HomeMy WebLinkAboutCOUNCIL - COMPLETE AGENDA - 01/22/2013 - COMPLETE AGENDACITY COUNCIL AGENDA
Karen Weitkunat, Mayor Council Chambers
Kelly Ohlson, District 5, Mayor Pro Tem City Hall West
Ben Manvel, District 1 300 LaPorte Avenue
Lisa Poppaw, District 2 Fort Collins, Colorado
Aislinn Kottwitz, District 3
Wade Troxell, District 4 Cablecast on City Cable Channel 14
Gerry Horak, District 6 on the Comcast cable system
Darin Atteberry, City Manager
Steve Roy, City Attorney
Wanda Nelson, City Clerk
The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities
and will make special communication arrangements for persons with disabilities. Please call 221-6515 (TDD 224-
6001) for assistance.
ADJOURNED MEETING
January 22, 2013
6 p.m.
1. Call Meeting to Order.
2. Roll Call.
3. The meeting of January 15, 2013, was adjourned to this date and time to allow the Council to
consider adjourning into Executive Session under Section 2-31(a)(2) of the City Code, for the
purpose of meeting with attorneys for the City, the City Manager, and affected members of City
staff with regard to potential litigation involving the City and the manner in which particular
policies, practices or regulations of the City may be affected by existing or proposed provisions of
federal, state, or local law.
4. Other Business.
5. Adjournment.
Karen Weitkunat, Mayor Council Information Center
Kelly Ohlson, District 5, Mayor Pro Tem City Hall West
Ben Manvel, District 1 300 LaPorte Avenue
Lisa Poppaw, District 2 Fort Collins, Colorado
Aislinn Kottwitz, District 3
Wade Troxell, District 4 Cablecast on City Cable Channel 14
Gerry Horak, District 6 on the Comcast cable system
Darin Atteberry, City Manager
Steve Roy, City Attorney
Wanda Nelson, City Clerk
The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities
and will make special communication arrangements for persons with disabilities. Please call 221-6515 (TDD 224-
6001) for assistance.
WORK SESSION
January 22, 2013
6 p.m.
1. Call Meeting to Order.
2. Railroad Quiet Zone Study Update. (staff: Amy Lewin, Mark Jackson; 30 minute
discussion)
Train horn use is governed by the Federal Railroad Administration (FRA), which allows
for establishing Quiet Zones in which train horns are not routinely sounded. This agenda
item provides an update on the City’s analysis of what it would take to implement Quiet
Zones in Fort Collins.
3. Incentives Benchmarking. (staff: Josh Birks, SeonAh Kendall; 1 hour discussion)
Since 2009, City Council has reviewed four business assistance package requests for
primary employers ranging in value of $75,000 to $4.5 million. Currently, the City of
Fort Collins uses the case-by-case approach to developing assistance packages. City
Council has, during recent conversations relative to business assistance packages,
indicated a more formal approach to package development would be preferable moving
forward. As a result, the Economic Health Office (EHO) sought a review of best
practices and industry standards to begin development of a formal business assistance
January 22, 2013
policy and procedure. The incentives framework study was performed in fall 2012 of
peer communities and focused on evaluating the utilization and development of
incentives. Staff has begun working on improving and formalizing the overall business
assistance policy and procedures based in part on this study. Staff is seeking direction
from Council in regard to the development of a formal policy and procedure for business
assistance.
4. Should the City Council submit a ballot measure for the April 2, 2013 Municipal election
asking voters to ban hydraulic fracturing treatment in the City of Fort Collins and/or on
City-owned lands? (staff: Laurie Kadrich, Dan Weinheimer, Wanda Nelson; 90 minute
discussion)
In December 2012, City Council authorized a moratorium preventing any further drilling
of oil and gas well in the city limits or on City-owned lands until July 31, 2013. Since
that time, citizens asked the Council to consider banning hydraulic fracturing in the city.
Hydraulic fracturing treatment or “fracking” is defined under the Colorado Oil and Gas
Commission rules as “all stages of the treatment of a well by the application of hydraulic
fracturing fluid under pressure that is expressly designed to initiate or propagate fractures
in a target geologic formation to enhance production of oil and natural gas.”
5. Other Business.
6. Adjournment.
DATE: January 22, 2013
STAFF: Amy Lewin
Mark Jackson
Pre-taped staff presentation: available
at fcgov.com/clerk/agendas.php
WORK SESSION ITEM
FORT COLLINS CITY COUNCIL
SUBJECT FOR DISCUSSION
Railroad Quiet Zone Study Update.
EXECUTIVE SUMMARY
Train horn use is governed by the Federal Railroad Administration (FRA), which allows for
establishing Quiet Zones in which train horns are not routinely sounded. This agenda item provides
an update on the City’s analysis of what it would take to implement Quiet Zones in Fort Collins.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. What feedback does City Council have regarding the possible courses of implementation
action that will be presented to the public?
• Are there other options that should be included?
• Are there options which should be deleted from further consideration?
2. Is there additional information that City Council would like provided as part of the Quiet
Zone Study?
BACKGROUND / DISCUSSION
Train Horn Use and Quiet Zones
Train horn use at public crossings is governed by the Federal Railroad Administration (FRA)
through its Final Rule on Use of Locomotive Horns at Highway-Rail Grade Crossings (Final Rule).
The rule was made effective in June 2005 and last amended August 2006. The Final Rule requires
the locomotive horn to be routinely sounded while trains approach and enter public highway-rail
crossings except when a “Quiet Zone” has been established. Quiet Zones require the
implementation of Supplemental Safety Measures (SSMs) or Alternative Safety Measures (ASMs)
that maintain safety at highway-rail crossings where locomotive horns have been silenced.
Examples of SSMs are provided in Attachment 1 and include:
• Four-Quadrant Gates
• Raised Median with Approach Gates
January 22, 2013 Page 2
• Wayside Horns1
• Crossing Closure
It is important to note that a new Quiet Zone must have a minimum length of one-half mile along
the railroad right-of-way. This requirement has an impact on the potential implementation of Quiet
Zones in Fort Collins because of the closely spaced crossings (i.e., less than one-quarter mile from
each adjacent crossing) in the downtown area and on the Colorado State University (CSU) campus.
Fort Collins Railroad Quiet Zone Study
The Railroad Issues Study Group was authorized by the Fort Collins City Council in July 2007 to
examine railroad issues that impact Fort Collins. The Railroad Issues Study Group Final Report
(December 2007) recommended that a Quiet Zone study be conducted to determine costs and the
ability to secure crossings to receive FRA Quiet Zone approval.
The Quiet Zone Study’s area of analysis includes crossings within downtown, the CSU campus, and
farther south along the BNSF Railway to Trilby Road. The Quiet Zone Study includes a technical
analysis of crossing improvement options and an overall implementation plan. The technical
analysis of the crossings was analyzed divided in two phases. The Phase 1 technical analysis was
conducted in 2010-11 with the support of the Downtown Development Authority (DDA) and
focused on the downtown area. The Phase 2 technical analysis began in August 2012 and focuses
on the crossings on the CSU campus south to Trilby. The reports from both phases include an
inventory of existing conditions, documentation of Quiet Zone requirements, potential Quiet Zone
improvements at each crossing, and notes on implementation. The Phase 1 Technical Report is
available at fcgov.com/transportationplanning/quiet-railroad.php, and a draft version of the Phase
2 Technical Report is available upon request.
Several of the crossings analyzed are planned to receive improvements as part of the MAX Bus
Rapid Transit (BRT) construction, but these improvements are not enough to warrant granting of
a Quiet Zone. The recommendations for Quiet Zone compliance in both reports are in addition to
the improvements to be installed with the BRT.
Because of the short distances between most of the crossings, only the five southernmost crossings
would be eligible to be implemented individually as “stand-alone” Quiet Zone crossings, as shown
in Attachment 2. The remaining crossings in the downtown area and at CSU need to be grouped and
considered as a corridor due to their proximity to one another.
Stand-Alone Quiet Zone Crossings
The crossings from Trilby through Drake are typical single-track crossings with adequate distance
between subsequent crossings to be treated with standard Supplemental Safety Measures (SSMs)
and can be pursued for Quiet Zone establishment individually. These crossings include:
1 Wayside horns are FRA-approved stationary horns that may be used in lieu of locomotive horns at individual or
multiple highway-rail crossings, including those within Quiet Zones. These are also considered as an SSM option,
but it should be noted that a wayside horn provides an audible warning to oncoming motorists of the approach of a
train and would thus not eliminate all noise at the crossing.
January 22, 2013 Page 3
• Drake Road • Harmony Road
• Swallow Road • Trilby Road
• Horsetooth Road
Grouped Quiet Zone Crossings
The crossings from Prospect Road north through College Avenue do not have the minimum one-
quarter mile distance between each adjacent crossing, and therefore must be considered as a corridor
for pursuit of Quiet Zone establishment.
Note: The crossings from Pitkin Street to Old Main Drive are under the jurisdiction of CSU
and would require CSU involvement in order to pursue Quiet Zone establishment. All other
crossings are under the jurisdiction of the City.
Options
• Implement Supplemental Safety Measures (SSMs)
Implementing FRA-approved SSMs is the most streamlined and straightforward approach to
establishing Quiet Zones but also likely the most expensive.
The SSM options for Quiet Zone improvements at the five stand-alone crossings are summarized
in Table 1. The improvement options are listed in order from least expensive to most expensive, and
the range of conceptual costs for each location and overall is also provided. Among the crossings
from Drake to Trilby, Swallow Road would be the least expensive crossing to pursue for Quiet Zone
designation initially. Much of the equipment necessary is in place or being upgraded as part of the
BRT project. Implementation of all five stand-alone Quiet Zone crossings is expected to range
between $700,000 and $1.59 million. Additional details are provided in Attachment 3.
Table 1. Stand-Alone Quiet Zone Crossing Options and Conceptual Costs
Crossing Options Cost Range*
Drake Road • Wayside Horns
• Four-Quadrant Gates
$160,000 to $390,000
Swallow Road • Raised Medians
• Four-Quadrant Gates
$60,000 to $260,000
Horsetooth Road • Raised Median/Wayside Horn
• Wayside Horns
• Raised Median/Exit Gate
• Four-Quadrant Gates
$135,000 to $260,000
Harmony Road • Raised Median/Wayside Horn
• Raised Median/Exit Gate
• Four-Quadrant Gates
$145,000 to $260,000
Trilby Road • Wayside Horns
• Raised Median/Approach Gates
• Four-Quadrant Gates
$200,000 to $415,000
TOTAL $700,000 to $1,585,000
*Note: These are conceptual costs that do not include items such as surveying or detailed design.
January 22, 2013 Page 4
The conceptual cost of implementing approved SSM improvements at all downtown crossings and
at CSU would range from $4.21 million to $4.90 million, depending upon the improvement (see
Attachment 4 for more details).
Other Options Explored
Given the magnitude of costs and challenges to implement Quiet Zone designations at these
locations, other possible opportunities to achieve silencing of train horns (other than treating each
crossing with an approved SSM) were researched and, where appropriate, discussed with the FRA.
These options are detailed in Attachment 5 and described below.
The options explored include:
• Pursuing waivers from the FRA regulations
• Making improvements at College and Cherry
• Implementing corridor solutions that stay below Nationwide Significant Risk Threshold
(NSRT)
• Becoming a test site city for new technology
• Proposing an amendment to the Final Rule for nighttime horn use in urban areas
Waivers
The Final Rule allows for waivers to be requested as a temporary or permanent modification of
Quiet Zone requirements. Based on staff’s research, two successful types of waivers were noted:
one type is related to not installing circuitry on tracks where it is impractical and one is related to
an exception in median design. Neither of these conditions addresses the City’s needs.
The FRA was contacted regarding the potential to formalize a varied horn pattern in areas of closely
spaced crossings (such as downtown and CSU) to reduce the continuous horn noise that currently
results. The FRA responded that the minimum of 15 seconds of warning prior to a crossing could
not be varied, even if the previous crossing is so close that the train horns are overlapping, as occurs
in Fort Collins. Therefore, pursuing a waiver to establish Quiet Zones does not appear to be a viable
option for the City.
College and Cherry Improvements
These crossings are very close to being Quiet Zone compliant; however, the close spacing of the
crossings would cause the locomotive engineer of a southbound train to violate the Quiet Zone at
the Cherry Street crossing every time it approaches Maple Street. This would be unacceptable
practice to the FRA and BNSF, even though the crossings at Cherry and College would truly be
silent for northbound trains, once past Maple. Thus, it would not be cost-effective for the City to
complete the additional access and median improvements at Cherry and College for pursuit of a
Quiet Zone specifically at these two crossings. However, these should be considered as part of the
Quiet Zone risk index corridor calculations, as described in the next item.
January 22, 2013 Page 5
Corridor Solutions below Nationwide Significant Risk Threshold (NSRT)
The FRA Final Rule does provide alternatives to installing SSMs at every public road crossing
within a proposed Quiet Zone. One possible alternative involves calculating the risk index along
the proposed corridor, with the crossing warning devices present today. The existing condition risk
index is then compared to the Nationwide Significant Risk Threshold (NSRT), which represents the
average risk at public highway-rail crossings nationwide that have flashing lights and gates, and at
which locomotive horns are sounded. If the risk of the proposed Quiet Zone corridor is higher than
the NSRT, additional SSMs must be implemented in an attempt to bring the risk number down
below the nationwide threshold. This is a trial and error process in which, for example, four-
quadrant gates might be added at two of the crossings, and the risk with those added features is
calculated. The resulting risk number is again compared to the NSRT, and if it is still higher than
the NSRT, more SSMs must be added, and so on until the calculated risk along the proposed Quiet
Zone corridor is below the NSRT.
The disadvantage of this option is that over time, as public highway-rail grade crossings nationwide
become safer, and the NSRT continues to drop, eventually the calculated risk for the City’s proposed
Quiet Zone may exceed the NSRT. At this point the community would need to reassess the Quiet
Zone risk calculator and add additional treatments to the corridor until the risk index is once again
below the NSRT. The NSRT is thus a “moving target” of sorts that will require monitoring by the
City.
The Quiet Zone Calculator program on the FRA Website does not allow credit to be given for
unusual warning installations, such as the post-mounted flashers on all four quadrants of
crossings/intersections on Mason Street. The program also does not have a way to account for
crossings where vehicular traffic is also controlled by traffic signals. Because the calculator does
not account for the actual conditions of the crossings in downtown Fort Collins along Mason Street,
it is likely overestimating the improvements needed to bring the calculated risk for the corridor
below the NSRT. The project team has initiated conversations with the FRA to see if the calculator
can be updated and/or if special methodology can be arranged to better reflect the conditions on
Mason.
Test Site for New Technology
The Final Rule provides instruction on how new measures can be tested and approved by the FRA
as an effective substitute for the locomotive horn in the prevention of collisions and casualties at
public highway-rail grade crossings. The pursuit of this type of proposal would involve finding a
manufacturer that has developed a product for this specific use, negotiating cost for installation and
testing, and compiling the appropriate application to the FRA for consideration.
Some options that have been discussed, but not pursued for approval by the FRA, include retractable
bollards and in-line security gates. Retractable bollards are posts that can lower into the ground.
These have been tested in Michigan with regards to deterring vehicles from driving around the
railroad gates, as described in the next paragraph and in Exhibit D of Attachment 5. Note that the
installation in Michigan was not specifically for the purpose of Quiet Zones, so if this option is
pursued, Fort Collins would likely be the first city to pursue acceptance by the FRA of retractable
bollards for Quiet Zone establishment.
