Hume, Wood Partner Up to Discuss Region Business, Elk Grove RISE Partnership

Josh Wood (left) of Region Business and Elk Grove City Council Member Pat Hume discuss a new economic
development program. |   
November 20, 2017 |     

With the advent of the RISE partnership between the City of Elk Grove and Sacramento-based Region Business, representatives of each entity recently appeared on a local radio program to discuss the new program.

Appearing on Saturday, November 11 edition of the Mark Haney radio show, was Region Business president Joshua Wood and Elk Grove City Council Member Pat Hume. The two explained the intent and long-term hopes of the Responsible Investments for a Stronger program - RISE.

The program, which was formulated and presented by Region Business to the City of Elk Grove will divert some of the city's deposits from large multi-national financial center institutions to regionally-based banks. As the charter participants in the program, the City has agreed to transfer $15 million to banks that are regionally-based and have branches within city limits.

As Wood explained, with the new deposits, banks like Five Star have committed to lend at least 50-percent of that money to locally-owned businesses. Wood added that this is a "concrete way to do economic development."

Explaining the city's rationale for switching some of these deposits, Hume said the some of these monies are kept in the State of California's local agency development fund that does the same thing but on a statewide basis. Although the money is available statewide, Hume said there are no requirements where the capital flows.

"The simplicity of this is that it is money that is generated locally, it gets invested locally, and it is put to work locally," he said. "So I think it is taking municipal finance and using it as a VC (venture capital) fund for start-ups, for expansions, for construction."

Also appearing with Hume and Wood was the chief executive officer of Rocklin-based Five Star bank, James Beckwith. When asked how they would loan the from City deposits with them based on RISE, Beckwith said his bank would focus on getting loans to Elk Grove businesses.

"In terms of Elk Grove, any monies that they deposit, to us, we would make sure that we did our best job to go ahead and make loans within Elk Grove," Beckwith said. "We are committing to do at least 50-percent, we are hoping to do more than that."

Beckwith said if Five Star does receive these deposits, they will voluntarily report back to Elk Grove on a semi-annual basis of loan disbursements.

While Elk Grove is the first to participate, Wood said he hopes to expand it to other entities including the county, school districts, special districts and other municipalities. Ultimately Wood expects to generate $1 billion in deposits for area financial institutions.

Hume said the decision to participate in RISE was made by city council's audit committee which consists of himself and Vice Mayor Steve Detrick.

"When we heard the pitch, we kind of had to lead staff along a little bit," he said. "Financial folks within municipalities tend to be a belt and suspender crowd for good reason."




   




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