law firm of Armstrong Teasdale LLP in St. Louis, Missouri, lbockman@armstrongteasdale. com; Rishi Diwan is an associate attorney with Armstrong Teasdale LLP, rdiwan@ armstrongteasdale.com; and Monica Conners is vice president, Business Retention & Expansion at the St. Louis Economic Development Partnership, mconners@stlpartnership.com.

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EVOLUTION OF THE NID ACT AND NEIGHBORHOOD IMPROVEMENT DISTRICT PRINCIPLES AND PRACTICES: AN ILLUSTRATED HISTORY by Thomas A. Cunningham and Steven R. Kratky

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irst authorized in the early 1990s, Neighborhood Improvement Districts (NIDs) provide Missouri local governments with a powerful and highly flexible tool to encourage economic development and real property improvements. However this was not always the case. The very act of establishing NIDs required overcoming constitutional limitations on the use of public monies and public credit for private purposes by way of an amendment to the Missouri Constitution. Mo. Const. art III, §38(c). This step paved the way for initial enactment in 1991 of the Neighborhood Improvement District Act (NID Act). The utility and flexibility that the NID Act now affords is the result of an evolution. This evolution has affected ways in which the NID Act is interpreted and applied, as well as techniques and practices through which NIDs are established and administered. This article will explore, through an examination of several case studies of NID approaches employed by Missouri cities over the years, the directions in which the NID Act has evolved and illustrate ways cities have used NIDs creatively over the years to achieve real results that had not previously been considered.

First Steps – Spradlin v. City Of Fulton: Is A Golf Course A “Neighborhood”?

As enacted, the NID Act authorizes designation of contiguous areas within which assessments are levied, securing general obligation bonds to fund public improvements that benefit the area designated. The availability of general obligation bonds provides a type of financing not accessible to other special assessment and benefit mechanisms, typically at very favorable rates of interest. The first uses of NIDs tended to be small and limited. In 1995 however, at the behest of a golf course developer, the city of Fulton established a NID to finance construction of a public golf

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course on a 188-acre tract of land. The NID consisted of a single parcel purchased and owned by the developer, who would build and operate the golf course as a public recreational facility under a lease to the City. The tract contained no residences or residents. The City authorized issuance of $3,110,000 in general obligation bonds to finance golf course improvements and imposed an assessment against the property in the NID to pay off the bonds. The City made no provision for prior voter approval. James Spradlin, a resident taxpayer of the city of Fulton, filed suit challenging the City’s actions. In resolving the lawsuit in the City’s favor, the Missouri Supreme Court determined as an initial matter that a valid NID could exist where the land comprising the district was owned by a single entity and contained neither dwellings nor residents. The Spradlin Court also held that general obligation NID bonds could be issued without prior voter approval, and without requiring imposition of an annual tax on all of the taxable property in the City. In approving these new, “limited” general obligation bonds, the Court noted that if special assessment revenues proved inadequate, a valid “full faith and credit” pledge, albeit one limited to current city revenue streams or surpluses, supported NID bond payments. Although the Court in Spradlin expressed doubt as to whether such “limited” general obligation NID bonds would be marketable, experience to date has demonstrated that underwriters and investors afford NID bonds much the same treatment as traditional, tax-backed general obligation bonds. With this recognition (and the Spradlin Court's broad favorable treatment), the stage was set for more “creative” approaches to NID financings.

City Of Olivette – Streamlining Toward Single-Step Financing To Improve Private Streets

On its creation in 1997, the city of Olivette’s NID was the largest ever The Missouri Municipal Review

attempted and included hundreds of residential properties. Although the large scope of the NID avoided questions of single entity ownership already resolved in Spradlin, the Olivette NID raised other evolutionary issues. The NID was intended to remedy widespread effects of deferred maintenance on private subdivision streets by financing street reconstruction and improvements to a degree that permitted ongoing city maintenance. In initial discussions, subdivision trustees were quite willing to accept NID assessments and public maintenance but expressed concerns over city ownership of street rights of way and potential future changes to the character of their “country lanes.” In turn, these concerns required exploration of the NID Act’s definition of the term “improvement” to resolve the degree of public ownership or interest required to invoke NID financing. In prior NID undertakings, reference to “public facilities or improvements” within the language of the definition gave rise to a perception that outright public ownership of NIDfinanced improvements was essential. Looking to the facts in Spradlin, however, where the City held only a leasehold interest, the City reasoned that subdivision trustees need only grant easements for public use and maintenance over the improved rights of way. This and subsequent NID financings have firmly established that the “public improvement” requirement for purposes of the NID Act is satisfied where the municipality obtains some cognizable property interest in the financed improvement, and does not require that fee simple title to the improved property to be obtained. Another innovation resulting from the Olivette NID experience was the application of single-step NID bond financing to projects where final improvement costs are determinable. Strict reading of the NID Act had suggested an awkward two-step financing mechanism in which a municipality must first issue a January 2014 / 21


temporary NID note to fund planning and construction phases. Only later, after project completion when actual costs were determined, could the City issue permanent NID bonds to redeem the temporary note and fund any differences. Although this was the practice at the time, Olivette saw a different approach. The City reasoned that where a maximum funding amount could be established, improvements and associated costs could be tailored to available funds. Thus, with improvement costs rea dil y a scertainable at th e beginning of a project, cities should be able to eliminate temporary notes and move directly to the permanent financing afforded by NID bonds. Subsequent consultations with the Missouri State Auditor’s Office affirmed this view. This single-step approach so fundamentally altered the practitioner’s view of NID financing that an immediate resort to permanent NID bonds has become the dominant approach applied in NID financings. Already at this relatively early stage, initial rigid views of the NID Act were yielding to more flexible approaches. As experience g r e w, mo r e pr a c t ic al in novation s followed.

