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DATE: June 15 2011 UNFINISHED BUSINESS
SUBJECT: APPROVE A MEMORANDUM OF UNDERSTANDING BETWEEN THE
CITY OF PALM SPRINGS AND THE COACHELLA VALLEY ECONOMIC
PARTNERSHIP TO MANAGE THE COACHELLA VALLEY INNOVATION
HUB (CViHUB) AND AN OPERATING BUDGET FOR CViHUB FOR
FISCAL YEAR 2011-2012.
FROM: David H. Ready, City Manager
BY: Community & Economic Development
SUMMARY
On May 18, 2011 the City Council received an update about the status of the iHub
statewide Initiative and a progress report on the work completed for the Coachella Valley
Innovation Hub (CViHub), including development of the program goals, monthly
conference call meetings and quarterly site meetings, the SBA Grant, the development of
the CViHub identify, website, and the program framework. Also discussed were the
organizational structure and the transfer of the program and services to a non-profit
operator. The Memorandum of Understanding between the City of Palm Springs and the
Coachella Valley Economic Partnership defines the parameters in which the iHub
program will be managed and operated and a budget for the first year.
The statewide iHub Initiative is designed to spur economic recovery and growth by
showcasing and supporting California's most promising hubs of innovation. The CViHub
Program is a regional partnership between the Cities of Palm Springs, Desert Hot Springs
and Cathedral City, focused on renewal energy and clean/green technology.
RECOMMENDATION:
1. Approve a Memorandum of Understanding between the City of Palm Springs and
I the Coachella Valley Economic Partnership to manage the Coachella Valley
Innovation Hub (CViHub) and an operating budget for Fiscal Year 2011-12.
2. Authorize the City Manager to execute all necessary documents.
STAFF ANALYSIS:
As stated in the Coachella Valley Innovation Hub (CViHub) application, the City of Palm
Springs is the managing partner for the iHub Program in coordination with the other two
partner cities. The application also called for the program to be turned over to a non-
profit host to manage and operate the iHub Program.
I(tMNO. �"
City Council Staff Report
(June 16, 2011)-- Page 2
(CViHub MOU-CVEP)
In the interim, City of Palm Springs staff has participated in the monthly statewide
conference calls; attended on-site quarterly meetings; and hosted a statewide quarterly
meeting for all iHub designees. Staff has also applied for grant funding to support the
goals of the iHub Program to spur development of startup companies and create jobs.
The City has also engaged a consultant to establish the iHub organizational structure;
develop the iHub identity and collateral materials; and establish roles and fiscal
responsibilities between the iHub Partners and Sponsors.
The Memorandum of Understanding (MOU) defines the responsibilities the Coachella
Valley Economic Partnership (CVEP) shall assume in managing and operating the
CViHub. A budget will also need to be approved in order for CVEP to advance the
program and services for iHub and incubator businesses. Some of the responsibilities
include hiring a full-time CViHub manager, establishing the programs and services at the
3111 E. Tahquitz Canyon facility; maintaining the website; managing the advisory board
and incubator committee; overseeing occupants and leases; providing facility services,
such as telephone, high speed internet access, determine rent structure, and overseeing
shared services — copier, fax, conference rooms, etc.
CVEP will also coordinate seminars and workshops that will help startup businesses grow
from idea to patent to commercialization to launch and job creation. Seminars and
workshops will focus on developing business plans, access to financial assistance,
accounting practices, and special interest topics. Other services include professional
networking introductions and events, mentoring programs, and access to services
providers, such as international trade specialists, E-commerce, and legal services.
The City of Palm Springs has provided the funding to develop the initial phases of the
CViHub Program. In 2010-11 fiscal year, the iHub account was established with a
beginning budget of $118,650. Those funds were used primarily for the Enterprise Zone
Application ($45,000); consultant services ($24,000); travel and training ($1,116), a
portion of the building remodel of 3111 E. Tahquitz Canyon Way ($17,500); and website
development and collateral materials ($3,500). The remaining balance will primarily be
used for exterior building improvements, which was the City's commitment to CVEP when
the lease was initially executed.
In order for CVEP to effectively manage and operate the CViHub a minimum budget of
$175, 000 is needed for the 2011-12 Fiscal Year. CVEP will hire a full time manager to
operate the CViHub and part of their responsibility will be to seek grant and other funding
to support and sustain the iHub program. Additionally, the partner Cities are considering
their financial commitment to the CViHub Program. The City of Desert Hot Springs will
include $25,000 for the iHub Program in the City Manager's proposed budget. The City of
Cathedral City is considering a similar level of funding. The combined funding
commitments will make it possible to not only hire a qualified manager, but also launch
the programs to reach out to existing businesses and cultivate start-up companies to spur
job growth in the three partner city jurisdictions.