January 22, 2013 Page 6
Fort Collins may be a good test site for installation and monitoring of retractable bollards, given the
small footprint of bollards and the limited available street area through downtown Fort Collins. In
addition to the crossings being closely spaced, existing development along the corridor edges does
not allow for roadway widening to accommodate additional railroad equipment within the street
envelope to truly isolate the track corridor during presence of a train. The bollards could be installed
in line with the curb on each side of the tracks across a test crossing downtown and connected with
adjacent traffic signals. This type of new technology testing could be offered as a research project
to the Engineering Department of CSU, as their involvement would provide analysis and monitoring
by an independent third party, as well as may offer the opportunity for the university to pursue grant
funding for the research project. The results would be unbiased and the resulting report could be
used in support of the City’s pursuit of the use of bollards for Quiet Zone establishment downtown.
Nighttime Horn Use Amendment
Periodically, the FRA will provide notification in the Federal Register inviting comment with regard
to specific activities or rules. The “rulemaking” process can lead to the issuance of a new rule, an
amendment to an existing rule, or the repeal of an existing rule. It would be through this process that
the City could propose an amendment to the Final Rule with regard to nighttime horn use in urban
areas.
Currently, the FRA does not have any Notices of Proposed Rulemaking regarding the Train Horn
Rule that would be appropriate for comment regarding an amendment to the rule.
Funding Options
There is no specific funding mechanism at the federal or state level that is in place to fund Quiet
Zone improvements. However, federal and state funds are in place for a variety of improvements
related to crossing safety, and there are also other funding mechanisms, such as the Safe Routes to
School Program, which could be applied to crossing improvements at crossings meeting the
conditions of the funding program.
Possible funding sources include:
1. Categorical Section 130 funds – these funds are specific to the elimination of hazards at
existing highway-rail at-grade crossings;
2. Other categorical safety programs, such as the Safe Routes to School Program; and
3. Regular federal-aid highway funds that may be used for safety improvements.
Other potential funding sources include:
• Local General Fund
• Transportation Fund
• Sales tax revenue
• Special districts
• Tax Increment Financing (TIF)
• Street Maintenance Funds
January 22, 2013 Page 7
• Special capital project tax packages, such as Building on Basics (BOB)
• Development/Redevelopment Impact Fees
• Federal earmarks
Next Steps
A near-term next step is to finalize the Phase 2 Technical Report by the end of January 2013.
The Study will then shift towards an implementation plan based on Council guidance. Possible
implementation actions include:
1. Pursuing one or more stand-alone Quiet Zone crossing improvements.
2. Pursuing grouped/corridor Quiet Zone crossing improvements.
3. Continuing discussions with the FRA regarding updating the Quiet Zone Risk Index
Calculator to better reflect the crossing warning devices present today, which would
decrease the resulting risk index for the corridor and may reduce the improvements needed.
4. Considering identifying a downtown crossing to serve as a test site for installation of a new
technology, such as retractable bollards, and engage in discussion with the FRA regarding
tasks and timeline for this process.
5. Continuing to monitor the FRA website for notices of rulemaking that may provide an
opportunity for comment regarding horn use at close-proximity crossings or horn use during
nighttime hours.
ATTACHMENTS
1. Supplemental Safety Measure (SSM) Examples
2. Quiet Zone Study Area
3. Stand-Alone Quiet Zone Crossing Summary Figure
4. Downtown and CSU Quiet Zone Crossing Options and Conceptual Costs
5. Phase 1 Draft Final Addendum Memo
6. Powerpoint presentation
Attachment 1
Railroad Quiet Zone
Supplemental Safety Measure (SSM) Examples
January 22, 2013
Four‐Quadrant Gate
Wayside Horn
Raised Median with Approach Gates
Crossing Closure (curb and gutter and open ballast
prevents crossing)
Attachment 2
Railroad Quiet Zone
Study Area
January 22, 2013
DOWNTOWN
STAND-ALONE
QUIET ZONES
CSU
COLLEGE
PROSPECT
NOT TO SCALE
DRAKE
TRILBY
Attachment 3
Railroad Quiet Zone
Stand‐Alone Crossing Summary
January 22, 2013
HARMONY Approx. Cost
Raised Median/
Wayside Horn $145,000
Raised Median/
Exit Gate $175,000
Four-Quadrant Gates $260,000
Costs are slightly lower because
improvements are being done as
part of the BRT.
HORSETOOTH Approx. Cost
Raised Median/
Wayside Horn $135,000
Wayside Horns $160,000
Raised Median/
Exit Gate $165,000
Four-Quadrant Gates $260,000
Costs are slightly lower because of
BRT improvements. Allowable
median break width for the Mason
Trail crossing is still being confirmed
with FRA.
SWALLOW Approx. Cost
Raised Medians $60,000
Four-Quadrant Gates $260,000
Costs are slightly lower because of
BRT improvements. Allowable
median break width for the Mason
Trail crossing is still being confirmed
with FRA.
DRAKE Approx. Cost
Wayside Horns $160,000
Four-Quadrant Gates $390,000
Costs are slightly lower because
improvements are being done as
part of the BRT. The only SSM
treatment silencing horns here is the
four-quadrant gate option.
TRILBY Approx. Cost
Wayside Horns $200,000
Raised Medians/
Approach Gates $205,000
Four-Quadrant Gates $415,000
Costs are slightly higher because no
improvements are being done as
part of the BRT.
DRAKE RD
HORSETOOTH RD
HARMONY RD
TRILBY RD
SWALLOW RD
Note: These are conceptual costs that do not include items such as surveying or detailed design.
NOT TO SCALE
Attachment 4
*Note: These are conceptual costs that do not include items such as surveying or detailed design.
**Note: These crossings are under the jurisdiction of Colorado State University (CSU); all other crossings
are under the jurisdiction of the City.
Railroad Quiet Zone
Downtown and CSU Quiet Zone Crossing Options and Conceptual Costs
January 22, 2013
Area Crossing Options Cost Range*
DOWNTOWN
College - Raised Median $20,000
Cherry - Raised Median
- Four‐Quadrant Gates $35,000 to $300,000
Maple - Four‐Quadrant Gates $380,000
Laporte - Four‐Quadrant Gates $380,000
Mountain - Four‐Quadrant Gates $380,000
Oak - One‐Way Street
- Four‐Quadrant Gates $260,000 to $330,000
Olive - Four‐Quadrant Gates $330,000
Magnolia - Four‐Quadrant Gates $380,000
Mulberry - Four‐Quadrant Gates $280,000
Myrtle - Four‐Quadrant Gates $330,000
Laurel - Four‐Quadrant Gates $380,000
Subtotal $3,155,000 to $3,490,000
CSU
Plum/Old Main** - Wayside Horns
- Four‐Quadrant Gates $310,000 to $430,000
Ped Crossing** - Upgraded Signage $20,000
University** - Wayside Horns
- Four‐Quadrant Gates $270,000 to $360,000
Ped Crossing** - Closure $0
Pitkin** - Wayside Horns
- Four‐Quadrant Gates $160,000 to $225,000
Lake - Wayside Horns
- Four‐Quadrant Gates $160,000 to $210,000
Prospect - Wayside Horns
- Raised Median/Wayside Horn $135,000 to $160,000
Subtotal $1,055,000 to $1,405,000
TOTAL $4,210,000 to $4,895,000
January 22, 2013 DRAFT FINAL
MEMORANDUM
TO: Amy Lewin, PE - City of Fort Collins
FROM: Stephanie Sangaline Anzia, PE – Felsburg Holt & Ullevig
SUBJECT: Fort Collins Phase I Quiet Zone Addendum Memo
(Post-2-Way Conversion/Track Rehabilitation Construction)
FHU Reference No. 12-126-01
The following information is provided as an Addendum to the Phase I Quiet Zone Study, dated July
6, 2011, completed for the City of Fort Collins with regard to the BNSF Railway crossings of Mason
Street downtown, and additional BNSF Railway and Union Pacific Railroad crossings of streets
north and east of downtown.
Phase I Study
It should be noted that the recommendations provided in the Phase I Study still apply. Those
recommendations offer Supplemental Safety Measure (SSM) concept options at each of the
crossings. SSM treatments are those that have already been approved by the Federal Railroad
Administration (FRA), and necessitate only a Notification process with the FRA. These options are
the most costly, but are also the options that provide the City with a permanent Quiet Zone at each
of these crossings.
Purpose of this Addendum
The focus of this addendum is to identify other possible opportunities to achieve silencing of the
train horns, other than treating each crossing with an approved SSM. There are several avenues to
be explored, in particular for the downtown portion of Mason Street, due to the urban environment
and multitude of railroad and traffic warning devices present within this corridor.
The following options have been researched and, where appropriate, discussed with the FRA
Regional Manager for Grade Crossing Safety & Trespass Prevention:
A. Opportunities for Waivers from the FRA Regulations
B. Improvements at College and Cherry
C. Quiet Zone Risk Index Calculator and Level of Crossing Treatment
D. New Technologies – Entertaining being a Test Site City
E. Proposing an Amendment to the Final Rule for nighttime horn use in urban areas
Some options have been vetted with the FRA and final information is provided within this memo.
For those options still being considered by FRA, or still being researched, information is provided
describing the scenario and possible avenues for the City to consider.
Attachment 5
January 22, 2013
Memorandum to Amy Lewin, PE – City of Fort Collins
Page 2
A. Opportunities for Waivers from the FRA Regulations
The term ‘waiver’ is defined within the Final Environmental Impact Statement (FEIS) for the
Interim Final Rule for the Use of Locomotive Horns at Highway-Rail Grade Crossings as: A
temporary or permanent modification of some or all of the requirements of the final rule as
they apply to a specific party under a specific set of facts. Waiver does not refer to the
process of establishing quiet zones or approval of quiet zones in accordance with the
provisions of the rule.
The FEIS indicates that ‘a regulation or specific section of a regulation, while appropriate for
the general regulated community, may be inappropriate when applied to a specific entity.’ It
goes on to say – ‘An extension of time to comply with a regulatory provision may be
needed, or technological advancements may result in a portion of a regulation being
inappropriate in a certain situation. FRA may grant a waiver from its regulations in such
instances.’
In Summary, the waiver process is as follows:
A petition for a waiver is received by FRA;
A notice of the waiver request is published in the Federal Register;
An opportunity for public comment is provided; and
An opportunity for a hearing is afforded the petitioning or other interested party.
In researching the FRA website for examples of successful waivers, two scenarios exist: 1)
waivers have been granted for not installing Constant Warning Time (CWT) circuitry where
it is not practical (i.e., industry/siding tracks that are infrequently used and at low speeds);
and 2) a waiver has been granted for eliminating the non-traversable curb on one side of a
median, such that vehicles stopped on the tracks could drive onto the median in the event
of an approaching train.
For downtown Fort Collins, the FRA was contacted regarding Final Rule Pg. 47637, Section
222.21 (a) which states “Sounding of the locomotive horn with two long blasts, one short
blast and one long blast shall be initiated at a location so as to be in accordance with
paragraph (b) of this section and shall be repeated or prolonged until the locomotive
occupies the crossing. This pattern may be varied as necessary where crossings are
spaced closely together.”
The FRA was asked if the train horn pattern through downtown Fort Collins, which can vary
in accordance with the Rule, could be formalized due to the close spacing of the crossings.
The following explanation was provided:
The idea in the regulation of varied pattern language is not to provide less horn sounding.
The regulation will not allow the horn to be sounded less than 15 seconds minimum. The
provision to be able to vary the pattern where crossings are closely spaced is 49 CFR
222.21(a) which recognizes that there are situations in which it may not be feasible to
complete the sounding pattern that is required in this section. This means that a railroad
would still be in compliance with 222.21(a) if the train only was able to provide two long
blasts instead of the required pattern of 2 longs, one short and one long because the
crossings are closely spaced. Section 222.21(a) does not override the requirement to
begin sounding the horn between 15 to 20 seconds prior to the crossing as required in
222.21(a)(2). There are scenarios where engineers will shorten up frequencies to get a
January 22, 2013
Memorandum to Amy Lewin, PE – City of Fort Collins
Page 3
whole sequence in or restart the pattern and not getting done with it as the train is already
occupying the next crossing when crossings are in close proximity.
This is better understood by reviewing attached Exhibit A. Sheet 1 of Exhibit A shows the
distance between each crossing (measured from end of concrete crossing material at one
crossing to end of concrete crossing material at the next crossing) through downtown.
Sheet 2 of Exhibit A shows the length of time the train horn needs to be sounded by a train
moving at 20 MPH, in order to provide a minimum of 15 seconds of warning and a
maximum of 20 seconds of warning.
For example, the distance the train horn needs to be blown by a 20 MPH train to provide 15
seconds of warning is 440 feet in advance of the crossing. The distance between the
crossing material at Magnolia and the crossing material at Olive is 390 feet. So in order to
provide the required 15 seconds of warning at Olive, a northbound train moving at 20 MPH
would need to begin sounding the horn while still occupying the Magnolia crossing, and
seemingly, still in the final stages of the horn pattern for the Magnolia crossing.
There is no language in the FRA Rule that allows for a variance from the minimum 15
seconds of warning in advance of a crossing, even if the previous crossing is so close the
train horn patterns are overlapping.
B. Improvements at College and Cherry
There are two existing crossings of the BNSF Railway on the north end of downtown that
already have the majority of the necessary equipment for Quiet Zone establishment using a
standard SSM installation, and only need minimal extra work. The two crossings are at
College and at Cherry. Both crossings have all of the railroad equipment already in place.
However both also have one commercial access within 60 feet of the gate arm that needs
to be relocated or closed, and both need medians extended. The concept improvement
figures for these crossings from the Phase I Report are included in Exhibit C.
In discussing this possibility of completing the necessary access and median work at these
crossings, and pursuing Quiet Zones at these two crossings, the issue of distance between
the crossings came up. Typically in areas where crossings are not closely spaced,
achieving ¼ mile of track distance in advance of an at-grade crossing is more realistic.
However, this is not the case through downtown Fort Collins.
The issue of the close spacing of the crossings would cause the locomotive engineer of a
southbound train to violate the Quiet Zone at the Cherry Street crossing every time as it
approaches Maple. The minimum distance for 15 seconds of warning is 440 feet, and the
distance between Cherry and Maple is 425 feet. Therefore the train horn would need to
begin sounding within the last 15 feet of the Cherry Street crossing, on its approach to
Maple. This known and expected violation is not acceptable practice for either the FRA or
the railroad, even though the crossings at Cherry and College would truly be silent for
northbound trains, once past Maple.
The conclusion of this discussion is that it would not be cost effective for the City to
complete the additional access and median improvements at Cherry and College for pursuit
of a Quiet Zone specifically at these two crossings. This would not likely be accepted by
FRA. However, in the next section through discussion of the Quiet Zone Risk Index
calculation, the improvements at Cherry and College would be a major contributing factor to
January 22, 2013
Memorandum to Amy Lewin, PE – City of Fort Collins
Page 4
reducing the overall risk through all of downtown when assessed as part of the downtown
corridor.
C. Quiet Zone Risk Index Calculator and Level of Crossing Treatment
The FRA Final Rule does provide alternatives to installing SSMs at every public road
crossing within a proposed quiet zone. One possible alternative involves calculating the risk
index along the proposed corridor, with the crossing warning devices present today. The
existing condition risk index is then compared to the Nationwide Significant Risk Threshold
(NSRT), which represents the average risk at public highway-rail crossings nationwide that
have flashing lights and gates, and at which locomotive horns are sounded. If the risk of the
proposed quiet zone corridor is higher than the NSRT, additional SSMs must be
implemented in an attempt to bring the risk number down below the nationwide threshold.
