HomeMy WebLinkAbout9/11/2014 DMCC Board Meeting - Agenda and Meeting Packet
DESTIN ATION
MEDICAL CENTER
CORPOR ATION
(DMCC)
BOARD MEETING
9:00 A.M. THURSDAY, SEPTEMBER 11, 2014
ROCHESTER CONVENTION CENTER
Destination Medical Center Corporation
Financial Summary July 2014
2014 Curent Month July 2014 Amount Percent
Approved Budget July 2014 YTD Remaining Remaining
General Expenses 146,000 61 3,235 142,765 98%
Professional Services 400,000 89,931 257,406 142,594 36%
City Expenses 340,000
Subtotal DMCC 886,000 89,992 260,641 285,359 32%
Third Party Costs ‐ DMC EDA *
Planning, Archictecture, Engineering 2,431,000 75,986 128,299 2,302,701 95%
Marketing and Public Relations
Communications Marketing & PR 545,000 53,044 90,068 454,932 83%
Public Relations & Communications 245,000 13,355 33,080 211,920 86%
Development and Legal Services
Development Services 1,675,000 182,500 730,000 945,000 56%
Financial, Accounting, and Investment Ser 675,000 67,500 270,000 405,000 60%
Legal Services 425,000 0 57,304 367,696 87%
Miscellaneous Professional Services
Economic Analysis Market Research, Repo 351,000 50,931 88,892 262,108 75%
Other Professional Services & Project Cos 100,000 ‐
Other Development Costs
Payroll, Staff, Administration & Benefits‐E 460,000 ‐ ‐ 460,000 100%
General Expenses ‐ EDA 382,000 5,525 84,093 297,907 78%
Reimbursable Expenses 30,000 ‐ 3,083 26,917 90%
Subtotal DMC EDA 7,319,000 448,841 1,484,819 5,834,181 80%
Total All 8,205,000 538,833 1,745,460 6,459,540 79%
DMCC Working Capital Note 3,000
* See Attached Contract Commitments for EDA Portion EDA Working Capital Note 10,000
Report 4002
8/13/2014 - 1:23 PM Page 1 of 1
DMC - ECONOMIC DEVELOPMENT AGENCY
DETAIL COST REPORT #4
Variance
Division Description
Master Project
Budget
A
Original
Contract
Amount
B
Contract
Revisions
C
Committed
Costs
B+C
Committed Direct
Owner Purchases
D
Un-Committed
Costs
E
Final Projected
Cost
B+C+D+E
Over/(Under)
Budget
(B+C+D+E)-A
Total Work
In Place
Percent
Complete
DEVELOPMENT COSTS
40-05-000 Architecture & Engineering $2,431,000.00 $1,542,261.95 $10,945.06 $1,553,207.01 $0.00 $877,792.99 $2,431,000.00 $0.00 $128,299.32 5.28%
40-05-300 Planning Services, Architecture, Engineering $2,431,000.00 $1,542,261.95 $10,945.06 $1,553,207.01 $0.00 $877,792.99 $2,431,000.00 $0.00 $128,299.32 5.28%
40-25-000 Marketing & Public Relations $790,000.00 $223,503.05 $12,105.44 $235,608.49 $0.00 $554,391.51 $790,000.00 $0.00 $123,148.34 15.59%
40-25-300 Communications, Marketing & PR $545,000.00 $176,237.76 $3,830.44 $180,068.20 $0.00 $364,931.80 $545,000.00 $0.00 $90,068.20 16.53%
40-25-310 Public Relations & Communications $245,000.00 $47,265.29 $8,275.00 $55,540.29 $0.00 $189,459.71 $245,000.00 $0.00 $33,080.14 13.50%
40-30-000 Development Services $2,350,000.00 $2,300,000.00 $0.00 $2,300,000.00 $0.00 $50,000.00 $2,350,000.00 $0.00 $1,000,000.00 42.55%
40-30-300 Development Services $1,675,000.00 $1,675,000.00 $0.00 $1,675,000.00 $0.00 $0.00 $1,675,000.00 $0.00 $730,000.00 43.58%
40-30-310 Financial, Accounting & Investment Services $675,000.00 $625,000.00 $0.00 $625,000.00 $0.00 $50,000.00 $675,000.00 $0.00 $270,000.00 40.00%
40-35-000 Legal Services $425,000.00 $89,208.01 $0.00 $89,208.01 $0.00 $335,791.99 $425,000.00 $0.00 $57,304.21 13.48%
40-35-300 Legal Services $425,000.00 $89,208.01 $0.00 $89,208.01 $0.00 $335,791.99 $425,000.00 $0.00 $57,304.21 13.48%
40-55-000 Misc Professional Services $451,000.00 $298,473.00 $10,000.00 $308,473.00 $0.00 $142,527.00 $451,000.00 $0.00 $88,891.94 19.71%
40-55-300 Economic Analysis, Market Research, Reports $351,000.00 $298,473.00 $10,000.00 $308,473.00 $0.00 $42,527.00 $351,000.00 $0.00 $88,891.94 25.33%
40-55-310 Other Professional Services & Project Costs $100,000.00 $0.00 $0.00 $0.00 $0.00 $100,000.00 $100,000.00 $0.00 $0.00 0.00%
40-90-000 Other Development Costs $872,000.00 $89,555.84 $7,619.55 $97,175.39 $0.00 $774,824.61 $872,000.00 $0.00 $97,175.39 11.14%
40-90-115 Payroll, Staff, Administration & Benefits-EDA $460,000.00 $0.00 $0.00 $0.00 $0.00 $460,000.00 $460,000.00 $0.00 $0.00 0.00%
40-90-120 General Expenses-EDA $382,000.00 $89,555.84 $4,536.96 $94,092.80 $0.00 $287,907.20 $382,000.00 $0.00 $94,092.80 24.63%
40-90-300 Reimbursable Expenses $30,000.00 $0.00 $3,082.59 $3,082.59 $0.00 $26,917.41 $30,000.00 $0.00 $3,082.59 10.28%
Subtotal $7,319,000.00 $4,543,001.85 $40,670.05 $4,583,671.90 $0.00 $2,735,328.10 $7,319,000.00 $0.00 $1,494,819.20 20.42%
PROJECT CONTINGENCY
90-00-000 Project Contingency $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0.00%
Subtotal $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 0.00%
PROJECT TOTAL $7,319,000.00 $4,543,001.85 $40,670.05 $4,583,671.90 $0.00 $2,735,328.10 $7,319,000.00 $0.00 $1,494,819.20 20.42%
Work in PlaceSchedule of Values
July 31, 2014
Destination Medical Center
Creating the World’s Leading Center for
Excellence in Health, Wellness and Medical Innovation
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
September 11, 2014
PRELIMINARY – FOR REVIEW AND COMMENT
1
PRELIMINARY – FOR REVIEW AND COMMENT
1.0 Introduction
- DMC Overview and Goals
- Document Overview
- Consolidated DMC 2015 Operating Budget
2.0 DMCC 2015 Budget
3.0 EDA 2015 Budget and Work Plan
A. EDA Preliminary Operating Framework and Organizational Structure
- EDA Purpose, Roles and Responsibilities
- Organizational Structure
