Community Vitality Center

Meeting of the Governance Board
Fairfield, IA
October 19, 2004

Present: Burt Chojnowski, Beth Danowsky, Jim Erb, Jane Halliburton, Mark Hamilton, Rick Morain, Steve Padgitt, Joan Phillips, Randy Pilkington, Carol Smith, Sue Cosner, Manuel Silva, Maureen Elbert, Kevin Prine, Nancy Van Milligan, Mike Wells, Denise Essman, Ed Raber, Mark Edelman, Sandy Burke, Craig Hertel, Rand Fisher, Gib Phillips

The meeting of the Community Vitality Center (CVC) Governance Board was called to order at 1:30 P.M. by Rick Morain, CVC Governance Board Chair. Morain asked if there were additions or changes to the agenda and there were none. Morain asked if there were changes to the minutes of the last meeting posted on the CVC web site and there were none.

Morain asked for reports. Morain reported as Chair that federal funding for the Northern Great Plains Authority would be dropped as a priority if funding were not made available this year. Steve Padgitt's administrative report said that a business plan was being put together for the Extension initiative in economic development. Mark Edelman added that Stan Johnson was improving in health and that Johnson hoped to report more on the Extension initiative at the January Board meeting.

Edelman reported on the tentative Senate budget appropriation numbers for FY 2005.

Edelman said that the CVC proposal to Kellogg for rural entrepreneurship ranked in the top 60 out of 180, but had not made it into the 12 semifinalists. He indicated that the 12 proposals accepted as semifinalists primarily represented areas of the country with chronic poverty and that Iowa does not really fit into extreme poverty criteria. The CVC has another proposal in to Kellogg for philanthropy, but there has been no feedback yet.

Morain asked for introductions and a review of recent activities from those present.

Craig Hertel gave an update on the philanthropy and foundation satellite programs. At least 62 counties had participated in them and the programs have been recorded and are available. Edelman reported that the Iowa Council of Foundations would oversee implementation of the Endow Iowa Matching Grant program and likely also the Countywide Gambling Endowment Program implementation. The lead entity would have an overview of how the counties develop their programs and focus. Nancy Van Milligan said that some tax credits from Endow Iowa were still available. Beth Danowsky said that there is a web site for information on the programs www.iowacommunityfoundations.org.

Edelman reviewed the agenda for tomorrow's entrepreneurship academy. He also said that he had attended the National Policy Conference which had sessions on entrepreneurship by Don Macke, Jayne Kayne, and KC Federal Reserve Bank, Center for the Study of Rural America. Proceedings from the sessions are available on the Farm Foundation website. Edelman reported that CVC was collaborating with the RUPRI Rural Entrepreneurship Center on a case study of entrepreneurship in Fairfield. Sandy Burke gave an update on the migration study.

Morain opened the discussion to new business. Edelman reviewed the budget recommendations for the CVC 4th year core funding. There has typically been $50,000-$60,000 in pilot and/or demonstration projects each year. The project selection process has been moved forward to the October Board meeting in order to make the submission to the USDA easier. Although a finalized budget is not needed until the January Board meeting, if a tentative budget was approved then the Executive Committee could act on it if there was a need to do it earlier. Edelman recommended allocating $50,000 to pilot projects. Morain added that over the last two years entrepreneurship and philanthropy have been the major areas of focus.

Manuel Silva asked if funds can carry over from one year to the next? Edelman said that many projects ask for extensions in order to complete their projects. The budget for the past year has been very similar to this one proposed. Silva asked what would be left over in January, for example, if another project came up. Edelman said that if five projects are approved for funding, $50,000 of the $70,000 tentatively allocated for entrepreneurship would be committed. Since there are nine project proposals and funding for only five, not all those submitting proposals will be funded.

Burt Chojnowski asked how the $70,000 for philanthropy would be spent. Edelman said that amount was set aside for partnerships and collaborations and it was his intent that the statewide Philanthropy Working Group that includes the Iowa Council of Foundations, Iowa Nonprofit Resource Center, and Department of Economic Development would be consulted on the details of the allocation of the $70,000. Edelman said he was assuming that the USDA proposal would still be due in early February and that he wanted to get away from needing two proposals for them, the main one and another one for the subcontracts.

Danowsky wondered if some amount or percent should be set aside as a contingency fund for projects that come up later on. Edelman said that USDA projects of this nature typically do not include contingency funds, but must be specified for some use to justify their allocation. Danowsky noted that there would be some flexibility on the philanthropy side to fund things but not much on the entrepreneurship side if the $50,000 was approved today for the specific projects.

Jim Erb asked if at each quarterly meeting if there could be an update as to where each allocation was at. That way there would be an idea of how spending was going at each Board meeting. Padgitt noted the need to keep funding times fairly regular so the those making the requests would know what to do and when. He also said that the CVC had an established pattern for the entrepreneurship proposals and that there was no similar pattern for the philanthropy focus. Jane Halliburton said there was a need to have an idea on allocations and not too much set aside for contingency spending as there were federal budget pressures that would be increasing.