This is a trial and error process in which, for example, 4-quadrant gates might be added at
2 of the crossings, and the risk with those added features is calculated. The resulting risk
number is again compared to the NSRT, and if it is still higher than the NSRT, more SSMs
must be added, and so on until the calculated risk along the proposed quiet zone corridor is
below the NSRT.
The downside of this option is that over time, as public highway-rail grade crossings
nationwide become safer, and the NSRT continues to drop, eventually the calculated risk
for the proposed quiet zone may exceed the NSRT. At this point the community would need
to reassess the quiet zone risk calculator and add additional treatments until the risk index
is once again below the NSRT.
SSMs and Risk Indices for Scenarios in Fort Collins
The following table summarizes several possible scenarios and the resulting Risk Index
calculations for the crossings along the BNSF Railway corridor through downtown Fort
Collins, beginning with College Avenue on the north, and ending with Laurel Street on the
south. The calculation worksheets from the FRA website are included in Exhibit B. Notes to
be considered with regard to these findings follow the table.
Crossing
Conditions
Description Quiet
Zone
Risk
Index
Nationwide
Significant
Risk Threshold
(NSRT)
Current existing
conditions
College, Cherry (gates/flashers/bells/CWT) 24,504
(est.)
13,722
Maple, Laporte, Mountain, Oak, Olive,
Mulberry, Laurel (post mounted
flashers/bells on each quadrant of each
intersection)
Magnolia, Myrtle
(cross bucks on each cross street
approach)
Added 4-
quadrant gates
to Laurel and
Mulberry
All other crossings remain the same. At
Laurel and Mulberry, post mounted flashers
would be removed and 4-quadrant gates
would be installed in line with the median
January 22, 2013
Memorandum to Amy Lewin, PE – City of Fort Collins
Page 5
Crossing
Conditions
Description Quiet
Zone
Risk
Index
Nationwide
Significant
Risk Threshold
(NSRT)
Added 4-
quadrant gates
to Laurel,
Mulberry and
Maple
All of other crossings remain the same. At
Laurel, Mulberry, and Maple, post mounted
flashers would be removed and 4-quadrant
gates would be installed in line with the
median curb on each side of the tracks
15,714.38
(too high)
13,722
Added 4-
quadrant gates
to Laurel,
Mulberry, Olive
and Mountain
All of other crossings remain the same. At
Laurel, Mulberry, Olive and Mountain, post
mounted flashers would be removed and 4-
quadrant gates would be installed in line
with the median curb on each side of the
tracks
13,578.57
<NSRT
13,722
NOTES:
1. The College Avenue crossing and the Cherry Street crossing have the benefit of
being nearly Quiet Zone compliant today. Including them in the risk calculation for
the corridor improves the overall risk index.
2. The Quiet Zone Calculator program on the FRA Website is a bit antiquated. It does
not allow credit to be given for unusual warning installations, such as post-mounted
flashers on all four quadrants of a crossing/intersection.
2. The Quiet Zone Calculator program does not have a way to account for crossings
where vehicular traffic is also controlled by traffic signals. This should have a safety
benefit, as vehicular traffic will be stopped at red traffic signals at all of the active
warning crossings upon notification of a train approaching.
In order to use the Quiet Zone Risk Calculator in a way that may better reflect the actual
conditions of the crossings in downtown Fort Collins along Mason Street, a conversation
with the FRA has been initiated including the following questions:
1. Is there a way to use the Quiet Zone Risk Calculator in a way that may better reflect the
actual conditions of the crossings in downtown Fort Collins along Mason Street?
2. Has anyone at FRA provided assistance with input data to the Calculator program to
provide some credit for traffic signals or post flashers at a crossing or range of
crossings?
3. Has anyone proposed (or could Fort Collins propose) a methodology for supplementing
January 22, 2013
Memorandum to Amy Lewin, PE – City of Fort Collins
Page 6
Visual Impacts
Currently, the active warning crossings through downtown are treated with post-mounted
flashers on each quadrant of each intersection. Each post has a set of flashers facing in
each direction, for a total of 16 flashing lights per post (8 flashing pairs).
To evaluate the visual impact of installing 4-quadrant gates along the track envelope at
some of the crossings, a Photoshop rendering was created. For comparison, the views of
two active warning crossings at Olive and Mulberry, are provided as they appear today.
Directly below each existing approach view, is the Photoshopped view with the post-
mounted flashers removed, and the 4-quadrant gates installed. These comparison views
are provided in Figures A and B on the following pages. Plan view concepts are included in
Exhibit C (attached).
Visually, the amount of equipment is not more than what exists today. The equipment is in a
different location, but given the amount of vehicular warning devices, signs, and mature
landscaping, the replacement of the post-mounted flashers with the gates does not appear
any more obtrusive than the equipment that exists currently.
D. New Technologies – Entertaining being a Test Site City
The Final Rule provides instruction regarding the manner in which the Associate
Administrator of the FRA might entertain new Supplemental Safety Measures (SSMs) or
Alternative Safety Measures (ASMs) that are not currently listed within the Final Rule. The
specific language from the Final Rule regarding this process is included in Exhibit D.
Generally, the device or technology would need to be tested and determined, by the
Associate Administrator, to be an effective substitute for the locomotive horn in the
prevention of collisions and casualties at public highway-rail grade crossings. The pursuit of
this type of proposal would involve finding a manufacturer that has developed a product for
this specific use, negotiating cost for installation and testing, and compiling the appropriate
application to the FRA for consideration.
Some options that have been discussed historically, but have not been pursued for
approval by the FRA include retractable bollards and in-line security gates. While either of
these options would have a smaller footprint of space needed for installation and operation,
there are risks of damage by and to vehicles and the potential for the mechanism to be
pushed onto the tracks into the path of an oncoming train by an errant vehicle.
Retractable bollards were installed at a railroad crossing in Wayne County, Michigan in
December 2007 for a 17-month testing and monitoring period until the Spring of 2009. The
results of that testing period are not readily available. This installation in Michigan was not
for the purpose of Quiet Zone establishment, but rather to deter vehicles from driving
around the railroad gates. Information regarding the Michigan study as well as photos of the
bollard installation is provided in Exhibit D.
Test Site City
With the completion of the track rehabilitation project through downtown Fort Collins, the
existing BNSF Railway tracks are no longer in pavement and accessible to vehicles for the
entire length of Mason Street. Raised curb and gutter encloses the ballast section
surrounding the tracks in between each cross street. This infrastructure improvement not
only isolated the tracks from vehicles within each block, it allowed for railroad and City
installed warning devices (post-mounted flashers, signing, traffic signals) to be added or
January 22, 2013
Memorandum to Amy Lewin, PE – City of Fort Collins
Page 7
Figure A. Mulberry Street at Mason/BNSF
Existing View with Post Mounted Flashers on each corner
Proposed View with 4-Quadrant Gates along track envelope
January 22, 2013
Memorandum to Amy Lewin, PE – City of Fort Collins
Page 8
Figure B. Olive Street at Mason/BNSF
Existing View with Post Mounted Flashers on each corner
Proposed View with 4-Quadrant Gates along track envelope
January 22, 2013
Memorandum to Amy Lewin, PE – City of Fort Collins
Page 9
reconfigured at the specific cross streets to restrict vehicular movement during approach of
a train.
The remaining limited available street area through downtown Fort Collins provides
challenges to the City for pursuit of a Quiet Zone. In addition to the crossings being closely
spaced, existing development along the corridor edges does not allow for roadway
widening to accommodate additional railroad equipment within the street envelope to truly
isolate the track corridor during presence of a train. It is due to these factors that Fort
Collins may be a good test site for installation and monitoring of the retractable bollards
specifically for pursuit of a Quiet Zone.
In this instance the bollards would be installed in line with the curb on each side of the
tracks across a test crossing downtown. The bollards could be interconnected to the traffic
signal cabinet, and receive its activation signal in logical coordination following the
clearance cycle of the traffic signal. This type of new technology testing could be offered as
a research project to the Engineering Department of CSU, as their involvement would
provide analysis and monitoring by an independent third party, as well as may offer the
opportunity for the university to pursue grant funding for the research project. The results
would be unbiased and the resulting report could be used in support of the City’s pursuit of
a Quiet Zone downtown.
Note that the retractable bollards tested in Michigan were installed in addition to approach
railroad gates, flashers and crossbucks. The FRA’s acceptance of the retractable bollard
may include requirements for some level of immediately adjacent railroad equipment.
However, the testing of a site in downtown Fort Collins would include documentation of the
existing post-mounted flashers and traffic signal restrictions, that may, in combination with
the bollards, be an acceptable Quiet Zone treatment to FRA.
E. Proposing an Amendment to the Final Rule for nighttime horn use in urban areas
Periodically, the FRA will provide notification in the Federal Register inviting comment with
regard to specific activities or rules. The ‘rulemaking’ process can lead to the issuance of a
new rule, an amendment to an existing rule, or the repeal of an existing rule. It would be
through this process that the City could propose an amendment to the Final Rule with
regard to nighttime horn use in urban areas.
There are several steps in this process including a Notice of Proposed Rulemaking
(NPRM), a comment period, evaluations (such as environmental or economic), possibly
interim rules, and in most cases a Final Rule is issued.
The Federal Docket Management System is available to the public and is the complete,
official record of rulemakings, guidance documents, adjudicatory actions, peer reviews,
data quality and other documents. This government-wide, on-line database includes the US
Department of Transportation's (DOT) public docket.
The rulemaking docket is the file in which DOT places all of the rulemaking documents it
issues (e.g., the NPRM, hearing notices, extensions of comment periods, and final rules),
supporting documents that it prepares (e.g., economic and environmental analyses),
studies that it relies on that are not readily available to the public, all public comments
related to the rulemaking (e.g., comments that may be received in anticipation of the
rulemaking, comments received during the comment period, and late-filed comments), and
other related documents. The DOT also prepares and places in the docket, summaries of
January 22, 2013
Memorandum to Amy Lewin, PE – City of Fort Collins
Page 10
any substantive, public, oral communications (sometimes referred to as "ex parte" contacts)
that concern a rulemaking that the FRA/DOT may receive.
Currently, the FRA does not have any Notices of Proposed Rulemaking regarding the Train
Horn Rule that would be appropriate for comment regarding an amendment to the rule.
Possible Courses of Action
1. Continue discussions with the FRA regarding working with the Risk Calculator to better
reflect the crossing warning devices present today which would decrease the resulting risk
index for the corridor, and which may reduce the improvements needed.
2. Consider a downtown crossing to serve as a test site for installation of a new technology,
such as the retractable bollards, and engage in discussion with the FRA regarding tasks
and timeline for this process.
3. Continue to monitor the FRA website for notices of rulemaking that may provide an
opportunity for comment regarding horn use at among close proximity crossings or horn
use during nighttime hours.
Attachments
Exhibit A
Distance Between Crossings Exhibit
Current Approximate Train Horn Distance Exhibit
Exhibit B
Quiet Zone Calculator Results Spreadsheet
Exhibit C
Phase I Concept Views: College, Cherry
Phase I Concept Views: Mulberry, Olive
Mason 2-Way Conversion Exhibit
Exhibit D
Final Rule, Part 222.55 – Approval of New SSMs or ASMs
Examples: Retractable Bollards, In-Line Security Gates
Exhibit A
Distance Between Crossings Exhibit
Current Approximate Train Horn Distance Exhibit
EXHIBIT A
2400’
450’
425’
540’
570’
390’
380’
390’
350’
Myrtle Street
Laurel Street
390’
630’
Fort Collins, CO
BNSF Crossings: Linden to Laurel
Distance Between Crossings Exhibit
NOTE: Distances are from end of crossing
material to end of crossing material
between each crossing.
January 22, 2013
EXHIBIT A
Myrtle Street
Laurel Street
Fort Collins, CO
BNSF Crossings: Linden to Laurel
Current Approximate Train Horn Distance
Exhibit
NOTE: Distances are measured in advance of
the end of crossing material of the crossing
being approached.
January 22, 2013
20
15
Legend:
587 ft in advance of
crossing; this is the location at
which trains must begin sounding
their horns for 20 seconds of
warning when approaching a
crossing at a speed of 20 MPH
440 ft in advance of
crossing; this is the location at
which trains must begin sounding
their horns for 15 seconds of
warning when approaching a
crossing at a speed of 20 MPH
FOR INFORMATION AND REVIEW ONLY
Exhibit B
Quiet Zone Calculator Results Spreadsheet
Exhibit C
Phase I Concept Views: College, Cherry
Phase I Concept Views: Mulberry, Olive
Mason 2-Way Conversion Exhibit
Exhibit D
Final Rule, Part 222.55 – Approval of New SSMs or ASMs
Examples: Retractable Bollards, In-Line Security Gates
1/4/2013
1
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RAIL CROSSING SAFETY
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3
Denton Road Layout
Denton Road
Installation
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4
Denton Road
Installation
Denton Road
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5
Denton Road
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1
Railroad Quiet Zone Study
City Council Work Session
January 22, 2013
Transportation Planning
ATTACHMENT 6
2
BACKGROUND
• Train horn use governed by Federal Railroad
Administration (FRA) – “Final Rule”
• FRA regulates implementation of Quiet Zones as
alternative
• Quiet Zones:
– Crossings at which locomotive horn not
routinely sounded
– Typically established with Supplemental Safety
Measures (SSMs)
– Must be at least ½ mile long
3
EXAMPLES OF QUIET ZONE SSMs
Raised Medians with Approach Gates
4
EXAMPLES OF QUIET ZONE SSMs
Four-Quadrant Gates
5
OTHER QUIET ZONE SSM OPTIONS
Crossing Closure
6
OTHER QUIET ZONE SSM OPTIONS
Wayside Horn
• Replaces locomotive horn from
train with locomotive horn on
post
• Reduces impact of noise away
from crossing
7
RAILROAD QUIET ZONE STUDY
• Railroad Issues Study Group (2007)
recommended
• BNSF line from Downtown to Trilby Road (~15
trains per day)
• Technical analysis
– Phase 1 Downtown (July 2011)
– Phase 2 CSU to Trilby (draft)
• Implementation plan (if desired)
8
FEEDBACK SOUGHT FROM COUNCIL
1. Guidance on the possible courses of action:
– Move towards implementation?
– Add/remove options?
2. Additional information that City Council would like
to see?