- Roles and Responsibilities of EDA Staff
B. EDA 2015 Work Plan
-EDAWorkPlan
C. EDA 2015 Operating Budget
- Preliminary Operating Budget
4.0 Capital Plan
- DMC Capital Plan
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
TABLE OF CONTENTS
Introduction
3
PRELIMINARY – FOR REVIEW AND COMMENT
The State of Minnesota has a national reputation for excellence in health care and medical innovation and has made
significant investments to stimulate the development of this high-value economic activity in the State. In 2013, Mayo
Clinic – the State’s largest private employer – with the City of Rochester, Olmsted County and other community
stakeholders brought forward the Destination Medical Center (DMC) proposal to secure Rochester’s and Minnesota’s
future as a global medical destination. After careful deliberation, the Governor and the Minnesota Legislature concluded
there was a compelling public interest for the state to assist in the development of the DMC and to create in State
statute the financing tools and public governance structure necessary to realize this transformational development in
Rochester and the region. The goals of the DMC have been established by the DMCC Board as:
DMC Goals (Adopted By DMCC)
The following goals have been adopted by the Destination Medical Center Corporation (DMCC) and serve as the basis
of the Development Plan and strategies for the DMC Initiative going forward.
Create a comprehensive strategic plan with a compelling vision that harnesses the energy and creativity of the entire
community
Leverage the public investment to attract more than $5 billion in private investment to Rochester and the region
Create approximately 35,000 – 45,000 new jobs, with workforce development strategies that support of that growth
Generate approximately $7.5 - $8.0 billion in new net tax revenue over 35 years
Achieve the highest quality patient, companion, visitor, employee, and resident experience, now and in the future
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
DMC OVERVIEW & GOALS (ADOPTED BY DMCC)
4
PRELIMINARY – FOR REVIEW AND COMMENT
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
DOCUMENT OVERVIEW AND OBJECTIVES
The following provides an overview of the proposed DMC 2015 operating budget for the review and approval of the
Destination Medical Center Corporation (DMCC) Board of Directors. The budget is comprised of the three parts:
DMCC Operating Budget
Includes the estimated expenses associated with the DMCC operations in 2015. The budget is comprised of
expenses for the Board of Directors and third party professional services related to legal, financial and similar
activities the DMCC Board will undertake in its role to oversee the implementation of the DMC initiative.
City of Rochester Budget
This includes the estimated operating expenses for the City of Rochester to administer and oversee certain aspects of
the DMC Initiative, including the estimated expenses for the City to act in its role as fiscal agent on the project. Note,
this estimate is based on previous year’s estimated expenses (2014) and is subject to change as the City finalizes its
budget for the 2015 operating year.
Economic Development Agency (EDA) Budget and Work Plan
This includes the estimated operating expenses for the EDA to provide services to develop and market the DMC
Initiative in accordance with the DMC Law and the service agreement between the DMCC and EDA. In 2015, the EDA
will transition its primary activities from planning to implementing the DMC Development Plan. A staffing plan and work
plan are provided in this document to illustrate the structure and functions anticipated to be undertaken by the
organization in 2015.
The full budget is included on the following page. The detailed budgets are incorporated in sections 2.0 – 4.0 of this
document.
5
PRELIMINARY – FOR REVIEW AND COMMENT
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
DMC 2015 CONSOLIDATED BUDGET
1. City budget is based on estimate of previous year’s expenses. City’s final budget is pending.
2. EDA budget does not include additional identified costs for professional services contingency or web site upgrades.
The proposed 2015 consolidated budget for DMC operations is included below.
2014 Expenses 2015 Total
ORGANIZATIONAL EXPENSES
Destination Medical Center Corporation (DMCC)
General Administrative Expenses $146,000 $217,203
Professional Services $400,000 $780,600
Subtotal $546,000 $997,803
City of Rochester (Note 1)$340,000 $275,000
Economic Development Agency (EDA) (Note 2)
Payroll, Staff and Administrative Benefits $460,000 $1,285,000
General Administrative Expenses $382,000 $222,000
Marketing Expenses NA $261,000
Meeting Expenses NA $12,000
Professional Services NA $555,000
Miscellaneous Costs NA $180,000
Subtotal $842,000 $2,515,000
THIRD PARTY COSTS (RELATED TO DEVELOPMENT PLAN AND START UP)
Development Plan and Start Up Costs $6,477,000 NA
Total Expenses $8,205,000 $3,787,803
DMCC 2015
OPERATING BUDGET
7
PRELIMINARY – FOR REVIEW AND COMMENT
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
DMCC 2015 BUDGET
The estimated expenses associated with DMCC operations is outlined below. Expenses are anticipated to include the
costs associated with the DMCC meetings and professional services from third parties representing the DMCC in legal,
financial and other services.
