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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/16/1999 - ITEMS RELATING TO THE CITYS ECONOMIC POLICY AGENDA ITEM SUMMARY ITEM NUMBER: 29A-D DATE: February 16, 1999 . FORT COLLINS CITY COUNCIL STAFF: Frank W. Bruno/ SUBJECT: Items Relating to the City's Economic Policy. i RECOMMENDATION: Staff recommends adoption of the Resolution and the Ordinances on First Reading. Pi FINANCIAL IMPACT: There are no financial impacts directly associated with the modification to the City's Economic Policy. The projected financial impacts associated with the Manufacturing Use Tax Rebate Program for 1998 is expected to be approximately $510,000. There are no direct or immediate financial impacts to the City in connection with the termination of the Development Impact Fee Rebate, and Street Oversizing Fee Exemption Programs. IMPACTS ON BUSINESS SECTOR: There are no direct impacts on the business community from the economic policy modifications. The changes to the Manufacturing Use Tax Rebate Program changes will likely encourage both the initial investment and re-tooling decisions of both large and small manufacturing businesses. This would be consistent with the policy change designed to encourage local business start-ups. The termination of the Development Impact Fee Rebate,and Street Oversizing Fee Exemption Programs may have different impacts. With regard to the Development Impact Fee Rebate Program, initial development costs associated with the construction or expansion of business facilities will not increase; however, there will no longer be an opportunity to seek a rebate of certain development fees associated with the project. This may in turn impact business decisions to expand locally. It should be noted that recent changes to the Street Oversizing Fee structure have actually resulted in a significant reduction of the Street Oversizing Fee as it pertains to industrial business uses. The termination of the Street Oversizing Fee Exemption Program will therefore have less long-term impact on businesses. DATE: e ruary 16, 1999 2 ITEM NUMBER: EXECUTIVE SUMMARY: The following actions resulted from the City Council study sessions held in April and December of 1998. These sessions were held by Council to continue the ongoing discussion of the appropriate City role in maintaining the long-term viability ofthe Fort Collins economy. Over the past ten years, the City has begun a shift away from the former model used in many parts of the U.S. of using financial incentives to encourage local business development and j ob creation. The current approach emphasizes tools and techniques that focus on building local capacity for business development and entrepreneurial activity. This includes refining the City's economic policy to reflect this shift, modifying the Manufacturing Use Tax Rebate Program to encourage new manufacturing business start-ups, and expansions. Additional actions include ordinances terminating the Development Impact Fee Rebate Program, and the Street Oversizing Impact Fee Rebate Program. BACKGROUND: On December 22, 1998, City Council held a study session to discuss the various elements of the City's economic policy. There were five main topics discussed: 0 Economic Policy Statement • Manufacturing Use Tax Rebate Program • Terminating the Development Impact Fee Rebate and Street Oversizing Fee Exemption Programs • Economic and Community Indicators • Economic Policy Advisory Board Council requested that the following items be brought forward for consideration during a regular City Council meeting. The items for consideration are as follows: A. Resolution 99-23 Amending the Economic Development Policy and Renaming it as the Economic Policy of the City of Fort Collins. B. First Reading of Ordinance No. 30, 1999, Continuing and Modifying a Temporary Manufacturing Equipment Use Tax Rebate Program For Fort Collins Manufacturers. C. First Reading of Ordinance No. 31, 1999,Repealing Article VII,Chapter 5 of the City Code in Order to Terminate the Development Impact Fee Rebate Program. D. First Reading of Ordinance No. 32, 1999,Repealing Section 24-113(b) of the City Code,in Order to Tenninate the Street Oversizing Exemption Program. Staff is currently compiling examples of various indicators from other communities for further consideration at a later date. While there was no agreement regarding the establishment of an economic policy board, Council suggested that the planned Community Dialogue process include a session on economic policy in order to elicit citizen perspectives on this topic. I DATE: February 16, 1999 3 ITEM NUMBER: A. Economic Policy • Action Proposed—Modification: As has been stated,the City's Economic Policy was last modified in August of 1994. Since that time the City has initiated a shift away from the use of financial incentives, toward a more entrepreneurial and small business approach. Perhaps the key to the suggested modifications is a focus on building local capacity to generate new business activity,and the spin-off of enterprises from Colorado State University, as well as existing businesses. The Policy now reflects efforts made to develop the Fort Collins Virtual Business Incubator, and the kick-off of a one-stop small business assistance center in concert with Front Range Community College's Small Business Development Center. Both entities are co-located along with the Service Corps. of Retired Executives (SCORE) on the main level of the Key Bank building at Oak and Howes in downtown Fort Collins. A copy of the Economic (Development) Policy with revisions from the prior version marked is attached to this Agenda Item Summary. B. Manufacturers Use Tax Rebate Program Action Proposed—Modification: The Manufacturers Use Tax Rebate Program was initiated in 1996, and was intended to focus on encouraging the investment made by local manufacturing firms in new manufacturing equipment. This type of investment was once made every three or four years for most companies. In this day and age such investments are being made every 15 to 18 months for some high-technology companies. Assessing use tax on every re-tooling results in a relative windfall for a community since there is little added cost or impact associated with serving the existing firms making these purchases. In 1996,the City rebated$380,287 to 10 of 27 firms that were eligible for rebates. In 1997,the City rebated$439,917 to 15 of 31 eligible companies. Staff estimates the 1998 rebate liability to be about$510,000. In early 1998, City Council approved several changes to the Manufacturing Use Tax Rebate Program. Many of the changes resulted from suggestions by local manufacturers. Staff is now recommending elimination of the three-year eligibility requirement that is currently a restriction of the program. This change reflects the Policy intent to encourage the initial investment as well as reinvestment of smaller start-up businesses as well as existing firms. Staff is also recommending an extension of direct payment arrangements beyond the initial nine-month period to the suggested 12 months. This would accommodate large-scale re-tooling projects that require additional time for completion. Consideration has been given to the tax equity and fairness questions that have arisen. Data shows that the base industry manufacturing sector continues to carry a predominate share of both the use tax and personal property tax load in Fort Collins. The attached graphs show that the manufacturing companies that are eligible for this program