9
STUDY AREA
TRILBY
DOWNTOWN
STAND-ALONE
QUIET ZONES
CSU
COLLEGE
PROSPECT
DRAKE
NOT TO SCALE
10
STAND-ALONE CROSSINGS:
DRAKE TO TRILBY
• Could be implemented
individually or as a
group
• Many crossings
receiving
improvements with
MAX
• Fairly streamlined
implementation
DRAKE RD
HORSETOOTH RD
HARMONY RD
TRILBY RD
SWALLOW RD
NOT TO SCALE
RAILROAD
11
STAND-ALONE CROSSING OPTIONS
AND CONCEPTUAL COSTS
Crossing Options Cost Range
Drake - Wayside Horns
- Four-Quadrant Gates
$160,000 to $390,000
Swallow - Raised Medians
- Four-Quadrant Gates
$60,000 to $260,000
Horsetooth - Raised Median/Wayside Horn
- Wayside Horns
- Raised Median/Exit Gate
- Four-Quadrant Gates
$135,000 to $260,000
Harmony - Raised Median/Wayside Horn
- Raised Median/Exit Gate
- Four-Quadrant Gates
$145,000 to $260,000
Trilby - Wayside Horns
- Raised Median/Approach Gates
- Four-Quadrant Gates
$200,000 to $415,000
TOTAL $700,000 to $1,585,000
12
OTHER CROSSINGS:
COLLEGE TO PROSPECT
• Includes 16 roadway crossings, 2 pedestrian
crossings
• CSU and City jurisdiction
• Standard SSM implementation:
– Downtown: $3.2 - $3.5 million
– CSU: $1.1 - $1.4 million
13
FUNDING
• Total cost of standard SSM implementation:
$5 - $6.5 million
• No funding source identified
• Some potential options:
– Safety programs
– Local General Fund
– Transportation Fund
– Sales tax revenue
14
OTHER OPTIONS EXPLORED
•Waivers
• College and Cherry Improvements
• Corridor Solutions below Nationwide Significant
Risk Threshold (NSRT)
• Test Site for New Technology
• FRA Final Rule Amendment
15
WAIVERS
• Successful waivers on record:
– Exemption from circuitry
– Exception to median design
• FRA response to customize our train horn pattern:
not viable
16
COLLEGE AND CHERRY
IMPROVEMENTS
• College and Cherry very close to Quiet Zone
compliance
• Maple too close for southbound train to not blow
horn
• FRA not likely to approve Quiet Zone
17
CORRIDOR SOLUTIONS BELOW
NATIONAL THRESHOLD
• Reduces level of investment needed
• Calculated corridor risk must be lower than
Nationwide Significant Risk Threshold
• Requires monitoring, reporting, and potential
additional improvements so corridor risk stays
below updated threshold
• Current FRA Calculator doesn’t give credit for
improvements Downtown
• In discussions with FRA about updates
18
NEW TECHNOLOGY
• Retractable bollards
• Tested in Michigan for safety
• Would work with manufacturer
• Need to get FRA approval
19
FRA “FINAL RULE” AMENDMENT
• FRA doesn’t accept unsolicited comments
• Current comment period not applicable
• 2013 may have comment period we can use
20
POSSIBLE COURSES OF ACTION
• Pursue one or more stand-alone crossing Quiet
Zones
• Pursue grouped/corridor crossing Quiet Zones
• Continue discussions with FRA about Risk
Calculator
• Pursue being a test site for new technology
• Continue to monitor FRA website for opportunities
to comment on “Final Rule”
21
NEXT STEPS
• Finalize Phase 2 Technical Report – January
2013
• If Council/community support:
– Draft Implementation Plan – Spring 2013
22
FOR MORE INFORMATION
Project Website:
fcgov.com/quietzone
Contact: Amy Lewin
alewin@fcgov.com
or
(970) 416-2040
DATE: January 22, 2013
STAFF: Josh Birks
SeonAh Kendall
Pre-taped staff presentation: available
at fcgov.com/clerk/agendas.php
WORK SESSION ITEM
FORT COLLINS CITY COUNCIL
SUBJECT FOR DISCUSSION
Incentives Benchmarking.
EXECUTIVE SUMMARY
Since 2009, City Council has reviewed four business assistance package requests for primary
employers ranging in value of $75,000 to $4.5 million. Currently, the City of Fort Collins uses the
case-by-case approach to developing assistance packages. City Council has, during recent
conversations relative to business assistance packages, indicated a more formal approach to package
development would be preferable moving forward. As a result, the Economic Health Office (EHO)
sought a review of best practices and industry standards to begin development of a formal business
assistance policy and procedure. The incentives framework study was performed in fall 2012 of
peer communities and focused on evaluating the utilization and development of incentives. Staff
has begun working on improving and formalizing the overall business assistance policy and
procedures based in part on this study. Staff is seeking direction from Council in regard to the
development of a formal policy and procedure for business assistance.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
The Economic Health Office is seeking direction in regard to the direction of the business assistance
package process. Items to address include:
1. Does the proposed framework meet the needs of the City, community, and businesses?
2. Does Council see any “gaps” in service? What, if anything, is missing from the
classification/ranking criteria?
3. How would Council prioritize the criteria? Should this be weighted?
4. What criteria items are essential, or the absence of them, would halt business assistance for
the company?
BACKGROUND / DISCUSSION
Although incentives are used by many states and municipalities to achieve economic objectives,
incentives are often controversial. There is an increased demand by taxpayers and public authorities
to validate economic development incentives and ensure the investment made to support business
has a clear benefit to the community. In early summer 2012, the Economic Health Office (EHO)
was requested by City Council to develop a framework to guide the City’s business assistance
January 22, 2013 Page 2
investments in part due to the increased number of requests coming before City Council for
consideration.
One of the primary purposes of the EHO is the retention and expansion of primary employers. The
City of Fort Collins uses a variety of local incentives to assist primary employers with relocation
and expansion efforts. Currently, the City does not employ a one-size-fits-all approach to
developing incentives packages. Instead, the City chooses to work collaboratively with each
primary employer and build a package that is specific to the particular business needs (Attachment
1). While this approach has worked for the City in the past, a clear business assistance policy will
allow the City to be up front with businesses, accountable to citizens and provide an equitable and
predictable process.
The 2012 Economic Health Strategic Plan (EHSP), adopted by City Council in June 2012, identifies
four focus areas: business support, innovation, talent management and community culture/quality
of place. One of the key goals was to develop community assets and infrastructure necessary to
support the region’s employers and talent. Goal 4 of the EHSP: Community Culture/Quality of
Place, identifies the monitoring of business and development climate to ensure Fort Collins’ ability
to nurture business as a strategy. Furthermore, the EHSP identifies the development of a clear
incentives policy to outline the use of the City’s economic health tool box as an action plan (page
37, available online at fcgov.com/business). Therefore, the EHSP provides direction, in addition
to the City Council direction, to develop a formal policy guiding the award and development of
business assistance investments.
There are several key objectives of the incentives benchmarking study and process improvement,
including:
• Provide an equitable and predictable process for all participants (businesses, City, and
community);
• Aid in determining the type and amount of assistance for primary employers;
• Ensure the benefits outweigh the costs; and
• Enhance the overall policies and procedures when assisting the business community.
As the Economic Health Office is receiving more and more requests for business assistance, staff
recognizes the needs for standard practices. Prior to this study, the evaluation has not been done due
to the low number of assistance requests. Since 2009, City staff has brought forth four business
assistance packages requests for consideration ranging in value from $75,000 to $4.5 million.
Recently, however, there has been an increase in requests made to the City for business assistance
when a company is looking to expand and/or relocate in the Fort Collins area. Two of the four
requests brought forth for Council consideration were in 2012.
Benchmarking Study
EHO staff began by engaging TIP Strategies, Inc., an Austin-based consulting firm, in the study on
October 2012. TIP Strategies’ incentives benchmarking report summarized incentives offered by
peer communities as well as economic development best practices. Sample measures of return on
investments (ROI) on incentive spending in each community were also investigated. The ultimate
objective was to assist the economic health staff understand how other communities utilize their
January 22, 2013 Page 3
economic development tools and to shape a comprehensive, clear, and effective business assistance
policy (Attachment 2).
Peer cities were selected based on their similarities and goals compared to the City of Fort Collins
(clusters, headquarters of large primary employer, education and workforce base, etc.). Each peer
benchmark was evaluated on its economic development toolkit such as tax rebates, loans, special
districts, and other tools that promote economic development. In addition, return on investment
measures was researched. Again, the purpose of the incentives benchmark study was to assist the
Economic Health Office in understand how other peer cities utilize incentives efficiently and
effectively to retain, expand and attract businesses, and to enhance the EHO’s business assistance
process (Attachment 3).
Limit in Scope of Analysis
It is not the intent of the incentives benchmarking study to evaluate the effectiveness of economic
development incentives from a fiscal, economic, social, or political position. Such analyses,
although important, are beyond the purview of this study. Instead, this report seeks to benchmark
the City of Fort Collins business assistance packages against a collection of other U.S. peer
communities to determine best practices. In addition, this study is intended to serve as a starting
place for a discussion on the policies and procedures related to the City’s overall economic health
strategy and how it compares to its peer communities.
Findings
During the course of the incentives benchmark study, it was discovered that there is no single
approach to incentives – no two communities approach business assistance the same way. However,
the City of Fort Collins is not unique in using the case-by-case approach to assistance. The study
revealed that many communities apply screening criteria to rank projects to determine the usefulness
of assistance to a particular business and to the municipality. In addition, many communities impose
a more formalized interaction approach with businesses (e.g., applications, formal review processes,
economic analyses, audits, etc.) than the current Economic Health Office’s request for assistance
memorandum (Attachment 1).
On November 19, 2012, the EHO staff, in collaboration with the City Attorney’s Office, Finance,
and Planning Departments worked to create a formalized business assistance process that includes
classification/ranking, minimum requirements of the business seeking assistance, enhanced analysis,
and explicit expectations of the business and city. Additionally, it was determined that a balance
sheet approach will be exercised for each business assistance package reviewed. EHO staff is
seeking guidance in regard to the minimum requirements required from businesses and the
classification/ranking criteria to assist in determining which tools will be utilized and the amount
of the tool offered to businesses (Attachment 3 and 7).
The intent of the classification/ranking and minimum requirements is to align business, community
and City objectives. The minimum requirements will assist both the City and the business in regard
to expectation requirements if assistance is approved by City Council. Some of the minimum
requirements required of the business include a timeline commitment, completion of a formal
application, pledge to annual reporting, commitment to separate reporting schedule for use tax
rebate, assurances of maintaining existing workforce and an acknowledgement of open
January 22, 2013 Page 4
communication of the package after a business assistance package has been developed and agreed
upon by both parties. In addition, an annual assessment of the business is required to verify the
required performance metrics attached to any incentives/assistance.
Another procedure in the business assistance process is the classification/ranking, which will assist
the Economic Health Office in prioritizing the business assistance request. The classification and
ranking will be evaluated based on the businesses contribution to the overall quality of place, size
and impact of business, corporate citizenship (i.e., environmentally and socially), and the overall
alignment with City objectives. This system will assist in developing a holistic view of the costs
and benefits of the business assistance to the community and business.
In addition, the Economic Health Office’s Economic Impact Analysis of potential business
assistance will take a balance sheet approach. This approach will review the economic impact from
a project and the costs and benefits for relevant taxing districts for a 10-year period. The analysis
will examine direct, indirect and induced economic impacts of the projects if the company decides
to expand and/or relocate within the city. The impact analysis will also investigate the present value
of the net benefits using a 5% discount rate. Furthermore, the economic impact analysis will study
the impacts if the company chooses to locate outside the city (Attachment 4).
Inputs to Business Assistance Amount
The Business Assistance Tax Rebate Program provides a performance-based incentives payment
to qualifying companies. The program is designed to support and encourage new business
development, business expansion and relocations that have generated net new high-quality,
permanent, full-time positions. The EHO defines “high-quality, permanent, full-time jobs” as ones
that meet the following scalable standards: 1) wages, 2) number of net new full-time jobs, and 3)
benefits.
Average Annual Wage Requirement
The following tables reflect potential incentives level based on the Larimer County annual average
wage of full-time permanent jobs (county source: QWEC Annual Table provided by the Department
of Labor and Employment). The annual wage rate calculation does not include benefits.
Additionally, the minimum job creation of net new full-time jobs will be based on an increase of
twenty percent of the overall workforce within the businesses’ Fort Collins facility.
January 22, 2013 Page 5
Part of the EHO’s definition of “high-quality, permanent, full-time jobs” requires businesses seeking
assistance to offer an employee health plan where the employer pays at least 50% of the employee
premium. In addition, the business must offer group health insurance to the employee dependents.
If the employer participation of the employee only premium is higher, this may be considered in
scaling the assistance package in addition to the annual average wage requirements.
Next Steps
After gathering information from the public and Council, the Economic Health Office will formalize
the business assistance policy and procedures for council consideration on Tuesday, February 19,
2013.
PUBLIC OUTREACH
The Economic Health Director presented information in regard to both the incentives benchmarking
study and the proposed process improvements to the Futures Committee on December 10, 2012 and
the Economic Advisory Commission on December 19, 2012. In addition, a public workshop is
being conducted on January 16, 2013, with an online tool available until mid-February 2013
(Attachment 5). The purpose of the outreach is to allow the community to review the application
process, filter criteria and rationale, the new analysis process, and answer other questions the
community might have.
ATTACHMENTS
1. Request for Assistance Requirements Memorandum, Economic Health Office
2. Incentives Benchmarking , Kathleen Baireuther and Caroline Alexander, TIP Strategies,
Inc., January 4, 2013
3. Minimum Requirements Flyer, Economic Health Office
4. A Report of the Economic Impact of Project X in Fort Collins, CO, Impact DataSource,
LLC., January 15, 2013
5. Public Workshop Flyer, Economic Health Office, January 16, 2013
6. Draft Request for Assistance Application, Economic Health Office
7. PowerPoint presentation
Economic Health Office
300 LaPorte Avenue
PO Box 580
Fort Collins, CO 80522
970.416.2170
970.224.6107 - fax
fcgov.com
MEMORANDUM
Date:
To: Prospective Company Applicant
From: Josh Birks, Economic Health Director
SeonAh Kendall, Business Retention & Expansion Strategist
Re: Request for Assistance Requirements
City Approach
The City of Fort Collins uses a variety of local incentives to assist primary employers with
relocation and expansion efforts. The City does not employ a one size fits all approach to
developing incentive packages. Instead, the City chooses to work collaboratively with each
primary employer and build a package that is specific to the individual needs. This approach
typically results in a better outcome for all parties. In addition, this approach allows for a wider
variety of incentives to be deployed depending on the needs of the project.
Local Incentives
The following incentives may be available to the project. However, please note that this memo
does not include an all-inclusive list of available incentives available without more details about
the specific project(s). These incentives are in addition to those available at the State and County
level incentives.
Private Activity Bond Financing – The incentive utilizes a Federal Program giving private
corporations access to Tax Exempt financing. The tool can provide up to $10 million in
financing capacity at interest rates substantially below current market interest rates
(approximately 3.5 to 4.5 percent). The financing can be used to acquire property, construct
building, renovate an existing building, and procure equipment. Interest savings on a $10
million loan over 20 years can total approximately $3.0 million.
Manufacturing Equipment Use Tax Rebate Program – The City’s Manufacturing
Equipment Use Tax Rebate Program permits local manufactures to request a partial rebate of
the 2.25 percent local use taxes paid on qualifying equipment. Use taxes are used by other
Colorado municipalities and intended to equalize competition between venders located in the
cities who collect local sales tax and those located outside the cities who do not charge local
sales tax. The City Administration will recommend approval to the City Council of a rebate
on manufacturing equipment use tax. Example, if the client were to invest $10,000,000 in
manufacturing equipment, this program could potentially save the company up to $225,000
in use tax.
Personal Property Tax Rebate – The City employs the use of personal property tax rebates
on a discretionary or case-by-case basis. Use of this incentive will require approval of the
ATTACHMENT 1
City Council. Past agreements with primary employers have included a 10-year rebate for 50
percent of the personal property in the expansion/relocation project.
Expedited Development Review – For large primary employment development projects, the
City will commit to an expedited development review and building permit application
process. This process can save essential time allowing for rapid construction minimizing the
time to the expansion/relocation event.
Other Incentives – The City has also employed a variety of other incentives specific to a
project. These other incentives have included assistance with off-site improvements and
deferral of additional fees (e.g. drainage fees). The use of these other incentives typically
depends on the financial need of the specific project.
Application Requirements
Formal Request for Assistance
A formal request for assistance must be submitted by the company to the Economic Health
Office on the applicant’s formal letterhead. Information needed includes:
Brief summary of the project, including description, purpose and timeline.
Location specifics
o Location, anticipated building square footage needs, acreage need, etc.
o Including locations considered outside of city limits
o Other incentives offered by other cities, regions, and/or states
o Other deciding factors
o Anticipated incentives offered by the State and region specific to this location
Costs associated with relocation/expansion/move
o Construction costs
o Land costs
o Building rehabilitation costs
o Manufacturing equipment costs
o Non-manufacturing costs
o Permits and fees costs
Jobs created and/or retained
o New jobs created
o Average annual salary of new jobs
o Average annual salary of existing jobs
o Anticipated training costs
Audit Availability
The parties agree that the City may, at its option, require the applicant company to make
available to the City all documents that verify the required performance metrics attached to any
incentives (i.e., jobs, equipment purchases, etc.).