Notes:
(1) Estimate for Civic Center room including staff and equipment
(2) $55/day Per Diem (non Public Sector Board Members - 4
(3) Assume $75/ meeting average cost - 8 board members
(4) Insurance Cost based on estimated EDA costs
(5) Allowance and/or estimate based on other similar organizations
(6) Est. Current cost
2015
escalation Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 Total
Staff Expenses 1.25%
Meeting Expenses (note 1) $2,228 $2,228 $2,228 $2,228 $2,228 $2,228 $2,228 $2,228 $2,228 $2,228 $2,228 $2,228 $26,730
Board Payments (note 2) $223 $223 $223 $223 $223 $223 $223 $223 $223 $223 $223 $223 $2,673
Travel Expenses Allowance (note 3) $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $7,200
Subtotal $3,050 $3,050 $3,050 $3,050 $3,050 $3,050 $3,050 $3,050 $3,050 $3,050 $3,050 $3,050 $36,603
General Administrative Expenses 2.00%
Insurance (Note 4)$150,000
Miscellaneous Expenses Reserve (note 5) $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $30,600
Subtotal $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $2,550 $180,600
Professional Services 2.00%
Legal Services $400,000
External Auditor (note 5)$50,000
Professional Services / Contingency (non‐EDA provided ‐ note 5) $300,000
Insurance/Risk Advisor (note 6) $30,600
Subtotal $780,600
Total Expenses $997,803
EDA 2015
PRELIMINARY OPERATING
BUDGET & WORK PLAN
9
PRELIMINARY – FOR REVIEW AND COMMENT
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
EDA OVERVIEW & WORK PLAN
In 2015, the DMC Initiative will evolve from the planning phase to the implementation phase of work. The Destination Medical
Center Economic Development Agency (EDA) is the entity responsible for “developing and marketing” the DMC Initiative on behalf
of the DMCC and City. The specific responsibilities of the EDA are enumerated under Minnesota, Chapter 143 (2013-2014
Regular Session), Article 10 (the “DMC Law”) and further defined in an “Agreement for Destination Services” between the
Destination Medical Center Corporation (DMCC) and EDA (the “DMCC/EDA Agreement”)
The following document provides an overview of the proposed “2015 Operating Budget and Work Plan” for the EDA and provides
an explanation of the operating framework anticipated to execute the work. The objectives of this proposal are to:
Objectives of the EDA 2015 Operating Budget and Work Plan
1. Establish an operating framework and budgetary proposal to establish an organization structure that has the capacity and
capabilities needed to execute this complex $5 billion initiative in accordance with the DMC Law.
2. To outline a general work plan and target accomplishments / milestones for the first year of operations.
3. To establish a staffing structure and operating plan positioned to attract and retain top talent to the organization, with the
“experience and expertise” (see DMC Law) to execute the Development Plan and meet the EDA’s statutory and contractual
obligations.
4. To breed flexibility in the plan, especially in the 2015 calendar year, to allow the EDA to evolve with input and guidance from
the permanent Executive Director and senior staff and to respond to the specific requirements of the final development plan
as approved by the DMCC Board and City of Rochester (target date for approval is February 2015).
This 2015 Operating Budget and Work Plan is preliminary in nature and will continue to evolve with the input of EDA Executive Director,
senior staff and as the Development Plan is completed and approved by the DMCC Board and City of Rochester. Over time, it may change to
meet the requirements of the project.
EDA
PRELIMINARY OPERATING
FRAMEWORK
11
PRELIMINARY – FOR REVIEW AND COMMENT
The EDA is a non-profit economic development agency established under Minnesota, Chapter 143 (2013-2014 Regular Session), Article 10 (the
“DMC Law”) for the purpose of “providing experience and expertise to the DMCC for purposes of developing and marketing the destination
medical center”. The services required of the EDA are specified in the DMCC Law and under the DMCC/EDA Agreement and include:
Services Enumerated by the DMC Law & DMCC/EDA Contract
The services enumerated in the DMC Law, and which are also contracted for under the DMCC/EDA Agreement, require the EDA to manage the
process and complete the DMC Development Plan (Target Adoption-February 2015). Additionally, the EDA must assist the DMCC and City in
implementing the goals, objectives and strategies in the DMC Development Plan, including, but not limited to:
1. Facilitating private investment through development of a comprehensive marketing program to global interests;
2. Developing and updating the criteria for evaluating and underwriting development proposals;
3. Drafting and implementing the development plan, including soliciting and evaluating proposals for development and evaluating and
making recommendations to the authority and the city regarding those proposals;
4. Providing transactional services in connection with approved projects;
5. Developing patient, visitor, and community outreach programs for a destination medical center development district;
6. Working with the corporation to acquire and facilitate the sale, lease, or other transactions involving land and real property;
7. Seeking financial support for the corporation, the city, and a project;
8. Partnering with other development agencies and organizations, the city, and the county in joint efforts to promote economic development
and establish a destination medical center;
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
EDA PURPOSE, ROLES & RESPONSIBILITIES
12
PRELIMINARY – FOR REVIEW AND COMMENT
9. Supporting and administering the planning and development activities required to implement the development plan;
10. Preparing and supporting the marketing and promotion of the medical center development district;
11. Preparing and implementing a program for community and public relations in support of the medical center development district;
12. Assisting the corporation or city and others in applications for federal grants, tax credits, and other sources of funding to aid both private
and public development; and
13. Making other general advisory recommendations to the corporation and the city, as requested.
Additional Services (Required Under DMCC/EDA Contract):
The DMCC/EDA Agreement provides for certain other services to be undertaken by the EDA, including:
1. Project Management
2. Information and Recommendations (Advisory and Oversight Services)
3. Project Budget Management
4. Accounting
5. Project Reporting
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
EDA PURPOSE, ROLES & RESPONSIBILITIES
13
PRELIMINARY – FOR REVIEW AND COMMENT
EDA
BOARD OF DIRECTORS
EXECUTIVE
DIRECTOR
Senior Financial Manager
Project Accountant(s)
Targeted Business Administrator
Administrative Staff
Development/Project Manger(s)
Financial Analyst(s)
Marketing & Communications Manager
Community Relations Coordinator
Communications Associate
MARKETING &
COMMUNICATIONS
DEPARTMENT
E
D
A
S
T
A
F
F
OPERATIONS
DIRECTOR
ACCOUNTING &
REPORTING
DEPARTMENT
BUSINESS
DEVELOPMENT &
FINANCE DEPT.