City Council Staff Report
(June 16, 2011)-- Page 3
(CViHub MOU-CVEP)
FISCAL IMPACT:
The City appropriated the amount of $125,000 for the Hub Program in the 2010-2011
Fiscal Year (account 117-2022-50050). That amount is available for this agreement in
the 2011-2012 year.
24
.John Rhymorrd, Director Cathy Van rn, Administrator
Community &'Economic Development Community & Economic Development
David H. Ready, City M�r
Attachment: Resolution
Memorandum of Understanding
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS TO APPROVE A MEMORANDUM OF
UNDERSTANDING BETWEEN THE CITY OF PALM SPRINGS
AND THE COACHELLA VALLEY ECONOMIC PARTNERHSIP
TO MANAGE THE COACHELLA VALLEY INNOVATION HUB
(CVIHUB), AND AN OPERATING BUDGET FOR FISCAL YEAR
2011-2012.
WHEREAS, the Western Coachella Valley Cities of Desert Hot Springs,
Cathedral City and Palm Springs have been designated by the State of California
as an Innovation Hub (iHub); and
WHEREAS, the State requires that the iHub be managed by, and
eventually turned over to, a 501 c3 non-profit organization; and
WHEREAS, the Coachella Valley iHub (CViHub) will offer programs and
services to support small business success as well as operate a "clean tech"
incubator; and
WHEREAS, a principal strategy of the Regional Economic Blueprint calls
for creation of a small business support programs, services and incubator; and
WHEREAS, the Coachella Valley Economic Partnership (CVEP)
maintains a 501 c3 designation and is the managing authority for the Regional
Economic Blueprint; and
WHEREAS, the iHub is a pilot program to support clean tech and small
business innovation; and
WHEREAS, the CViHub program and incubator will be co-located with
CVEP in the Regional Business Center at 3111 East Tahquitz Canyon Way; and
WHEREAS, the CViHub will operate under the direction of a nine member
CViHub Board with representatives of the three Western Coachella Valley cities
and six private sector business professionals; and
WHEREAS, the CViHub will be funded through a variety of sources,
including support from the three Western Coachella Valley cities, SBA and other
grants, leases, sponsorships, memberships and program revenue for the first two
years; and
WHEREAS, the partner cities have requested that CVEP assume
operations of the CViHub on their behalf.
4
Resolution No.
Page 2
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY
RESOLVE AS FOLLOWS:
Section 1. That the Memorandum of Understanding, between the
Coachella Valley Economic Partnership and the Cities of Palm Springs, Desert
Hot Springs and Cathedral City, to assume the operation of the CViHub under
the criteria set forth in the State of California's Innovation Hub Initiative, is hereby
approved.
Section 2. The term of the Memorandum of Understanding is for a period
of two years commencing on July 1, 2011 and terminating on June 30, 2013
unless otherwise extended by mutual agreement as specified in the
Memorandum of Understanding.
Section 3. The City Manager or his designee is hereby authorized to
execute all documents relating to the Memorandum of Understanding.
ADOPTED THIS 15T" DAY OF JUNE, 2011
David H. Ready, City Manager
AIIEST:
James Thompson, City Clerk
v
Resolution No.
Page 3
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. is a full, true and correct copy, and was duly adopted at a regular
meeting of the City Council of the City of Palm Springs on ,
by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
t?