contribute 72% of the City's $1.5 million in personal property tax and 70% of the City's $5.4 million in use tax. Staff is recommending that the Manufacturing Use Tax Rebate Program be continued on a year-to- year basis due to the serious possibility that legislation will be brought forward at the State level in 1999 to eliminate Personal Property Tax. Similar legislation was passed in the legislature in the past two years, but vetoed by Governor Romer each time. Such a change to the City's tax base (elimination of approximately$1.5 million in revenue)would dramatically impact the City's ability DATE: February 16, 1999 4 ITEM NUMBER: to deliver current services. This situation might also require the curtailment of the Manufacturing Use Tax Rebate Program. Staff will monitor this activity and keep the Council informed. A copy of the Program Description with revisions from the prior version marked is attached to this Agenda Item Summary. C(1). Development Impact Fee Rebate Program Action Proposed- Termination: The Development Fee Rebate Program was initiated in 1990 with City Council approval. The Program was originally a Fee Waiver program,with the General Fund actually bearing the burden for the firm. The program was modified in 1994, and converted to a Rebate Program. In this way the firm pays the fees up-front, and then receives a rebate of the fees (as approved by Council)over time using the sales and use taxes received from the firm. At the time the program was designed it was intended to assist in the location and expansion of basic industrial firms by reducing the initial costs associated with the construction/expansion of the firms facilities. Since the program's inception,roughly$980,000.has been approved by Council. The actual results associated with the program have,however,been very difficult to gauge. Ordinance No. , 1999, repeals the City Code provisions establishing the program, and terminates the operation of the program. C(2). Street Oversizing Impact Fee Waiver Program Action Proposed- Termination: The Street Oversizing Fee Exemption Program was initiated in August 1989, and was intended to assist in the location and expansion of smaller basic industrial firms. The Program functions administratively,and can be approved up to a maximum of$50,000. The City Council has appropriated$100,000 each year for the past nine-years for the Program. The funding is limited to the yearly$100,000 appropriation, and does not cant'-over from year-to-year. Since the program's inception, roughly $170,000 has been spent. The typical amount of an exemption has been in the $3,000 to $5,000 range. Again, it is very difficult to link either the success,or failure of a business to the existence of this program. From an anecdotal perspective one could make an argument that this,and the Development Impact Fee Rebate Program,might provide some added encouragement for a firm to expand in Fort Collins. Recent changes to the structure of the Street Oversizing Fee Waiver Program have actually resulted in a reduction of the fee for industrial business uses. Ordinance No. 32, 1999,repeals the City Code provision establishing the program, and terminates the operation of the program. ATTACHMENT A CITY OF FORT COLLINS MANUFACTURING EQUIPMENT USE TAX REBATE PROGRAM FEBRUARY 16, 1999 I. DEFINITIONS The following definitions shall apply in the administration of this temporary program: A. Manufacturing shall mean the operation of producing, in an industrial setting, a new product, article, substance or commodity, different from and having a distinctive name, character, or use from raw or prepared materials. Manufacturing shall not include: publishing; ready-mixed concrete production; logging; mining; farming; construction by contractors; wood preserving; electroplating, plating, metal heat treating, and polishing for the trade; lapidary work for the trade, fabricating of signs and advertising displays; milk bottling and pasteurizing; various service industries to the manufacturing trade such as typesetting, engraving, plate printing, and preparing electrotyping and stereotype plates. Manufacturing shall not include product research and development and testing. B. Manufacturing equipment shall mean the equipment used by a manufacturer in the manufacturing process as defined above. Manufacturing equipment shall not include climate control equipment. C. Full time equivalent (FTE) shall mean a full time employee or the equivalent thereof. This definition includes seasonal, temporary, permanent, and contractual employees of the company and all employees of contract employment agencies who perform temporary manufacturing services for the applying company. II. QUALIFICATIONS A. Only firms engaged in the manufacturing process, as defined herein, are eligible for the manufacturing use tax rebate. B. The rma. tifeeturimu operations of atieh firrm rmust have existed im the Gity of Fort Gellins for at least a three year peried prier to appliee B. Only purchases of machinery by a person engaged in manufacturing to be used in the City of Fort Collins directly and exclusively by such person in the manufacture of tangible personal property, for sale or profit, are eligible for the rebate. 1 C. All purchases by manufacturing firms will be subject to the full 3A46 LMi sales and use tax rate. A rebate will only be granted upon application and approval of the specific manufacturing equipment purchases for which a rebate is requested. D. The rebate shall apply only to purchases where a a.996 Wja= use tax has been paid directly to the City of Fort Collins by the manufacturing firm requesting the rebate. 1. Firms may request a direct payment of use tax to the City under the following conditions: a. The direct payment arrangement may only be requested by the manufacturer for large one-time expansion or retooling projects. b. All direct payment arrangements must be pre-approved by the Financial Officer. Manufacturer's must give no less than 60 days notice prior to execution of the agreement. C. Direct payment arrangements must be agreed to in writing by each retailer supplying the manufacturing equipment. d. Any direct payment arrangements will be limited to a period not to exceed-nine months. e. Manufacturers will be required to submit a monthly accounting of all purchases made under the direct pay agreement with their monthly sales and use tax return. f. Any use of the agreement by the manufacturer after the expiration date will result in a ten percent (10%) penalty of the tax that was due on those purchases. E. Sales or use taxes paid to another taxing jurisdiction for purchases of manufacturing equipment are not eligible for the rebate. F. Used manufacturing equipment purchased when a business is acquired through sale or transfer of title or possession is not eligible for the rebate unless the purchaser has been engaged in business in the City for at least three years. Assets acquired as a result of a merger between two firms located in Fort Collins will be eligible for the rebate. *F either of the ee pwies has been engaged in business in Fort Geliffins fa at least three -fears. G. Manufacturing equipment that is leased shall be subject to the full 3.996 pff, sales and use tax rate imposed by the City and collected by the lessor. Sales or use tax paid to the lessor shall not be eligible for the rebate. I. Firms must certify as to compliance with Federal, State and local laws and 2 regulations for the manufacturing facility located in Fort Collins. Firms must be current with all payments to the City