This organizational chart is provided to demonstrate a preliminary organizational structure for the EDA as it moves into full-scale operations.
Consultants and Service Providers
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
PRELIMINARY OPERATING FRAMEWORK
This organizational framework is provided to give context to the DMCC Board on the scope and scale of the organization that is required to
manage this complex, $5 billion initiative. The organizational structure and staff plan may evolve over time to respond to specific requirements
and strategies of the project and/or the Development Plan. The EDA Executive Director, with approval from the EDA Board, will be
responsible to determine the final staff and operating structure, provided such structure is consistent with the approved budget.
14
PRELIMINARY – FOR REVIEW AND COMMENT
STAFF TYPE OF
REQUIREMENT
REFERENCE TO
REQUIREMENT TYPE OF SERVICE
Executive
Director
Project Oversight All • All Services and Work of Staff
Statutory #1
• Attracting and facilitating private investment through development of a comprehensive marketing program to global interests
Statutory #8
• Partnering with other development agencies and organizations, the City, and the County in joint efforts to promote economic development
and establish a destination medical center
Statutory #9 • Supporting and administering the planning and development activities required to implement the Development Plan
Contractual Information & Recommendations • Advise the EDA on all matters including, but not limited to, maintenance of the budget and master project schedule.
Contractual Information & Recommendations
• Oversee the work on the project and identify as early as possible any circumstances that might impact the master project schedule and/or
budget
Operations
Director
Statutory #7 • Seeking financial support for the DMCC, the City and a project
Statutory #14 • Making other general advisory recommendations to the DMCC and the City, as requested
Contractual Project Management
• Manage EDA's Consultants and monitor their performance and progress
Contractual Project Management • Coordinate and manage the DMC initiative focusing on the goals of maintain the approved budget and master project schedule
Contractual Information & Recommendations
• Provide recommendations to the DMCC on critical project decisions in writing with sufficient detail to enable the DMCC to make informed
decisions
Contractual Informational &
Recommendations • Meet and provide progress reports and updates to the DMCC monthly and submit a monthly report.
Contractual Project Reporting • Act as secretary to the DMCC and be responsible for: posting notices, agendas, meeting information and preparing meeting minutes.
Contractual Project Reporting
• Peer review of funding requests, project financing and construction progress and payment requests against industry standard norms and
reporting to DMCC and City
Senior
Financial Manager
Contractual Project Management • Hold and manage subconsultant contracts and monitor compliance with applicable law, approved budget, master project schedule, insurance
requirements, and licensing requirements.
Contractual Project Budget Management • Identify and present cost savings opportunities over the course of the project and confer the DMCC periodically to determine whether there
are areas where costs can be reduced
Contractual Accounting • Review, comment upon and otherwise assist the DMCC Treasurer, Assistant Treasure, State agencies and/or City in review of accounting
records and/or audits\
Contractual Reporting • Report project activities and track activities against adopted milestones and objectives
Contractual Reporting • Auditing of DMC funding expenditures with reports to the DMCC and the City
Contractual Reporting • Other Reports as Required
The following outlines the primary statutory and contractual responsibilities that are attributable to each of the staff positions contemplated within the draft organizational structure. This structure is preliminary in
nature and may be altered over time based on the input of the Executive Director and DMCC Board.
6
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
PRELIMINARY OPERATING FRAMEWORK –STAFF ROLES & RESPONSIBILITIES
15
PRELIMINARY – FOR REVIEW AND COMMENT
STAFF TYPE OF
REQUIREMENT
REFERENCE TO
REQUIREMENT TYPE OF SERVICE
Project Accountants
Contractual Project Budget Management • Manage the budget for the project including monitoring and updating the budget monthly for the DMCC
Contractual Accounting
• Manage the accounting, processing of invoices, payments and reporting for all contracts executed for the DMC project including payments to the
EDA and Subconsultnats
Contractual Accounting • Review Invoices, submit master payment application and disburse payments
Contractual Accounting • Prepare monthly progress report
Targeted Business
Administrator General Reporting • Tracking and reporting on workforce development requirements established for the project
Development
Associate/
Project
Manager
Statutory #12 • Assisting the DMCC or the City and others in applications for federal grants, tax credits and other sources of funding to aid both private and
public development
Contractual Reporting • Provide monthly reports and an annual report and/or update the DMCC and others as requested
Contractual Reporting • Track and assist the City and Mayo on the annual certification of private investment within the DMC District
Contractual Reporting • Track and report on project funding expenditures against the adopted Development Plan
Contractual Reporting • Track and report on economic and fiscal impacts resulting in the DMC Development District
Operational General • Assist Executive Director and Operations Director in the execution of DMC strategies, including the facillitation of transactions and projects
Financial Analyst(s)
General Assistance with Financial Matters • Assisting with running financial models, peer review of pro formats/financial matters, tracking of information, market analysis and other
Contractual Reporting • Track and report on economic and fiscal impacts resulting in the DMC Development District
Marketing &
Communications
Manager
Statutory #10 • Preparing and supporting the marketing and promotion of the medical center development district.