INCENTIVES BENCHMARKING STUDY 2012
City of Fort Collins, CO
2012
INCENTIVES BENCHMARKING
The business incentives policies of 8 communities, including: Loveland, CO;
Austin, TX; Charlottesville, VA; San Diego, CA; Portland, OR; Milwaukee, WI;
Gainesville, FL, and Pittsburgh, PA were profiled through web research and
phone interviews in October 2012. The research is summarized in a series of
tables in this document, and there is a corresponding “Supplementary
Documentation” deliverable for each city with relevant policies, announcements,
and program details.
TIP Strategies, Inc.
06 East 6th Street, Ste. 550
Austin, TX 78701
tipstrategies.com
ATTACHMENT 2
PAGE | 1
CONTENTS
ABOUT ................................................................................................................................................................................
2
KEY FINDINGS .................................................................................................................................................................... 2
ECONOMIC DEVELOPMENT TOOLKIT ........................................................................................................................... 3
ORGANIZATIONAL RELATIONSHIPS ............................................................................................................................. 4
REGIONAL COLLABORATION ........................................................................................................................................ 5
PROGRAMMIC CASE STUDIES ....................................................................................................................................... 7
ECONMIC IMPACT ANALYSIS (EIA) ................................................................................................................................ 9
PERFORMANCE AGREEMENTS, COMPLIANCE, & ROI MEASURES ............................................................................. 10
LOVELAND, CO ................................................................................................................................................................. 11
AUSTIN, TX ....................................................................................................................................................................... 15
CHARLOTTESVILLE, VA .................................................................................................................................................... 19
SAN DIEGO, CA ................................................................................................................................................................. 22
PORTLAND, OR ................................................................................................................................................................ 26
MILWAUKEE, WI ............................................................................................................................................................... 28
GAINESVILLE, FL .............................................................................................................................................................. 36
PITTSBURGH, PA .............................................................................................................................................................. 39
METHODOLOGY &WORK PLAN ....................................................................................................................................... 41
PHASE 1: PEER COMMUNITY IDENTIFICATION ........................................................................................................... 41
PHASE 2: ACQUIRE AND ANALYZE INCENTIVES POLICIES AND MEASURES OF ROI. ................................................ 44
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 2
ABOUT
TIP Strategies, Inc. was engaged to identify and profile the business incentives policies of peer communities on behalf of the City of Fort
Collins, CO, in the fall of 2012. Sixteen cities were identified as possible competitors after a review of peer communities identified in the
City’s strategic plan, major employer office locations; and communities with similar target industries. Eight communities responded to
interview requests: Loveland, CO; Austin, TX; Charlottesville, VA; San Diego, CA; Portland, OR; Milwaukee, WI; Gainesville, FL, and
Pittsburgh, PA. For each community, phone interviews were conducted with the departments responsible for negotiating performance
agreements around business incentives during October 2012.
DELIVERABLE STRUCTURE
The Key Findings section of this report compares the communities to one another across a range of characteristics and highlights best
practices around specific themes. Detailed Community Profiles around incentives practices make up the remainder of the document. For
each community, a summary matrix has been developed to reflect the findings from the interview and web research. Supplementary
Documentation, which serves as a comprehensive index of relevant policies, announcements, and program details, is also provided for
each community. Individual documents referenced in the Community Profiles can be found in the associated Supplementary
Documentation file.
COMPARABLES
Half of the communities interviewed have a similar organizational structure to that of Fort Collins, where economic development programs
and associated incentives are managed directly by City staff and must be reviewed and approved by City Council. For this reason, the
Loveland, CO; Austin, TX; Charlottesville, VA; and San Diego, CA are featured in the review of Economic Development Toolkits and
Organizational Relationships.
KEY FINDINGS
Communities with clear, stated incentives policies tended to also have a clearly articulated incentives process and compliance
review. Interviewees noted that the combination of a strategic plan for economic development and a formal incentives
policy allowed them to negotiate performance agreements with more confidence. City Councils generally upheld existing
strategy documents and incentives policies through their votes on specific deals, according to interviewees.
Many of the communities were willing to share examples of performance agreements. Overall, these contracts are highly-
customized, detailed documents that include a number of provisions to protect the municipality in the event of non-compliance by
the business partner. The agreements generally provide for a series of specific remedies, and cover the cost incurred to the City
to collect expenses owed, as well as any interest associated with non-compliant payments.
Performance agreements are often “back-loaded.” Business partners are required to complete a formal reporting process
before incentives (often in the form of tax rebates) are awarded. Agreements are generally tied to a specific timeline and are
capped at a specific dollar amount per year.
Although both Austin, TX, and Charlottesville, VA, do not generally award large incentives, but incentives provided by the State
can only be awarded if the municipality enters into a performance agreement with the business. In effect, the approval of local
incentives makes it possible for very significant State funds to be leveraged as part of a negotiation. For example, in the
performance agreement between the City of Austin and Facebook, $200,000 in City incentives was awarded over a 10-year
period. The State of Texas added $1.4 million to the deal. “Without state participation we would definitely be at risk.”
Many incentives policies that were developed prior to 2005 are currently being re-evaluated. Austin and San Diego both plan
to revamp their incentives policies during 2013 and have already tasked special committees with the review of their policies.
Although almost every community interviewed conducts some form of economic impact analysis prior to entering into a
performance agreement, not all communities have clear, stated processes to evaluate return-on-investment on an ongoing
basis. Of the communities interviewed, Austin, TX, has the most transparent and consistent compliance process.
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 3
ECONOMIC DEVELOPMENT TOOLKIT
The business incentives process in
each community and the relevant
programs, taxes, and services that are
negotiated in performance agreements
as incentives are summarized in the
matrix below. State, county, and
municipal programs are all considered
to be a part of the community’s
“toolkit.”
Some specific programs are
highlighted independently of more
general descriptions of the incentive
categories to illustrate initiatives that
were unique to certain communities
(such as relocation assistance), or
seemed to be consistently utilized by
the peers (infrastructure improvements,
cash incentives for new primary jobs).
Fort Collins, CO
Loveland, CO
Austin, TX
Charlottesville, VA
San Diego, CA
Provision for Case-by-Case Incentives
Formal Incentives Policy
Clear Evaluation Process
Economic Impact Analysis
Agreement Approval by Council
ROI Measure
Compliance Review
Cash Incentives for New Primary Jobs
Cash Grant, Loan or Loan Guarantee
Bonds (Industrial Revenue or Other)
Tax Increment Financing
Special Assessment / Improvement Districts
Enterprise Zone
Foreign Trade Zone
Development/Reinvestment Zones
Downtown District
Urban Renewal Authority
Corporate Income Tax Credit, Rebate or Reduction
(In Texas, "Franchise Tax" is similar in effect but calculated differently.)
Property Tax Abatement/Exemption
Sales tax refund, exemptions or other sales tax deductions
Manufacturing Use Tax
Relocation Assistance
Infrastructure Improvements
Public Utility Incentives
Expedited Permitting/Review
Waiver of Development Fees
Job Training Programs
Marketing/Promotional Support
OTHER PROGRAMS
& SERVICES
TAXESDISTRICTS SPECIALFINANCINGPROCESS ZONES &
Overview
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 4
ORGANIZATIONAL RELATIONSHIPS
Many municipalities are one of many economic development actors in their community. The relationships among organizations are often
challenging to manage and it is not uncommon for groups in one geographic area to perform redundant functions. The organizational
ecosystems are mapped here, in brief, in three general categories of economic development activity.
PRIMARY EMPLOYMENT ATTRACTION,
RETENTION, AND EXPANSION
SMALL BUSINESS DEVELOPMENT,
ENTREPRENEURSHIP, AND INCUBATION
DESTINATION MARKETING
City of Fort Collins Rocky Mountain Innosphere and Innovation Initiative Visit Fort Collins - Fort Collins CVB
Colorado Office of Economic Development and
International Trade
Fort Collins Area Chamber of Commerce Larimer County
Northern Colorado Economic Development
Corporation
Larimer County SBDC
Larimer County Workforce Development Center CSU Ventures
Fort Collins Area Chamber of Commerce Engines and Energy Conservation Laboratory at CSU
CSU Research Innovation Center
City of Loveland Rocky Mountain Innosphere and Innovation Initiative Engaging Loveland
Colorado Office of Economic Development and
International Trade
Loveland Center for Business Development Loveland Hospitality Association
Northern Colorado Economic Development
Corporation
Office for Creative Sector Development Larimer County
Larimer County Workforce Development Center Loveland Chamber of Commerce
Loveland Business Assistance Network (LBAN)
Opportunity Austin, Greater Austin Chamber of
Commerce
Austin Technology Incubator Austin Convention and Visitors Bureau (ACVB)
EGRSO, City of Austin
University of Texas Office of Technology
Commercialization (OTC)
Opportunity Austin, Greater Austin Chamber of
Commerce
Travis County Greater Austin Chamber of Commerce
Economic Development and Tourism- Office of
the Governor
TexasWideOpenforBusiness.com Small Business Development Program- City of Austin TravelTex.com
International Business and Recruitment- Office of
the Governor
Thomas Jefferson Partnership for Economic
Development
City of Charlottesville Office of Economic Development Charlottesville Albemarle CVB
Office of Economic Development, City of
Charlottesville
UVA Innovation Charlottesville Regional Chamber of Commerce
Albemarle County Economic Development
Authority
Thomas Jefferson Partnership for Economic
Development
The Downtown Business Association of
Charlottesville
Virginia Economic Development Partnership
Central Virginia Small Business Development Center
(CV SBDC)
Shop Charlottesville!
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 5
REGIONAL COLLABORATION
1. Opportunity Austin
The Greater Austin Chamber of Commerce is an economic development organization that represents the 5-county MSA. In
addition to the City of Austin, other communities also have economic development organizations. The Chamber serves as an
umbrella business recruitment arm (the City contributes $300,000 annually) for the region. Opportunity Austin is a Chamber-led,
5-county regional economic development/fundraising initiative that brings together public and private sector actors for the
purpose of economic development. The City of Austin has a contract with Opportunity Austin for the purpose of business
recruitment, marketing, and high school education initiatives. The City is one of many communities represented by the initiative.
Investors (public and private) in Opportunity Austin are significant economic development advocates. For example, there was a
recent business marketing trip in Chicago that involved several community partners and private sector advocates of the region
that are willing to speak to businesses on behalf of the Chamber. With the resources generated by the Opportunity Austin
campaign, the Greater Austin Chamber undertakes national and international marketing activities to generate business
recruitment leads for the region. Prospects interested in locating in the Greater Austin region contact the Chamber are and
provided site location assistance.
If a project is considering locating in the Austin city limits, the City of Austin is at the table throughout the deal. If a site is selected
in the City, then the incentives process can begin. The City can even draft a deal while the company is deciding to make a
preliminary offer.
2. Greater Charlottesville Region- Thomas Jefferson Partnership for Economic Development
In Charlottesville, there are three basic levels of economic development activity: the state (VEDP), regional (TJPED) and local
(City, County). In general, business recruitment leads flow down through the state to the regional group, and then to the local
level. The City of Charlottesville has a strong relationship with the regional group (TJPED) and relies upon them to handle the
majority of the marketing in support of the attraction efforts.
The City also works closely with Albemarle County (the City is entirely surrounded by the county), including joint-presentations to
business recruitment prospects. “The City realizes it must support growth in the county given our small size and largely
developed status. The likelihood of new jobs coming to the County is much greater than the City.”
3. Loveland Business Assistance Network (LBAN)
The Loveland Business Assistance Network is a group of agencies that have joined together in an effort to help individuals who
are starting a business in the City of Loveland and individuals who have an existing business in Loveland. Taking initiative from
the Colorado Office of Economic Development & International Trade’s “Advancing Colorado” campaign, the City of Loveland’s
Business Development Manager invited local, regional and state agencies associated with resources for starting a new business
(or tools for existing businesses) to address questions from marketing to workforce issues.
These agencies have joined together in the Loveland Business Assistance Network (LBAN). The LBAN meets monthly to
discuss how Loveland businesses are being helped and what tools are needed to further help them. In addition to the LBAN, the
City also supports its business community with resources such as the Loveland Center for Business Development, a “rebel”
SBDC funded directly by the City that is more nimble its Federally-funded counterparts.
4. City of San Diego Incentive Zone Mapping and Expedited Permitting
The City of San Diego is “zoned for incentives.” It has 19 Business Improvement Districts, 15 Redevelopment Project Areas, one
Enterprise Zone, a Foreign Trade Zone, Recycling Market Development Zones and a Renewal Community. Although these
zones are an effective way to structure incentives programs, it can lead to a great deal of confusion for businesses interested in
different sites throughout the City.
In an effort to support private industry investment and development in San Diego, the Economic Growth Services Department
worked with the San Diego Regional Economic Development Corporation (SanDAG) to create a convenient way to access
information on the wide array of business development and incentives zones available throughout the City. SanDAG's Regional
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 6
Economic Development Information module (REDI) allows users to access information organized by property (see screenshot,
page 6). This mapping system allows visitors to enter either a property address or Assessor Parcel Number (APN) to obtain a
Business Incentive Report containing information on special incentive zones and districts that may apply to a particular parcel
(online at: http://redi40.sandag.org/?source=city#/Mapping). In addition to this searchable database of properties, the permit
expediting program provides a certain level of hand-holding by City staff that helps companies navigate the planning process and
gives them an advocate to “untie knots” that arise during the permitting and incentives processes.
Regional Economic Development Information - San Diego Regional Economic Development Corporation (SanDAG)
Source: http://redi40.sandag.org/?source=city#/Mapping
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 7
PROGRAMMIC CASE STUDIES
1. Charlottesville Technology Zone
In an effort to promote the advancement of technology-based businesses, the City of Charlottesville created the first citywide
Technology Zone in the Commonwealth of Virginia (June 19, 2000). The ordinance creates a tax incentive for qualified
technology businesses operating anywhere within the boundaries of the City of Charlottesville, thus making the entire city a
"technology zone.”
The Tech. Business Tax Credit reduces business license fees (This is essentially a gross receipts tax on the privilege of doing
business within a locality. Generally, for each business activity with receipts of $50,000, a fee of $35 is due and payable. Any
business activity with receipts greater than $50,000 pays tax using the rate in the Tax Rate Schedule
(http://www.charlottesville.org/Index.aspx?page=477) on the entire amount. Because this is a calculated value, the average
savings for firms in the Technology Zone varies depending on the gross receipts of the company. The current per company
average is $1,200 a year.
The Tech. Business Tax Credit reduces business license taxes on businesses meeting the criteria (below) for the license year:
For qualified technology businesses whose gross receipts in a year are $50,000 or less, the fee is reduced 100%.
For qualified technology businesses whose gross receipts in a year are more than $50,000, the tax is reduced 50%.
Qualified Technology Businesses are generally described as follows:
Engaged in design, development, creation, for lease, sale or license of computer software, hardware, systems or of
biotechnology, pharmaceutical or medical technologies, immunology and analytical biochemistry services,
telecommunications or electronics
Internet service providers
Receivers, principals or prime contractors of identifiable federal appropriations for research and development defined in
Federal Acquisition Regulations, in the areas of computer and electronic systems, computer software, applied sciences,
economic, social and physical sciences.
Is NOT operating under a certificate of public convenience issued by Virginia Corporation Commission, or engaged in the
provision of a "utility service" as defined by City Code.
