Big Sky Economic Development Authority- December 2002 Issue

Big Sky Economic Development AuthorityBuilding Businesses and Creating Jobs in the Greater Billings Area

Welcome to this month’s edition of the Big Sky EDA Newsletter. In this edition, we highlight our “Ticket to Tomorrow” legislative programs, introduce our newest Member Investor, talk about the latest Business Expansion and Retention news, and bring you news from our departments. Plus, we’ll feature an article on “Brain Drain” and what can be done to prevent it.

News from the Director – Our “Ticket to Tomorrow” Montana’s Economic Development Stimulus Package

Computers Unlimited Contributes $15K to Big Sky EDA

Greater Yellowstone Business and Education Council (GYBEC)

Big Sky EDA Retention Program Works to Actively Help
Existing Businesses

McClure Featured in Manufacturing Magazine

Department Highlights

Joseph P. McClure
Executive Director

News from the Director

Our “Ticket to Tomorrow”

Montana’s Economic Development Stimulus Package

In order to strengthen the future in our state, the Montana Legislature needs to take a look at some of the concerns that create a blockage in economic development. This economic development package could include the following vehicles to encourage private sectors investment in jobs, in plant and equipment, in training and workforce development, and other economic development initiatives:

1. Develop the Montana Economic Development Fund (similar to the Treasure State Endowment Program [TSEP]) by earmarking a portion of the money flowing into the Coal Tax Trust Fund, so that the interest income from the Fund is permanently devoted to economic development. This is consistent with the goals and purposes of the Coal Tax Trust Fund as adopted by the people in 1979, in I-95.

2. (a) Utilize the interest from the Unemployment Insurance Fund to jumpstart the creation of a statewide workforce training fund. The initial UI funding would be paid back by capturing a portion of the state income tax withholding from new jobs created as a result of this training program.

(b) In addition, once the fund is jumpstarted, it would be maintained by setting aside a portion of the withholding tax paid by newly created “base industry sector” jobs for a specific period of time (i.e., the first 5-10 years the job is in existence). The funds would be used for future economic development to increase job growth even further. As new jobs are created, the fund grows. It is the kind of program that attracts conservative and liberal support; the funding is directly dependent upon successful new job recruitment/company expansion.

3. Create a corporate tax credit for companies that invest in and/or contribute to sanctioned economic development agencies. To be a “sanctioned” ED agency, one might have to be a Port Authority. This would ENCOURAGE private sector investment in economic development and lessen the burden on the public sector for the funding of these initiatives.

4. Utilize the Universal Benefit Surcharge (UBS) found on utility bills. These dollars currently flow back to the utility companies to assist with energy efficiency issues. Small business owners (mostly manufacturers) could tap into this fund to upgrade their equipment to be more energy efficient and at the same time become more competitive by utilizing new technology. Further legislative authorization may not be necessary; it may only require an education program among small business owners.

5. Lower the state personal income tax by reducing or eliminating the federal deductibility in a revenue neutral proposal.

6. Adopt the federal capital gains tax rates for Montana.

7. Update the current threshold earnings amount (currently $1,000) and otherwise amending to a realistic level the threshold requirements for reporting and paying Montana income tax by a non-resident.

Working together, we can improve the economic development of Montana for today, and for the future. The time is now to enact changes that will let the nation know that Montana is “open for business.”

McClure Featured in Manufacturing Magazine

Manufacturing Today, a national economic development and manufacturing magazine, in its last issue focused on the evolution of economic development in a lengthy feature article. The article writer interviewed Executive Director McClure at great length and quoted him extensively throughout feature, leading off and referring back to his past and present experiences in economic development.

The interesting and informative article explains how the team process of site selection has become the norm applied when companies look into areas for potential expansion.

To read the article, click here.

http://www.manufacturing-today.com/0209/SeptOct_06.htm

Computers Unlimited Contributes $15K to Big Sky EDA

Big Sky EDA recently announced that Computers Unlimited http://www.cu.net/ has become the latest business to sign on as a private industry Member Investor in the agency’s expanded economic development efforts. Launched via a campaign in July, Big Sky EDA’s turn to private industry (as Member Investors) for financial support was implemented to raise $500,000 in matching funds that Big Sky EDA currently receives from Yellowstone County.

“Computers Unlimited is a perfect example of a company that truly is committed to working within our community to provide a solid economic base. With nearly 150 local professional employees working at their downtown corporate offices, the company — especially its President and CEO Dr. Michael Schaer, has contributed much to the city of Billings.” said Big Sky EDA Executive Director Joe McClure. “We are ecstatic to have them on board as a Member Investor.”