Contractual Project Management
• Coordinate with the City, the County, Mayo Clinic and the DMCC and other regional planning groups to facilitate planning the execution of the
DMC Initiative
Community Relations
Coordinator Statutory #11 • Preparing and implementing a program for community and public relations in support of the medical center development district
Communications
Associate General Assistance with Marketing
Matters • Management of the Web Site, Social Media, Blog and other electronic strategies to facilitate DMC marketing
Administrative Staff General Administrative Assistance • Managing the office/hr (one person) and supporting the staff of the EDA and assisting with the facilitation and posting of materials 7
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
PRELIMINARY OPERATING FRAMEWORK –STAFF ROLES & RESPONSIBILITIES
EDA
2015 Work Plan
17
PRELIMINARY – FOR REVIEW AND COMMENT
The target date for approval of the DMC Development Plan in February 2015. Currently, the planning team is in the process of developing the component
parts of the DMC Development Plan which will establish the land planning, economic development, marketing and financial framework and strategies forthe
DMC Initiative. Included as part of the plan there will be a phasing strategy, funding priorities and guidelines, a 5-year operating and 5-year capitalplan
outlining the strategies for the project in more detail. Once approved, the EDA will implement theses strategies in accordance with their contract andthe
approved plan. The major activities that are anticipated to occur in the first year of operations include:
Activities and Targeted Dates for Completion:
Facilitate and manage the final approval of the DMC Development Plan Q1
Initiate plans to educate/inform stakeholders and the public on the final approved DMC Development Plan, and processes Q1 (Start) / On-Going
Launch global market strategy to secure Rochester and Southeast Minnesota as a Destination Medical Community Q1 (Start) / On-Going
Formalize partnership and joint marketing initiatives with Mayo Clinic for research/bio-science and health/wellness strategies Q1 (Start) / On-Going
Establish coordination committee with key community partners (e.g. Mayo, Chamber, RAEDI, RDA and RCVB) Q1
With approval of Development Plan, manage implementation of specific strategies / project goals Q2 (Start) / On-Going
As appropriate, Identify and assist in preparation of early DMC funding applications to prepare for initial approvals Q1 (Start) / On-Going
Update, as necessary, the EDA Work Plan to reflect the specific strategies of the DMC Development Plan Q2 (Start) / On-Going
With approval of Development Plan, assist with DMC funding applications / evaluate for DMCC Board and City (if requested) Q2 (Start) / On-Going
With approval of Development Plan establish regional, national and global resource network to assist with information/data
collection and marketing Q2 (Start)/ On-Going
Based on approved Development Plan strategies, finalize relationship and partnerships with Mayo Clinic and community
organizations to advance research/bio-science, wellness and tourism initiatives consistent with identified priorities
Identify and pursue potential partnerships, tenants and/or investors in the market based on targeted growth sectors Q2 (Start) / On-Going
Identify and work on strategies to mitigate potential funding gaps for venture capital Q3 (Start) / On-Going
Initiate strategies to attract, grow and retain a top-tier workforce in market based on targeted growth sectors Q3 (Start) / On-Going
Initiate strategies for targeted business and workforce initiatives Q2 (Start) / On-Going
Prepare annual report for community Q4
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
2015 EDA WORK PLAN
18
PRELIMINARY – FOR REVIEW AND COMMENT
Continue Technical Committee Meetings with City/County staff to discuss planning and potential projects On-Going
On-Going project accounting and reporting activities as required by the DMCC/EDA contract On-Going
On-Going administrative and management activities as required by the DMCC/EDA contract On-Going
Specific Milestone Dates/Activities:
Assist DMCC/City with preparation of annual report By February 15th
Prepare Certification of Mayo Clinic and Private Investment Certification By April 1st
Assist DMCC with Report to DEED – Open Appointments, Annual Report Compilation By July 15th
EDA 2016 Operating Budget and Work Plan Submission By August 1st
Assist DMCC with Submission of 2015 DMC Budget to City By September 1st
This work plan is preliminary in nature and is subject to change as additional information becomes available related to the final
Development Plan, strategies and priorities.
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
2015 EDA WORK PLAN
EDA Proposed
2015 Operating Budget
20
PRELIMINARY – FOR REVIEW AND COMMENT
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
2015 OPERATING BUDGET –ESTIMATED STAFF COSTS
Jan Feb Mar April May Jun Jul Aug Sep Oct Nov Dec 2015 Total
(Rounded '000)
STAFF COSTS
Payroll Escalation 1.25%
Payroll $70,667 $70,667 $70,667 $70,667 $70,667 $80,667 $80,667 $80,667 $80,667 $80,667 $80,667 $80,667 $918,000
Other Expenses, Benefits, Vacations, Deductions 40% $28,267 $28,267 $28,267 $28,267 $28,267 $32,267 $32,267 $32,267 $32,267 $32,267 $32,267 $32,267 $367,200
Total Staff Costs (Rounded to Nearest '000)$98,933 $98,933 $98,933 $98,933 $98,933 $112,933 $112,933 $112,933 $112,933 $112,933 $112,933 $112,933 $1,285,000
MONTHLY OPERATING COSTS
Rent, Utilities, Office & Equipment Expenses $12,358 $12,358 $12,258 $12,258 $12,508 $12,508 $12,508 $12,508 $12,509 $12,509 $12,359 $12,359 $149,000
Payroll Expenses $628 $628 $628 $628 $628 $628 $628 $628 $628 $628 $628 $628 $8,290
Website, Drafting and Graphics Support $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $45,000
Micellaenous Costs $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $20,000
Subtotal (Rounded To Nearest '000)$18,000 $18,000 $18,000 $18,000 $19,000 $19,000 $19,000 $19,000 $19,000 $19,000 $18,000 $18,000 $222,000
TOTAL EST. MONTHLY EXP. (EST. ADVANCED FUNDS) $116,933 $116,933 $116,933 $116,933 $117,933 $131,933 $131,933 $131,933 $131,933 $131,933 $130,933 $130,933 $1,507,000
MARKETING COSTS
Advertising, Marketing, Print & Collateral $150,000
Subcriptions/Professional Organization Memberships $6,000
Conferences, Meetings, Travel, Sponsorships & Programs $85,000
Micellaneous Costs $20,000
Subtotal $261,000
EDA BOARD MEETINGS & COMMUNITY MEETINGS
Room Rentals (Board Meetings & Community Meetings)$9,000
Micellaenous Costs $3,000
Subtotal $12,000
SERVICE PROVIDERS
Legal $75,000
Public Relations & Communications $180,000
Marketing & Advertising $75,000
Finanical & Reporting Consultants (e.g. tax, audit, econ‐fiscal, etc.)$125,000
Other Contracted Services $100,000
Subtotal $555,000
OTHER COSTS AND EXPENSES
Insurance & Taxes $150,000
Micellaneous Costs / Contingency $30,000
Subtotal $180,000
TOTAL $2,515,000
ESTIMATED MONTHLY EXPENSES ‐ 2015
The proposed EDA operating budget for calendar year 2015 is outlined below.