2. San Diego Clean Tech Initiatives
Assessment (2007)
In 2007, the City of San Diego and the San Diego Regional Economic Development Corporation commissioned an assessment
of the region’s clean technology assets and capabilities (conducted by Global CONNECT, a program of the University of
California, San Diego. “The report inventories companies in the region that offer cleantech products or services, and reviews
issues relevant to the development of a cleantech cluster such as current higher education programs and research efforts, the
business climate for technology companies, access to risk capital, policies and incentives, natural resources that may aid the
development of cleantech, and related opportunities in agriculture.” This assessment served as a foundation for a benchmarking
study of other clean tech hubs, policy recommendations around promoting clean technology businesses, and a more coherent
economic development strategy focused on clean technology. See: Clean Tech Assessment 2007
Clean Technology Program Manager (2007)
In 2007, Mayor Jerry Sanders also announced a Clean Technology Initiative Clean Tech Manager Initiative in an effort to
promote the expansion, attraction and retention of businesses that develop products and technologies that provide
environmentally sustainable solutions. In addition to the Clean Technology Assessment, the City created the position of Clean
Technology Program Manager. The Clean Tech Program Manager will be responsible for “promoting, fostering, and coordinating
strategic alliances and collaboration among local, regional, state, and federal institutions to develop and execute the City's clean
technology business attraction strategy.” See: Clean Tech Manager Initiative
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 8
Clean Tech Partnership with UCSD (2008)
In 2008, the City’s Cleantech Initiative and UC San Diego’s William J. von Liebig Center for Entrepreneurism and Technology
Advancement entered into a partnership to accelerate the commercialization of environmentally friendly technologies from
academia to the private sector. The partnership will provide seed funding and business mentoring to university faculty members
and researchers in the region to accelerate the transition of their inventions to a commercial venture. In collaboration with its
strategic partner the San Diego Regional Economic Development Corporation (EDC), the City will provide $140,000 in seed
funding for the commercialization of at least two pilot projects for a full year term. See: Clean Tech Partnership with UCSD
For more information about the City’s Cleantech Initiative, visit www.sandiego.gov/cleantech.
3. Milwaukee “WAVE” Water Rate
In 2011, the City of Milwaukee instituted discounted water rates to water-intensive business with a new Economic Development
Rate (EDR), also known as the WAVE Rate, Water Attracting Valued Employers. The city’s Milwaukee Water Works (MWW)
discount can be used to help attract business and encourage expansion by its customers. The utility will give discounted water
rates for a five-year period to new or expanding businesses within its service area in exchange for increased water usage and
creation of living-wage jobs. Businesses must have a plan for water use and efficiency so water is not wasted.
About the WAVE Rate
1. Water usage requirement
A new customer must use at least 668 CCF (500,000 gallons) of water per month, excluding irrigation water and cooling water.
An existing customer must have a baseline water usage of at least 1,337 CCF (1 million gallons) per month, and its usage must
increase by 2,500 CCF (1.5 million gallons) per month or 50% over its baseline water usage per month, whichever is less,
excluding irrigation water and cooling water. Baseline water usage is the highest amount used in one month in the 24 months
preceding the application for the EDR.
2. Job creation requirement
Within 90 days of EDR approval, a new customer must create at least 25 new living-wage jobs in the MWW service area. Within
90 days of EDR approval, an existing customer must create at least 25 new living-wage jobs in the MWW service area over and
above the customer’s average workforce in the service area for the 12 months prior to approval for the EDR. The new jobs must
be retained throughout the 60-month period of EDR eligibility. The living wage is established by the City of Milwaukee. In 2011,
the living-wage rate is $8.80/hour.
Additional requirements
Customers applying for the EDR must submit to the MWW a water use and efficiency plan, estimating expected water
uses by type and quantity, and demonstrate they have implemented the cost-effective, industry best management
practices for water use efficiency.
Irrigation and cooling water are not eligible for the EDR and will be billed at applicable nonresidential general service
rates. Customers must, at their own expense, install plumbing for a secondary meter or meters to measure the use of
this water separately.
Customers will be disqualified from the EDR if:
Minimum usage requirements are not met for any four consecutive monthly billing periods, or
The average number of living-wage jobs created falls below 25 during any nine-month period, or
Annual audit by MWW finds water use and efficiency plan is not in place and after 90 days, customer fails to implement
a plan.
Find complete details online at www.milwaukee.gov/water > Business Services.
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 9
ECONMIC IMPACT ANALYSIS (EIA)
1. Comprehensive Review of EIA models
A thorough review of EIA models and an analysis of their strengths and weaknesses can be found in Analyzing the Benefits and
Costs of Economic Development Projects, by Jonathan Q. Morgan of UNC-Chapel Hill (April 2010). A summary table from this
report is included in the table below.
Comparison of Economic and Fiscal Impact Models, Analyzing the Benefits and Costs of Economic Development Projects
Source: Analyzing the Benefits and Costs of Economic Development Projects, UNC School of Government, April 2010, p15.
http://sogpubs.unc.edu//electronicversions/pdfs/cedb7.pdf?
2. City of Loveland: CSU
The City of Loveland uses an EIA model developed by Colorado State University Regional Economist Martin Shields. For this
analysis, 5 years is the standard assumed timeline (occasionally the analysis is also run for 10 years). The analysis does not
include multipliers. One of the most important considerations is the cost of delivering services to the company. Generally, if more
than 30-40% of the employees live in the community, the deal is expected to be a net loss. When residents employed by the
company have annual wages of over $72,000, the City breaks even. See: Billet Tech Economic Impact Analysis;
3. City of Austin: WebLOCI
Each project is evaluated using a standard set of criteria adopted by the Austin City Council, including: fiscal impact, linkages to
the Austin economy, impact on city services, character and number of jobs, quality of life, environmental initiatives, project
investment and other related items. WebLOCI (http://webloci.innovate.gatech.edu/), a web-based tool for cost/benefits analysis
developed by the Georgia Tech Enterprise Innovation Institute, is also used to evaluate incentives agreements (Council-
mandated). “The analysis is helpful in that it gives a pretty conservative cost/benefit analysis that only considers direct benefits of
a project. The subscription cost is minimal.”
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 10
PERFORMANCE AGREEMENTS, COMPLIANCE, & ROI MEASURES
1. Performance Agreements
Performance Agreements often form the basis for future compliance measures and ROI tracking programs. Sample agreements
provided by interviewees narrowly define which companies qualify for incentives, how long incentives will be available, what
constitutes a “qualified job” (in terms of % of average County annual wage, for example), reporting expectations, and a total
dollar cap on incentives awarded to the company annually. Structuring agreements with compliance tracking and reporting in
mind creates a de-facto system for the municipality to follow-up on its investments in the form of incentives.
2. City of Austin Transparency, Compliance, and ROI
A list of all active performance agreements is available online: http://austintexas.gov/page/economic-development-agreement-
documents. Although each performance agreement is unique, the annual compliance process applies to all parties who enter
into agreements with the City of Austin. Compliance reviews of all economic development agreements must be submitted by
each business and verified by an independent party. Those independent reviews are also available to the public online:
http://austintexas.gov/page/agreements-payments-information
Rebates are not awarded until the company demonstrates compliance. If the company is found to be compliant with the
agreement, they are rebated the taxes as stated in their agreement. The City has terminated or dispended agreements as a
result of non-compliance. The City’s intent is to pay the companies and we want them to achieve their goals. Companies set their
own goals in the initial incentives application form and those numbers are adjusted by the time the deal is written. Some
companies may not collect an incentive for a particular year of the agreement if they are deemed non-compliant, but that does
not prevent them from receiving an incentive in future years as long as they can demonstrate compliance in future years. Of the
16 agreements have been approved by Council, 4 have been terminated due to non-compliance (25%). The City of Austin uses
WebLOCI to measure ROI. This is a software program developed by Georgia Tech and allows us to both look at the costs and
benefits for each project in order to determine a net benefit. The ROI is driven by specific community inputs such as tax rates,
permits, fees and utility costs / revenues.
3. City of Loveland - Return on Investment
In the Incentive Impact Report (2008-09), the City of
Loveland tracks how much of the initial incentive
amount the City of Loveland has recovered since the
incentive was awarded. This figure is calculated by
taking the Total Revenue to the City of Loveland
(using the change in property tax and any applicable
sales tax collected) and dividing it by the total
incentive amount. This figure does not include any
revenue impact from jobs created, so the actual
benefit to the City of Loveland is much greater than
the ROI would indicate.
The initial EIA completed by CSU does include an
impact from jobs and a 5-year impact timeline. As it is
not possible to measure the actual direct impact of
jobs created from incentive recipients, that information
is not included in the ROI calculation. Additionally,
there is only 2 to 3 years of data (since the creation of
the incentives policy) available upon which to
determine the actual impact, so this analysis does not
extend as far as the original economic impact analysis
of 5 years.
Return on Investment by Company Since Incentive was Granted
Source: City of Loveland Incentive Impact Report (2008-09)
INCENTIVES BENCHMARKING STUDY 2012
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LOVELAND, CO
City of Loveland Economic Development Department
Betsey Hale, Economic Development Director (haleb@ci.loveland.co.us)
500 East Third Street, Suite 300 •Loveland, CO 80537
970.962.2316 •www.cityofloveland.org
DEPARTMENT STRUCTURE AND FUNCTION
Overview The City of Loveland Economic Development Department has five full-time staff engaged in
primary employer attraction, expansion and retention, downtown redevelopment, retail recruitment
and retention, visitor attraction, destination marketing, and creative sector development. The City
maintains strategic partnerships with local, regional, and state business assistance providers. The
Loveland Business Assistance Network (LBAN) meets quarterly and is a forum for members to
report the status of projects and seek partners to leverage financial and staff resources.
Loveland has a truly regional approach to economic development. The first priority is the city,
followed by the region and the state. For example, if a company relocates to Loveland from a
neighboring community, incentives are not offered for existing jobs, but the company will be eligible
for incentives tied to new jobs created when it relocates. See: Strategic Plan (2012)
Activities • Promoting collaboration with the City’s economic development partners at local, regional
and state levels;
• Fostering an environment supportive of entrepreneurial endeavors;
• Supporting the recruitment of primary jobs to the region; and,
• Marketing Loveland, Colorado and its strengths as a community with a proactive
business climate and highly educated and trained workforce.
INCENTIVES POLICY & FRAMEWORK
Does the City have a formal
incentives policy?
Yes, available online. See: City of Loveland Incentives Policy, February 2012
Economic Incentive Fund annual budget: $250,000
Loveland is very pro-businesses. In the late nineties, the City decided to set aside money in the
general fund for the purpose of incentives. The appropriation serves as an additional resource for
city staff when working with companies. In assisting companies, construction materials use taxes,
permit fees, etc., are waived first, and then incentives packages may be added to the deal.
Excellent transportation infrastructure and utility rates are both critical. Loveland has a municipal
utility company with the third lowest residential rates, and they have negotiated discounted rates
for larger users in the past. It is also critical that the development review process is expeditious in
addition to offering a business assistance package and waiving/rebating as much as possible
(while protecting the general fund).
How are projects evaluated for
incentives?
Is there a formal evaluation process,
such as a decision matrix or cost-
recovery model?
The evaluation process varies slightly depending on the incentives offered.
See: City of Loveland Incentives Policy, February 2012
All agreements must be approved by Council and a 3rd party is required to complete a cost/benefit
analysis before an agreement will be considered.
See: Billet Tech Economic Impact Analysis
INCENTIVES BENCHMARKING STUDY 2012: LOVELAND, CO
PAGE | 12
Is there a recent example of a deal
that was won or lost due to/as a
result of incentives?
Yes. Crop Production Services (CPS) and Agrium chose Loveland over Greeley, Fort Collins, and
other communities. Loveland's combined subsidies totaling $442,000 for Agrium and CPS were
tied only to a property inside Centerra that is part of the Centerra URA (Urban Renewal Authority).
Through the agreement, $700 million of public improvements were made to the area. The
agreement allows for TIF revenue that is then reinvested into the area in the form of parking lots,
streets, etc. over 25 years. The cash incentives were back loaded; the City only paid if the jobs
were created and maintained for over one year.
See: Agrium Advanced Technologies (AAT) Agreement
The City also recently negotiated an agreement with Bass Pro shops, including:
• A $250,000 waiver of part of the development fee and use tax expense that Bass Pro will
incur, to be paid from the City Council's economic incentive fund.
• A fast-track development review schedule;
• Commitment of $25,000 in promotional support, paid for with lodging tax money, for each
of three events that the retailer will organize to drive tourist traffic to the store and to the
surrounding development; and
• In conjunction with the development, Centerra developer McWhinney plans a 100-room
hotel, three restaurants, a convenience store, and possibly a bank adjacent to Bass Pro's
building on the 26-acre site between Interstate 25 and Centerra Parkway.
How has the policy helped or
hindered economic development
agreements over time?
“The City is very bullish on partnerships with the private sector. The initial incentives policy was
developed by local industry leaders, and part of the goal is to leverage those partners and trust that
such activities will lead to growth. We are willing to sit down and talk with anyone and we are
interested in understanding the bottom line.”
Are there other organizations or
entities that play a role in economic
development? If so, who are the
other players and what are their
role(s)?
The Loveland Business Assistance Network (LBAN) meets quarterly and is a forum for members to
report status of projects and seek partners to leverage financial and staff resources.
The LBAN partners include but are not limited to:
Primary Employment Attraction, Retention, and Expansion
• Colorado Office of Economic Development and International Trade (OEDIT)
• Northern Colorado Economic Development Corporation (NCEDC)
• Larimer County Workforce Development Center
Small Business Development and Entrepreneurship/Incubation
• Office for Creative Sector Development (OCSD)
• Loveland Center for Business Development (LCBD)
• Rocky Mountain Innosphere and Innovation Initiative (RMII)
• Loveland Chamber of Commerce
Destination Marketing
• Engaging Loveland
• Loveland Hospitality Association
• Larimer County
See: Business Resource Guide; LBAN Providers Matrix (2010); NCEDC Contract (2010);
Engaging Loveland Destination Marketing (2012)
How are the tasks of economic
development distributed among
different entities in the community,
and how are these relationships
structured?
See the LBAN Providers Matrix (2010) (this will be updated in 2013; some of the names are
presently incorrect). The Loveland Business Assistance Network (LBAN) has quarterly meetings
INCENTIVES BENCHMARKING STUDY 2012: LOVELAND, CO
PAGE | 13
ECONOMIC DEVELOPMENT TOOLKIT
What tools for economic
development and related funding
are available in your community?
(Inventory)
Total budget : $250,000
Possible Incentives for Primary Employment
• Development Fees and Use Taxes
• Cash Incentives for New Primary Jobs (Net New Jobs; Regional Relocation; Job
Verification)
• Public Infrastructure Requirements
• Enterprise Zone Tax Benefits
• Aviation Development Zone Benefits
• City of Loveland Job Training Dollars
• Expedited Review
• Sponsorship of Private Activity Bonds
• Downtown Loveland
• Others as Approved by Loveland City Council
Possible Incentives Commercial and Retail Development
• Development Fees, Sales and Use Taxes on Construction Materials
• Public Infrastructure Requirements
• Sales Tax Rebate
• Downtown Loveland
• Others as Approved by Loveland City Council
See: City of Loveland Incentives Policy, February 2012
Does the city charge manufacturing
use tax? If so, at what rate?
Yes. There is a 3% use tax on equipment. It is charged on new equipment only. Equipment moved
by the company from another facility is exempt.
In addition to incentives offered by
the City, are there incentive
programs at the state or regional
level?