City Of Wentzville – Coping With New Stakeholders Benefitting From New Drainage System Improvements

The trend of individual developerowners of a single parcels seeking NID financing for various subdivision improvements continued through the 1990s. At the inception of these projects, NID assessments were typically levied on the single development parcel and paid by the single developer. However, as development proceeded and lots were sold off, and, of necessity, assessments became more complicated, new issues of NID administration arose involving realtors and new property owners. In 1997, the city of Wentzville had formed a NID to fund construction of storm drainage and retention systems serving newly created residential lots surrounding the Bear Creek Golf Course. As development proceeded, shifting from temporary developerpaid financing to permanent NID bond financing, the City discovered that ultimate purchasers of residential lots had not been informed prior to sale and were not necessarily aware of NID

22 / January 2014

assessments imposed on their newly purchased properties. The City’s response involved immediate outreach and notification to realtors active in the Bear Creek area including notification of NID assessments applicable to the area and requests that this information be passed along as a matter of course to prospective purchasers of lots within the development. Moreover, Wentzville and other cities now require as part of agreements to provide NID financing that developers include in sale contracts a written notification of NID assessment obligations applicable to the property to be purchased. Indeed, many cities now require inclusion in sale contracts for lot purchases a separate paragraph apprising the purchasers of NID assessment obligations and requiring purchasers’ written acknowledgment of the notification. 1

City Of Festus – “Piggybacking” City Improvements On Prior NID Projects A particularly useful feature of the NID Act is ability of a municipality to issue a single series of NID bonds for multiple NID improvements, thus realizing significant savings in costs of issuance. Section 67.455 of the NID Act expressly provides that “[a]n improvement may be combined with one or more other improvements for the purpose of issuing a single series of general obligation bonds to pay all or part of the cost of such improvements ...”. Although the NID Act uses the term “improvements,” the city of Festus reasoned that this language also could be read to permit combinations of improvements located in separate neighborhood improvement districts. The City had previously approved two prior private subdivision NIDs supported by temporary NID notes issued to the respective developers. However, neither project standing alone (or even put together) provided sufficient critical mass to justify ancillary costs of NID bond financing. Within a year of the issuance of the temporary notes, the City identified a need for new water storage and delivery facilities to accommodate growth within the City. Moreover, costs of the water facilities combined with the costs of the NID improvements would justify costs of NID bond financing. The Missouri Municipal Review

Reasoning that under Missouri law a municipality, though immune from taxation, may be subject to special assessment, the City formed its own NID over city property and levied annual NID assessments sufficient to pay the costs of the water system improvements. The City then issued NID limited general obligation bonds to pay the costs of the combined private subdivision and city water system improvements. In so doing, the City allocated costs of issuance among the improvements pro rata in proportion to the costs of each improvement, thus sharing the aggregate issuance costs for additional savings.

City of St. Charles – “Turnkey” NID Improvements For New Urbanist Neighborhoods

New Town at St. Charles was envisioned as a multi-phased “New Urbanist,” high-density residential development in the city of St. Charles. Planned improvements ranged from lakes, plazas and fountains, to vehicular and pedestrian bridges, to decorative street lights and furnishings, to extensive storm and flood-control devices and sanitary sewerage. In approving more than $30 million of NID financing for the New Town development over a 10year build-out period, the St. Charles City Council realized that a unique partnership would be required. Rather than a pay-as-yougo approach typical of municipal finance projects, the City imposed a “turnkey” requirement where the City would pay the developer from NID bond proceeds deposited in a city-held project fund, only for completed and installed improvements. The accepted improvements would then be turned over to the City for public maintenance. To assure the completeness of improvements to be accepted, financing agreements between the City and the developer specified a strict verification regime to which applications for payment would be subjected. Moreover, in addition to providing a greater degree of certainty and control over the process, this “turnkey” approach to NID financing allowed the City to avoid burdens of construction and project management typically associated with NID improvements. The “turnkey” approach also reduced requirements for payment and performance security, thus providing additional savings. www.mocities.com


Streets Of St. Charles At Noah’s Ark – NID Provides “Bridge” Financing For New, Large- Scale, MixedUse Development In The City Of St. Charles