*Note: This budget assume the Preliminary Development Plan is complete in December 2014 and that additional planning services are not required in the 2015 calendar year. If the
schedule is extended, or such services are required, the budget will need to be modified to address these specific needs.
Note: This budget does not include the additional costs identified for professional services contingency and web services.
EDA Proposed
Capital Improvement Plan
22
PRELIMINARY – FOR REVIEW AND COMMENT
The DMC Development Plan is targeted to completed in February 2015 and a 5 Year Capital Improvement Plan is
anticipated to be incorporated and approved at that time. The Development Plan is updated every 5 years in
accordance with the DMC Law. The Capital Improvement Plan will be updated every year in accordance the
agreements between the City, DMCC and EDA.
DMC 2015 OPERATING BUDGET & EDA WORK PLAN
CAPITAL IMPROVEMENT PLAN
DESTINATION MEDICAL CENTER
ECONOMIC DEVELOPMENT AGENCY (EDA)
UPDATE - TARGETED BUSINESS STRATEGY
REPORT DATE: SEPTEMBER 11, 2014
In July 2014, the DMCC Board requested that representatives of the DMCC, EDA and City continue to
work together to advance the strategies related to targeted business initiatives associated with the DMC
Initiative. Since that time, the following has been accomplished:
Adoption of Interim City M/WBE Policy
On July 21, 2014 the Common Council of the City of Rochester unanimously approved an interim
M/WBE policy related to the potential financing of DMC projects in the City of Rochester. A copy of the
adopted policy is attached with this report. The City policy will be reviewed upon the completion of the
draft DMC targeted business strategy to ensure coordination among efforts.
Meeting with Department of Human Rights
Representatives of the City, DMCC and EDA met with the Commissioner of the Minnesota Department
of Human Rights and with representatives of the Governor’s Office to collect information on trends,
programs and other considerations that may influence the development of strategies related to the
DMC targeted business programs.
Interviews and Information Collection with Stakeholder Groups
Representatives of the City, DMCC and EDA met with stakeholder groups to understand the programs
and activities that are already occurring in the local / regional market and identify potential groups to
partner with in the future. The groups included:
Randy Johnson : Workforce Development, Inc.
Arianna Bush : Workforce Development, Inc.
Dr. Jim Gross : Rochester Community and Technical College
Paul Fleissner : Olmsted County Community Services
Heidi Walsh : Olmsted County Community Services
Kolloh Nimley : Council on Black Minnesotans
Edward McDonald : Council on Black Minnesotans
Donavan Bailey : NAACP
W.C. Jordan : NAACP
Rebecca Sedarski : Chicano Latino Affairs Council
Julissa Viveros : Latino Economic Development Center
Jerry Williams : Rochester Chamber of Commerce/Supplier Diversity Initiative
Kevin Lindsey : Commissioner, Minnesota Department of Human Rights
Recommended Next Steps
The recommended next steps in the process are:
• Workgroup to continue to meet and advance strategic plan based on data collected to date.
• Workgroup to meet with representatives of the DMCC Board to vet strategies
• Provide preliminary recommendations to DMCC Board at November meeting
DESTINATION MEDICAL CENTER
ECONOMIC DEVELOPMENT AGENCY (EDA)
MONTHLY UPDATE REPORT
REPORT DATE: SEPTEMBER 11, 2014
MASTER PROJECT BUDGET
The following is a summary of the sources and uses of funds included in the current payment application. This
summary represents the approximately $7.3 M portion of the budget and/or expenses that are managed and
reported by the EDA. The balance of funding (approximately $886,000 for a total budget of $8.205 M) is DMCC and
City of Rochester funding and managed outside of the EDA budget.
• A summary of the sources and uses of funds as of Map #5 (July) is included above. A detailed cost report is
also attached with this update.
• MAP #1 - #5 are processed. Map #6 (August) was submitted to City/DMCC on September 10, 2014.
• The 2015 DMC Operating Budget and EDA Work Plan have been submitted to the DMCC for review and
approval at the September 11, 2014 DMCC Board Meeting. If approved, the budget will be forwarded to the
City of Rochester to review during its budget process in the fall 2014.
• The EDA is operating within budget and no major budgetary risks for the 2014 calendar year are known at this
time.
MASTER PROJECT SCHEDULE / DEVELOPMENT PLAN PROCESS
• The DMC Development Plan remains on schedule. The major phases of work include the following:
− Creative Analysis Phase: Completed in June 2014
− Options Phase: Target Completion in September 2014
− Preliminary Plan Phase: Target Completion in November 2014 (Strategies) and December 2014 (Full
Draft). Once approved by the DMCC Board, the plan will be submitted to the City of Rochester.
− 60-Day City of Rochester Review Process: Target – January 2015 – February 2015
− Targeted approval of the Development Plan: February 2015
• A Milestone Schedule for the 2014 (Remaining) / 2015 calendar years is attached.
• An outline of the major topics to be considered at EDA and DMCC Board Meetings in the coming months is
attached with this report.
• The next DMCC Board Meeting and DMCC/EDA Working Session will be held on November 13, 2014.
PROJECT FINANCE / FINANCIAL MANAGEMENT
• The EDA, DMCC and City have executed a term sheet outlining the major terms and conditions of the
Amendment to Advance Funds. The full contracts are under negotiation.
• The City and DEED are working to finalize their agreement related to the flow of funds. The deadline for
completion is September 2014.
SOURCES OF FUNDS
City Contribution $7,319,000.00 40 Development Costs $1,494,819.20
50 Financing Costs
60 Other Project Costs
90 Project Contingency
Remaining Budget $5,824,180.80
TOTAL SOURCES $7,319,000.00 $7,319,000.00
USES OF FUNDS
TOTAL USES
DESTINATION MEDICAL CENTER
ECONOMIC DEVELOPMENT AGENCY (EDA)
MONTHLY UPDATE REPORT
DEVELOPMENT PLAN – PROCESS/DESIGN/PLANNING
• The EDA has advanced plans from the conceptual phase and established the program/phasing models for the
project. In turn, these models are becoming the basis of the economic-fiscal analysis and financial framework
for the project. The EDA is evaluating the options within the financial framework to establish the draft finance
plan and business strategies for the DMC Initiative. The advancement of the planning concepts and an
overview of the financial framework will be discussed at the EDA/DMCC Joint Board Session.
