RTC # 02-347

Previous Council Item	Next Council Item	Corresponding Agenda
List of Council Meetings	List of Reports to Council	Sunnyvale Home Page

RTC # 02-347 August 27, 2002

SUBJECT:

Award of Contract for the Implementation of an Economic Development Strategic Marketing Plan (F0208-17)(RTC#02-347)

REPORT IN BRIEF

To ensure a continued positive business climate in Sunnyvale, the Economic Development Division is proposing a strategic marketing program. A series of surveys and focus group sessions were conducted to assess the current business climate in the city, to identify services that are important to the business community, and to identify quality of life issues related to the business community and relevant to the broader Sunnyvale community. Based on the findings from these focus groups and surveys, staff requests the award of a contract to SK Consulting of San Jose for the implementation of this strategic marketing plan. The cost of the proposed marketing plan, including consulting services, printing, advertising and miscellaneous expenses, will not exceed $150,000. The cost of the program will be paid from the current Economic Prosperity budget.

BACKGROUND

Over the past several months, the Economic Development Division has been conducting a series of surveys and focus group sessions, and reviewing other related City documents to assess the current business climate in the city. During this process, staff also identified services that are important to the business community, as well as quality of life issues important to the business community and Sunnyvale residents. A broad range of participants were involved in this process, including the Chamber of Commerce, small and large businesses, hotels, retail businesses, high tech businesses and City staff. Based on the information from these groups, staff determined that the four key areas in the current strategic plan continue to be valid strategies for the program. These include:

The City should look at efforts that promote and nurture economic diversity, and build on its positive business climate.
The City should communicate the benefits of doing business in Sunnyvale and the importance of businesses to the community.
The City, in partnership with businesses, should be active in regional and local activities so that decisions and programs have added value to the community.
The City should create measurable, local programs that increase the long-term viability of business. Programs should not promise actions so broad they are not achievable.

Within these key areas, it was determined that although the City of Sunnyvale enjoys a positive overall business climate, the City could increase the benefits of doing business in the city by fostering relationships between the City, the business community and residents. Also, customer service-related interactions between the City and businesses, business-to-business relationships and resident-to-business relationships should be examined as part of a continuous improvement program.

Some of the key findings and comments from businesses for each of the four strategies are:

The City should look at efforts that promote and nurture economic diversity, and build on its positive business climate.

The community is comprised of diverse cultural and ethnic businesses and residents. More data is needed on the make-up of businesses by type, size, location and other factors.
A strong sense of community is important to businesses as well as to residents.
Businesses in the downtown want to feel they fit into the City’s "grand design" when downtown redevelops; and businesses outside the downtown want to be recognized as important to the community.
Consistency is important to businesses.

The City should communicate the benefits of doing business in Sunnyvale and the importance of businesses to the community.

Businesses want to be better informed about City services and doing business in the City.
Outcome is a direct reflection of the process. Businesses relate their satisfaction to the outcome of their project, but process and knowledgeable staff play a pivotal role in having a positive outcome.
The City needs to show a balance between serving the business community and serving the residents of Sunnyvale. Businesses contribute 70% of revenues to general fund.
There is a need to improve awareness of services and support organizations (small business assistance, marketing, etc.) to assist in the growth of businesses.

The City, in partnership with businesses, should be active in regional and local activities so that decisions and programs have added value to the community.

The most important issues facing Sunnyvale are traffic congestion, over-development, development of downtown, and maintaining property values/economic growth.
Businesses want a greater voice in City government.

The City should create measurable, local programs that increase the long-term viability of business. Programs should not promise actions so broad they are not achievable.

The opportunity exists to create organizations or associations of business groups to facilitate and/or improve continuous communication with businesses.
Businesses feel that the City should invest more in the business community. This may include campaigns, advertising citywide (Shop Sunnyvale), dedicated liaison with industry groups, assisting with marketing, and targeted attraction (e.g., bringing more retail to downtown).
Key issues for businesses include signs (visibility), parking and expediting approval processes.