The crash of real estate and development markets in 2008 spelled the end of various planned projects throughout Missouri and the nation. In 2007, for example, the city of St. Charles had approved tax increment allocation financing (TIF) for a mixed-used project containing approximately 3 0 0 , 0 0 0 s q u a r e f e e t o f City of Pacific City Hall commercial office space built on a high density, New Urbanist theme on the Missouri NID Act. This choice was informed by river, adjacent to Interstate 70, near the evolving principles established in prior City’s casino entertainment district. In NID financed projects: that a NID may the wake of the 2008 crash, however, be composed of a single parcel, owned TIF financing was simply unavailable. by a single owner; that a City, although Facing the collapse of the project, the tax exempt, may be subject to special City turned to the NID Act. assessments; and that a strong market Unlike TIF, the full faith and exists for NID obligations. credit pledge that supports NID bond In Pacific, the sole parcel of payments made NID financing viable, property included in the proposed NID even in a post-2008 environment. The was owned by the City itself. Further, City’s agreement to establish a NID only the City would be subject to NID for the project area and to provide NID assessment. The City reasoned, however, bond financing on an interim basis that so long as the City enjoyed adequate also contained an express requirement cash flow, assessment obligations that, in any event all NID Bonds could continue to be satisfied. In a issued would be redeemed by TIF or competitive solicitation, the City secured similar obligations not later than 2016, underwriting for the NID bonds that presumably when the project had been were offered and sold publically, and built out. Even with this requirement, obtained at the same time, a State the City’s NID bonds found a ready Auditor’s certification that the NID market. Four separate offerings were bonds complied with all laws of the state made totaling more than $35 million in of Missouri. project funds. As of this writing, the “Streets Conclusion: NID Lessons Learned of St. Charles at Noah’s Ark” mixedThe NID Act has come a long way used project is well on its way to since its creation in the 1990s. Today, completion. The Noah’s Ark project NID bonds are issued directly without demonstrated the utility and flexibility the necessity of a prior temporary note; of NID financing as “bridge financing” cities may satisfy public improvement to rescue a critical, but endangered, r e q u i r e m e n t s b y o b t a i n i n g a n y project. cognizable property interest in an improvement; NIDs may be established City Of Pacific – City Becomes solely for city-owned properties; and Sole “Developer” Of NIDcities may assure that new property Financed City Hall Upgrades owners are apprised of NID assessment In 2011, the city of Pacific sought obligations by developers as a condition low-cost financing for a proposed of NID financing, and requiring that renovation and expansion of City Hall. new purchasers similarly acknowledge After considering various traditional the notification. NID bonds have options, the City elected to utilize the been used as primary, temporary and www.mocities.com

The Missouri Municipal Review

bridge financing. Each of these aspects as well as ot her, no w - c ommon attributes of the NID Act, were once considered novel. All of this serves to underscore the flexibility of the Neighborhood Improvement District Act as perhaps the state’s most powerful development tool, one that will likely continue to be applied to solve new p r o b l e m s i n creative ways. Thomas A. Cunningham is an attorney and founding shareholder of Cunningham, Vogel & Rost, P.C., legal counselors to local government, and practices in the areas of municipal finance, urban development and land use law. Steven R. Kratky is an associate with Cunningham, Vogel & Rost, P.C. Contact them at (314) 446-0800 or www.municipalfirm.com. Footnote 1

In apparent recognition of the notice issue,

Senate Bill 248, effective on August 28, 2013, revised the NID Act by adding a new requirement that, as a condition of levying any future NID assessment, the clerk of the governing body establishing a NID must record with the county recorder’s office an instrument which sets forth: (i) the owners of record of the property within the NID as grantors; (ii) the name of the governing body establishing the NID and the title of the official or agency responsible for collecting and enforcing the NID assessments, as grantees; (iii) the legal description of the NID property; and (iv) the identifying number or a copy of the resolution or ordinance creating the NID. As a result of such an inclusion in county land records, subsequent title searches typically performed in connection with the sale of property would likely reveal this notification, thus providing notice to prospective purchasers that a NID assessment applies to the subject property. This is but one example of how NID practice has preceded (in this case by some 15 years) formalization in the NID Act itself of practical solutions to problems arising in the context of day-to-day NID administration. (In another such example, section 67.456.3 enacted in 2004, acknowledged and formalized the thenestablished practice of proportional reallocation of assessment amounts on parcels that are subdivided after final NID improvement costs have been levied and assessed on such parcels.)

January 2014 / 23


Expanding Your Economic Development Tool Box by Joe Bednar and Craig Davis

Most economic developers are familiar with the standard tools in the economic development tool box, but some projects require a different approach and outside-the-box thinking. Spencer Fane partners Joe Bednar and Craig Davis have highlighted four often-overlooked incentive tools that can be leveraged to move your project from the drawing board to completion. Contact them at jbednar@spencerfane.com, (573) 634-8116 or mdavis@spencerfane.com, (816) 292-8231.

Real Property Tax Increment Allocation Redevelopment Act State Administered Job Incentive Tools Highlights* §§135.950-135.973 RSMo

aka Tax Increment Financing §§99.800 to 99.865 Overview

Local Areas, Plans And Projects

• Type Of Benefits: Tax credits. • Description Of Benefits: Tax credits and real property tax abatement of at least 50 percent for 10 years on improvements to the real property. • Allowed Uses Of Benefits: Tax credits may be transferred, sold or assigned. The sale price cannot be less than 75 percent of the par value of such tax credits. • Eligible Business Types: An eligible business must be located in a Missouri Enhanced Enterprise Zone (EEZ). Individual business eligibility will be determined by the zone, based on creation of sustainable jobs in a targeted industry or demonstrated impact on local industry cluster development.

• The TIF Program comprehensive program … to reduce or eliminate those conditions, … that qualified the redevelopment area as blighted area, conservation area, economic development area, or combination thereof, and to thereby enhance the tax bases of the taxing districts that extend into the redevelopment area. §99.805 RSMo • Allows the capture of 100 percent of the incremental property taxes and 50 percent of the incremental economic activities taxes (sales tax, earnings tax, etc.) to be directed to the development of the project (either directly or to support bond debt service). • Term of 23 years.

State Supplemental Tax Increment Financing Assistance • Recovery of sales tax up to 50 percent of all incremental sales tax paid within the project, or • An amount equal to 50 percent of the state withholding on all employees employed at the project through the year 2029.