of Fort Collins and firms must not be in default with any contractual agreements with the City. III. TIERED REBATE SCHEDULE A. The following tiered rebate schedule will be used to determine the amount of rebate to be granted: CITY OF FORT COLLINS TIERED REBATE SCHEDULE Cost of Use Tax Use Tax Rebate Manufacturing Equipment Rate Paid Percentage Maximum Rebate S 0 to $5,000,000 3.00% 2.00% $100,000 $5,000,001 to $15,000,000 3.00% 1.00% $100,000 $15,000,001 to $50,000,000 3.00% 0.00% None $50,000,001 and over 3.00% 2.00% $2,200,000 Total Maximum Rebate $2,400,000 B. The maximum rebate given to any one company for purchases of manufacturing equipment will be $2,400,000. C. Any company whose purchases of manufacturing equipment exceed $50,000,000 in a calendar year, will be limited to a $200,000 rebate if the growth in the company's FTEs in Fort Collins exceeds 10% in that year. G. AN rebates will be lurmited to :7596 of the eligible vureHasea to allow for the pertia Al IV. PROCEDURES A. Prequalification The Financial Officer shall notify those companies who were listed in the Standard Industrial Code (SIC) classification as "manufacturers" for City of Fort Collins sales and use tax purposes on or before January 1 , 1996 of the temporary manufacturing use tax rebate. The company wishing to apply for a rebate under this program shall be required to complete a prequalification form 3 as may be required by the Financial Officer. B. Monthly Reporting 1 . Companies that have been qualified to participate shall be required to submit a monthly report of manufacturing equipment purchases to the City. The report shall be in accordance with a prescribed format and schedule set forth by the Financial Officer. 2. The reports shall be filed with the company's sales and use tax return on the 20th of the month following date the equipment was purchased. 3. All qualifying manufacturers shall be required to file a monthly sales and use tax return. Quarterly and annual filings are not allowed. C. Year-end Rebate Process 1. All participants must submit an application for rebate no later than March 31 following the calendar year for which the rebate is requested. Example: rebate requests for 1998 must be submitted by March 31, 1999. 2. Applications must be filed using the format prescribed by the Financial Officer. 3. Applications may be subject to audit as provided in Chapter 25 of the Code of the City of Fort Collins. 4. Applicants will be notified of the amount of the rebate by mail. 6. Should a dispute arise regarding the amount of rebate allowed by the City, the applicant may, within twenty (20) days after such decision is mailed, petition the Financial Officer for a hearing on the rebate claim. The Financial Officer will notify the applicant of the time and location of the hearing. All hearings will be held in Fort Collins. After the hearing, the Financial Officer will make a final ruling as he or she deems just and proper. A copy of the final ruling will be furnished to the applicant. 7. The right of any company to apply for a rebate under this program is not assignable. An application for rebate must be made by the company that paid the tax. 4 GAMEETING AgwdoM0218\eoonpol.wpd i i 5 . RESOLUTION 99-23 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING THE ECONOMIC DEVELOPMENT POLICY AND RENAMING IT AS THE ECONOMIC POLICY OF THE CITY OF FORT COLLINS WHEREAS,on February 5, 1991,the City Council adopted Resolution 91-15,affirming the City's Economic Development Policy; and WHEREAS,the Economic Development Policy was revised on August 2, 1994, to better reflect the City's role in the community's economic development approach,and to express the City's intention to work in cooperation with other public and private entities to promote and encourage - workforce training,human resources development,and basic and advanced skills enhancement;and WHEREAS,the Council believes that the economic strategy of the City continues to be best characterized as a partnership among the public and private sectors, and the citizens of the community; and WHEREAS, it is the desire of the Council to amend the Economic Development Policy, renamed as the Economic Policy, so that said policy better reflects the City's role in working to enhance the community's prosperity, in addition to stating the City's intention to work in cooperation with the other public and private entities to encourage workforce training, affordable • housing, human resources development, small business and entrepreneurial activity, and business reinvestment; and WHEREAS,Council believes the proposed changes included in the Economic Policy are the best interests of the City. NOW, THEREFORE,BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the Economic Policy of the City of Fort Collins, attached hereto as Exhibit"A" and incorporated herein by this reference,is hereby adopted,and shall supersede the previously approved Economic Development Policy. Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this 16th day of February,A.D. 1999. Mayor ATTEST: City Clerk EXHIBIT "A" City of Fort Collins Economic Policy The methods by which communities address the enhancement of their local economies vary widely. In some instances the responsibility for leading a community's economic development effort falls to a single entity, whether it be local or regional, public or private. There are many models across the country ranging from government funded and directed programs, to privately sponsored programs with little or no municipal involvement, or collaborative models. In Fort Collins, economic development can be best characterized as a partnership among the public and private sectors, and the citizens of Fort Collins. This partnership is based - upon a continuum of services to existing and prospective business in which the City facilitates the processes and procedures required for site development, provides data and demographic information, invests in municipal infrastructure, and considers other initiatives on a case-by-case basis. The private sector shares responsibility with the public sector for the retention and expansion of business or industry within Fort Collins. This may include marketing and promotion of the community, outreach to existing business, assistance in arranging project financing and small business counseling. . This effort is supported directly and indirectly through the work of various entities identified below. The following outlines the partnership approach currently in practice in the Fort Collins community. As with any policy statement, this document should be reviewed in the context of current needs and relevance at least every two years. Role of City of Fort Collins The view held by the City of Fort Collins is that whether they are considering expansion or relocation, businesses are most concerned and interested in the community's overall quality of life. Those in the private sector responsible for corporate site selection most often cite the quality of both our primary and secondary schools, the skills of our workforce, the consistent quality and value of municipal services, and perhaps in many ways above all, the state of our natural environment. Over the years, the City of Fort Collins has invested in its utility systems to ensure reliability and consistency of service. This has been cited by many firms as a critical element in their success, and a key reason why they chose Fort Collins for their initial location, or expansion. Additionally, City policies and investment in parks, trails, and open space