CV!Hub - CVEP
DRAFT MOU TERMS/OBLIGATIONS
City of Palm Springs(Western Coachella Valley Cities)
• Provide CViHub facility(as part of existing facility lease)
• Transfer CViHub website
• Provide original graphic design files for CViHub logo and identity design and collateral
• Provide guidance for Initial Advisory Board structure and members
• Provide Draft CViHub guidelines for review and adoption by Advisory Board
• Provide List of required programs and services
• Provide Draft Incubator Agreement
• Provide draft Job description for full time manager
• Continue to provide staff support
• After 2 years of successful operations,transfer of state designation
• Minimum funding of$125,000/yr for 2-years
• Cooperation for grant applications and implementation to support iHub
Coachella Valley Economic Partnership
• Assume responsibility for further development and operations of CViHub program and services
• Hire/maintain dedicated,full-time manager to direct and oversee operations,work with clients
• Oversee/maintain website,calendar, blog, social network accounts
• Monthly reporting against metrics(see Attachment A)
• Responsibility for coordination of advisory board,monthly meetings and all records as needed
(See attachment B)
• Formation of a selection committee for incubator
• Oversee selection criteria,application process, incubator leases/occupants(See attachment C)
• Deliver CViHub program and services including at least:
Facility Based Services
1. Space
a. Telephone
b. LAN
c. High Speed Internet Access
d. Space for individual servers
e. Shared Conference Room
f. Address
g. Restrooms
h. Janitorial
2. Rent—determined by Board
a. Free
b. Below market rate
3. Shared Office Systems
a. Copies(at cost)
b. Fax
c. Postage meter(at cost)
d. Receptionist/switchboard
e. Usage/user charge
Business Basics
1. Seminars&Workshops
a. Business plans
b. Financial management and accounting support
c. Financing assistance
d. HR support
e. Hot Topics—Special Interest
f. Commercialization/Licensing
2. One on One Meetings/Support
3. Mentoring
Professional Services Providers
1. Accounting& Financial Professionals
2. Regulatory Compliance
3. E-commerce
4. Federal procurement
5. Manufacturing Assistance
6. Legal Services
7. International Trade
Networking
1. Events
2. Introductions
3. Virtual
Education Seminars and Training
1. SBDC(Small Business Development Center)
2. SBA(Small Business Association)
3. SCORE (Counselors to America's Small Businesses)
4. WDC(Women Business Development Center)
5. CIEDEC(CA Inland Empire District Export Council)
Attachment A
CV-Nub Draft Performance Metrics
Reported Quarterly to the Host Cities
• Companies providing outreach services
• Companies receiving outreach services
• Number of companies in residence
• Number of graduating companies
• Number of employees hired by iHub companies(jobs created)
• Number of employees hired by iHub graduate companies(jobs created)
• Revenues/sales form iHub start-up companies
• Number of interns/students trained
• Number of sponsors, corporate partners, members or contracts signed
• Number of patent disclosures/applications by Nub companies
• Funding sources and amounts leveraged or invested in iHub companies
9
Attachment B
CViHub Advisory Board
The Coachella Valley iHub organizational goal is to stimulate the establishment and growth of innovative
clean industries,contribute to job creation and support economic growth in the Western Coachella
Valley.The iHub will host an Incubator and offer programs and services to new and emerging businesses
in clean technologies.
The Incubator will include facility space,flexible leases,shared use of common office reception and
equipment, business assistance, mentoring and other technical resources. A network of existing
resources in the community will be developed to support client needs.
The initial Advisory Board will be comprised of 9 total members. Along with three appointed
representatives from the public agency founders(one elected member from each city),the CV iHub
Board will consist of six representatives from the private sector(with at least one business
representative from each of the three cities)with mixed entrepreneurial and technology experience
relevant to the targeted industry sectors,representatives of area higher education institutions and
critical public sector economic development groups.The CViHub operator should seek and maintain a
diverse board of directors representing different races,ethnicities, backgrounds and financial status
representing diversity of experience as well. Background that includes start up experience and
entrepreneurial drive and spirit should also be represented.Ties to the community will also be critically
important to help establish credibility and gain recognition for the organization.
A Sub-Committee of the Board will be appointed to work with staff to review and select qualified
candidates for the incubator.
The Board will establish policy guidelines for incubator operations and assist in screening prospective
incubator clients.The Board will also be instrumental in promoting the iHub initiative and generating
awareness and understanding of the incubator as an important economic development tool for the
Western Coachella Valley.
Examples of the type of business executives and experience needed for Board of Directors include:
1. Wind Power 11. Business Leaders
2. Solar Energy 12. Political Official
3. Green Building Industry 13. Legal
4. Bio-Fuels/Bio-Materials 14. Venture Capital
5. Water Filtration/Purification 15. Wealth Management
6. Healthcare-Medical Devices 16. Marketing and Brand Management
7. Clean Technologies 17. Journalism/Media
8. Academic Research 18. Foundation
9. Utility Company 19. Entrepreneur
10. Banking 20. Start Up Experience
Attachment C
CV iHub Incubator Client Selection
Application Process
1. Complete Application
2. Present to Selection Committee Panel—Board,Advisors,Staff
3. Accept or Decline and Refer
Evaluation Criteria
1. Targeted industry sectors—innovative, clean technology
2. Early stage of development(typically within first two years, but small companies involved with
significant change in direction or launch of new product may also apply)
3. Potential to commercialize or launch within 3 years
4. Show ability to pay rent while cash flow is developed
5. Applicant must want to take advantage of and benefit from value added services and guidance
available
6. Capacity for growth and provision for job creation and economic benefit
7. Not in competition with other incubator clients(or no conflict)
Graduation Policies
1. Time Limits-3 to 5 years
2. Value—clients who have progressed beyond benefit of services
3. Resource Commitments—clients who require excessive commitment of resources