Written by David Castellon
Fresno Mayor Lee Brand announced his proposed $1.136 billion budget for the 2017-18 fiscal year on Tuesday, noting that it emphasizes funding for economic development that includes making the city a draw for e-commerce businesses.
“My vision for Fresno is to transform our economy by creating citywide prosperity that will improve the quality of life for everyone in Fresno,”
Brand told reporters during a press conference at City Hall, noting that this was his first budget proposal as Fresno’s new mayor after eight years on the city council.
City officials announced in March that Ulta Beauty — the nation’s larges retailer of cosmetic, skin-care and hair-care products — had decided to locate its first West Coast distribution center in Fresno, which could bring about 1,000 new jobs here. And Brand noted that Nordstrom, Inc. strongly considered building a distribution center here for its online sales.
That didn’t happen, as officials with the department store chain announced last year it would hold off until market conditions improve before deciding whether to build a distribution center in Fresno or Visalia.
“Soon, we hope to hear good news from Amazon,” which is considering Fresno as the site of its own distribution center, Brand noted. “That’s another potential 2,500 jobs.”
“When you add the possibility of getting the [California ] High-Speed Rail Heavy Maintenance Facility built here with 1,500 new jobs, then we’re already halfway to getting 10,000 new jobs in the next 10 years,” and the presence of those added working people could generate another 10,000 jobs here, he said.
“That means our unemployment rate gets cut in half, from 10% to an unprecedented 5%. Those 20,000 new jobs also mean an estimated average of $1,050 of increased tax revenue per job. That’s potentially $21 million dollars more per year by the year 2027,” Brand said.
To do that, the mayor said economic development efforts have to focus on drawing manufacturing and e-commerce businesses to key locations in the city, including parcels near the “triangle” at highways 41 and 99, as well as developing a campaign to brand and market that area for distribution businesses.
“We are requesting a modest increase in the Economic Development budget in order to continue our unprecedented momentum by enhancing our marketing program, including communicating to site selectors across the country that Fresno is a hot commodity,” Brand stated in a letter to the public included in his budget proposal. “My goal is to put Fresno on the map as a preferred choice to relocate new business.”
Fresno already has a lot going for it to draw e-commerce businesses, including affordable land, a central locale in the state and proximity to major freeway corridors and California’s major urban centers, a cheap labor base, cheap water, cheap energy and good weather, he said.
“And we have an urban population of at least 500,000. That’s check, check, check, check [for] a business model I believe is right for these e-commerce centers,” Brand told reporters.
“The new retail model is what can you get out in one or two days,” to customers, said Brand, noting that e-commerce represents just about 8 percent of the U.S. market, but that is likely to grow significantly over the next couple of decades.
“I tell you, the growth is billions of dollars every year, so I think we should be poised — we should put our efforts, our resources — and with our partners from Fresno County and others to make this become a reality,” he explained.
“To get that growth in Fresno, we have to do a job, and that job includes getting ourselves ready with the infrastructure. There is a lot of money that needs to be spent on freeway interchanges, street widening, bringing in broadband,” things that often didn’t happen in the past until after large businesses located here, the mayor said.
“We need a finished product [beforehand], and we need to market it and brand it, and we’re going to do both.”
“A successful building of e-commerce centers in the south Fresno industrial triangle will create thousands of new jobs in the area,” and build up Fresno’s tax base, Brand said.
“If we do nothing at all — make no changes to our strategy — it isn’t enough to fulfill our commitment to our City and our residents. It’s not acceptable.”
A copy of the 438-page proposed budget wasn’t available to reporters during the afternoon press conference, but it was posted later online at fresno.gov/finance/budget.
Brand’s proposed budget exceeds last year’s $1.1 million budget, making it the largest in the city’s history.
Brand noted that he could make the proposal because the city followed sound financial practices after nearly going broke during the recession, allowing him to recommend a spending plan that includes building a new police sub station in southeast Fresno that would be fully paid for with money from the General Fund — the city’s main funding pot — without accruing heavy debt by issuing bonds to pay for it, which was how the city funded such projects in the past.
“Well, we ran too many bonds and had a major problem with excess debt,” so now the goal is to go through the next eight to 10 years and get that debt dropped $15 million-plus, said Brand, noting that his plan is for the $7 million cost of the sub station will be paid for through savings the city accrues by refinancing its current debts.
Other provisions of the proposed budget proposal include:
– Hiring 21 new police officers.
– Purchasing 50 new police patrol vehicles and 14 motorcycles.
– Expanding the Weekend Health & Fitness Program to include instructional and recreational swimming programs at schools in the Fresno Unified and Central Unified school districts.
– Providing $5 million in funding for renovation projects at neighborhood parks.
– Providing more than $26 million for street maintenance projects.
– Continuing contributions to the City’s General Fund reserve, with a goal of increasing it from the current $21 million to $32 million by fiscal year 2019-2020.
– Continuing the implementation of the Mayor’s Rental Housing Improvement Act by establishing the Proactive Rental Housing Inspection Program that will focus on inspecting sub-standard housing and work to compel property owners to improve it.
The new budget cycle begins July 1, but it will be up to the Fresno City Council to decide whether to approve the mayor’s proposal as it is or to require changes.