and natural areas continue to be important influences to both business investment and citizen satisfaction. These are values to which the City Council and the citizens are deeply committed and serves as the cornerstone of the City's economic development effort. • t 02/16/99 Included in these values is a dedication to doing all the City can to encourage the development of housing for a variety of income levels, maintenance of a fair local taxation system, and attention to developing and maintaining a high quality, and state-of- the-art infrastructure. This also includes developing a fiber optic network, and other resources that may be available in the future,providing both internal and external linkages to other firms, research institutions, and support services. The City's primary role in economic development focuses on those areas which directly involve City process and procedure. The City's economic development program is based on City Council Resolution 87-49 and subsequent Ordinances in which Council adopted certain goals, policies, and programs related to economic development and economic opportunity. In general terms, the goals of the City of Fort Collins is to encourage and support economic opportunities which provide self-sustaining employment, increase private investment within the community and improve the quality of life for Fort Collins residents. Achievement of these goals is pursued through a series of policies adopted by City Council and outlined in the above referenced resolution. Among these are the following: • Commitment to maintaining and enhancing the City as a good place to live and work. • Emphasis on comprehensive, quality municipal services as the City's primary contribution to the community's economic development effort. • Creation and maintenance of a positive climate for both local and new business. • Assist and encourage small business retention and entrepreneurial activities as appropriate. • Encourage workforce training,retraining, education, and employee support services to assist in the creation and expansion of meaningful employment opportunities. • The City's role in dealing with prospective expansions or relocations focuses on planning and the provision of municipal services and facilities such as streets and utilities. • Encourage the development of a wide variety of business activities rather than focusing solely on one sector. • Awareness of the community's role in the global and domestic marketplace, and the importance of welcoming and assisting visitors from other nations, foreign firms, and tourists. 2 02/16/99 Action steps, which may be used to implement the aforementioned policies, may include the following: • The City will work with other public and private entities to promote policies and programs which encourage education, training, workforce development, and basic and advanced/technological skills enhancement. • The City will provide prospective businesses with information regarding municipal services, schools, recreational opportunities,health care, and other services available within the community. • The City will make existing and prospective business aware of opportunities available through Colorado State University and the private sector in the areas of - product and process development. • The City will consider partnerships with other public and private entities such as the Fort Collins Virtual Business Incubator and Small Business Development Center to encourage entrepreneurial activity within a one-stop environment. The City will continue to maintain and enhance utility and technological infrastructure and strive to provide consistently reliable and efficient service, at the best value possible. • The City will strive to maintain a municipal tax and fee structure which is both reasonable and equitable. • The City will provide assistance to business and industry with regards to City process and procedures. • The City will continue to afford new and existing business and industry the opportunity to seek specific assistance pursuant to Council adopted Ordinances and other programs enabled by state or federal legislation. • The City will monitor economic, community and environmental indicators on a periodic basis and consider actions that address a change in the local economy. • The City will evaluate all programs and policies that are suggested for Council consideration to determine if there are unintended impacts on the business community. Role of Private Sector The private sector plays a significant role in the success of the overall economic development strategy. The mission of the private sector, is to work with the City and other public and private organizations to retain and expand basic industry and other businesses within the City and County. This effort requires the support of Fort Collins, 3 02/16/99 EDC, the Chamber of Commerce and other entities referenced below, as well as the local banks, financial institutions and existing business and industry. The private sector role is characterized by its ability to work with new and existing business in a confidential manner. Issues such as real estate values,business climate, financing options, and site options are most appropriately addressed by the private sector. Role of Outside Entities The efforts of the City and private sector to enhance the economic prosperity of the community are directly and indirectly supported by several organizations and entities such as Colorado State University,Downtown Development Authority, business associations, Larimer County Convention and Visitors' Bureau,Poudre R-1 School District,Workforce Investment Board, and the Employment and Training Service. Though each has an independent focus,their work contributes to the overall quality-of- life and prosperity, enjoyed within the community. In this way, the network required to conduct an effective community-based economic development program is provided. 'Resolution 87-49 of the Council of the City of Fort Collins adopting the goals and policies related to Economic Development and Economic Opportunities in Fort Collins. 4 02/16/99 . City of Fort Collins Economic Development Policy The methods by which communities address eeeftemie develep theenfiancementof F- heir local'd economies vary widely. In some instances the responsibility for leading a community's economic development effort falls to a single entity, whether it be local or regional, public or private. There are many models across the country ranging from government funded and directed programs; to privately sponsored programs with little or no municipal involvement of `oollaboratrve models: In Fort Collins, economic development can bee stst characterized as a partnership among the public and private sectors, and the citizens of Fort Collins. This partnership is based - upon a continuum of services to existing and prospective business in which the City facilitates the processes and procedures required for site development, provides data and demographic information, invests in municipal infrastructure, and considers other initiatives on a case-by-case basis. The private sector shares responsibility with the public sector for the retention and expansion of business or industry within Fort Collins. This may include marketing and promotion of the community, outreach to existing business, assistance in arranging project financing and small business counseling. This effort is supported directly and indirectly through the work of various entities .7.