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*cg41FOAN CITY COUNCIL STAFF REPORT
DATE: JUNE 18, 2014 UNFINISHED BUSINESS
SUBJECT: APPROVE BUDGET ALLOCATION FOR THE COACHELLA VALLEY
INNOVATION HUB (CViHUB)
FROM: David H. Ready, City Manager
BY: Community & Economic Development
SUMMARY
The Coachella Valley Innovation Hub (CViHub) Program is a regional partnership
between the cities of Palm Springs, Desert Hot Springs and Cathedral City, managed by
the Coachella Valley Economic Partnership (CVEP), and focused on growing and
mentoring start up companies, primarily in the renewable energy and clean/green
technology industries.
Palm Springs has made an allocation for the past three years in the amount of $125,000
per year for the core iHub program, with additional funding of $75,000 in 2012-13 and
$30,000 in 2013-14 to help launch the Accelerator Campus. In addition, the City has
committed $1,000,000 paid over three years for the upgrade of the Accelerator Campus
buildings, which was the successful match for a USEDA grant and a grant from the
Desert Healthcare District.
RECOMMENDATION:
1. Approve Budget allocation for the CViHub Program in the amount of$65,500.
2. Request CVEP to make a budget request of each of the two partner cities in the
same amount.
3. Authorize the City Manager to execute all necessary documents.
STAFF ANALYSIS:
Since 2011, CVEP has operated the Coachella Valley iHub on behalf of the City of Palm
Springs and its two partner cities under an Administrative Agreement. Palm Springs has
provided the majority of the funding for the project; over the past three years the City has
budgeted an amount of $125,000 per year for the core iHub program, and provided
additional funding of $75,000 in 2012-13, and $30,000 in 2013-14 to help launch the
Accelerator Campus. In addition, the City has committed $1,000,000, to be paid over
three years for the upgrade of the City-owned Accelerator Campus buildings, which was
used as a successful match for a US EDA grant and a grant from the Desert Healthcare
District. BEM 4, F
City Council Staff Report
(June 18, 2014)— Page 2
(CViHub Funding)
Over the past three years, the average expenditure by CVEP for the iHub has closely
matched the revenue from the three cities, or about $175,000 per year. For the first two
years, Desert Hot Springs and Cathedral City contributed $25,000 each per year; DHS'
contribution in 2013-14 was reduced by half. With the successful launch of the
Accelerator Campus, however, CVEP anticipates its annual iHub budget for FY 14-15 to
increase to $429,400, which is the iHub and the Accelerator.
Part of how CVEP is able to support a jump in cost is that they have projected an
increase in non-municipal revenues to $232,708, with the addition of $57,708 in lease
revenues from Accelerator Campus companies, another $100,000 operating grant from
Wells Fargo (matching one received last year), and the ability to allocate $75,000 in
project management costs to the Desert Healthcare District grant for the Medical
Campus. This allocation is allowed because the iHub Manager also serves as the project
manager for the renovation of the building.
Nevertheless, without any of the three cities' financial support, the program would have
an operating deficit of$196,732, or approximately $65,500 for each of the three cities.
Staff recommends the City budget $65,500 in this fiscal year for the CViHub, and request
CVEP to return to the other two partner cities for a similar amount. A new Administrative
Agreement with CVEP will return to Council in July.
John Raymond, Director David H. Ready, City Manager
Community & Economic Development
4.F. FISCAL YEAR 2014-15 BUDGET DISCUSSION ON SUNDAY LIBRARY
SERVICE, EXTENDED SWIM CENTER HOURS AND IHUB FUNDING:
RECOMMENDATION: Direct staff as appropriate.
MATERIALS TO FOLLOW
Item No. 4 . F .