Development and Implementation of a Business Retention and Expansion Program for Dobrich
Summary
The municipality of Dobrich joined the Bulgarian Resource Cities Program, funded by USAID and implemented by FLGR and ICMA, in its second phase. Resulting from the economic development efforts of previous program phases, Dobrich identified a need for a long-term development plan for the municipality. The plan, Dobrich 2020, was developed in 2002 with the involvement of 1,500 citizens. The municipality s partners in this process included Mr. Philip Dunlap, Economic Development Director, and Mr. Ed Gardner, Assistant Director of Economic Development, City of Auburn , Alabama . Having summarized various ideas, proj ects, and initiatives, the Bulgarian and U.S. experts jointly identified several strategic goals. The first of these goals was to consolidate the efforts of local businesses, the nongovern mental sector, and citizens for the development of existing businesses, employment genera tion, and a better quality of life for the citizens of Dobrich.
Problem Statement
Dobrich needed to develop the local economy to provide a solid basis for solving pressing urban development and social problems. The municipality, in coopera tion with national bodies and the private sector, needed to identify management solutions and mechanisms aimed at encouraging positive economic change and employment generation. Dobrich municipal staff also lacked skills and practices for cooperation with businesses. In achieving its goals, Dobrich faced the challenges of developing a dialogue with local busi ness representatives and identifying the most effective ways of supporting and cooperating with them.
Project Description
To meet the above challenges, the partners tried to determine how local business and muni cipal representatives could work together within the current economic environment. The Local Economic Development and Marketing of Bulgarian Municipalities Project, a part of Phase IV of the Bulgarian Resource Cities Program, presented a timely solution. Dobrich has been involved in the project since the beginning of 2003.
Some of the most important actions that Dobrich has taken while trying to become a real partner with local business are listed below. These actions are based on the knowledge acquired at professional training events organized by FLGR and ICMA under the project, and on the technical assistance delivered by the partners from Auburn , Alabama .
Establish and Operate a Municipal Guarantee Fund
The Municipal Guarantee Fund (MGF) for small and medium-sized enterprises (SMEs) was established by a decision of Dobrich s municipal council. The MGF is capitalized by munici pal property, cash revenues representing 10 percent of the revenue from privatizing the munici pal interest in commercial companies, and in-kind contributions of property owned by commercial companies in which the municipality has a stake larger than 50 percent. The MGF s current capitalization is 87,000 leva.
The purpose of the MGF is:
To provide guarantees for up to 50 percent of the credit risk on bank loans extended to SMEs in the municipality.
In cooperation with the SME Agency, to develop loan guarantee schemes for SMEs that identify guarantee amounts and terms.
To sign agreements with commercial banks that have targeted lending programs for SMEs and establish guarantee schemes between banks and the MGF.
To review specific projects and provide opinions to be used as grounds for extending loan guarantees.
Establish an Entrepreneur s Desk at the Dobrich Citizen Information Center
In 2003 an Entrepreneur s Desk was established in the municipal Citizen Information Center to shorten business startup and expansion procedures. Desk staff provide consultations and handle the documents needed for registration of a company; construction or renovation of new commercial facilities; and licenses, permits, and registration paperwork for different busi ness activities. Through this initiative, the municipality has given real help to entrepre neurial citizens willing to start their own business.
Organize Mayor s Outreach Forums for Business Representatives
The first business outreach forum of Mayor Detelina Nikolova took place on February 16, 2004 . This initiative aimed to demonstrate openness to the community and empathy for local businesses problems, and was based on the principle of having the municipality go to the people. Galina Miteva, Deputy Mayor for Economic Development, also attended the meet ing. The business outreach forum was held in the industrial zone, at a former large plant that currently hosts 22 private companies. These companies represent different industries and have different problems. The purpose of the meeting was to develop direct contacts with company management and staff. The meeting resulted in many suggestions for improving the interaction between the municipal administration and businesses. Some specific prob lems faced by the companies were solved, but most importantly, the meeting paved the way for friendly relations and partnership between the municipality and the Dobrich business community.
Establish an Economic Development Advisory Board with the Mayor of Dobrich
In December 2003, as a part of the training under the Local Economic Development and Mar keting of Bulgarian Municipalities Project, FLGR organized a roundtable on economic development advisory boards in municipalities. Based on the training, and with the assis tance of Auburn economic development staff, the team and the mayor established an eco nomic development advisory board. Nine leading business representatives were invited to serve on the board. The first meeting took place on January 20, 2004 , during a working visit of the Auburn partners, and was attended by Mayor Detelina Nikolova and Deputy Mayor Galina Miteva. At this meeting, Auburn s Economic Development Director, Phillip Dunlap , shared his experience with the Auburn Industrial Development Board, an entity established in the 1970s. The main topic of the board s next meeting in March was the 2004 municipal budget. The participants shared many constructive suggestions and initiated specific acti vities. For example, three board members committed financial and material assistance for the spring cleaning of the city in April. The initial efforts of Dobrich s econ omic development advisory board have been promising and have laid the groundwork for many joint investment projects and innovative approaches in solving the problems of Dobrich s economy.