Computers Unlimited joins the Billings Gazette, Wells Fargo Bank, US Bank and Sysco Foods, all private industry Member Investors who have also supported the agency’s mission by contributing financially to Big Sky EDA’s fundraising campaign. According to McClure, Computers Unlimited has signed on to pledge $5,000 a year for the next three years.

“We’re here to build businesses and create jobs. With financial support from the private business sector, we’ll be able to do even more to help diversify, expand, and improve the economy of Yellowstone County the entire Billings region,” said McClure. “With these Member Investor funds, we’re already expanding on our existing services. It’s because of the support of companies like Computers Unlimited that we can expand our mission.”

Greater Yellowstone Business and Education Council (GYBEC)

While a well educated workforce is a key factor in economic development, another important factor is taking steps to avoid a shortage of trained workers as Baby Boomers begin to retire in mass from the workforce. These important issues must be addressed in order to provide a stable, consistent economy.

In that vein, the Greater Yellowstone Business and Education Council (GYBEC) was created with personnel from various agencies, including Big Sky EDA. The mission of the council is to serve as a vehicle for communication between the government/business community (employers) and the education community. The involvement includes the identification of labor needs, sharing of ideas about workforce development and job training and recommending or instigating program development within the schools, and between business and education groups. The council also provides information about concerns and issues, which influence the health, development and well being of the business community.

The council was launched in May by Celebrate Billings at a meeting that attracted more than 120 business and industry leaders from the Billings area. Michael Gulledge, publisher of the Billings Gazette, was appointed chairman, with Joseph McClure, executive director of Big Sky EDA, David Irion, executive director of St. Vincent Healthcare Foundation, John Cech, dean of the MSU-Billings College of Technology, Rae Olson, marketing director of PPL-Montana, Bruce Whittenberg, community leadership consultant, and Sharon Peterson, state director for Senator Max Baucus, serving on the steering committee.

The committee identified several education issues facing Billings. Among those issues is a lack of two-year and certificate workforce-training opportunities in the greater Billings area for healthcare, business and industry. Another issue is the critical need for the Billings community to be able to quickly respond to training needs of existing businesses and potential new businesses. Eighty-six percent of higher education students in Billings are enrolled in four-year degree programs, and worker shortages in the Billings area are expected to increase, particularly in the trades, service industries, health care technologies and computer technology industry. The council hopes to bring business and industry and secondary and post-secondary institutions together to develop appropriate programs to address these shortages.

At a meeting on November 12, the council identified six area industries that are most in need of more help from the post-secondary education system. Helping them in this important process was Dr. Leo Presley, a leadership training and organizational management specialist. Those six industries are: 1) agriculture; 2) health care; 3) energy and natural resource extraction; 4) government nonprofit and education; 5) financial services; 6) the service sector, including tourism. After participants identified these industries, they also then named the top three challenges each of these industries face in getting the best educational value.

As specialist Presley stressed, “We must build the stakeholder’s alliance and engage influence brokers. It’s time to sell the vision, empower the constituency and integrate into the culture.”

Big Sky EDA Retention Program Works to Actively Help
Existing Businesses

After the initial success of its pilot Business Expansion and Retention (BEAR) program, Big Sky EDA has announced it will expand the program geared at helping existing local businesses to become stronger and grow. The agency is now positioned to take the BEAR program to a new, more powerful level with the help of a very dynamic collaborative BEAR team comprised of individuals from the Billings Chamber of Commerce, Montana State University – Billings, MSU-Bozeman Extension Office, the Montana Department of Commerce, Montana Job Service, and Rocky Mountain College, along with a host of volunteers.

The BEAR program, launched nearly a year ago, is spearheaded by Big Sky EDA’s Business Outreach and Recruitment Director Linda Beck. According to Beck, the program is designed towards retaining local businesses that are at certain growing stages of business. It also serves as a resource for businesses that have problems or growth barriers, or that may be in danger of reducing their job force or shutting their doors.

Here’s how the program works: volunteers from the BEAR team interview local businesses (selected according to predetermined criteria such as size, number of employees, revenues, etc.) to find what needs must be met for growth and/or what sorts of barriers to growth or concerns need to be remedied. These results are then taken to the BEAR Task Force, who determines what resources the business may need and can utilize for solutions.

The pilot program began last December, with members of the BEAR team visiting 16 businesses and recommending resources to 14. Six additional companies have been visited by BEAR representatives in an effort to assist them with their growth and expansion activities. “In evaluating the efforts of this team to date, we have concluded that the process was very successful, and we have seen some very good results from the team’s efforts,” said Big Sky EDA Executive Director Joe McClure.

