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Worker Cooperative Policy October 16, 2018 Page 2 residents and providing the necessary resources for residents to become business owners in the City. During the September 4, 2018 City Council meeting, staff was directed to bring back a policy to the City Council for their consideration. Several cities across the United States have developed initiatives designed to support the development of worker cooperatives such as: Madison, WI — created an economic development program designed to support worker cooperatives; Minneapolis, MN — refocused their small business loan program to support worker cooperatives, and cities of Oakland and Berkeley passed a resolution of support for worker cooperatives. Over the past year, Economic Development staff have been working with community organizations, such as Santa Ana Building Healthy Communities, Delhi Center and Cielo, which are currently engaging and incubating local worker cooperatives with a focus on addressing local issues like food insecurity, wage inequality, and other positive health outcomes for residents. These discussions have led to a new proposed policy within the Community Development Agency to provide support for worker cooperatives. The two main actions of the policy are summarized below: 1. Develop Worker Cooperative Support Program within the Economic Development Division 2. Support and promote the conversion of businesses into worker cooperatives by offering informational workshops to local businesses Many business owners do not have succession plans and communities should be prepared for the impending retirement of these businesses. Many times, these businesses close or relocate out of the area impacting the local residents that work there. By supporting the development of worker cooperatives, these businesses can take advantage of a new business structure that enables the workers to become owners and keep their jobs and the business in the City. Staff is recommending the adoption of the worker cooperative policy. With this policy adoption, future funding sources will need to be identified to continue to market and promote the actions of this Policy. City staff will also provide an annual report to the City Council on the progress of identifying and supporting local worker cooperatives in the City and will also work to include financial incentives for worker cooperatives in upcoming business license review initiatives. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #3 Economic Development, Objective #1, (Implement a comprehensive Economic Development strategy to ensure that Santa Ana is a City with a vibrant business climate that is accessible, user-friendly and welcoming to all residents and visitors), Objective #5, Strategy C (Develop a knowledge base to foster economic development by actively partnering with non-profit organizations). 19D-2