• The EDA has continued meetings with the City Technical Committee and met with the City’s Comprehensive
Plan Team on August 6, 2014. This City is embarking on the comprehensive plan process, which is estimated
to be completed over an 18-24 month period. The EDA Team will continue to coordinate with the
Comprehensive Plan Team through the completion / approval of the Development Plan.
• The EDA Planning team is in the process of meeting with City staff and departments to vet the concepts as
they advance and identify/resolve potential issues going forward. Meetings will continue through the
completion of the plan in 2014.
• The EDA held briefings for City Council and County Board members on August 5, 2014. In general, both the
City Council and County Board responded favorably to the concepts presented in the Creative Analysis. They
were particularly interested in further analysis of the demand models and proposals for mode shift to transit
options. They uniformly stressed the importance of grounding the plan in an economic model and framework
that not only considered the cost to build proposed projects but also the costs to operate/maintain the
project. The planning team is currently finalizing the requested analysis and is advancing the financial
framework / economic analysis. Meetings are being set up to continue briefings with the City Council and
County Board in October, 2014.
• The planning team continued to meet with stakeholder groups including working with Mayo Clinic to
coordinate strategic planning for bio-science initiatives. The EDA also met with representatives from the
surrounding neighborhoods to understand concerns related to potential direct impacts of the DMC Plan on
these residential areas.
COMMUNITY INPUT PROCESS
• The EDA retained a community input consultant to advice on the process as the plan advances over the next
several months. This consultant is the same consultant working on the City’s Comprehensive Plan which
provides for the opportunities for increased synchronization between the two processes.
• The EDA continues on-going outreach activities including website updates, blogs, a bi-weekly newsletter and
presentations within the community and the region.
• A public forum is being held September 11, 2014, 6:30 pm – 9:00 pm.
TARGETED BUSINESS /WORKFORCE
• The EDA continues its work with the City of Rochester and DMCC Board to establish a planning framework for
targeted business and workforce initiatives.
• The City of Rochester has approved an interim M/WBE strategy which establishes targeted workforce goals of
4% minority and 6% women owned businesses. These targets are based on MNDOT’s standards for the SE
Minnesota region.
OPERATIONS
• EDA is continuing the search process for Executive Director.
• EDA submitted a budget for the 2015 calendar year and is in the process of launching EDA operations to
prepare for permanent staff (e.g. establishing benefits, identifying office space, etc.)
DESTINATION MEDICAL CENTER
ECONOMIC DEVELOPMENT AGENCY (EDA)
MONTHLY UPDATE REPORT
KEY CONSIDERATIONS/IDENTIFIED RISKS
Advancement of Plan Concepts. In September the planning team needs feedback from EDA/DMCC Boards and
direction from EDA on advancement of the following, which serve as the foundation of the Development Plan:
Guiding Principals
DMC Districts and Conceptual Plan
Program and Phasing Models
Primary Transit Strategies and Framework
DMC Development District Boundary
Coordination with Comprehensive Plan. The comprehensive plan is in its initial phases. The DMC
Development Plan will be largely complete before the comprehensive plan completes is initial analysis.
Coordination between the two planning teams is critical but there could be unknown issues that impact the
timing of the plan. Both teams are committed to coordination to resolve and/or mitigate any potential issues.
Third Party Impacts. Potential impacts from third parties (state agencies, political climate, etc.) could impact
the schedule; EDA is already experiencing this with inability to hire permanent staff.
Execution of Agreements. The City/DEED Agreement and Working Capital Loan Agreements between City,
DMCC and EDA are currently being negotiated. The EDA is coordinating its retention of permanent staff to
coincide with the completion of these agreements and has shifted expected retention of full staff from 2nd/3rd
quarter of this year to the end of the year.
MAJOR ACCOMPLISHMENTS LAST 60 DAYS:
The following provides an outline of the tasks completed in the last 60 days.
• Draft Guiding Principles
• Final Creative Analysis and Draft Options For Master Plan
• Draft Transit Framework
• Preliminary Market Analysis & Program Recommendations
• Framework/Methodology for Economic-Fiscal Baseline
• Framework for Financial Models
• Coordination with City Comprehensive Plan Team and City/EDA Technical Team
• Draft DMC 2014 Budget and EDA Work Plan
• Stakeholder Discussions On Targeted Business/Workforce Initiatives
• Community Conversations on June 12th
• Second Public Forum on July 10th
• Working Capital Loan Term Sheet Complete
MAJOR TASKS TO BE COMPLETED OVER NEXT 60 DAYS:
The following provides an outline of the anticipated tasks to be completed in the next 60 days.
• Conceptual Master Plan
• Conceptual Transit Plan
• Conceptual Infrastructure Plan
• Economic-Fiscal Analysis
• Initial Finance Plan / Finance Strategy
• Draft Marketing Plan
• Draft Business Plan
• Draft Operations Plan (5 Years)
• Draft Targeted Business Framework
• DMCC Board Meetings on November 13th
• 3rd Public Forum on November 13th
• Working Capital Loan Complete
DESTINATION MEDICAL CENTER
ECONOMIC DEVELOPMENT AGENCY (EDA)
MONTHLY UPDATE REPORT
COST REPORT
DESTINATION MEDICAL CENTER
ECONOMIC DEVELOPMENT AGENCY (EDA)
MONTHLY UPDATE REPORT
MILESTONE DATES The following provides an outline of the major milestone dates for the project known as of the date it was issued. This milestone schedule is not meant to be a comprehensive document and does not represent all meetings/calls, actions, tasks or deadlines associated with the project. The schedule is subject to change without notification.
