HomeMy WebLinkAboutCAO-14-045 - EDIF Impact Analysis
REPORT TO:
Committee of the Whole
DATE OF MEETING:
November 17, 2014
SUBMITTED BY:
Rod Regier, Executive Director, Economic Development,
519-741-2200 ext. 7506
PREPARED BY:
Janette MacDonald, Economic Development Analyst,
519-741-2200 ext. 7760
WARD (S) INVOLVED:
All
DATE OF REPORT:
November 10, 2014
REPORT NO.:
CAO-14-045
SUBJECT:
Expression of Interest E14-064 [Consultant Service — Impact
Analysis of the Economic Development Investment Fund (EDIF)]
___________________________________________________________________________
RECOMMENDATION:
That no further action be taken regarding Consultant Service – Impact Analysis of the Economic
Development Investment Fund.
BACKGROUND:
As part of the 2014 budget deliberations, issue paper BD-07 identified that the 10-year investment time
frame of EDIF has concluded, with funds fully allocated, making this an appropriate time to initiate an
external review of the impact of EDIF.
On Monday, August 24, 2014 Council was presented with report FCS-14-156 regarding Expression of
Interest E14 -064 — Consultant Services — Impact Analysis of the Economic Development Investment
Fund ( EDIF), with a recommendation to award the contract to HDR Decision Economics, Toronto,
Ontario at their estimated fee of $71,000, plus H.S.T. of $9,230, for a total of $80,230. Council
requested that the scope and fee estimate be reduced.
On September 15, 2014 Council was presented with report FCS-14-168 with a revised cost estimate
from HDR Decision Economics, reducing scope and cost to $60,000, plus H.S.T. of $7,800, for a total
of $67,800. Council directed that no action be taken with respect to the expression of interest, and
directed staff to report back regarding the possibility of having Wilfrid Laurier University and/or the
University of Waterloo assist with determining the impact of EDIF.
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REPORT:
In 2010 staff partnered with the Laurier Centre for Economic Research and Policy Analysis (LCERPA)
to arrange for an academic review of the methodology used by staff in preparing the 2009 Economic
Impact Analysis of EDIF. The recommendations from the academic panel were implemented where
possible.
In consultation with local faculty in economics, two possible additional approaches for academic
collaboration were identified; however, neither option appears to be feasible at this point in time.
Option 1:
Find an interested academic who is willing to pursue a research project with the help of
graduate research assistants. The City of Kitchener will still pay for the research, but potentially at a
lower cost compared to consultant fees.
Unfortunately, this approach is not appropriate for this particular research project as there are almost
no local academics specializing in economic impact assessments. University of Waterloo faculty
primarily specialize in public finance, monetary economics, natural resources, labour and industrial
organization. Similarly, WLU economists primarily teach micro, macro, public and development
economics. Only one local professor has the background for this type of analysis. This academic was
offered the opportunity to participate as a paid consultant, but did not provide an expression of interest.
Option 2:
Extract a component of the terms of reference to create a modular project for students to
pursue under the supervision of an academic advisor. This requires selecting a more general research
topic that aligns with the capabilities of local faculty and students. For example, a student could conduct
a survey of stakeholders to explore the relationship between EDIF investments and firm decisions to
locate/expand/invest in the region.
This approach still requires finding students/faculty willing to take on the assignment, which is not
guaranteed. Further, it would not be possible to produce an estimate of the aggregate impact of EDIF,
which was the primary goal stated in the terms of reference for this project. Instead this approach would
refine a component of the existing analysis, which would add little value to the analysis and would still
need to be funded by the City.
During the next year staff resources are required for the development of the KEDS 2015. Therefore it
would be difficult to allocate staff time toward reconstructing the project design and co-ordinating
student-led research.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Theme: Financial Management
Strategic Direction: Ensure responsible use of public funds within a supportive policy framework.
FINANCIAL IMPLICATIONS:
The net estimated cost for Expression of Interest E14-064 was $61,056.00 to be paid out of the
Economic Development Reserve. The recommendation to defer the project means that the funds will
remain in the reserve fund.
8.e. - 2
COMMUNITY ENGAGEMENT:
N/A
ACKNOWLEDGED BY:
Jeff Willmer, CAO
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