* All of the tools identified have significant legal requirements. The elements highlighted are not intended to be, nor should they be utilized as legal advice in regard to the use of incentives. 24 / January 2014

The Missouri Municipal Review

www.mocities.com


Special Taxing Districts Highlights* CID – Community Improvement District §§67.1401 to 67.1571 RSMo • Special assessments against real property; and/or real property tax and/or retail sales and use tax. • Within its boundaries, to provide assistance to or to construct, reconstruct, install, repair, maintain and equip any of the following public improvements: • Pedestrian or shopping malls and plazas; • Parks, lawns, trees and any other landscape; • Convention centers, arenas, aquariums, aviaries and meeting facilities; • Sidewalks, streets, alleys, bridges, ramps, tunnels, overpasses and underpasses, traffic signs and signals, utilities, drainage, water, storm and sewer systems and other site improvements; • Parking lots, garages or other facilities; • Lakes, dams and waterways; • Streetscape, lighting, benches or other seating furniture, trash receptacles, marques, awnings, canopies, walls and barriers; • Telephone and information booths, bus stop and other shelters, rest rooms and kiosks; • Paintings, murals, display cases, sculptures and fountains; • Music, news and child-care facilities; and any other useful, necessary or desired improvement.

www.mocities.com

Special Taxing Districts TDD – Transportation Development District §§238.200-275 RSMo Highlights* “Project” includes any: • Bridge, street, road, highway, access road, interchange, intersection, signing, signalization, parking lot, bus stop, station, garage, terminal, hangar, shelter, rest area, dock, wharf, lake or river port, airport, railroad, light rail, or other mass transit and any similar or related improvement or infrastructure. • Sales tax may be imposed in increments up to 1 percent. • Special Assessments may establish different classes or subclasses of real property for purposes of levying differing rates. The rate may vary for each class or subclass based on the level of benefit derived from projects funded by the district. • Property Tax. If approved by at least foursevenths of the qualified voters voting on the question in the district, the district may impose a property tax in an amount not to exceed the annual rate of .10 cents on the hundred dollars assessed valuation.

The Missouri Municipal Review

January 2014 / 25


Economic News Around Missouri Retail Sales Retail sales during the winter holiday season represent an indicator of economic activity and consumer sentiment. According to the National Retail Federation, the number of shoppers for the holiday increased from 139 million last year to a record-breaking 141 million shoppers this year with the average holiday shopper spending $407. Midwest consumers spent an average of $386 during Black Friday weekend. Total spending nationwide for the weekend was estimated at $57.4 billion. Cyber Monday sales jumped 18 percent to rank as the heaviest spending day in history with online sales for the five-day weekend topping $5.3 billion, a 22 percent increase from last year.

Automotive Industry Missouri's resurgent automotive industry is bringing another leading automotive parts supplier and more jobs to the Kansas City region. Grupo Antolin North America will invest more than $15.7 million in a 150,000 square-foot automotive manufacturing facility to supply Ford's Kansas City Assembly Plant, creating an estimated 118 new jobs. Grupo Antolin's new state-of-the-art manufacturing facility in Kansas City will initially produce headliners for the all-new Ford Transit van, that will be manufactured at Ford's Kansas City Assembly Plant in Claycomo. Grupo Antolin is an international automotive parts manufacturing company. The company designs, manufactures and supplies automotive overhead systems, interior trim and door functions, ambient and functional lighting products, lighting consoles and seat functions for major auto manufacturers worldwide, including Ford and General Motors. Headquartered in Spain, Grupo Antolin has 100 manufacturing plants and 22 offices in 25 countries, including nine facilities in the United States.

New Headquarters The Missouri Department of Economic Development announced that BIME Analytics, a Francebased business intelligence technology company, will open its new North American headquarters in Kansas City. The company is investing $390,200 to locate in Kansas City’s Crossroads District and is expected to hire 44 new employees within the next five years. Founded in 2009, BIME is a cloud computing company that delivers simple-to-use business intelligence data. The company’s interactive and customizable dashboards provide clients easy solutions to access, organize, and analyze big data. Although BIME is based in Montpellier, France, nearly onethird of the company’s clients are in North America. Locating in Kansas City gives the company better access to their current clients and allows for greater growth opportunities.

26 / January 2014

The Missouri Municipal Review

www.mocities.com


www.skw-inc.com

Community Development Funds The Missouri Department Development of Economic Development approved $1,908,500 in Community Development Block Grant funds to assist four communities with repairs, replacements or upgrades to water treatment systems. • T h e c i t y o f W y a t t w a s approved for $408,500 in CDBG funds to make improvements to the wastewater system it shares with Wilson City. Funds will be utilized to replace collection lines in both cities as current lines are old, deteriorating and experiencing inflow and infiltration problems. • The city of Humansville was approved for $500,000 in CDBG funds for wastewater system upgrades to meet Department of Natural Resources regulations. • The city of Dudley was approved for $500,000 in CDBG funds to add an aeration system and UV disinfection to the existing system. • The city of Stanberry was approved for $500,000 in CDBG funds for system upgrades to sustain the existing population and economic base, and provide an avenue for growth. The CDBG program, administered by the Missouri Department of Economic Development, provides grants and loan funds to cities with a population under 50,000 and counties under 200,000 to assist in a variety of public works and economic development projects.