As a part of this momentous movement to enhance economic development via existing business owners, Big Sky EDA has invested $10,000 on the purchase of a new ExecutivePulse™ database system. This system, created by Pennsylvania-based Business Retention Technologies (BRT), provides members of the BEAR program team with an extranet database that will allow them to keep accurate records, analyze cumulative data, assess company risk and diagnose the overall health of existing local companies in Yellowstone County. Team members can go on-line on the Internet at any time, from any computer, and add company information and details in the Big Sky EDA database.

“With the phenomenal success of BEAR’s pilot program, it’s clear we must take this valuable retention program to the next level,” said McClure. “This software will make the job of the BEAR team easier, as well as provide useful, solid economic data.”

During the second week of November, Laith Wardi and Del Birch of BRT gave a presentation to the BEAR team and others in Billings, addressing in depth the topic of business retention and its crucial role in economic development. “These two professionals boast a combined 30 years in business retention programs,” said McClure. “They work with cities like Washington D.C., Buffalo, N.Y, and Erie, Penn., and have helped bring business expansion and retention to the forefront of economic development.”

McClure verified a fact that the duo emphasized in a key point during their presentation: “Good retention leads to good attraction,” he said. “Most job creation happens through retention. As a matter of fact, up to 80% of new jobs come through existing firms.”

According to McClure, business expansion and retention is now a top priority of Big Sky EDA. “Since the basis of creating jobs lies in retaining local businesses, we are really making retention our main focus. This is not to say we will not actively recruit outside businesses to Billings. However, we must first take care of the businesses that are already here, because if we can’t take care of them, we also could not take care of businesses that move into our community.”

During their presentation, BRT’s Wardi and Birch also said that a good retention program supports local recruitment efforts, a point that McClure whole-heartedly believes in. “CEOs from out-of-town companies often turn to local CEOs about the business climate of an area they are looking to move into,” he said. “If they hear that a community doesn’t take care of its own, out-of-town CEOs become very wary of moving in.”

Another strong point made during the BRT presentation was that business retention creates a business community more ready to compete on a global scale. “Business retention helps create world-class competitors, and in general makes a community more competitive,” said McClure. “In addition, our program provides local businesses with a BEAR team that is their business advocate and point of contact for all economic development and business-related sources.”

McClure added that the BEAR program could not have been possible without the help of all the entities and people involved. “I cannot tell enough of the level dedication and professionalism this group exudes. They are willing to help with whatever they can, whenever they can. We are very happy to have such outstanding team support and resources for local businesses.”

Department Highlights

Procurement and Technical Assistance Center
Serving All of Montana

Update on Homeland Security and Procurement

Maureen Jewell, CCAS
PTAC Director
By Maureen Jewell, CCAS
PTAC Director

On Dec. 10, Big Sky EDA’s MT PTAC hosted a teleconference on Homeland Security (HLS) — Challenges & Opportunities. Three top-rated speakers addressed the topics of: liability and legal issues to address the risks of contractors who will be doing business with the new Department of Homeland Security ; the structure and timelines for the new department; types of procurements; and the regulations or/and methods that will be used. In addition to walking through the HLS Act, we learned what organizational entities will be evolved and what their roles will be in HLS. The speakers also supplied contact names for the various departments.

If you or your business is considering developing or offering products or services to the new Department of Homeland Security, contact the MT PTAC for more detailed information and assistance.

The entire presentation is available for use in audio format at Big Sky EDA’s Business Information Center (BIC), located on the first floor of Granite Tower (222 N. 32nd St.). A list of the top 10 action items for homeland security contractors is also available.

Community and Workforce Development

BIG SKY EDA AND HEAD START TEAM WINS $500,000 EXPANSION GRANT: 20 NEW JOBS CREATED

Patty Nordlund
Community and Workforce Development Manager

A $500,000 grant from the U.S. Department of Health and Human Services, Administration for Children, Youth and Families was awarded to allow Billings Head Start to expand into two outlying counties. Big Sky EDA’s Community Development department collaborated with Billings Head Start to apply for and secure this grant that will allow the Billings office to set up satellite programs in Big Horn and Carbon counties. The Billings Head Start Program will set up and supervise the office, and hire employees from within the communities to be served.

The process began two years ago when groups from Red Lodge and Joliet approached Billings Head Start with a request that they expand the program into those communities. “At the time, there was no money for it,” said Head Start Executive Director Judy Bryngelson. “However, we worked with the communities to identify their needs and the resources they had available, so that when grant money became available, we could ask for it.”

Bryngelson added that Hardin came forward and approached her group at a later date. “The need in Hardin for this program was just as great as for the other communities, so we agreed to help them as well,” she added.

According to Big Sky EDA’s Community and Workforce Development Manager Patty Nordlund, her agency actually became involved in the Head Start program four years ago. “We had someone at Big Sky EDA who was on a board committee for Head Start. When that person retired, I took over that position and began working with them, helping them establish a fundraising program.”