-, identified below. The following outlines the partnership approach currently rn practicg.m the Fort Collins community ;As'with,any policy_statement, this document should Be reviewe"U the context of current needs and relevance at least every'two,years. Role of City of Fort Collins The view held by the City of Fort Collins is that whether they are considering expansion or relocation,businesses are most concerned and interested in the community's overall quality of life. Those in the private sector responsible for corporate site selection most often cite the quality of both our primary and secondary schools, the skills of our workforce, the consistent quality and value of municipal services, and perhaps in many ways above all, the state of our natural environment. Over the years,the City of Fort Collins has invested in rts'utility systems to ensure reliability and consistency of service. This has been cited by many firms ai a critical element in their success;and a key reason why they chose Collins for their initial ,. ._ '. location,or expansion Additionally,City policies and investment in parks,trails, and open space and natural areas continue_to,be_important influences to both business investment and citizen satisfaction. These are values to which the City Council and the citizens are deeply committed and serves as the cornerstone of the City's economic development effort. •�Y4W$T'.R;"""S' r Efi.4P'S �'�ff'+'a Included in these values is a dedication to doingl all the City can to encourage'the shoo `eN,levez g"-�. i c57uC' b i k sdevelopment£ofhou g for a vane�ofcome levelsmaintenanceof a fairlocal t�aarion s y s t e m attention to developngandmataminga lughqual ty sand state-of' thegart uifrastructure�This also�mcludes develo;piriga fiUeopheork and other resourcestha may;be a a Table m the fine d mgRb othnternal and external linkages_to otherWfirms,research msrituhons;and support`services: The City's primary role in economic development focuses on those areas which directly involve City process and procedure. The City's economic development program is based on City Council Resolution 87-49 and subsequent Ordinances in which Council adopted certain goals,policies, and programs related to economic development and economic opportunity. l In general terms,the goals of the City of Fort Collins is to encourage and support economic opportunities which provide primary self;, suspgpj g employment, increase private investment within the community and improve the quality of life for Fort Collins residents. Achievement of these goals is pursued through a series of policies adopted by City Council and outlined in the above referenced resolution. Among these are the following: • emeFiex a€Commtmgnt to mamtauing andwenhapc g the City as a good place to live and work. • Emphasis on comprehensive, quality municipal services as the City's primary contribution to the community's economic development effort. , ,� R - • Creation and maintenance of a positive climate for both local and new business. • Assist and encourage small business retention and e*geasie entrepreneurial activities as appropriate. • Encourage aad mete workforce training, retraining, education, and employee support services to assist in the creation and expansion of meaningful employment opportunities. • The City's role in dealing with prospective expansions or relocations focuses on planning and the provision of municipal services and facilities such as streets and utilities. Finaneial iffeenAives will be is b ease basis and.. st • Encourage the development of a wide variety of business activities rather than focusing solely_on one sector. A enes o the commumty�s`ioole in the global and domestic marketplace,and . theermportance of wel_commg and assisting visitors.from oth_ er nations, foreign firms, and tourists; Action steps,which may be used to implement the aforementioned policies, may include the following: • The City will work with other public and private entities to promote policies and programs which encourage education, training, workforce development, and basic and advanced/technological skills enhancement. • The City will provide prospective businesses with information regarding municipal services, schools, recreational opportunities, health care, and other services available within the community. • The City will make existing and prospective business aware of opportunities available through Colorado State University and the private sector in the areas of product and process development. Tke,City will consid pa t�nersh ps wit'h,othe p b is and priv ateeen�the��s such the Fort Collins Vutual Business Incubator and Small Business Development'_ Center�to encour_age,�entrepreneunal activity�nthm a one_stop environment, • The City will continue to maintain and enhance utility and technological infrastructure and strive to provide consistently reliable and efficient service, at the best value possible, • The City will strive to maintain a municipal tax and fee structure which is both reasonable and equitable. • The City will provide assistance to business and industry with regards to City process and procedures. • The City will continue to afford new and existing business and industry the opportunity to seek fi_a fteial ineentives specific assistance pursuant to Council adopted Ordinances and other iixcc—mires programs enabled by state or federal legislation. The C ty 11 monitor economic, community and environmental indicators on a pe o w basis and consider actions that address,a_change in the local.economy, 'The Citywill evaluate all programs and policies that are g �tedfor C p g p suggested for Council consideration to determine if there are unintended impacts on the business community. • Role of Private Sector The private sector plays a significant role in the success of the overall economic development strategy. The mission of the private sector, is to work with the City and r npj, ,. other public and pupate organizations to retain and expand basic industry and bthei r.,. businesses within the City and County. This effort requires the support of Fort Collins, EDC the Chamber of Commerce and other entities referenced below, as well as the local banks, financial institutions and existing business and industry. The private sector role is characterized by its ability to work with new and existing business in a confidential manner. Issues such as real estate values, business climate, financingoptions,and site options are most appropriately addressed b the private sector. P P _._.._.�. Y P -- Role of Outside Entities The efforts of the City and private sector to enhance the economic prosperity of the community are directly and indirectly supported by several organizations and entities such as Colorado State University, Downtown Development Authority; mus ess associ t oia nq, Larimer County Convention and Visitors' Bureau, Poudre R-1 School District,Private a�dustfy - Wotkforce:Investment Board, and the Employment and Training Service. Though each has an independent focus, their work contributes to the overall quality-of-life and prosperity, enjoyed within the community. In this way,the network required to conduct an effective community-based economic development program is provided. 