CC 06-06-2023 Item No. 4. Chamber Agreement_Desk Item & Attachment D1
CITY COUNCIL STAFF REPORT
DESK ITEM
Meeting: June 6, 2023
Agenda Item #4
Subject
Consider executing an Agreement between the City of Cupertino (City) and the Cupertino
Chamber of Commerce (Chamber)
Recommended Action
Authorize the City Manager to execute an Agreement between the City of Cupertino and the
Cupertino Chamber of Commerce for up to five years, at an annual amount not-to-exceed $52,000
Background:
All questions and responses that were in the Supplemental Report are included here
with the following corrections:
-Staff’s Response to Question 2
-Question 9 from Councilmember Chao
-Staff’s Response to Question 10
-Attachment D
Staff’s responses to questions received from councilmembers are shown in italics.
Q1: How come such item, which is a part of the FY2022-23 Budget, was not mentioned
at all in any of the previous city council meeting on FY2022-23 budget? (Chao)
This item is part of the proposed annual budget for FY 23-24. It was not the intent to discuss
each program or item during the budget hearing process as Council level approval of individual
contracts above the City Manager contract authority allow for a more in depth discussion.
Q2: What's the justification to put this on last minute, the day when the final budget is
to be approved, and especially when the city is cutting other services to a bone? (Chao)
Award of contracts are separate actions from approval of the annual budget. Contracts are
presented to the Council at all times of the year. This gives the Council the opportunity to
review the contract details and make a decision based on greater information.
2
Staff believes the Chamber of Commerce is well-placed to support existing Cupertino business,
and contracting with the Chamber will allow the Economic Development Division to focus on
activities that will generate new business in the City and revenues that will support the
provision of public services in a time of fiscal need. However, Council has full discretion to
approve, modify, or deny staff’s recommendation.
Q3: What other cities are paying Chamber of Commerce, by the hour, to perform the
services listed in the agreement? (Chao)
Staff has not investigated the compensation structure of other cities’ agreements with their
Chambers of Commerce at the level of detail necessary to answer this question.
Q4: What outreach has been done for this brand-new budget item? Which
Councilmembers have provided input or have been consulted on? Which community
members or business members have been consulted on? (Chao)
The City has a long-standing relationship with the Chamber of Commerce. Certain
Councilmembers have expressed concern about the lack of a written agreement governing that
relationship. The proposed is responsive to those concerns and delineates the services that the
Chamber would provide under the agreement. Approval of this item would authorize the City
Manager to enter into a contract with the Chamber of Commerce to perform those services. The
budget is a separate item that will be subject to a separate vote of Council. The proposed budget
includes funding for the agreement and will be voted on separately by Council, in a separate
public process. This is the standard process for approving appropriations and contracts for
routine operational matters under the authority of the City Manager but having not-to-exceed
amounts in excess of the City Manager’s contracting authority.
Q5: Most consultant contracts come with the resumes of personnels who will be
providing the services and the rate to demonstrate they have the expertise to perform
the task. Please provide the personnel and their resumes. (Chao)
Chamber of Commerce personnel resumes and email can be found in Attachment C.
Q6: Please provide the rationale why such services as outlined in the agreement should
not be funded by the Chamber by its paying membership and its fundraising activities,
already heavily subsidized by the city through fee waivers. (Chao)
The City has not offered room rental waivers to the Chamber of Commerce. Prior to 2021, the
Chamber did not pay for the facility rentals because these meetings were being reserved by staff
and considered to be City meetings. Since that time, the Chamber has paid for room rentals at the
nonprofit rate. As noted above, staff believes the Chamber is well-placed to support existing
Cupertino businesses, thereby allowing the Economic Development Manager to focus more on the
development of new business and new revenues for the City.
Q7: An earlier staff report has listed all of the subsidies the city has been providing the
3
Chamber and is continuing to provide the Chamber of Commerce, including festival
fee waivers, room rentals and other services. Please include such information so the
Council has full scope of the subsidies when making decisions. (Chao)
The June 21, 2022 staff report documenting the City’s historical support for the Chamber is
available at:
https://cupertino.legistar.com/LegislationDetail.aspx?ID=6035260&GUID=9F8B7563-C37F-
433E-AA84-0BEE4FB16CBB&Options=&Search=
Q8: The Federal government already provided funding for the Small Business Center,
which utilizes volunteers to help small businesses. It seems the city will be funding a
service normally provided by volunteers. Please clarify the difference. (Chao)
The Small Business Development Center (SBDC) serves the entire County. Its primary mission
is to help businesses develop business plans that provide access to capital. The Chamber is a local
organization with an ability to provide customized attention to our local businesses and offer a
much broader range of services, including access to capital, and to assist businesses with issues
relevant in Cupertino.