Organize Public Discussions
In February 2004, the municipality of Dobrich organized a public discussion in the form of its first poll on optimizing the public transport system. The purpose was to improve the public transport services delivered to citizens and companies whose staff primarily use public trans port to commute to work. The Dobrich team interviewed more than 50 local companies, most of which are located in Dobrich s main industrial area, the North Industrial Zone. The team then summarized inter view responses in 20 specific suggestions. At a regular meeting of the municipal council on April 27, 2004 , the municipal administration submitted proposals for decisions on specific issues raised by citizens and companies; namely, changing existing public transport routes, establishing new routes, and building new bus stops. From this effort Dobrich has gained positive experience with holding public discussions on pressing issues to identify solutions. Today, Dobrich boasts an optimized public transport system that meets all current needs.
Publish Marketing Profiles for Major Businesses in Dobrich
Dobrich s business retention and expansion program includes measures aimed at promoting the products and core activities of local businesses. In the beginning of this year, survey cards were mailed to almost all companies within the municipality. The completed survey cards were collected by personal visits of municipal staff to the companies, by fax, or by e‑mail. The Dobrich team then summarized the information collected in a database, which allowed them to develop individual marketing profiles for each company. In general, the profile includes contact information and information on a company s activities, products, major clients, history, and future plans. Dobrich used the new marketing profiles to present the local machine-building companies for the first time at the trade fair in Hanover , Germany , on April 19 24, 2004 . All investors who demonstrated interest have received professional-quality information on companies in Dobrich.
Publish The Partners Newsletter
At all the team s meet ings with local business representatives, they invariably mentioned the lack of available information on opportunities for entrepreneurs to apply to international and national funding programs. As a result, the partners decided to form a team of one repre sen tative each from the Chamber of Commerce and Industry, the Dobrich Business Center , and the Regional Development Agency. The pur pose of the team is to regularly provide informa tion, in electronic format, on the services provided by the three institutions, as well as on business initiatives they organize within the municipality (seminars, training, round tables, and conferences). The information collected is published in the monthly newsletter, The Partners, and is sent to companies electronically. This new initiative, which gives a clear sign that the Dobrich municipal administration values the availability of relevant information, has already generated positive responses and suggestions from the business community.
Implementation Timeline
The formation of the business advisory board, the organization of the public discussions, the company interviews, and the publication of company marketing profiles, as well as the development of the newsletter, were activities that the team initiated in December 2003 and completed by April 2004.
The groundwork for the MGF began in 2002 when the municipal council adopted a proposal for its establishment. In February 2003, the council adopted regulations on the structure and the operation of the MGF. In early 2004, the MGF board approved the first loan guarantee request.
The Entrepreneur s Desk at the Citizen Information Center has been functional since early 2003.
Solutions Overview
The results from Dobrich s involvement in Phase IV of the Bulgarian Resource Cities Pro gram and the Local Economic Development Project will contribute to the future achieve ment of tangible, positive changes for the economic development of the municipality.
On April 9, 2004 , the MGF board approved the request for a 50 percent credit risk guaran tee submitted by Zhetom Ltd. The guarantee is in the amount of 15,000 leva and is for an equipment purchase loan.
As a result of the public discussions on the optimization of the public transport system, the Dobrich municipal council decided to change five bus routes and create three new ones. This has met the transport needs of a series of companies and their staff.
The Dobrich team interviewed more than 50 local companies.
The Dobrich team developed a database of company information.
The municipality published 30 company marketing profiles.
The municipality represented eight local machine-building companies at the trade fair in Hanover , Germany .
A monthly newsletter, The Partners, is being published.
Benefits
Dobrich s involvement in the Local Economic Development and Marketing of Bulgarian Municipalities Project, implemented by FLGR and ICMA, has been a source of new know ledge and skills. Many questions arose that required answers and specific solutions. The partners identified a need to build administrative capacity for the initiation of new programs and to encourage new forms of funding for business support projects. The partners have found new, specific solutions for increasing SMEs involvement in national and international programs.
Conclusion
Through the Bulgarian Resource Cities Program, Dobrich has found the key to its economic revival. The assistance and the professional approach of FLGR and ICMA, as well as the technical assistance provided by the partners from Auburn, Alabama, helped Dobrich realize the need to consolidate the efforts of all its institutions, businesses, and citizens in order to achieve its economic priorities and meet citizens needs. This has become the municipality s vision: local business and local government together for the prosperity of Dobrich.