'Resolution 8749 of the Council of the City of Fort Collins adopting the goals and policies related to Economic Development and Economic Opportunities in Fort Collins. "' 09 ad._t' the ORDINANCE NO. 30, 1999 • OF THE COUNCIL OF THE CITY OF FORT COLLINS CONTINUING AND MODIFYING A TEMPORARY MANUFACTURING EQUIPMENT USE TAX REBATE PROGRAM FOR FORT COLLINS MANUFACTURERS WHEREAS,the City Council authorized a Temporary Manufacturing Equipment Use Tax Rebate Program(the"Temporary Rebate Program") for the limited period of calendar years 1996 and 1997 through the adoption of Ordinance No. 29, 1996; and WHEREAS, with its adoption of Ordinance No. 109, 1998, the Council extended the Temporary Rebate Program through the 1998 calendar year; and WHEREAS,it is the intent of the City Council to modify the Temporary Rebate Program for 1999 to incorporate administrative and program scope changes that have been recommended by City staff, and to continue said program as described in Exhibit"A", attached hereto and incorporated herein by this reference,while the Council continues to evaluate the Temporary Rebate Program,as well as other components of the City's Economic Policy with a concern for tax and fee fairness and effectiveness of economic development incentive policies and programs. NOW, THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT • COLLINS as follows: Section 1. That a revised Manufacturing Equipment Use Tax Rebate Program(the "Revised Rebate Program"), as described in Exhibit"A", attached hereto and incorporated herein by this reference, is hereby adopted and extended for calendar year 1999. Section 2. That the Revised Rebate Program shall supersede the Temporary Rebate Program and shall continue to be further reviewed in conjunction with the City's Economic Policy in the overall concern of tax fairness and effectiveness. Section 3. That the Council may at any time modify, extend or terminate the Revised Rebate Program. Section 4. That the City Manager shall continue to monitor the Revised Rebate Program and its projected costs and impacts on a monthly basis throughout 1999, and if the City Manager determines from that review,or from any other information,that the Revised Rebate Program poses a financial,environmental or other threat to the well-being of the City,the City Manager shall report such determination to the Council Section 5. That the provisions of this ordinance shall not be construed as establishing any right or entitlement to a rebate of any taxes on the part of any applicant and that the actual rebate of use taxes under such Revised Rebate Program shall be entirely discretionary with the City Council and shall be subject to the appropriation of funds for such purpose. Introduced, considered favorably on first reading, and ordered published this 16th day of February,A.D. 1999, and to be presented for final passage on the 2nd day of March,A.D. 1999. Mayor ATTEST: City Clerk Passed and adopted on final reading this 2nd day of March, A.D. 1999. Mayor ATTEST: City Clerk EXHIBIT "A" CITY OF FORT COLLINS MANUFACTURING EQUIPMENT USE TAX REBATE PROGRAM FEBRUARY 16, 1999 I. DEFINITIONS The following definitions shall apply in the administration of this temporary program: A. Manufacturing shall mean the operation of producing, in an industrial setting, a new product, article, substance or commodity, different from and having a_ distinctive name, character, or use from raw or prepared materials. Manufacturing shall not include: publishing; ready-mixed concrete production; logging; mining; farming; construction by contractors; wood preserving; electroplating, plating, metal heat treating, and polishing for the trade; lapidary work for the trade, fabricating of signs and advertising displays; milk bottling and pasteurizing; various service industries to the manufacturing trade such as typesetting, engraving, plate printing, and preparing electrotyping and stereotype plates. Manufacturing shall not include product research and development and testing. B. Manufacturing equipment shall mean the equipment used by a manufacturer in the manufacturing process as defined above. Manufacturing equipment shall not include climate control equipment. C. Full time equivalent (FTE) shall mean a full time employee or the equivalent thereof. This definition includes seasonal, temporary, permanent, and contractual employees of the company and all employees of contract employment agencies who perform temporary manufacturing services for the applying company. II. QUALIFICATIONS A. Only firms engaged in the manufacturing process, as defined herein, are eligible for the manufacturing use tax rebate. B. Only purchases of machinery by a person engaged in manufacturing to be used in the City of Fort Collins directly and exclusively by such person in the manufacture of tangible personal property, for sale or profit, are eligible for the rebate. C. All purchases by manufacturing firms will be subject to the full City sales and use tax rate. A rebate will only be granted upon application and approval of the specific manufacturing equipment purchases for which a rebate is requested. D. The rebate shall apply only to purchases where a full City use tax has been paid directly to the City of Fort Collins by the manufacturing firm requesting the rebate. 1. Firms may request a direct payment of use tax to the City under the following conditions: a. The direct payment arrangement may only be requested by the manufacturer for large one-time expansion or retooling projects. b. All direct payment arrangements must be pre-approved by the Financial Officer. Manufacturer's must give no less than 60 days notice prior to execution of the agreement. C. Direct payment arrangements must be agreed to in writing by each retailer supplying the manufacturing equipment. d. Any direct payment arrangements will be limited to a period not to exceed twelve (12) months. e. Manufacturers will be required to submit a monthly accounting of all purchases made under the direct pay agreement with their monthly sales and use tax return. f. Any use of the agreement by the manufacturer after the expiration date will result in a ten percent (10%) penalty of the tax that was due on those purchases. E. Sales or use taxes paid to another taxing jurisdiction for purchases of manufacturing equipment are not eligible for the rebate. F. Used manufacturing equipment purchased when a business is acquired through sale or transfer of title or possession is not eligible for the rebate unless the purchaser has been engaged in business in the City for at least three years. Assets acquired as a result of a merger between two firms located in Fort Collins will be eligible for the rebate. G. Manufacturing equipment that is leased shall be subject to the full City sales and use tax rate imposed by the City and collected by the lessor. Sales or use tax paid to the lessor shall not be eligible for the rebate. I. Firms must certify as to compliance with Federal, State and local laws and regulations for the manufacturing facility located in Fort Collins. Firms must be current with all payments to the City of Fort Collins and firms must not be in default with any contractual agreements with the City. 2 III. TIERED REBATE SCHEDULE A. The following tiered rebate schedule will be used to determine the amount of rebate to be granted: CITY OF FORT COLLINS TIERED REBATE SCHEDULE Cost of Use Tax Use Tax Rebate Manufacturing Equipment Rate Paid Percentage Maximum Rebate $ 0 to $5,000,000 3.00% 2.00% $100,000 $5,000,001 to $15,000,000 3.00% 1.00% $100,000 $15,000,001 to $50,000,000 3.00% 0.00% None $50,000,001 and over 3.00% 2.00% $2,200,000 Total Maximum Rebate $2,400,000 Note: The percentage of tax paid and the percentage of rebate allowable are subject to adjustment should the City's tax rate change during the course of this program. B. The maximum rebate given to any one company for purchases of manufacturing equipment