RD150 - Center for Innovative Technology (CIT) Operating Plan Fiscal Year 2013


Executive Summary:
Fiscal Year 2013 Funding

CIT’s Fiscal Year 2013 budget was approved by the General Assembly at 2:00 am on May 15th. Due to the elongated budget approval process, CIT leadership developed the 2013 Operating Plan and budget based on its best estimate for Commonwealth appropriation revenue. Excluding the $1 million of funding added by the Governor for modeling and simulation and cyber security, leadership’s revenue estimates were correct. Since the additional funding was not supported by the General Assembly through the negotiation process, the Operating Plan and budget were developed without the additional $1 million. The use of these funds will be incorporated into the Operating Plan and financial forecast in early June.

Fiscal Year 2013 is the second consecutive year of elevated program and contract revenue for CIT. While elevated from pre-2012 revenue levels, 2013 revenue of $12.06 million is lower than the prior year revenue forecast of $14.19 million. Overall, both years are a significant improvement over 2011 actual revenue of $8.29 million.

Elevated funding for Fiscal Year 2012 was a result of the following key drivers:

• Sustained Commonwealth appropriations for the GAP Fund
• Federal grant revenue for broadband program funding
• Federal grant revenue for seed stage energy company investment

Reductions in revenue from 2012 to 2013 are caused by the following:

• GAP program funding reduction of $800,000 in Commonwealth appropriations
• GAP Energy Fund reduction of $1.35 million due to ending ARRA funding
• Completion of specific research and development programs

In addition to the funding CIT receives directly, CIT is designated as the fiscal agent for $4.8 million of funding for the Commonwealth Research Commercialization Fund (CRCF). The combined revenues of $12.06 million for CIT and $4.8 million for CRCF funding provide CIT with fund deployment capability of $16.86 million to facilitate technology programs for the Commonwealth in Fiscal Year 2013.

Fiscal 2013 Operating Plan

For Fiscal Year 2013, CIT’s mission will continue to be “accelerating the next generation of technology and technology companies” coupled with the objective to “achieve national recognition as the premier services provider engaged in technology company creation and company growth.”

To achieve these objectives, CIT will operate five service lines each under the leadership of a vice president. These service lines are:

Service line: Research and Development, Responsible Executive: Nancy Vorona
Service line: Entrepreneur, Responsible Executive: Thomas Weithman
Service line: Connect, Responsible Executive: Paul McGowan
Service line: Broadband, Responsible Executive: Karen Jackson
Service line: Commonwealth Support Programs, Responsible Executive: Bob Stolle

The 2013 CIT Operating Plan provides a complete description of the goals, objectives, plan of work, value proposition, program impact, and milestones for each service line. The following sections provide a summary of the Plan and funding by service line.

Research and Development service line

For Fiscal Year 2013, the Research and Development service line will execute the following programs:

1. Maintain the Commonwealth Research and Technology Roadmap.
2. Structure, administer, and audit $4.8 million of awards for the Commonwealth Research Commercialization Fund.
3. Ongoing execution of the federally funded Mid-Atlantic Regional Association Coastal Ocean Observing System for high frequency radar-based oceanic research.
4. Ongoing execution of the federally funded Mine Safety project for wireless environmental monitoring system for use in underground mines.

In addition to program operations, service line leadership will examine and pursue new opportunities in energy, national security and life sciences. To execute these programs, the Research and Development service line will expend $367,473 as outlined in the funds usage chart below.

Entrepreneur service line

For Fiscal Year 2013, the Entrepreneur service line will execute the following programs:

1. Operation of CIT’s Federal Funding Assistance Program which helps Virginia companies secure SBIR/STTR funding and ensures that the Commonwealth preserves its top 5 national ranking for total SBIR/STTR awards.
2. Accelerate seed-stage funding for Virginia’s technology startup companies by operating the GAP Fund family of funds. Funding for Fiscal Year 2013 will allow the GAP Fund to place 18 investments and support second-round funding for existing high-growth portfolio companies.
3. Accelerate seed and growth funding for Virginia’s energy companies by operating the Commonwealth Energy Fund. Federal funding for this Fund will enable the creation or growth of four energy companies.

The combination of the GAP Fund and Commonwealth Energy Fund will produce a projected 20 to 30 investment transactions for Fiscal Year 2013. To execute these programs, the Entrepreneur service line will expend $8.67 million as outlined in the funds usage chart below.

Connect service line

For Fiscal Year 2013, the Connect service line will execute the following programs:

1. Ongoing execution of the Virginia Regional Extension Center contract with the Virginia Health Quality Consortium to assist physicians with the implementation of electronic medical records and achievement of Meaningful Use. The Virginia target for implementation is 2,300 physicians.
2. Ongoing execution of the Virginia Department of Education Longitudinal Database System contract to assist with the design and approach for the establishment of a student database.
3. Pursuit and closure of new consulting business with emphasis on mobile learning; health information technology; and state, local, and national education initiatives.

To execute these programs, the Connect service line will expend $438,715 as outlined in the funds usage chart below.

Broadband service line

For Fiscal Year 2013, the Broadband service line will execute the following programs:

1. Operate the Office of Telework Promotion and Broadband Assistance to encourage the usage of telework alternatives for public and private sector employees.
2. Execute programs to support the efforts of public and quasi-public bodies within the Commonwealth to enhance availability of and access to affordable broadband services throughout Virginia. These programs include:
a. Mapping and Planning programs to refine the Commonwealth’s broadband availability map and establish plans and an approach for adopting broadband applications and infrastructure.
b. Application development and deployment to stimulate usage and demand for broadband applications in areas including telemedicine and telework.

To execute these programs, the Broadband service line will expend $1.85 million as outlined in the funds usage chart below.

Commonwealth Support Programs service line

The Commonwealth Support Programs service line has been established to address region-specific technology growth challenges. As an outgrowth of CIT’s Innovation Index and Roadmap programs, this service line ensures CIT programs are appropriate for regional growth objectives. Throughout the development and refresh of the Roadmap, leadership of this service line examines opportunities to propose new CIT programs to address current growth inhibitors. To execute these programs, the Commonwealth Support Programs service line will expend $317,923 as outlined in the funds usage chart below.

Corporate Support Groups

In addition to the operating service lines, CIT is supported by the Finance and Administration (F&A) group under the leadership of the Chief Financial Officer (CFO), Linda Gentry. CIT’s F&A group is responsible for all financial, legal, and administrative functions of the corporation including the design and operation of a federal and state compliant financial management system.

The Chief Technology Officer (CTO), David Ihrie, provides leadership of the group responsible for technology vision, as well as information technology services. The goal of the CTO is to take a lead role in defining, promoting, and implementing forward-looking technology policies and processes that advance entrepreneurial activity and the assimilation of technology.

CIT is supported by the Government and Public Relations group under the leadership of Vice President Hap Connors. The Government and Public Relations group is responsible for state, federal, and public relations functions.