Q9: The Economic Development Manager, paid by the taxpayers, is already utilizing
her time to help the Chamber of Commerce to collaborate with the Chamber in helping
its members, in ribbon cutting, business permits and other services. Please provide the
hours utilized by the Economic Development Manager to communicate with Chamber,
including preparing and attending the Legislative Action Committee meeting. Please
include the approximate hours other city staff spent attending the Legislative Action
Committee meetings in the past. (Chao)
The City does not generally track hours that staff devotes to providing services to Cupertino
businesses. The Economic Development Manager has attended 2-3 Legislative Action
Committee (LAC) meetings in the last year. In addition, other City staff have attended 2-3 LAC
meetings.
Q10: If the Chamber will charge the city, by the hour, for the services they are
providing their current or prospective members, the City should charge the Chamber
for every hour the City currently provide services to the Chamber members and
prospective members, just to be fair. Please provide an estimate for an equal
partnership where both parties are charging the other party for every hour of services.
(Chao)
The City has historically provided economic development services to Cupertino businesses free of
charge. Council could direct staff to explore developing a fee-for-service model in which the City
charges businesses for services. Staff does not recommend this approach because successful
economic development programs lead to higher tax revenues that are beneficial to the City and
its residents as well as businesses who take advantage of the programs.
4
Q11: Please include the page from FY2022-3 Budget, which has a breakdown of the cost
for each program. (Thomas showed a similar page for Teen program and Senior
program from the PDF of the budget book. But the PDF of the amended budget is not
in the agenda packet?) (Chao)
The Economic Development Division’s budget narrative is outlined on pages 34-35 of the
“Administration” section of the budget book at:
https://www.cupertino.org/home/showpublisheddocument/33169/638189149608200000.
Q12: What's the funding for Economic Development Department in the past 10 years?
Or at least for the past 5 years so we put things in perspective as we make decisions.
(Chao)
Attachment D is a screenshot of the report from OpenGov covering actuals from FY08-09 to the
present. This information can also be found at:
https://cupertino.opengov.com/transparency/#/28422/accountType=expenses&embed=n&breakdo
wn=8775b50c-fca7-4517-9869-
839bfac61c9a¤tYearAmount=cumulative¤tYearPeriod=years&graph=bar&legendS
ort=desc&proration=true&saved_view=83805&selection=53FB871C3A8573A64C25040A3CAD0
171&projections=null&projectionType=null&highlighting=null&highlightingVariance=null&yea
r=2023&selectedDataSetIndex=null&fiscal_start=earliest&fiscal_end=latest..
Q13: The staff report stated "Events & Meetings – The Chamber will provide
opportunities for City representatives to attend networking events and meetings, host
professional women’s luncheons, and organize broker breakfasts." But this is already a
benefit the City gets as a paying member of the Chamber. Are we getting anything
different with this agreement? (Chao)
The professional women’s luncheons have historically been hosted by City staff. The City has not
hosted a broker breakfast. The Chamber will be assisting the City in organizing and hosting
these events.
Q14: The staff report states "The Chamber will develop and maintain a
Cupertino Dashboard, market and promote City-organized business events, ..." Please
provide the rationale that the City should outsource this to Chamber, who does not have
expertise in this area? (Chao)
The Cupertino Dashboard will serve as an important tool for economic development and will
include data on jobs, wages, firms, households, job postings, small businesses, restaurant and
retail, economic forecasts and more. The Chamber will not only design the dashboard, but also
acquire this data from 3rd party agencies and update it regularly.
Q15: The staff report states "Marketing and Promotion – The Chamber will develop and
maintain a Cupertino Dashboard, market and promote City-organized business events,
support Small Business Saturday and other marketing campaigns, and conduct outreach
and education regarding policy changes to all businesses." Please help me
5
understand why the City has to pay Chamber to perform the task our own Economic
Development Department is already doing and is better equipped at doing? (Chao)
As mentioned in the staff report, in light of the evolving economic dynamic and increased need for
economic development, staff will be refocusing on the core functions of economic development and
relying on the Chamber of Commerce to service local business audiences. Examples of labor
division between City staff and the Chamber are as follows: City staff will primarily focus on
business attraction and retention strategies, market trends analysis, policy development and
implementation, and development and permit facilitation. The Chamber will complement these
efforts in performing needed outreach to property owners and tenants to fill vacant spaces and
engaging with investors and developers to encourage revenue-generating projects. The City will
still be conducting outreach and supporting all Cupertino businesses; however with the support of
the Chamber, the City is hoping to expand on these services. The basis for the assumption that
Chamber is not well-equipped to perform the scope of services set forth in the agreement is not
clear.