will be $2,400,000. • C. Any company whose purchases of manufacturing equipment exceed $50,000,000 in a calendar year, will be limited to a $200,000 rebate if the growth in the company's FTEs in Fort Collins exceeds 10% in that year. D. All rebates will be reduced by the proportional amount of any voter-approved dedicated taxes, currently 25% of use taxes imposed, but no such reduction will affect the applicable maximum rebate. IV. PROCEDURES A. Prequalification The Financial Officer shall notify those companies who were listed in the Standard Industrial Code (SIC) classification as "manufacturers" for City of Fort Collins sales and use tax purposes on or before January 1 , 1996 of the temporary manufacturing use tax rebate. The company wishing to apply for a rebate under this program shall be required to complete a prequalification form as may be required by the Financial Officer. B. Monthly Reporting 1 . Companies that have been qualified to participate shall be required to . submit a monthly report of manufacturing equipment purchases to the City. The report shall be in accordance with a prescribed format and 3 schedule set forth by the Financial Officer. 2. The reports shall be filed with the company's sales and use tax return on the 2Oth of the month following date the equipment was purchased. 3. All qualifying manufacturers shall be required to file a monthly sales and use tax return. Quarterly and annual filings are not allowed. C. Year-end Rebate Process 1. All participants must submit an application for rebate no later than March 31 following the calendar year for which the rebate is requested. Example: rebate requests for 1998 must be submitted by March 31, 1999. 2. Applications must be filed using the format prescribed by the Financial Officer. 3. Applications may be subject to audit as provided in Chapter 25 of the Code of the City of Fort Collins. 4. Applicants will be notified of the amount of the rebate by mail. 5. It is the City's intent that all rebates will be paid by December 31 of the year the rebate request is made given that all documentation is provided. 6. Should a dispute arise regarding the amount of rebate allowed by the City, the applicant may, within twenty (20) days after such decision is mailed, petition the Financial Officer for a hearing on the rebate claim. The Financial Officer will notify the applicant of the time and location of the hearing. All hearings will be held in Fort Collins. After the hearing, the Financial Officer will make a final ruling as he or she deems just and proper. A copy of the final ruling will be furnished to the applicant. 7. The right of any company to apply for a rebate under this program is not assignable. An application for rebate must be made by the company that paid the tax. G1MEETING\A9ende99\021 B\eoonpoMwpe 4 ORDINANCE NO. 31, 1999 OF THE COUNCIL OF THE CITY OF FORT COLLINS REPEALING ARTICLE VII, CHAPTER 5 OF THE CITY CODE IN ORDER TO TERMINATE THE DEVELOPMENT IMPACT FEE REBATE PROGRAM WHEREAS, the City Council established by Ordinance No. 44, 1990 a program for the rebate of impact fees for economic development, codified at Section 5-325 through 5-329 of the Code of the City of Fort Collins (the "Development Fee Rebate Program"); and WHEREAS, the Development Fee Rebate Program, as modified by the adoption of Ordinance No. 123, 1994, continued in place to date; and WHEREAS,in June, 1998,the City Council adopted Ordinance No. 111, 1998,suspending indefinitely the operation of the Development Fee Rebate Program,in order to allow for the review and evaluation of the City's incentive programs for economic development, including the Development Fee Rebate Program, along with other components of the City's Economic Policy, with a concern for tax and fee fairness and effectiveness of economic development incentive policies and programs; and WHEREAS, staff has completed this evaluation, and has presented for City Council consideration a modified and comprehensive economic policy that refocuses the City's efforts away Mfrom the use of financial incentives as a tool to stimulate economic activity; and WHEREAS,Council has determined that termination ofthe Development Impact Fee Rebate Program would be in the best interests of the citizens of Fort Collins; and WHEREAS, City Council may reconsider the termination of the Development Fee Rebate Program if economic and community conditions decline, or circumstances otherwise change in a manner that results in significant growth in unemployment,reduction in sales and use tax collections, or negative changes in other economic, fiscal,and community indicators. NOW,THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Article VII of Chapter 5 of the City Code is hereby repealed,terminating the City's program for Rebate ofImpact Fees for Economic Development,except as applicable to Development Fee Rebates currently in progress, and that no further applications for Development Fee Rebates shall be accepted. Introduced, considered favorably on first reading, and ordered published this 16th day of February,A.D. 1999, and to be presented for final passage on the 2nd day of March,A.D. 1999. Mayor ATTEST: City Clerk Passed and adopted on final reading this 2nd day of March,A.D. 1999. Mayor ATTEST: City Clerk ORDINANCE NO. 32, 1999 • OF THE COUNCIL OF THE CITY OF FORT COLLINS REPEALING SECTION 24-113(b) OF THE CITY CODE, IN ORDER TO TERMINATE THE STREET OVERSIZING EXEMPTION PROGRAM WHEREAS, the City Council established by Ordinance No. 91, 1989 a program for exemption from the City's Street Oversizing Fee for contribution to economic development,codified at Section 24-113(b) of the Code of the City of Fort Collins (the "Street Oversizing Exemption Program"); and WHEREAS, the Street Oversizing Exemption Program, as modified by the adoption of Ordinance No. 38, 1998,has continued in place to date; and WHEREAS,in June, 1998,the City Council adopted Ordinance No. 110, 1998,suspending indefinitely the operation of the Street Oversizing Exemption Program, in order to allow for the review and evaluation of the City's incentive programs for economic development, including the Street Oversizing Exemption Program,along with other components ofthe City's Economic Policy, with a concern for tax and fee fairness and effectiveness of economic development incentive policies and programs; and WHEREAS, staff has completed this evaluation, and has presented for City Council . consideration a modified and comprehensive economic policy that refocuses the City's efforts away from the use of financial incentives as a tool to stimulate economic activity; and WHEREAS, Council has determined that termination of the Street Oversizing Exemption Program would be in the best interests of the citizens of Fort Collins; and WHEREAS,City Council will reconsider the termination of the Street Oversizing Exemption Program if economic and community conditions decline, or circumstances otherwise change in a manner that results in significant growth in unemployment,reduction in sales and use tax collections, or negative changes in other economic,fiscal, and community indicators. NOW, THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Section 24-113(b) of the Code of the City of Fort Collins is hereby repealed, terminating the Street Oversizing Exemption Program,and,that no further exemption from the Street Oversizing Impact Fee for contribution to economic development shall be granted pursuant to such section. Introduced, considered favorably on first reading, and ordered published this 16th