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New Research Facility Pharma Medica Research Inc. is opening a new research facility in St. Charles. The $30.8 million project will bring 320 new high-tech jobs to the state within the next three years. Pharma Medica Research Inc. is a contract research organization headquartered in Toronto that serves clients in the pharmaceutical and biotechnology industry. It offers a wide range of services including scientific affairs, medical writing, clinical conduct, bioanalysis, biostastics, data management, and clinical trial monitoring. The company began hiring employees in late August and plans to begin conducting clinical trials in January 2014.

www.mocities.com

The Missouri Municipal Review

January 2014 / 27


A Day In The Life ... of Missouri Mayors In 2014, The MML Review will feature insights from local government officials across the state in a new series, "A Day In The Life." In this issue, the Review asked several Missouri mayors to share their goals for 2014, what inspired them to serve in their community and other questions to provide a glimpse into their role as city leaders.

Mayor Gerry Welch, Webster Groves Mayor Raeanne Presley, Branson Mayor Sly James, Kansas City Mayor Bill Kolas, Higginsville

What sparked your interest in local government? Mayor Presley: After a large portion of Hwy. 76 was annexed by the city of Branson, they were seeking citizens to serve on the Planning and Zoning Board.  I thought it would be interesting and would allow me a chance to have a night away from our two young and rambunctious sons! Mayor James: My interest began with a desire to see my city, Kansas City, recognized and appreciated for its tremendous assets, people and potential. Mayor Kolas: I had been disappointed with some of the lack of improvements of city services, namely the city streets.  After numerous attempts to have the street I lived on repaired, as well as other obvious problems in the city, I chose to run for the board of aldermen, and see if I could do something about it from that position.

What goals do you have for 2014 in your city? Mayor Welch: There are some nice operational goals like addressing the beautification and safety issues at our main intersection in the City to building on our designation as the Creative Community of Missouri this year by including more public art and completing our Sculpture Garden. But our biggest goal is to ensure that legislative changes to the tax structure do not harm us. Webster Groves is home to so many regional 28 / January 2014

nonprofits (more than any other community) that educate the region’s elementary and secondary children, provide social services and residential facilities to youth in crisis, offer a college and seminary education, and provide housing for hundreds of seniors. The City provides police, fire, EMT, and other local services for all of these facilities. Our goal is to be effective in our communication to legislators about the need for some regional sharing of tax dollars to continue to service these regional nonprofits. Mayor Presley: Our board has designated two revitalization projects  — the Spirit of 76 and Historic Downtown – as the top priorities. Our City will continue controlling our costs internally and work with community leaders to encourage new projects within our City.  We’re pleased to see an expansion of health care by Cox and Mercy that will lead to an expansion of quality jobs for our citizens. Mayor James: • Decrease crime. • Increase education opportunities. • Continue the upward trend of the local economy. • Continue to make city government more innovative.

What do you love about your community? Mayor Welch: We represent what it really means to live in a community – a place where people care about each other, know and support their local businesses, and have enormous pride about their homes, gardens, neighborhoods, schools, churches, events and more. I love the nonpretentious way our residents go about their daily lives watching out for their neighbors and friends; volunteering for scouting and athletic and school and The Missouri Municipal Review

event activities; taking care of their property and enjoying the company of each other. There is no better place to live than Webster Groves! Mayor Presley: The hard-working generous individuals that call Branson home.  We are primarily a service industry that comes with its own challenges. However, tourism is an uplifting occupation and we’re blessed to live in a community with strong faith, a desire to preserve our environment, and compassion to those in need. Mayor Kolas: It is a can-do attitude.  There is and has always been an attitude that, we as a community can accomplish what we decide is important that will add to our quality of life.  There are more than 80 separate groups, boards and organizations, plus the city that come together when there is a need to make things better. 

What is a long-term improvement you would like to see? Mayor Presley: Our Spirit of 76 is top of mind.  It includes a focus on making our main tourism corridor more pedestrian friendly. We plan to bury utility lines, expand walking opportunities and mix in a few surprises of fun for our visitors and locals. Mayor James: I want to change the conversation around education in this City. I want anyone who is truly committed to education reform, to stop playing politics and make the necessary investment to get the job done. That means we must be as committed to investing in education, our social infrastructure, as we are in investing in our physical infrastructure like roads and bridges. That means you defend every child’s right to have a first-class education with as much passion as you would defend every adult’s right to have a gun. I want education to be our www.mocities.com


priority and an attainable goal for every child in Kansas City. Mayor Kolas: A four-lane Missouri Highway 13 from Clinton, Mo. north to Hamilton, Mo.  About seven miles of MO 13 travels within the city limits of our community.  Traffic mobility and safety are concerns now that will only increase as time goes by.  Also, improvements to MO Hwy. 13 will encourage development along the route bringing new businesses and residents.  This will surely bring added revenue to our tax rolls allowing for more improvements to the City.

What is the most challenging aspect of your position as an elected official? Mayor Welch: The biggest challenge is always balancing the interests of the individual and those of the community, something that faces most elected officials. We deal with it in everything from fence ordinances to zoning to tax policy. This is why decision making must be done thoughtfully with good information, and why there are sometimes restless nights of sleep – or no sleep. This ranges from the increase in trash rates that could hurt lowincome seniors but provide yard waste relief for most of the City to a needed new addition to the library that could impact the immediate neighbors. Mayor Presley: I wish that we heard more often from citizens about their desires. People assume that everyone communicates, and some do, but it is difficult to engage the population in ways that bring positive ideas to the table.  We need everyone in the conversation to make our community the best it can be. Mayor James: Time management. Mayor Kolas: We try very hard to keep the public informed of decisions being made by the mayor and board of alderman.  We invite the movers and shakers in our community to join us in a round table discussion. When information concerning an idea or future project is presented and understood, the mood is positive and we move ahead with the work to be done.  If this does not happen, then incorrect information becomes the norm and we stand still or go backwards

www.mocities.com

instead of moving ahead.  I am pleased to say that, while there will always be rumors, more than 80 percent of the time the citizens have backed the decisions coming out of City Hall. We are a progressive city

