City Council

CITY OF FREDERICKSBURG, VIRGINIA HON. MARY KATHERINE GREENLAW, MAYOR HON. CHARLIE L. FRYE, JR., VICE -MAYOR, WARD FOUR CITY COUNCIL HON. KERRY P. DEVINE, AT-LARGE HON. MATTHEW J. KELLY, AT-LARGE HON. JASON N. GRAHAM, WARD ONE HON. JONATHAN A. GERLACH, WARD TWO Council Chambers, 715 Princess Anne Street HON. DR. TIMOTHY P. DUFFY, WARD THREE Fredericksburg, Virginia 22401 Council Work Session October 6, 2022 City Council Bi-Annual Planning Off-Site The Council of the City of Fredericksburg, Virginia held a bi-annual review on Thursday, October 6, 2022, beginning at 8:30 a.m. at the Executive Plaza, 601 Caroline Street, on the third floor. Council Present. Mayor Mary Katherine Greenlaw, Presiding. Vice-Mayor Charlie L. Frye, Jr. Councilors Kerry P. Devine, Timothy P. Duffy, Jason N. Graham, Jonathan A. Gerlach and Matthew J. Kelly. Also Present. City Manager Timothy J. Baroody, Assistant City Manager Mark Whitley, Assistant City Manager David Brown, City Attorney Kathleen Dooley, Assistant City Attorney Dori Martin, Economic Development Director Bill Freehling, Deputy Clerk of Council Brenda Martin, Assistant to the Clerk Pricilla Ramirez and Clerk of Council Tonya B. Lacey. Others Present. Facilitator Tyler St. Clair, Chief Executive Officer and Chief Economist at Chmura Economics & Analytics Dr. Christine Chmura, and President of Fredericksburg Regional Alliance Curry Roberts. City Council Bi-Annual Planning Off-Site. Facilitator Tyler St. Claire opened the session up with a welcome and she reviewed the purpose and goals of the planning session. Team Building: Refreshing Council Relationships and Teamwork. The Council participated in a team building exercise which allowed the Council to discuss the experiences and values that led them to public service. Economic Update and Outlook for the United States and the City of Fredericksburg. Dr. Chmura presented a presentation and she discussed the following: Two General Measures Show Inflation is Near a 40-Year High, Lockdown Shifted Demand to Goods 1 and Away from Services, Inflation is Not Good for Long-Term Economic Growth, Doesn’t Two Consecutive Declines in Real GDP Qualify as Recession, No, Not Two Straight Declines in GDP NBER is the Arbiter of Recession in U.S. The Economy is Slowing: Jobs Ads -6.5% Since June 27, Jobs Ads for Staffing Firms -8.3% Since June 27, Raising Federal Funds Rate Target too Much Will Invert the Yield Curve, An Inverted Yield Curve Typically Precedes a Recession (3-Month Bill vs. 10-Year Note), Latest Thoughts from Fed Officials Point to Further Increases in Federal Funds Rate Target, Federal Reserve Chair Jerome Powell, August 19, 2022 (quote, Emphasis mine), Real GDP has Slowed – ‘Official’ Recession in Our Forecast, Median House Value of Owner- Occupied Units, Fredericksburg Labor Shed Extends Beyond City Limits (1013 Lafayette Boulevard; Fredericksburg Battlefield Visitor Center), Fredericksburg Employment is 1,299 Jobs Below Pre COVID Peak, 2022 Q1, Employment More Volatile, Partly Because of Relatively Small Employment Base, Changing Mix of Jobs Favor Higher Wages, Population Growth has Slowed in Fredericksburg, Population Growth has Slowed in Fredericksburg, but Grew 200 from 2019- 2021, Economic Development Success will be Important to Employment Growth, 800 Jobs at Virginia Health Care Center (Spotsylvania) in Late 2024 Will take Employment to Pre-COVID Level, 800 Jobs at Virginia Health Care Center in Late 2024 will Multiply into 1, 141 Jobs, Employment Growing Slower than National Average of 4.7%, Tight Labor Market: July 2022 Unemployment Rates has Fallen to 3.5% in July Compared to 3.6% in the U.S., Fredericksburg Employment Expected to Grow 2.2% Next Year Compared with 2.4% in U.S., Some Industries Still Shy of COVID Peak Employment, Competitive Advantage in 8 Major Sectors, Including Tourism, 10-20 Major Sectors Pay Better Than Average Wages, Employment in Most Industries Expected to Grow, People Transferring Out of Industries Created Many Job Openings, People Exiting the Industry (Mainly Retiring) Create Many Openings Each Year, Fredericksburg Expected to Need an Average 3,237 Workers Over the Next 10 Years, DoD Spending Supports Businesses in City of Fredericksburg, Top 10 DoD Contract Recipients in Fredericksburg, 4 of Top 20 Occupations Pay Better than Average Wage, Office & Medical Presence Clear in Top 20 Occupations, Skills in 45-Minute Drivetime of Fredericksburg Shift Toward Office/Headquarters, Job Posts in Fredericksburg are Flat Over Last Few Weeks, Healthcare and Education Institutions Top the List of Job Posts, 5% of Ads in Fredericksburg Promote Remote Work, 7.8% of Ads in Fredericksburg 45-Minute Drivetime Promote Remote Work, How will Fredericksburg Fair During a Recession? – 3,000 Jobs Peak to Low Point in 2008 Recession, Professional, Scientific, 2 and Technical Services -282 Jobs Peak to Low Point in 2008 Recession. Health Care Typically Grows Through Recessions, Strengths, Opportunities, Weaknesses, Threats (SWOT) Analysis, and Implications of Recession. (See Attachment III for more Information). The Future of City of Fredericksburg Economic Development. Mr. Curry Roberts presented a PowerPoint and he discussed the Demographics, Population Growth, Economic, Educational Attainment, Age 25-64, Fredericksburg Region Gross Regional Product, Targeted Industries, Visitors to the City, Entrepreneurial Ecosystem, Naval Surface Warfare Center Ball, Upcoming Attractions and Opportunities. (See Attachment IV for more Information). Business Incentives for City of Fredericksburg. Economic Development Director Freehling presented a PowerPoint Presentation and he discussed City Council Priority #3 – Make business attraction the focus of economic development and bring family-sustaining careers to the City, focusing on integration with regional, statewide and global economies and industry clusters, Economic Development Strategic Plan, Incentives in FXBG, Incentives Used Sparingly, BPOL In Fredericksburg, Categories/BPOL Tax Rates in FXBG (per $100 of Gross Receipts), Losing Out on Opportunities, Why we Are Losing Out, Possible Solutions, Tiered/Capped Examples, How FXBG Could Do It, Business Services Data and Possibility for Business Services Tax Rate – Effective July 1, 2023. (See Attachment V for more Information). Background: The Vision/Priority Setting Strategy. Ms. St. Claire discussed the local elected Leadership Model, past retreat 2016, 2018 and 2021 Vision and priority development, 2021 Focus on Racial Equity – Vision Revision and Issuance, community engagement and communication and Staff strategic work planning, coordination and progress reporting. See Attachments IX for more information. Council Assessment. The City Council evaluated and discussed assets, strengths, needs and interest and potential initiatives for the City. See Attachments VII through IX for more information. Review the Assessment and Affirm Vision and Desired Future States. Ms. St. Clair led the Council in the reading of the Vision and the Desired Future States. Adjournment. There being no further business to come before the Council at this time, Mayor Greenlaw declared the session officially adjourned at 5:00 p.m. 3 ______________________ Tonya B. Lacey Clerk of Council City of Fredericksburg 4