Chojnowski said that he liked the budget and that perhaps the philanthropy effort would become more self-sufficient in the future and that maybe eventually some funding would be given back to the CVC. Edelman said that the CVC's flexibility is limited by the $250,000 that it is the core budget and he reminded the Board that they had developed a strategic plan that had an objective for developing capacity for creating 10 new businesses per county per year with a price tag of $2 million. He said there is a need to think of what could be accomplished and efforts to diversify the revenue sources. Chojnowski added that the service bureau concept would give more flexibility to the funding.

Morain asked for a motion on the tentative budget. Silva moved and Mark Hamilton seconded to accept the tentative budget as proposed. Danowsky called the question and all members voted "I"; none opposed and the tentative budget was approved.

Edelman discussed how the project proposals had been reviewed and the system used. Each project was rated on 10 attributes by two merit reviewers. The independent ranking scores were combined into one set of combined ranking scores. The Director recommended funding for the projects with the top five combined ranking scores. Morain noted that there were differences in ranking by the two reviewers and Denise Essman asked if a project could be given less than the $10,000 requested. Edelman said that in the past, some projects had requested less than the full amount of funding and that some projects were asked to make changes in their proposed budget categories. Edelman indicated that two reviewers were used in past peer review systems. Morain suggested that perhaps three reviewers might be used in the future. Padgitt said that it wasn't unusual in peer review to have discrepancies in reviews and that the rankings were consistent among the reviewers for the top five rated projects. Joan Phillips also said that in her experience she had often found variations in reviewer rankings.

Chojnowski suggested that perhaps projects could be reviewed by others who have already been funded by the CVC. He expressed concerned that some proposals were allocating too much to salaries. Chojnowski also indicated a preference for paring the spending in Project 9 and didn't see a need for $10,000 for 10 students.

Erb noted that in the Vision Iowa process the proposers get an initial review from the program and that they then renegotiate with their local group to finalize the project proposal. He suggested to take the proposals and review them with each group. Edelman indicated that CVC has in the past and will in the future negotiate with Project sponsors before subcontracts are finalized and that the CVC staff attempts to carryout the preferences and priorities of the CVC Board. Chojnowski added that there could be money saved and leveraged to get more out of the proposals for less money. Erb said that the projects should be linked to contacts and lessons learned from previous projects to the extent that there are similarities.

Padgitt moved that there be an adhoc committee formed to make a recommendation on the process of proposal review for future projects but not for the proposals needing action today. Halliburton seconded Padgitt's motion. Randy Pilkington said that there could be a review committee to go into the proposals more deeply. Chojnowski said that there should be feedback to the proposal groups so that the proposals could be strengthened before they get to the board.

Morain asked for a vote on the Padgitt motion. All Board members voted "I"; none opposed and the motion to form an adhoc committee to review and recommend on the process of reviewing future project proposals was approved.

Edelman noted that there would be enough time to have a Board committee also review the current proposals and thus give suggests for improving the projects accepted. Halliburton said that she was concerned about changing the process for these current proposals and recommended going ahead with the Director's recommendations on these projects.

Morain asked if there was a need to approve the projects and the dollar amounts today and Edelman said that what was going to be funded would need to be known close to the end of the year so that the subcontracting forms could be done and submitted in February. Chojnowski asked if this would close the funding for this round and Edelman said that yes, it would. Morain suggested that the Board not go through the projects today as a committee of the whole and Carol Smith said that Board members have reviewed the projects and could submit comments to Edelman.

Silva moved to form a committee to provide suggestions for improving the project proposals presented to the Board and Chojnowski seconded it. Morain said that he would appoint a committee of Chojnowski, Erb, and Pilkington plus one or two others. Danowsky called the question and all Board members voted "I"; none opposed. The motion to form a committee to review the project applications was approved.

Edelman talked about ways to diversify the funding for the CVC. Initiatives were suggested for federal, state, and private funding. Edelman said he would like to pursue the statewide collaborations that had been proposed in the Kellogg proposal on entrepreneurship. Erb suggested that Iowans for a Better Future should be contacted regarding their goal groups from the 2010 Report. Chojnowski suggested the Edward Lowe Foundation as another source of funding. Edelman asked the Board if pursuing the various suggested funding sources was appropriate for the CVC staff to work on. Halliburton moved to authorize the CVC staff to move forward on these potential initiatives for further CVC funding. Padgitt seconded. All Board members voted "I"; none opposed and the motion to pursue other funding sources was approved.

There was discussion of the philanthropy satellite programs and the issues arising in counties now as they deal with the gambling and the Endow Iowa funds.

The meeting was adjourned.