For 12 years I worked as a supervisor at different levels for a national retail chain. During this time it was drilled into our heads that the No. 1 resource for our company was the people we had working for us.
One of the highest priorities of supervisors was employee retention. Employees to a company are no different than small business is to our city. They are our production. Their efficiency, productivity, economic stability, customer service levels, etc. are all essential to their own success, which in turn provides substantial benefits to the city via sales tax revenues and jobs, which produce a trickle-down economic effect.
As mayor, I would introduce a small business support plan and base it on the years of working with employee retention plan processes. The correlations are startling.
First, we must think of our businesses as the most important economic resource we have in Maricopa. Second, we must develop a pattern of dealing with our small businesses so the environment they operate in is beneficial, supportive, and rewarding. My plan for achieving these goals is as follows:
Creating the office of Small Business Ombudsman.
A key element to any retention plan is the belief that somebody actually cares. Currently, there isn’t a specific person at city hall to call if you are a small business owner. Owners and managers need a point of contact to find a multitude of answers.
Generally a business owner or manager is sent to each department to answer a specific need. Instead of the chase, the city should have someone who will do some of the legwork. This person would be well versed in the small business process and needs of the business owners and managers. They would be able to act as intermediary when difficult issues arise, such as code compliance. They would be able to consolidate information and help the small business owner do what they do best – spend time operating their business, not chasing down people at city hall.
Creation of Small Business Roundtables
Having someone give their opinion and being able to speak frankly about problems within any structure is essential to understanding where both successes and failures exist.
The small business roundtables would be specific to industry types so the city could become familiar on a much more finite level.
Restaurant owners, insurance agents, real estate agents, soft goods retailers, grocers, etc. could all benefit from shared learning, experiences, and express their individual needs to the city. Our Economic Development department would host these roundtables and they would include key stakeholders such as representatives from MEDA and the city council.
Creation of a Small Business Incentive Plan
Incentives can be highly effective in retaining top talent. The same is true of businesses. If businesses add economic base and jobs, the logical result is an increase in tax revenues and economic productivity in our city. My plan could be called an investment by the city because of the way it would be structured to help offset financial obligations while giving the city a return in increased revenues.
The 100,000-foot view of the plan would be to allow new and current businesses that are creating jobs to use a sales tax credit to pay down development impact fees.
For new businesses there would be a delay in development impact fee payments for a period that would allow a business to begin operations without the significant up-front costs associated with DIFs.
They would enter into an agreement with the city that would place a portion of their sales tax revenue in a credit account that could be used to pay down the DIFs when they come due. The benefit to the business is more working capital to start, while having an incentive to boost sales to offset the fees. Any current business in Maricopa would benefit by being able to expand operations and increase jobs, while using already accrued tax credits to pay for development impact fees.
The city would become an investor in these businesses by allowing development to happen while delaying impact fee payments, with the ultimate goal being the generation of enough revenue through business development and expansion to completely offset the development impact fees while creating new jobs.
An example would be a restaurant that has operated in Maricopa for say, four years. During that time the restaurant was able to produce $1 million in sales annually, resulting in $20,000 in sales tax revenue each year for the city. Over the course of four years, the restaurant has had a tax revenue base of $80,000.
Now the restaurant wants to expand and that expansion to a stand-alone building would result in $50,000 in development impact fees. If those fees are required up front, it is possible the restaurant wouldn’t be able to finance those fees and would have to use available capital to pay them, capital that would severely limit expansion efforts.
In my plan, they would get credit for past revenues up to 25 percent of sales taxes collected, which would equal $20,000, and the restaurant would enter into an agreement to pay the remaining balance of fees over three to five years, again using sales tax credits — with up to 50 percent of new sales tax revenues available for credit, depending on the number of jobs created.
The net result would be an expanded business creating more jobs and higher revenues for the city while allowing a larger capital investment by the restaurant and ultimately abating the development impact fees. This method would be fair because it would be based on the real impact a business has on our economy and not how well the developer could negotiate with the city. It would also give smaller enterprises a chance to grow their businesses within the city.