Please tell us about a particularly memorable city event where you had the opportunity to participate. Mayor Welch: There are so many of these. This past year at our September Jazz Fest opening, our firefighters attached a large flag to our fire truck ladder and raised it to a patriotic musical opening by the Air Force Band. It flew so high against a perfectly blue sky and somehow the firefighters and Air Force members and the music brought tears to so many of us. We have a Senior Roundtable group that provides Christmas gifts and visits to seniors without families. Not only are the visits memorable, but the calls and notes that say thank you are to be treasured. And, those visits with school children are always wonderful. This is the best part of the job! Most memorable was the second grader who asked if I came to their school in my limousine!!!! Mayor Presley: Our Centennial was a special celebration, bringing together young and old to focus on values we cherish and wish to preserve. On a less happy note, the Leap Day tornado of 2012, while fortunately causing no loss of life, brought us together in a time of crisis.  I was proud of our community in the ways they shared and lifted up those who had suffered terrible losses. Mayor James: I really loved the inaugural picnic that we had with city workers rather than an inaugural ball with corporate and civic folks. We did have some corporate and civic folks attend the picnic so in that regard, it was a truer representation of the City and something I just really enjoyed being in attendance for.

What is the one thing you wish every citizen would understand about local government? Mayor Welch: Local government affects the quality of their lives every day – from the streets to public safety to parks and recreation. Local government The Missouri Municipal Review

officials are your friends and neighbors who work hard to improve their communities. They like to hear from their constituents and they want to make the right decisions. Mayor Presley: That so many decisions that matter to their daily lives are made by leaders who live right down the street from them.  From the quality of their schools, to the condition of the roads, to the water they drink, to the response time of police and fire. These critical services are not provided, generally, by state or federal government, but are the best efforts of many volunteers, both elected and appointed. Mayor Kolas: How local government works, the responsibilities of the elected officials and the city employees, and how public service is different from private enterprise.

When you were a child, what did you want to be when you grew up? Mayor Welch: It varied – one time it was a dancer, then a nun, then a lawyer... Mayor Presley: A pharmacist, but seems a bit late for that degree now! Mayor James: I wanted to be a lawyer because that is how I thought I could help people. Mayor Kolas: A carpenter or draftsman.

Most people would be surprised to learn ... Mayor Welch: I played the organ in church and sang and played daily masses in Latin. Sometimes the priest and I would see how fast we could do a mass! I played quite a few funerals but no one ever hired me to do their wedding! Mayor Presley: That I was the mascot for Branson High School – a pirate, and that I am addicted … to bubble gum! Mayor James: I love to cook risotto! Mayor Kolas: I played lead guitar and sang with a Country Western Band in the 1970s.

January 2014 / 29


44th Annual Missouri Municipal League Legislative Conference Capitol Plaza Hotel ♦ Jefferson City, MO ♦ February 11-12, 2014 TUESDAY, FEBRUARY 11, 2014

*Tentative Program

12:00 noon

Registration

1:30 p.m.

Welcome and Opening Remarks

1:45 p.m.

MML Legislative Briefing

2:15 p.m.

Overview of the 2014 Session: MO House of Representatives

2:45 p.m.

Overview of the 2014 Session: MO Senate

3:15 p.m.

Break

3:30 p.m.

The Honorable Chris Koster, Missouri Attorney General

4:00 p.m.

The Honorable Jason Kander, Missouri Secretary of State

4:45 p.m.

Adjourn

5:30 p.m.

Reception

6:30 p.m.

Dinner On Your Own With Legislators

WEDNESDAY, FEBRUARY 12, 2014 7:30 a.m. 8:00 a.m.

Breakfast - Capitol Plaza Hotel The Honorable Jay Nixon, Governor, State of Missouri (Invited)

Join fellow local leaders from across the state at the MML Legislative Conference to share information, learn about legislative issues, and visit with state legislators. The Conference will provide you with a unique opportunity to: ♦ Learn more about the issues pending in the Legislature; ♦ Participate in discussions with legislators and peers on a wide range of municipal issues; ♦ Visit informally with Senators and Representatives during the legislative reception; ♦ Hear first-hand from invited state officials and learn more about their programs and how they will affect your city. 30 / January 2014

The Missouri Municipal Review

www.mocities.com


44th Annual Legislative Conference Capitol Plaza Hotel, Jefferson City, MO February 11-12, 2014

REGISTRATION: $130 per person; includes reception and breakfast. •

All registrations to be made online, regardless of payment option.

For those who need to pay by check, please select the “Bill Me” option for your payment method. When you have completed the registration process, you may print off an invoice to submit with your payment and confirmation for your registration.

Online Registration Link; visit MML Conferences at www.mocities.com. HOTEL RESERVATIONS: The conference room block is currently open and will close on January 12. Please make room reservations directly with the Capitol Plaza by calling 1-800-3388088. (Additional rooms have been reserved at the Baymont Hotel Inn and Suites, across the street from the Capital Plaza Hotel, call 573-636-5231 for reservations.) CANCELLATIONS: Received by February 5, 2014, will receive a full refund. No refunds can be made after that date. If you have any questions please call the League’s office at 573-635-9134.