Calendar Year 2014 (Remaining)
Date Milestone Schedule
September 10th City Technical Committee Meeting (Review of Documents)
Due Date: EDA Payment Application #6 to DMCC for Approval (City Copied)
September 11th
DMCC Board Meeting
Joint Working Session of EDA-DMCC Boards
Public Forum
September 23rd Preferred Date #1 – DMCC/EDA Best Practice Trip (Return on 26th)
September 30th Preferred Date #2 – DMCC/EDA Best Practice Trip (Return on 3rd)
Due Date: Execution of City Agreement with DEED
October 8th City Technical Committee Meeting (Incudes Joint Meeting with City Staff and City Departments)
October 10th Due Date: EDA Payment Application #7 Submitted to DMCC for preliminary review/approvals
November 10th Due Date: EDA Payment Application #8 Submitted to DMCC for preliminary review/approvals
November 12th City Technical Committee Meeting
November 13th
DMCC Board Meeting
EDA/DMCC Joint Planning Session
Public Forum
December 10th Due Date: EDA Payment Application #9 Submitted to DMCC for preliminary review/approvals
December 17th DMCC Board Meeting to Approval Preliminary Draft Plan (Tentative - Date to Be Confirmed)
Calendar Year 2015
Date Milestone Schedule
January 5th Due Date: EDA Payment Application #10 Submitted to EDA for preliminary review/approvals
January 10th Due Date: EDA Payment Application #10 Submitted to DMCC for preliminary review/approvals
January 31st Target Date: EDA completes Annual Report for review by DMCC Board, DMCC Board submits February 15th (See Below)
February 1st Due Date: Additional budget recommendations from DMCC to City (if budget is not approved in previous year)
February 3rd Due Date: EDA Payment Application #11 Submitted to EDA for preliminary review/approvals
February 10th Due Date: EDA Payment Application #11 Submitted to DMCC for preliminary review/approvals
February 15th Due Date: DMCC/City Submit Annual Report to DEED
February 25th DMCC Board Meeting to Adopt Plan (Note: Meeting Needs to Be Scheduled/Date Confirmed)
March 3rd Due Date: EDA Payment Application #12 Submitted to EDA for preliminary review/approvals
March 10th Due Date: EDA Payment Application #12 Submitted to DMCC for preliminary review/approvals
March 1st Target Date: Completion of McGladry Review of Mayo Clinic Investments
March TBD EDA Board Meeting: Any Final Actions on Development Plan / Approval of 2014 Investment Certification
March 5th Due Date: EDA Payment Application #12 Submitted to EDA for preliminary review/approvals
March 10th Due Date: EDA Payment Application #12 Submitted to DMCC for preliminary review/approvals
April 1st Due Date: Submittal of 2014 Certification of Investment to DEED
April 5th Due Date: EDA Payment Application #13 Submitted to EDA for preliminary review/approvals
April 10th Due Date: EDA Payment Application #13 Submitted to DMCC for preliminary review/approvals
May 5th Due Date: EDA Payment Application #14 Submitted to EDA for preliminary review/approvals
May 10th Due Date: EDA Payment Application #14 Submitted to DMCC for preliminary review/approvals
June 5th Due Date: EDA Payment Application #15 Submitted to EDA for preliminary review/approvals
June 10th Due Date: EDA Payment Application #15 Submitted to DMCC for preliminary review/approvals
July 5th Due Date: EDA Payment Application #16 Submitted to EDA for preliminary review/approvals
July 10th Due Date: EDA Payment Application #16 Submitted to DMCC for preliminary review/approvals
July 15th Due Date: DMCC report to DEED – Open Appointments, Annual Report Compilation
DESTINATION MEDICAL CENTER
ECONOMIC DEVELOPMENT AGENCY (EDA)
MONTHLY UPDATE REPORT
August 1st Due Date: 2016 EDA Operating Budget Submittal to DMCC
Due Date: DEED Certification of Amount of GSIA
August 5th Due Date: EDA Payment Application #17 Submitted to EDA for preliminary review/approvals
August 10th Due Date: EDA Payment Application #17 Submitted to DMCC for preliminary review/approvals
September 1st Due Date: DMCC to Submit 2016 DMC Budget Request to the City of Rochester (Note includes DMCC, EDA and City Budgets)
Due Date: DEED to Provide GSIA Funding to City
September 5th Due Date: EDA Payment Application #18 Submitted to EDA for preliminary review/approvals
September10th Due Date: EDA Payment Application #18 Submitted to DMCC for preliminary review/approvals
October 5th Due Date: EDA Payment Application #19 Submitted to EDA for preliminary review/approvals
October 10th Due Date: EDA Payment Application #19 Submitted to DMCC for preliminary review/approvals
November 5th Due Date: EDA Payment Application #20 Submitted to EDA for preliminary review/approvals
November 10th Due Date: EDA Payment Application #20 Submitted to DMCC for preliminary review/approvals
December 5th Due Date: EDA Payment Application #21 Submitted to EDA for preliminary review/approvals
December 10th Due Date: EDA Payment Application #21 Submitted to DMCC for preliminary review/approvals
DESTINATION MEDICAL CENTER
ECONOMIC DEVELOPMENT AGENCY (EDA)
MONTHLY UPDATE REPORT
OUTLINE OF DISCUSSIONS / ACTIONS AT DMCC BOARD MEETINGS & EDA/DMCC WORKING SESSION The following is a preliminary list of the items that may be discussed during the scheduled board meetings. Please note, this outline is preliminary in nature and is subject to change without notification. September
• 2015 EDA Operating Budget and Work Plan (DMCC)
• Review Concept Plans (Options) – Select Direction for Preliminary Development Plan
• Preliminary Draft of Phasing Strategies
• Economic / Fiscal Baseline Methodologies
• Approach to Targeted Business Framework / Next Steps November
• Preliminary Draft of Master Plan/Infrastructure Plan/Transportation Plan
• Preliminary Draft of Business Development Strategy
• Preliminary Draft of Marketing Strategy
• Preliminary Draft of Communications/Community Input Strategy
• Preliminary Draft of Finance Plan
• Preliminary Draft of Funding Agreements December
• EDA/DMCC Approval of Preliminary Development Plan January/February
• City Approvals – Process TBD February
• DMCC Approval of Final Plan