EXISTING POLICY

The following are the policies that support the proposed marketing plan:

Economic Development Outcome: Foster a prosperous community, a vibrant business environment, a diversified and broad tax base, and a downtown with vitality, by:

Communicating the benefits of doing business in Sunnyvale and the importance of businesses to the community,
Incorporating regional perspectives into local strategies so that decisions and programs add value to the business community,
Strategically retaining and attracting targeted business clusters to achieve economic diversity.

Socio-Economic Sub-element

Goal 5.1B Maintain and establish policies that promote a strong economy which provides economic opportunities for all Sunnyvale residents within existing environmental, social, fiscal and land use constraints.

Policy 5.1B.2 Participate in partnerships with local industry/businesses in order to facilitate communication and address mutual concerns.

Policy 5.1B.3 Monitor the effect of City policies on business development and consider the effects on the overall health of business within the City.

Goal 5.1C Endeavor to maintain a balanced economic base that can resist downturns of any one economic sector.

Policy 5.1C.3 Maintain an attractive business community.

Policy 5.1C.4 Promote business opportunities and business retention in Sunnyvale.

Policy 5.1C.6 Consider development of a strong business retention program.

DISCUSSION

To ensure a continued positive business climate in Sunnyvale, staff is recommending a multi-focused marketing, communication, and outreach program. The proposed program will build on the City’s reputation as a good place to do business and respond to concerns that have resulted from the economic downturn. The concerns that emerged include the importance of "sense of place" to businesses for employee retention as well as encouraging residents to "Shop Sunnyvale" and support local businesses. The targeted audiences for the marketing program are the businesses, residents and City staff.

Sunnyvale Business Community

The key message to the Sunnyvale business community will be that the City supports business and recognizes the contributions business makes to the quality of life in Sunnyvale. The Community Development Department and Economic Development Division are dedicated to business advocacy, serving as the business-to-City liaison.

During the "peak" in the economy, business development moved at a very fast pace. High-tech companies had fewer choices on where to locate. Many retail and hospitality businesses were extremely busy. Since the downturn in the economy, businesses have more choices, and with declining revenues, there are increased concerns about various requirements for doing business in the City. While this is not unique to Sunnyvale, this marketing program will allow us to conduct a proactive outreach program to businesses in response to these and other issues.

Improved communication tools will be developed through email and other mechanisms. Tools, such as a "business kit" to better describe how to do business in Sunnyvale is also recommended.

Sunnyvale Residents

The key message to the residents will be that spending money at Sunnyvale businesses provides funds to operate the City’s essential services, making possible a high quality of life in the community. The marketing program will also highlight business support to the community through volunteerism and other public service involvement.

In the June 2000 and December 2001 External Customer Satisfaction Survey, the City asked residents, "Should the City continue to use local tax dollars to pay for activities that promote business and industrial development in the city?" The "yes" response was thirty-one percent and thirty-seven percent respectively. In the June 2002 External Customer Satisfaction Survey the question was rephrased to ask, "About seventy percent of the City’s general fund budget comes from businesses in the City. Should the City continue to support commercial and industrial development in the city?" The "yes" response was seventy-six percent, which suggests that residents are more supportive of businesses if they are informed and understand about their contributions to the city.

At this past year’s Leadership Sunnyvale program, a presentation was made regarding the revenues from the business community to the City’s general fund. It became apparent that if residents and other business people knew that dollars spent in Sunnyvale would result in revenues to the City to support essential services, they would make a more concerted effort to support local businesses.

Possible products include regular articles in City and community publications and other media, and advertising to increase awareness of the importance of business to the community’s overall quality of life. Advertising would be placed to revitalize and update the "Shop Sunnyvale" campaign and to raise the level of awareness of business contributions to the community.

City Staff

The key message to City staff will be that business values the assistance and support they receive from staff and the revenues that are received from businesses support the services and programs offered by the City.