Places to Dine in Jefferson City (Please call for reservations for your delegation.) Alexandro’s Applebee’s Arris’ Bistro Bingham’s-Truman Hotel Bones Chili’s Colton’s Steak House and Grill Das Stein Haus Domenico’s Italian Restaurant Hunan’s Longhorn Steakhouse Madison’s Café O’ Donoghue’s Steak & Seafood Prison Brews Red Lobster Ria’s Sapphire’s - Doubletree Hotel Yen Ching www.mocities.com

2125 Missouri Blvd. 2319 Missouri Blvd. 409 W. Miller St. 1510 Jefferson 210 Commercial St. 3515 Missouri Blvd. 2415 Missouri Blvd. 1436 Southridge 3702 W.Truman Blvd. 1416 Missouri Blvd. 3545 Missouri Blvd. 216 Madison 900 East High St. 305 Ash Street 3519 Country Club Drive 3550 W. Edgewood Dr. 422 Monroe St. 2208 Missouri Blvd. The Missouri Municipal Review

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January 2014 / 33


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News From The Bench

REVIEW OF CITY COUNCIL DECISION TO GRANT A CONDITIONAL USE PERMIT IS LIMITED TO A DETERMINATION OF WHETHER THE DECISION IS SUPPORTED BY COMPETENT AND SUBSTANTIAL EVIDENCE ON THE RECORD AS A WHOLE. by David Davis DeBold v. City of Ellisville, et al., No. ED99944 (Mo. App. E.D. August 29, 2013)

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al-Mart applied for and was granted a conditional use permit for development of a store in the City of Ellisville on Sep. 5, 2012. The project was reviewed by numerous city officials and departments. It was determined that the project was consistent with the City’s comprehensive plan and the standards of good planning. DeBold filed an appeal of the decision with the City on Sept. 19, 2012. The appeal was considered by the City Council on Oct. 3, 2012, and denied. Thereafter, DeBold sought judicial review of the City Council’s decision. On Feb. 26, 2013, the court entered BEGIN BEGIN TODAY! TODAY! its Order and Judgment affirming the decision of the City Council on the QUESTIONS? QUESTIONS? appeal. The court found that the City’s decision to grant the conditional use permit was supported by competent FACTS FACTS & & FIGURES FIGURES and substantial evidence on the record. --The The program programisisopen opento toboth bothelected elected and and appointed appointedmunicipal municipalofficials. officials. When reviewing a city council’s --Electives Electivesallow allowofficials officialsto tostudy studywhat whatisismost most important importantto tothem. them. administrative decision to grant or deny --Participation Participationisisvoluntary. voluntary. a special use permit, the trial court must --Registration Registrationisisaccomplished accomplishedwith withease easeand and speed. speed. determine whether the city council’s --The Theprogram programutilizes utilizesexisting existingMML MMLtraining training such suchas asconferences conferencesand online onlinetraining, training, decision wasand supported by substantial as aswell wellas asspecialized specializedcrafted craftedworkshops workshopsto to provide providemeaningful meaningfuland anduseful usefulinformation. information. and competent evidence on the record as a whole. RSMo § 89.110. DeBold incorrectly argued that the standard of review was established by Chapter 536. It is well established that Chapter 536 only applies when another more specific statute does not apply and RSMo § 89.110 is a more specific statute www.mocities.com www.mocities.com that applies to conditional use permits. Deffenbaugh Industries, Inc. v. Potts, 802 S.W.2d 520 (Mo. App. W.D. 1990). This section establishes a deferential standard of review. So long as the decision of the city council is supported

by competent and substantial evidence on the record as a whole, the trial David Davis is an attorney, founding member court is bound by the city council’s of Davis Law, LLC and author of the Missouri determination and cannot substitute its Local Government Employment Law Handbook. He counsels and defends local government and own judgment. businesses in the areas of employment law, Furthermore, trial court’s for the grandfathering is limited to HoW review time, other programs may be recogdo i enroll?commercial litigation, civil rights and general those officials who attended five pursuant tohave Chapter 89 is limited Enrollment is simple. Just com- nized as counting towards the certificaof the last seven Missouri Municipal plete the registration tion program. The League does reserve litigation. Contact him at 314-863-6868 or form on the to the certified record the city League Conferences. Individuals who of accept or reject any nonLeague’s website. There is a $150 en- the right to ddavis@davis-law-llc.com. Follow him on Twitter attended theproceedings. 2013 MML Elected Of- rollment MML training for credit in the program. council Therefore, the fee. trial ficials Training Conference can receive @DavisLawLLC. Currently, the only non-MML training court errthat in counted denyingdoes DeBold’s credits for did thosenot sessions approved for credit in the program are tHe muniCipal governanCe toward the program. To take advan- institute provide Credit for non- some of the seminars conducted by attempts to offer evidence other than tage of either of these options, officials mml programs or seminars? St. Louis County Municipal League’s need check off these options when Training Academy and the NIMS certithetocertified record. The program is intended to utilize completing the online enrollment form.

existing MML training programs. Over

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January 2014 / 35


Tech Talk

HOW TO THINK ABOUT TECHNOLOGY IN THE WORK OF GOVERNMENT The Key To Performance Is Information That Makes Work Accountable, Provides Guidance, Coordinates Over Distance And Seeks Out Innovation by Jerry Mechling

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e may be living in the Information Age, but, ironically, we rarely think carefully about how information might improve how we work. Instead, we tend to think about the technology itself, about how the features and power of what we’re about to buy are arguably better than whatever we’re presently using. This tends to miss the real value of information that gives us feedback to learn how our systems work. When feedback is quick and clear, the learning is easier and we typically get good results. That’s why most of us find it easy to learn to ride a bicycle. But learning to “ride” the work of government is harder because feedback is often slow and obscure. To make better choices about technology and how to use it, and to improve the work of government, we need better judgment about the impacts of information availability and feedback. Government managers would make substantially better choices if reasonably careful assessments were made on four common ways that information is used to improve work.