The State of Colorado is not a significant player in incentives deals. State and local incentives are
not tied. See: Toward a More Competitive Colorado, 8th Edition
Are there any unique assets
(incubator, state-of-the-art facilities,
etc.) that function as a de facto
incentive to attract private
investment?
The Office for Creative Sector Development has a dedicated staff to support entrepreneurs as well
as a tech transfer program. The office subsidizes consulting services with a top-tier consultant
(Dave Lung) who has worked with local companies to develop relationships with Federal Agencies.
City staff initially worked with Dave through the Colorado-NASA project. When the state lost
funding for the project, the City created an agreement with him. He is currently on a $10,000/month
retainer for approximately 20 hours/month. To date, there have been a few notable small
successes, such as a contract with the Navy research lab. There is a proposal to bring him on as
the community’s Chief Innovation Officer in the future.
The Office is also working with members of the Innosphere to develop an accelerator for graduates
of that incubator. The City also partners with Colorado Clean Energy Cluster, Loveland Center for
Business Development, the Chamber, and the NCEDC. The NCEDC convenes a C-level executive
forum once every-other month that pulls executives together in a quiet setting, which results in a lot
of constructive feedback and guidance.
The City of Loveland is proud of its entrepreneurial heritage and supports its business community
with resources such as the Loveland Center for Business Development and the Loveland Business
Assistance Network. The City also funds a “rebel” SBDC that is more nimble and intensive than the
Federally-funded counterparts in other communities.
See: Business Resource Guide
INCENTIVES BENCHMARKING STUDY 2012: LOVELAND, CO
PAGE | 14
ROI MEASURES
How many performance agreements
has the City entered into?
16 performance agreements since 2008. The policy began in 2008.
From 1999-2007, agreements with McWhinney and 20 other corporations were negotiated under
the Millennium Finance Agreement.
What kind of reporting requirements
are expected of companies who
receive incentives?
The City Council is very focused on counting cash. If it's a company involved in the downtown
revitalization, we do consider more qualitative characteristics. Economic impact is part of a
checklist. Some EIAs are negative even though they are good deals. The City measures the cost
of delivering services to the company. If more than 30-40% of the employees live in the
community, it’s likely that the deal will cost Loveland money. The City breaks even when
residents make about $72,000/year.
Each agreement is crafted for the individual company. There is less of an emphasis on jobs and
more on bottom line. (What's their revenue and customer growth?) “We are re-inventing how we
measure success because we are not confident that jobs are a good metric, or the only metric
that matters.“
See: Incentive Impact Report
What is the timeline associated with
incentives agreements and how, if at
all, are companies held accountable to
the community (Claw back
agreements)?
Each project has its own timeline. Some funding is linked to lease timelines, for example. When
the EIA is run, five years as an assumed timeline, occasionally for ten years. (The EIA does not
include multipliers.)
What does the claw back look like (is
this done in a percentage or
something else)
Performance agreements generally include a claw back, as well as a personal guarantee. For
example, Colorado VNet is obligated to return 50% of the original $900,000 incentive plus
interest as the result of a recent lawsuit. The Lightning Hybrids agreement also requires a claw
back of $28,000, which is being reclaimed in the form of product; two City buses are being
retrofitted with the LHI product for fuel efficiency.
Loveland avoids front-loaded incentives. Performance agreements are generally “pay for
performance” rather than estimates of future job growth. There has also been a general shift
away from “cash per jobs” incentives agreements.
After being awarded an incentive, how
many companies do not collect on the
award? Can this be put into a
percentage?
Of 16 performance agreements since 2008, only two companies were non-compliant.
Are there incentives tied to the overall
established level of employment
commitment rather than net new jobs?
If so, for how long?
There is not a clear-cut example. Loveland did award $300,000 to Crop Production Services for
moving 150 jobs to Loveland.
Would you be willing to share an
example of an incentives agreement
and the associated tactics to measure
ROI on incentives?
Lightning Hybrids had a front-loaded incentive agreement, but did not meet their goal of 35 jobs.
See: Lightning Hybrids, Inc. Agreement
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 15
AUSTIN, TX
City of Austin Economic Growth and Redevelopment Services Office (EGRSO) • Economic Development Division
Brian Gildea, Economic Development Manager (brian.gildea@ci.austin.tx.us)
City Hall 301 West 2nd Street, Suite 2030 • Austin, Texas 78701
512.974.6381 • http://austintexas.gov/department/economic-growth
DEPARTMENT STRUCTURE AND FUNCTION
Overview EGRSO serves as the business development arm of Austin Energy (municipally-owned utility) to
enhance electric revenues. To effectively support and recruit business in Austin, EGRSO has
integrated a core international focus while supporting local initiatives through Cultural Arts, Music,
Redevelopment/Downtown, Economic and Small Business Development. EGRSO’s aim is to create a
sustainable cultural and economic environment that enhances the vitality of Austin.
See: Economic Growth and Redevelopment Services Office (EGRSO) Fast Facts
The Economic Development Division increases jobs and investment in the Austin region by attracting
new businesses to Austin and helping existing businesses to grow. The Economic Development
Division also provides relocation, retention, and expansion assistance.
Programs & Services • Emerging Technologies Program
• Business Expansion and Relocation
• Business Retention and Enhancement Program (Downtown: Congress / E 6th Street)
• International Economic Development Program
• Economic Development Agreements
• Economic Development Agreement Proposals
INCENTIVES POLICY & FRAMEWORK
Does the City have a formal
incentives policy?
Yes. See: Ordinance no. 040624-08; An ordinance creating an economic development program and
authorizing an economic development agreement with Samsung Austin Semiconductor, L.P.
How are projects evaluated for
incentives?
Is there a formal evaluation
process, such as a decision
matrix or cost-recovery model?
EGRSO implements the City of Austin Economic Development Policy as directed by the Austin City
Council. Each project is evaluated using a standard set of criteria adopted by the Austin City Council,
including fiscal impact, linkages to the Austin economy, impact on city services, character and
number of jobs, quality of life, environmental initiatives, project investment, and other related items.
WebLOCI (http://webloci.innovate.gatech.edu/), a web-based tool for cost/benefits analysis, is also
used to evaluate incentives agreements (Council-mandated). The program offers a bottom line:
“helpful in that it gives a pretty conservative cost/benefit analysis (only direct benefits).” The
subscription cost is minimal (developed by Georgia Tech Enterprise Innovation Institute).
See: Incentives Process Flow Chart; Business Information Form; Firm Based Incentive Matrix
Is there a recent example of a
deal that was won or lost due
to/as a result of incentives?
The existing incentives policy (See: Ordinance no. 040624-08) was created and adopted in 2004
after Toyota chose San Antonio for a large manufacturing deal. The city and community leadership
realized they were losing out on deals because they did not have as many economic development
tools and a clear incentives policy. “Without a policy in place, we were badly positioned and it left a
poor impression of Austin as unfriendly to business.”
Does the city charge
manufacturing use tax? If so, at
what rate?
No, the City of Austin does not charge a manufacturing use tax, but does have a personal property
tax and an inventory tax.
INCENTIVES BENCHMARKING STUDY 2012: AUSTIN, TX
PAGE | 16
How has the policy helped or
hindered economic development
agreements over time?
“The fact that we have an incentive policy does protect us from the political cycle to some degree.
Amendments were proposed in the HID deal, for example, but did not go through because those
requirements are not part of the existing policy. It's not fair to drop add-ons to these companies at the
last hour. A clear policy gives companies much more certainty. If you are upfront with it, they can
work with it.”
“The Apple, Inc. deal put everything under a microscope. One of the comments made by a council
member is that companies should show a demonstration of need. If a company needs the money,
however, the chances are nil that they will be an economic development asset. From our perspective
it’s more critical that a company can demonstrate that the community needs the jobs and the capital
investment.”
See: Apple, Inc. Agreement; Apple, Inc. Agreement, Chapter 380; “Amid debate, Austin
incentive deals for businesses are fairly rare”
What is the role of the special
committee? Will the special
committee alter their verification
process?
A special committee is currently reviewing the policy to integrate recent considerations. They will
revisit policies such as: requirements on residency for new hires; prevailing wage of construction
staff; and wage floors. There is a reluctance to offer City incentives if not all of the new hires will be
City residents, but that policy might result in many challenges around defining “resident” or creating
talent shortages because of arbitrary limitations on which hires “count.”
More information about the Special Committee on Economic Incentives (members, a meeting
schedule, and relevant Q&A and supplementary documents) can be found online:
http://austintexas.gov/department/special-committee-economic-incentives
Are there other organizations or
entities that play a role in
economic development? If so,
who are the other players and
what are their role(s)?
The Greater Austin Chamber of Commerce is an economic development organization that represents
the five-county MSA. Other communities also have economic development organizations. The
Chamber serves as an umbrella business recruitment arm (the City contributes $300,000 annually)
for the region. If a project is considering Austin, the City of Austin is at the table throughout the deal. If
a site is selected in the City, then the incentives process can begin. The City can even draft a deal
while the company is deciding to make a preliminary offer. Investors in Opportunity Austin (Chamber
initiative) are also significant economic development advocates. There was a recent business
marketing trip in Chicago that involved several community partners who acted as private sector
advocates in conversations with businesses.
How are the tasks of economic
development distributed among
different entities in the
community, and how are these
relationships structured?
The City of Austin has a contract with Opportunity Austin, the economic development arm of the
Greater Austin Chamber of Commerce, for the purpose of business recruitment, marketing and high
school education initiatives.
How does the City work
collaboratively with its
neighbors?
Opportunity Austin is a five-county regional economic development initiative and the City of Austin is
just one of the communities that help fund Opportunity Austin.
INCENTIVES BENCHMARKING STUDY 2012: AUSTIN, TX
PAGE | 17
ECONOMIC DEVELOPMENT TOOLKIT
What tools for economic development
and related funding are available in
your community? (Inventory)
The City of Austin Incentives Summary is an overview of the different incentives available to
companies. Of the incentives, Chapter 380 Agreements are used most frequently.
Chapter 380 of the Local Government Code provides legislative authority for Texas
municipalities to provide a grant or a loan of city funds or services in order to promote economic
development. The City of Austin's Chapter 380 economic development agreement terms are
performance-based, requiring compliance with specific and tangible goals before making
payment. Each agreement is unique with its own terms.
See: Apple, Inc. Agreement, Chapter 380; US Farathane Agreement, Chapter 380
Travis County recently (November
2012) passed an incentives policy.
Travis County is authorized to create a program to stimulate business within its borders. For a
company to be eligible for a base incentive, it must plan to invest at least $25 million in new
construction and create at least 100 full-time, non-seasonal jobs. The company must also have
a human resources benefits policy and build in certain areas of the county. In addition, the
company must pay employees an hourly wage that equals or exceeds the county's established
minimum wage.
If those conditions are met, the county may grant the company a base incentive—a tax
abatement of up to 45 percent of its property taxes. From there, the company can earn
additional incentives for meeting goals for job creation, eco-friendly building design, and hiring
economically disadvantaged employees.
See: “Travis County Adopts Tax Incentive Policy;” Travis County Economic Policy
Discussion (2012); Comparisons of City of Austin and Travis County Economic
Development Policies; “Victories for Living Wages”
In addition to incentives offered by the
City, are there incentive programs at
the state or regional level available to
companies that invest in the
community?
All of the projects that have been awarded local incentives have also leveraged State funds
significantly. For example, the Facebook deal awarded $200,000 in City incentives over 10
years, and the state of Texas added $1.4 million to the deal. “Without State participation we
would definitely be at risk.” State funds are only available to companies if the local jurisdiction
offers incentives.
See: City of Austin Incentives Summary; “Travis County Adopts Tax Incentive Policy;”
Comparisons of City of Austin and Travis County Economic Development Policies
If companies cannot get State
incentives without local incentives, how
is this addressed by Austin? What is
the smallest incentive given?
The City of Austin looks at each project based on its own merit. The City has entered into
agreements with companies/projects that were not eligible for State level incentives, but
matched a specific community initiative or value, such as providing jobs for the hard-to-employ
segment of the population. The smallest incentive approved by the City of Austin is $200,000
over a 10 year period (Facebook).
Are there any unique assets
(incubator, state-of-the-art facilities,
etc.) that function as a de facto
incentive to attract private investment?
Yes: Austin Technology Incubator; University of Texas at Austin; talent in general (“We don’t
even have to mention the level of education of the workforce”). “You can be as cool as you want
but the talent is critical.” UT and the other universities in the area, including A&M and Baylor are
easy to recruit from and companies can easily bring talent here. The quality of life and state
business climate also attract companies. The cost of doing business also functions as an
incentive of sorts. It’s cheaper than in peer cities such as San Jose, Denver, Seattle, etc.
INCENTIVES BENCHMARKING STUDY 2012: AUSTIN, TX
PAGE | 18
ROI MEASURES
How does Austin measure ROI? Is
there a particular metric that they
must hit?
The City of Austin uses WebLOCI to measure ROI. This is a software program developed by
Georgia Tech that allows the City to look at the costs and benefits associated with each project in
order to determine a net benefit. The ROI is driven by specific community inputs such as tax rates,
permits, fees, and utility costs / revenues.
What kind of reporting requirements
are expected of companies who
receive incentives?
Following City Council Resolution 20071206-049, the City began having compliance reviews of all
economic development agreements verified by an independent party and making those
independent reviews available to the public online:
http://austintexas.gov/page/agreements-payments-information.
The same resolution eliminated project-based incentives for large scale mixed-use projects from the
economic development program.
See: Compliance Review for Economic Development Agreements
What is the timeline associated with
incentives agreements and how, if
at all, are companies held
accountable to the community
(Claw back agreements)?
Each agreement is unique, but the annual compliance process requires reporting around each
metric as it is stated in the original economic development agreement. Companies self-report and
must submit an independent third-party report as well. Reports include measures such as direct
benefits, number of jobs created, wages, and capital investment.
If the company is found to be compliant with the agreement, they are rebated the taxes as stated in
their agreement. Rebates are not awarded until the company demonstrates compliance. The City
has terminated or dispended agreements as a result of non-compliance. The City’s intent is to pay
the companies and see them achieve their goals. Companies set their own goals in the initial
incentives application form, and those numbers are adjusted by the time the deal is written.
See: Domain Compliance Report; Domain Compliance Report, Independent Consultant
After being awarded an incentive,
how many companies do not collect
on the award? Can this be put into
a percentage?
Some companies may not collect an incentive for a particular year of the agreement if they are
deemed non-compliant, but that does not prevent them from receiving an incentive in future years
as long as they can demonstrate compliance.
In terms of the number of contracts that have been terminated due to non-compliance, the numbers
are as follows:
Number of agreements approved by Council = 16
Number of agreements terminated due to non-compliance = 4
4 terminated/16 agreements = 25% of approved agreements have been terminated due
to non-compliance.
Do agreements require an
employee commitment, not based
on net new jobs, but the overall
established level of employment
commitment? If so, for how long?
All City of Austin projects require the company to retain any existing employees that are on hand at
the beginning of the process, in addition to creating the net-new job hires and associated wages
that are part of the project.
Would you be willing to share an
example of an incentives
agreement and the associated
tactics to measure ROI on
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 19
CHARLOTTESVILLE, VA
City of Charlottesville Office of Economic Development
Chris Engel, CEcD, Director of Economic Development (engel@charlottesville.org)
610 East Market Street • Charlottesville, Virginia 22902
434. 970.3111 • charlottesville.org
DEPARTMENT STRUCTURE AND FUNCTION
Overview The Office of Economic Development (OED) serves as a catalyst for public and private initiatives that
create employment opportunities and a vibrant and sustainable economy. The OED team works to
enhance Charlottesville’s economy, create quality jobs, increase per capita income and improve the
quality of life for residents. Economic Development staff promotes Charlottesville as a premier
location for business and regularly works with entrepreneurs and existing businesses seeking to
grow locally. It is the intent of the team to craft business-driven strategies that enhance workforce
and business development throughout Charlottesville and the region.