day of February,A.D. 1999, and to be presented for final passage on the 2nd day of March, A.D. 1999. Mayor ATTEST: City Clerk Passed and adopted on final reading this 2nd day of March,A.D. 1999. Mayor ATTEST: City Clerk City Manager MEMORANDUM City of Fort Collins DATE: December 31, 1998 TO: Mayor & City Council Members THRU: John F. Fischbach, City Manager gal. 4-�SLL FROM: Frank W. Bruno, Assistant City Manag�1�— — RE: Economic Policy Study Session Follow-up On December 22, 1998, City Council held a Study Session to discuss the various elements of the City's economic policy. There were five main topics discussed: • Economic Policy Statement • Manufacturing Use Tax Rebate Program • Ordinances Terminating the Development Impact Fee Rebate & Street Oversizing Fee Exemption Programs • Economic & Community Indicators • Economic Policy Advisory Board Regarding the Economic Policies, Council made the point that each Council Member continues to be very interested in ensuring that the local economy remains consistently vibrant. While there was much discussion about how the City's economic policies affect this outcome, the following action items rose to the surface regarding the various discussion items: Economic Policy Statement: 1. Enhance the focus on the City's work in developing the fiber optic infrastructure. Although not directly an economic development tool, in reality, this technology will provide major telecommunication advantages for businesses in Fort Collins. 2. Add language to the effect that the City will monitor economic and community indicators on a yearly basis to determine if policy changes or new programs are warranted. 3. Include a statement that the City will also monitor, and check the impacts of various policy decisions and/or programs on the local business community. This will likely include an addition to the agenda item format that will cover staff analysis of the business impacts of a proposed policy or Council action. 4. Periodic review of City Plan to determine if there are unintended impacts on the business community, and suggest further refinements to counter such impacts. • 300 LaPorte Avenue • P.O. Box 580 • Fort Collins,CO 80522-0580 • (970)221-6505 • FAX(970)224-6107 Economic Policy Study Session Memo December 31, 1998 Page Two 5. Include some method of triggering policy reconsideration if economic conditions, such as increased unemployment warrants such action. 6. Find some method of quantifying the multiplier-effect associated with new manufacturing jobs, as well as the mix of service-sector jobs (they are not all unskilled; some are very meaningful in our local economy). Manufacturing Use Tax Rebate Program: 1. Eliminate 3-year waiting period for eligibility for the program. 2. Allow for a greater than 9-month direct payment for the tax on large projects. 3. Consider a more definitive date by which the rebates will be paid to eligible companies. This could possibly be October 31' following the application. Ordinances Terminating Development Impact Fee Rebate & Street Oversizing Fee Exemption Programs: General support to terminate these programs, with reconsideration should the unemployment rate increase substantially. Support for termination was not however unanimous, some felt that the programs were necessary in order to continue to encourage firms to consider Fort Collins for relocation or expansion. The view was also expressed that the Rebate Program could continue to be a good source of community reinvestment grants from the companies receiving the rebates. Economic & Community Indicators: Generally, there was support for tracking measures regarding the community's economic and overall well-being. There was not however, support for the list of indicators suggested by staff. Council voiced concern that the City not jump blindly into the indicators, rather, that the City take the time to examine the Quality of Life Indicators suggested a few years earlier through the Challenge Fort Collins process. Additionally, Council thought it might be helpful to review the Jacksonville, Florida, Seattle, and other community indicators. Staff will compile and share with Council over the next few months. Economic Advisory Board: There was a great deal of discussion, but little consensus regarding the formation of an advisory board. Some Council Members felt that the creation of a citizen board might lead to division, others felt that it was important to have such a board focused on economics and trends that had some expertise in the field. Suggestions ranged from convening a board with broad perspectives, to hiring an economist skilled in trend and econometric analysis. Overall, Council seemed to settle on the concept of utilizing the Community Dialogue process to gather citizen comments regarding economy and business activity. • Economic Policy Study Session Memo December 31, 1998 Page Three As a final note, some Council Members felt it was important to undertake a review of economic policies on an annual basis, rather than biennial. Formal action on the above items will likely occur in February 1999. MEETINGS OF THE BOARD OF COMMISSIONERS OF THE FORT COLLINS HOUSING AUTHORITY The Board of Commissioners of the Fort Collins Housing Authority(the "Board')meets the 3rd Tuesday of each month in the City Council Chambers of City Hall, 300 LaPorte Avenue, Fort Collins, Colorado. The meetings begin at 6:00 p.m. or as soon thereafter as the City Council completes its business. Board meetings are cablecast on City Cable Channel 27 of the TC1 Cable System Boardmembers: Ann Azari Will Smith Bill Bertschy _ Michael Byrne Chris Kneeland Scott Mason Charles Wanner Citizen Participation The Citizen Participation portion of the meeting is scheduled at 6:00 p.m., or as soon thereafter as the City Council completes its business. During this portion of the meeting, items which are not specifically on the agenda may be brought up for discussion. Citizen Participation is limited to 30 • minutes. Individuals who wish to address the Board must first be recognized by the Chair or Vice Chair. Comments should be made at the microphone at the front of Chamber, and each individual must give his or her name for the record. (All proceedings are audio taped.) a Applause, outbursts or other demonstrations by members of the audience are not allowed. Courtesy shall be given to all speakers. Speakers are asked to keep comments brief(five minutes or less) and specific to the item under discussion. In the event that several individuals plan to speak on the same subject, duplication of comments should be avoided. Please remember Board agendas may be long, and others are waiting to be heard. Aeenda Summary The agenda summary lists and gives a brief description of each item to be considered by the Board. Immediately after the meeting is called to order, the Acting Executive Director will review the agenda,calling attention to any additions,deletions,or corrections that may be necessary. The order of the agenda, as published, will be followed unless changed by the Board. • } Method of Debate #( a Chair introduces the item, and subject; asks if formal presentation will be made by staff i D Staff presentation(optional) r a Board questions of staff on the item Board motions on the item Chair requests"citizen comment on the item(three minute limit for each citizen) Input from Fort Collins Housing Authority Community Representatives Board comments/finther questions/clarifications Board vote on the item t f i j { 1 Thank you for your interest in the Fort Collins Housing Authority.