This marked the first time Head Start worked with Big Sky EDA on putting together a grant, Bryngelson added. “They are a wonderful resource for our community,” she said. “ People don’t tend to think of non-profit organizations as a business, but we really are a very important sector of the community. With this expansion, we’ll be able to develop 20 new jobs, and will also be able to help 55 additional families. This really is about economic development.”

Nordlund agrees with that assessment. “Not only does this expansion grant provide jobs, the Head Start program works with families to improve parenting skills and develop children’s potential. They will have a better chance of becoming successful taxpayers and future business leaders,” she said.

The communities that the programs are expanding into have been very involved in the process. “We’ve worked with the communities to determine their needs and individual cultures. Big Sky EDA did a terrific job on gathering data and economic descriptors and demographics. With all this input, we were able to put together specific programs that fit the need of each community,” Bryngelson added.

In Red Lodge, the program will be a full-day, full-year operation run out of the local hospital. In Joliet, the program will be a part-day preschool program that will be located in that communities’ brand new community center. Hardin’s program will offer two preschool classrooms, and will be integrated with that school system’s special needs programs, so that all children in need of Head Start services will be together. “It’s a great model of inclusion,” Brygelson added.

The entire range of Head Start services, including literacy programs, medical and dental services, food programs, programs for parents and special needs services, will be offered in the expansion programs.
Nordlund added that other agencies wanting to win grants could call Big Sky EDA at 256-6871 or visit http://www.bigskyeda.org.

Combating “Brain Drain” in Rural Communities

By Joe McClure
Executive Director
Big Sky EDA

One problem facing many rural communities and regions across the United States is “Brain Drain.” The name sounds funny, but the problem is not; it is the loss of young people who choose to leave the community and start their careers in major metro areas. This is very typical in states such as Montana, where college graduates may not see the opportunities which lie within their home state, or even within their own communities.

It is vitally important that businesses and government work together to keep talented young minds within the state and plug the drain. One of the most innovative ways to combat the problem of brain drain was created in the state of Pennsylvania. Between just 1995 and 1997, that state had a net out-migration of 20,000 college students. The significance and impact of losing young people on that state’s long-term economic prosperity and quality of life was not lost on former Governor Tom Ridge and Pennsylvania State Department of Community and Economic Development Secretary Sam McCullough. That department took the initiative and explored reasons why college graduates were leaving in such high numbers.

McCullough visited with hundreds of students at more than 20 of the state’s colleges and universities. During these visits, two constant themes surfaced. First, students, even those born and raised in Pennsylvania, didn’t know much about the opportunities within that state. Second, students were not aware of job opportunities within the state’s traditional and New Economy sectors.

These two points are the tenets of various programming under the Stay Invent the Future Initiative. The program’s goal, which is to retain and attract young people to the Commonwealth of Pennsylvania, is being aggressively backed by the state and Team Pennsylvania Foundation with significant financial resources — a total of $12 million over fiscal years 2001-02 and 2002-03.

In its first year, the initiative has created partnerships with over 800 organizations, and its success rests with the local, regional and statewide partners and leaders who have aggressively acted to design, develop and implement youth retention and attraction strategies and projects.

Can Montana follow the Pennsylvania example? Yes. While $12 million might seem out of reach for our state, we can still encourage partnerships to keep our young talent in Montana. Local private businesses and public entities, such as Big Sky EDA, can work together for creative solutions to our own “Brain Drain” problem. Working with businesses, we can find out about the multitude of opportunities that exist in Montana for our young people.

Our first step should be the same as Pennsylvania’s: find out the reasons for the exodus. Do our young people feel there are no opportunities outside the traditional Montana marketplace? Do they feel powerless to create new opportunities? Do they feel that Montana is behind the times in creating a “New Economy” sector? These are questions that must be answered by the only people who can answer them: our young.

One of the end results of the Pennsylvania initiative was a marketing campaign that utilized the “Fairy Job Mother.” In a series of inventive, offbeat, ads, a lumpy man in a pink tutu takes students who are about to leave Pennsylvania on a tour of the state. Caught in the grip of the friendly, yet determined, Fairy Job Mother, the students learn of the state’s extensive, high-tech industries, its lifestyles ranging from world-class cities to vibrant small college towns, and its abundant recreational opportunities.

While the approach is unconventional, it is a good example of how to use the media to get a point across. In a state like Montana, with such wide open areas, the media can be a powerful tool to reach a mass, spread out, audience.

Our young people are the most important resource of Montana. To lose them would be as damaging as losing any other natural resource. The time for creating a plan to retain them — and bring back the ones who have already left — is now.

http://www.bigskyeda.org/Newsletter/Director/

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