Sunnyvale has a long-standing reputation for providing customer service. Services such as those provided at the one-stop counter and e-permits give Sunnyvale a competitive edge. It is important to look for ways Sunnyvale can continue to be on the leading edge in this and other service areas. The proposed program is intended to build on the City’s continuous improvement process and identify ways to continue and improve the services that are behind this reputation. SK Consulting would assist with an assessment and training program designed to enhance the level of customer service provided to businesses.

Proposed Marketing Program

One of the recommended strategies is to work with existing business groups or develop formal or informal groups if necessary. This is based on the premise that working with business groups will improve communication by increasing the number of businesses who are in the communications loop. For example, staff is already working with the Chamber of Commerce, the Moffett Park Business and Transportation Association, and the Sunnyvale Downtown Association. To improve communication with businesses on El Camino Real, staff may organize groups by type of business (auto dealers, retailers, property owners, etc.) or by location (shopping centers, specific blocks, adjacent to residential neighborhoods, etc.). Generally, groups could be organized according to interest in specific issues. Staff will look for opportunities to facilitate communication between these business groups and the City.

The current routine and non-routine work items for the Economic Prosperity program are all compatible with or fall under the umbrella of the proposed strategic marketing program. Some examples of the major work items for the year include outreach to downtown businesses, create a retention plan for businesses on El Camino Real, developing business and residential partnerships, and creating an economic development database with information about businesses that will help match City services with business needs. A satisfaction survey will be created to measure the success of the program. The effectiveness of these recommendations will be evaluated throughout the implementation of this program so that adjustments can be made as necessary.

The proposed program is intended as a complimentary effort to other outreach programs in the community. Groups such as the Moffett Park Business and Transportation Association; the Chamber of Commerce STAR (Sharing Tips and Referrals) Groups, Economic Development Committee, and Board of Directors; and the Sunnyvale Downtown Association have actively contributed to the findings of the surveys and focus groups. Discussions will continue with these groups so that their programs and the City’s marketing program will compliment each other and avoid unnecessary duplication of programs.

Requested Consultant Agreement

Staff requests that Council award a one-year contract in an amount not to exceed $75,000 to SK Consulting of San Jose for the implementation of the Economic Development Strategic Marketing Plan described in this report. A detailed list of services to be performed under the request contract is provided in Exhibit "B" of the attached Consultant Services Agreement. SK Consulting has already assisted City staff in the development of the proposed plan by completing a marketing assessment and providing marketing recommendations. The cost of these services were less than $50,000 and, therefore, did not require Council award of contract.

Section 2.08.070(b) of the Sunnyvale Municipal Code exempts professional and specialized services from the competitive bidding process.

FISCAL IMPACT

Total cost for the one-year contract will not exceed $75,000. Funds have been budgeted in Department of Community Development Operation Account #244360. The contract will be part of the ongoing Economic Prosperity work program. No additional funds are requested for the consultant's services. Through business retention and growth, the City revenues will stabilize or increase. Promoting "Shop Sunnyvale" will also have a positive impact on sales tax revenues to the City.

PUBLIC CONTACT

Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, publication of the Council agenda in the San Jose Mercury News, and the availability of the report in the Library and the City Clerk’s Office.

ALTERNATIVES

Approve the requested contract with SK Consulting in an amount not to exceed $75,000 and in substantially the same form as the attached draft.

Do not approve the requested contract with SK Consulting.

RECOMMENDATION

Staff recommends Alternative #1.

Prepared by:

Karen L. Davis
Economic Development Manager

Reviewed by:

Robert Paternoster
Director, Community Development

Reviewed by:

Mary Bradley
Director, Finance

Approved by:

Robert S. LaSala
City Manager

Attachments

Proposed Consultant Services Agreement

Previous Council Item	Next Council Item	Corresponding Agenda
List of Council Meetings	List of Reports to Council	Sunnyvale Home Page