Making work visible and accountable

We need to learn what we are actually doing and measure its results. For this, digital data collection and analysis are enormously cost-effective. According to recent IBM studies, more than 90 percent of all of the information ever collected and presently available has been gathered in the past two years. In education, for example, it is now possible to get not only aggregate annual measures of school performance, but also daily feedback on the work of individual students and teachers. More information collection and analysis can make other activities similarly visible. Of course, we need good judgment about tradeoffs between work performance and other concerns, 36 / January 2014

such as equity and privacy. But, we should take more advantage of the recently created ability of information to make work visible and accountable.

Making guidance accessible and “ready to hand”

Performance usually improves when we have access to good advice relevant to the challenges we are facing. Mobile smartphones and tablets are making it possible to offer contextsensitive and relevant information to government workers even when they are away from their desks and need to make decisions. Firefighters, for example, can know the layouts and contents of the buildings they must enter in emergencies, and doctors can use video on a tablet to explain medical recommendations to their patients. We should take more advantage of the ability of technology to make information and guidance always accessible.

Making it easier to tap the benefits of distance, specialization and scale

Thousands of years ago, everyone lived in very small groups with very limited divisions of labor. Over time, as transportation and communication improved, we have invented larger and much more complex divisions of labor. Information enables the coordination of the larger, more specialized and more distant communities we have generated – not only allowing singers to reach distant listeners, but teachers to reach distant students, doctors to reach distant patients, and tax collectors to reach taxpayers. We need to take greater advantage of the ability of information to tap the benefits of distance, specialization and scale. For example, we might take more consistent advantage of the ability to s u p port dist ant and dispersed populations with remotely provided medical care, education, human The Missouri Municipal Review

services, environmental monitoring and regulation.

Making it easier to find and adopt innovative ways of working

Only a little over a 100 years ago, we lived roughly half as long as we do today. Increases in life expectancy have been entirely due to knowledge gained about health care and its application to medical practice. So it is in almost everything we see in government and elsewhere. To diffuse new approaches, we have benefited not so much from “in-channel” command-and-control flows of information, but rather from “out-of-channel” and “cross-boundary” voluntary collaboration. Networks have thus boosted government innovation – from fundamental scientific research to the kinds of experimentation and diffusion of innovation that led to the Internet. We should be taking more advantage of information technology’s ability to encourage crowdsourcing and other network-based approaches to innovation. What we need isn’t merely better technology. What we need is better ways of working, and the key for that is in how we use the information better technology can create. This article is from Governing.com, dated June 6, 2013. Written by Jerry Mechling who is a research vice president at Gartner Inc.

www.mocities.com


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January 2014 / 37


Member Accomplishments Certified Municipal Clerk

Congratulations to the City of Riverside’s City Clerk Robin Littrell for earning the prestigious Certified Municipal Clerk designation from the International Institute of Municipal Clerks! To earn this designation, a participant must attend extensive education programs and have pertinent experience in a municipality. Find more information on the program at www.iimc.com.

Cities of Distinction

Three cities were designated as Cities of Distinction by Kansas City's business magazine, Ingram's. Congratulations to the cities of Independence, Belton and Warrensburg! Read more at http:// www.ingramsonline.com/.

MML Calendar of Events January 8 21 22 23 28 29 30

Missouri General Session Convenes Last Day of Candidate Filing 2014 CDBG Application Workshop, Madison, MO 2014 CDBG Application Workshop, Trenton, MO Final Certification to Election Authority 2014 CDBG Application Workshop, Poplar Bluff, MO 2014 CDBG Application Workshop, Springfield, MO

February 7 11-12 25-28

GFOA Winter Seminar, Columbia, MO MML Legislative Conference, Jefferson City, MO Missouri Park and Recreation Assn. Annual Conference, Lake Ozark, MO

April 8

Municipal Election Day

May 21-23

Digital Cities Survey

The City of Independence has been ranked seventh in its population category (75,000 - 124,999) in the 13th annual Digital Cities Survey conducted by the Center for Digital Government and Digital Communities magazine. This is the 11th year Independence has been ranked as one of the most technology-advanced cities in America. The Center for Digital Government says the annual survey recognizes municipalities that successfully incorporate information technology into operations to better serve their constituents and businesses.

APWA Mid-America Conference & Exhibit Show, Overland Park, Kan.

For more events, visit the events calendar at www.mocities.com.

2014 APWA Mid-America Conference & Exhibit Show May 21-13, 2014

Best Performing Small City

The city of Columbia was chosen as the Best Performing Small City by the Milken Institute. The City was credited with high-tech industries like telecommunication that saw employment grow by 60 percent from 2007 to 2012.

Overland Park Convention Center Overland Park, Kansas For more information, visit http://kcmetro.apwa.net/MenuHomepage/144/2014-Mid-America

MIRMA

Missouri Intergovernmental Risk Management Association Phone: 573.817.2554 Web: www.mirma.org

Missouri’s First Municipal Self Insurance Pool

38 / January 2014

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Workers’ Compensation Property General Liability Public Officials Liability Employment Practices Liability Law Enforcement Liability Automobile Boiler & Machinery Airport www.mocities.com


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