Q16: The staff report states "Technical Assistance – The Chamber will provide
information to existing and prospective businesses on how to open, operate, and grow
their business." Such information is already provided by the Federally funded Small
Business Development Center. Please provide information on the "expertise" of the
Chamber in this area and track record of providing such services. Please provide the
rationale for the Cupertino to pay the Chamber to perform such service, available to
businesses from other agencies for free. (Chao)
Small Business Development Center provides services countywide and may not be as able to
support individual businesses in Cupertino as the local serving organization such as the Chamber
of Commerce. See the answer to Question 8 above for more information.
Q17: The staff report states " In addition, the Chamber will host technical assistance
seminars, coordinate ribbon cuttings and grand openings, and support City programs
and initiatives such as the Cupertino Business Outreach Program visits and surveys ".
Such webinars and ribbon cutting and grand openings seem to be what Chamber
provides as member services. The full-time Economic Development Manager has been
providing such services to all Cupertino businesses. The outreach on programs and
surveys are the duties of the Economic Development manager. I think the now "full-
time" Economic Development Manager would be able to perform such responsibilities,
as stated, since the City has more outreach to businesses through business license
registration. Please help me understand why the City needs to pay Chamber, by the
hour, for the responsibilities already performed by the Economic Development
Manager? (Chao)
As outlined in the answer to Question 15 above, the Economic Development Manager, when
hired, will be focusing on the core functions of economic development, and relying on the Chamber
of Commerce to service local business audiences. In addition, this agreement is not limited to
Chamber member businesses, but to all businesses in Cupertino that possess a valid Cupertino
6
business license.
Q18: Potential conflict of interest in advocacy. The Chamber is supported by its paid
members and donations. How could we navigate this potential conflict of interest or
perception of conflict of interest? (Chao)
There is no conflict of interest that prevents the City from entering into the proposed contract with
the Chamber of Commerce, and in fact the Chamber’s interest in supporting its members aligns
closely with the City’s economic development goals. In addition, the proposed agreement ensures
that all services outlined in the scope will be available to all businesses in Cupertino, regardless of
Chamber membership status. Staff recommends that Council approve the proposed agreement to
clarify the City’s longstanding relationship with the Chamber and establish defined services that
the Chamber will provide all City businesses. Any perception of a conflict of interest is likely
related to political consideration that it would be inappropriate for staff to consider in making its
professional recommendations to Council.
Q19: If the Chamber is paid by the City to perform services the City already provides
anyway, it might give businesses the perception that they are not eligible for such
services since they are not Chamber member. Please help me understand how this
confusion of roles would not negatively affect the services the City is already
providing. (Chao)
Any collateral and promotional materials related to this agreement will make it clear that these
services are available to all Cupertino businesses and not just Chamber members. The assumption
that the Chamber will be providing services that “the City already provides anyway” is incorrect.
Q20: Since the Chamber will be invoicing the City monthly, will the payment be based on
the number of hours shown on the invoice, or will City pay a flat amount of $4,330,
regardless of the hours invoiced? (Mohan)
The Chamber of Commerce will not be paid a flat monthly amount. The Chamber will submit
monthly invoices which will include the number of hours spent on the Agreement scope. The hours
may vary from month-to-month, but the annual amount under this agreement will not exceed
$52,000.
Attachments Provided with Original Staff Report:
A. Scope of Work
B. Pay Rate Comparison by Cupertino Chamber of Commerce
Additional Attachments Provided with Supplemental 1:
C. Chamber of Commerce Personnel Info
Additional Attachments Provided with Desk Item:
D. Screenshot of Economic Development Division budget actuals from FY 08-09 – present
ATTACHMENT D
Source: https://cupertino.opengov.com/transparency/#/28422/accountType=expenses&embed=n&breakdown=8775b50c-fca7-4517-9869-
839bfac61c9a¤tYearAmount=cumulative¤tYearPeriod=years&graph=bar&legendSort=desc&proration=true&saved_view=83805&
selection=53FB871C3A8573A64C25040A3CAD0171&projections=null&projectionType=null&highlighting=null&highlightingVariance=null&y
ear=2023&selectedDataSetIndex=null&fiscal_start=earliest&fiscal_end=latest..
Economic Development Division Budget Actuals FY 2008-09 to Present