The OED is part of the City Manager’s Office and is located in City Hall. The Office also coordinates
and administers the functions of the Charlottesville Economic Development Authority. The OED
implements its strategies through an integrated approach, utilizing internal and external stakeholders,
public and private partnerships and industry networks. The OED cannot accomplish its mission
alone. There is always a team approach.
See: Charlottesville Target Markets Report
Core Values • Support, cooperate, and collaborate with federal, state, regional, and local organizations,
businesses, academia, and others on projects designed to retain and create jobs,
strengthen businesses and improve Charlottesville’s economy;
• Deliver quality services, assistance, and programs to businesses and other partners
efficiently, effectively, and promptly;
• Be proactive and demonstrate competency and professionalism in all aspects of work;
• Deliver creative and innovative ideas and solutions to complex problems; and keep the
public informed of economic development news and activities.
INCENTIVES POLICY & FRAMEWORK
Does the City have a formal
incentives policy?
No formal policy. “As a city we traditionally are not aggressive with respect to incentives.”
“Incentives are offered on a case-by-case basis, but we generally keep it pretty close to the vest.”
“Our most significant incentive is a city-wide technology zone, the first and only in Virginia. The
funding for incentives even in that zone is fairly modest, but taxes are reduced significantly. Most of
the land in the City is developed (10 square mile space). There isn’t much to incentivize; there aren’t
business parks with empty space. The focus is more on redevelopment for higher and better uses.
There is more interest in the downtown urban core than our development community can actually
handle, due to the cost of land and challenges associated with urban developments.”
See: Charlottesville Business Incentives; Technology Zone Incentives; Technology Zone
Incentives Application; Technology Zone Ordinance
INCENTIVES BENCHMARKING STUDY 2012: CHARLOTTESVILLE, VA
PAGE | 20
How are projects evaluated for
incentives?
Is there a formal evaluation
process, such as a decision matrix
or cost-recovery model?
Incentives are subject to Council approval. In general, the City is interested in promoting job creation,
especially job creation for a wide variety of employees.
Two recent performance agreements require a certain level of investment and a certain number of
jobs to be created. Once they have reached both thresholds and can demonstrate it, a portion of the
improvement to the tax base is shared with the company. This kind of agreement is similar to a TIF
but doesn't involve a bond or the markets; the City shares 50% of tax roll increase over 5 years, for
example. Incentives are tied to real estate tax base improvements.
This kind of agreement is only utilized in the case of significant projects with millions of dollars
invested and many jobs created. For example, the Waterhouse project in downtown Charlottesville.
The mixed use project, located along west Water Street, contains 130,000 square feet of new and
renovated space that includes residential units, office space, and parking. Waterhouse was built with
six stories, with nine dwelling units built with commercial and office space. Worldstrides moved in
from a previous location in Albemarle County in December 2011. The building was built on the site of
the former Downtown Tire Center, which was demolished in September 2010.
How has the policy helped or
hindered economic development
agreements over time?
“Our perspective on incentives is to create the environment and atmosphere for a company to be
successful. A lot of that is infrastructure, which is a local government function already. Parks, roads,
broadband, etc. We prefer to invest in amenities and infrastructure and let them make the numbers
work.”
Are there other organizations or
entities that play a role in
economic development? If so,
who are the other players and
what are their role(s)?
“Behind the scenes, there's a very high level of interaction between staff at the University of Virginia,
the City, and the County. There is a Planning and Action Committee (PAC) that exists for the sole
purpose of connecting those dots by meeting quarterly (University President, County Executive, City
Manager and their designees). There is also the PTAC (the technical version of planning and action)
that consists of the senior planner from the City and County, representatives from the Architects
Office at the University, and so on. There are also a number of standing agreements between the
institutions.”
The University has become increasingly collaborative in recent years. They are opening up more and
more to the community and making an effort to be a local player. In the past, it has been the job
engine. Almost a quarter of all jobs are affiliated with the University in one way or another. The
University has a new Office of Economic Development, and it reorganized its patent office (UVA
Innovation).
“Recently, the City/County/University had a life science roundtable with 15 of the top life science
companies in the area. We are working to grow Charlottesville for life sciences in particular. Have
always worked to attract spinoff activity, but now there is a willingness to connect to City and County
resources. In the past, no one at the University was tasked with managing that relationship.”
See: Target Markets Report
Are there any examples of
business assistance programs?
The City of Charlottesville has an active business visitation program. The City also provides one-on-
one counseling for entrepreneurs and organizes some training programs and partners on others.
How are the tasks of economic
development distributed among
different entities in the community,
and how are these relationships
structured?
There are 3 basic levels of economic development activity – the state (VEDP), regional (TJPED) and
INCENTIVES BENCHMARKING STUDY 2012: CHARLOTTESVILLE, VA
PAGE | 21
ECONOMIC DEVELOPMENT TOOLKIT
What are the tools for economic
development in your community?
See: Charlottesville Business Incentives, Technology Zone Incentives
What is the average savings for
the Technology Zone?
It varies depending on the gross receipts of the company. The current per company average is
$1,200 a year.
Does the city charge
manufacturing use tax? If so, at
what rate?
We have a Business Personal Property Tax (furniture, tools, machinery) that is currently $4.20 per
$100 in value. http://www.charlottesville.org/Index.aspx?page=480
In addition to incentives offered by
the City, are there state or
regional incentives?
Yes. There is a similar dynamic in Virginia (to Texas) with most of the state incentives. To access the
Governor's Opportunity Fund there must be a local match.
See: Virginia Business Incentives Summary; Virginia Guide to Business Incentives
Does Charlottesville have other
incentives they use besides the
Technology Zone that are not
state programs?
Currently the City does not.
Are there any unique assets
(incubator, state-of-the-art
facilities, etc.) that function as a de
facto incentive to attract private
investment?
In addition to the University of Virginia and the assets it provides, Charlottesville has a legitimate
claim to unique quality of life and environment. The climate, geography, history, downtown mall area,
University medical, and athletic offerings (ACC-level events) are all a true draw for businesses.
Who are the city's major
employers?
This list here is a good start: http://www.charlottesville.org/Index.aspx?page=578
ROI MEASURES
After being awarded an incentive,
how many companies do not
collect on the award? Can this be
put into a percentage?
This has not occurred to-date, but since the incentive is on the back-end it certainly could if the jobs
and or investment do not occur.
What kind of reporting
requirements are expected of
companies who receive
incentives?
Varies by Performance Agreement.
Are there any municipalities that
have an employee commitment
based on the overall established
level of employment commitment
(not net new jobs)? If so, for how
long?
The City’s performance agreements do state that the required employment remain in place for the
period of the incentive.
INCENTIVES BENCHMARKING STUDY 2012
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SAN DIEGO, CA
Mayor's Office of Economic Growth Services
Lydia Moreno, Government Incentives Program Manager (lmoreno@sandiego.gov)
202 C St., 4th floor MS 4A •San Diego, CA 92101
619.236.6330 •www.sandiego.gov/economic-development/
DEPARTMENT STRUCTURE AND FUNCTION
Overview The Mayor's Office of Economic Growth Services implements economic development programs in
order to create and retain jobs and taxable investment in the City of San Diego.
Economic Growth Services consists of two focused work units: the Business Expansion, Attraction, and
Retention (BEAR) Team and the Government Incentives (GI) Team. These two teams work directly with
businesses, business organizations, and City departments to facilitate new investment and to create a
business-friendly environment that ensures a stable economy. Economic growth, energy independence,
revenue enhancement, and community revitalization are accomplished by attracting new companies,
retaining and/or expanding existing companies, making San Diego competitive in emerging markets,
and revitalizing older business communities.
Goals and Objectives • Attract, retain, and expand businesses through the use of appropriate and beneficial tools.
• Maintain a business-friendly environment to increase jobs and promote economic stability.
• Make San Diego competitive in emerging markets such as CleanTech.
• Foster economic development in economically distressed communities.
• Increase the City's international trade-related activities.
INCENTIVES POLICY & FRAMEWORK
Does the City have a formal
incentives policy?
The Business & Industry Incentive Program (created by San Diego City Council Policy 900-12)
serves as the City's primary economic development platform. Its incentives are typically combined with
those from other City special incentive programs, the Office of Small Business, and other incentives
offered through the City's Redevelopment Agency.
There are several different council programs for incentives in the 900 series. 900-1 and 900-12 are the
general policies for economic development. There are about 5 policies in total. 900-3, 900-4, 900-
7,900-12, 900-15, 900-17. Written to apply to different kinds of businesses and to cover a range of
scenarios in which incentives could be used (retention, expansion, and attraction).
How, and to what extent, has
the policy been helpful in
guiding economic development
investment?
The City is in the process of revising and updating this policy, but it is not expected to result in major
changes. It has not been updated since 2000 or 2001. It is not expected to change in significant ways,
but certain processes have changed since it was written in 2000.
INCENTIVES BENCHMARKING STUDY 2012: SAN DIEGO, CA
PAGE | 23
How are projects evaluated for
incentives?
Is there a formal evaluation
process, such as a decision
matrix or cost-recovery model?
The cost/benefit equation varies by program. Usually the challenge is identifying which deals are best
suited to which program(s). See Business & Industry Incentive Program
Businesses are eligible for financial incentives if they meet one of the following criteria:
(1) provide significant revenues and/or jobs; (2) promote the stability and growth of City taxes and other
revenue; (3) construct appropriate development in older parts of the City; or (4) are being induced by
other jurisdictions to relocate from San Diego. These incentives may include project advocacy, due
diligence, a streamlined permit review processes, or reimbursement of a portion of development-related
fees.
“The process has changed slightly. We no longer have a city manager; we have a strong mayor
system. There is an Economic Development and Strategies Committee on City Council, and our office
reports to this committee. If the Committee recommends moving forward with a particular deal, the
Council would vote. The office is strongly supported by the Council. We have a very pro-economic
development Council (some are running for mayor). There was more tension around economic
development growth in the 90's, but the community is more aligned now.
Is there a recent example of a
deal that was won or lost due
to/as a result of incentives?
The attraction of Soitech Solar, a solar manufacturing company, was largely based on incentives.
Jensen Meats expanded and decided to stay in the region. Motorola was lost due to incentives; decided
to start a new division (mobility) and went to Chicago.
See: Grant Will Speed Solar Factory Construction; San Diego Breaks New PACE Ground with
FIGTREE
How has the policy helped or
hindered economic
development agreements over
time?
The City's General Plan (2008) included an Economic Prosperity Element, including an identification
of target industries and recommendations around the kinds of incentives that industries need and want.
Recently, a developer sought approval for a mixed use development with majority residential across the
street from an existing manufacturer. Because the General Plan called for the preservation of industrial
properties, the hearing body at the time decided that the proposed project was not conducive to the
goal of preserving industrial land as stated in the Economic Prosperity Element in the General Plan.
In the past, economic development strategies didn’t always align with one another. In a recent Audit of
the Economic Development Office, there was a strong recommendation for the different economic
development entities to work together from a common strategic plan.
See: Economic Prosperity Element, Economic Development Audit 2012
Are there other organizations or
entities that play a role in
economic development? If so,
who are the other players and
what are their role(s)?
The City works with CleanTECH San Diego, the California Center for Sustainable Energy, and local
universities and research institutes to devise ways to nurture San Diego's emerging clean technology
industry. The City is also taking advantage of Federal stimulus grants and state incentives to bolster the
local clean tech sector, including partnering with San Diego Gas & Electric and CleanTECH San Diego
to offer no-interest financing for energy-efficiency upgrades for small businesses.
Additionally, the City cultivates an open dialogue and partnership with private non-profit organizations,
trade associations and other institutions, including the San Diego Regional Economic Development
Corporation and the San Diego Regional Chamber of Commerce to maintain a business-friendly
environment.
There are also a number of economic development organizations, including the regional economic
development corporation and geographic economic development councils. There are 18 municipalities
in San Diego County. There are also 3 geographic councils for economic development (east, south,
INCENTIVES BENCHMARKING STUDY 2012: SAN DIEGO, CA
PAGE | 24
What are the tools for economic
development and related
funding available in your
community? (Inventory)
The Business & Industry Incentive Program (created by San Diego City Council Policy 900-12)
serves as the City's primary economic development platform. Its incentives are typically combined with
those from other City special incentive programs, the Office of Small Business and other incentives
offered through the City's Redevelopment Agency.
Business Cooperation Program The Business cooperation Program (BCP) is designed to simultaneously lower operating and facility
costs for a wide variety of firms doing business in San Diego and prevent the annual loss of millions of
dollars in Sales and Use Tax revenue to the City’s General Fund. Participating firms receive a cash
rebate on new tax revenue equal to $.025/dollar based on total sale or purchase price of qualifying
equipment. Since the program’s inception, 14 companies have participated in the BCP generating $2.2
million in additional sales/use tax revenue to the City. ($350,000 was budgeted for the 2012 fiscal year
to support this program).
Guaranteed Water for industry
Program
The Guaranteed Water for Industry Program was created to provide an uninterruptible supply of water
for manufacturing and R&D firms, many of whom are highly dependent on water for industrial
processing and cooling needs. "Certified" water customers are "exempt" from mandatory water
conservation measures in the event of a drought ("water warning") situation and must use reclaimed
water to the extent possible in their manufacturing areas, cooling towers, and/or other uses, plus
implement "Best Management Practices for Potable Water Conservation.”
Other benefits include: discounted monthly rates for reclaimed water usage (.80/HCF); a possible one-
time cost savings on water capacity charges. Available to all companies, so it is an implicit part of many
packages when a deal is developed. Such projects ,must have a "purple pipe" available and a need for
the water- make a deal with the city that they will use purple pipe water as long as they will still have
water to conduct business when there is an emergency. This incentive is especially valuable for R&D
companies because they have water for research as well as purple pipe (reclaimed) for landscaping,
etc.
Clean Tech Initiative In 2007, the City launched a new Clean Tech (Clean Technology) Initiative in an effort to promote the
expansion, attraction and retention of businesses that develop products and technologies that provide
environmentally sustainable solutions. Clean technologies enable a more valuable use of natural
resources and reduce ecological impacts to the region. The Initiative seeks to develop an emerging
cluster that will create new job opportunities in these emerging industries. (Budget for a staff person,
not explicit dollars associated with the initiative.)
See: Clean Tech Assessment 2007; Clean Tech Manager Initiative; Clean Tech Partnership with
UCSD; San Diego Breaks New PACE Ground with FIGTREE; Grant Will Speed Solar Factory
Construction
Enterprise Zones
Businesses that operate in an Enterprise Zone (EZ) can claim tax credits for employee wages and
manufacturing equipment purchases. Businesses are also offered job referral services, development
permit expediting and assistance, tax savings on loans, reductions on certain development fees, and
access to specialized technical and financial assistance programs. San Diego’s Regional Enterprise
Zone is located throughout the City of San Diego including communities in the South Bay area near the
U.S.-Mexico border and in portions of the cities of National City and Chula Vista. A special enterprise
zone is also located at the Naval Training Center Redevelopment Project Area, which includes Liberty
Station, near Downtown.
See: Regional Enterprise Zone Information; Regional Enterprise Zone Fact Sheet
INCENTIVES BENCHMARKING STUDY 2012: SAN DIEGO, CA
PAGE | 25
Foreign Trade Zone
(FEDERAL)
• Duty Deferral - Delayed payment of duties on goods that enter the U.S. market
• Duty Exemption - No duties on or quota charges on imported goods that are later re-exported
• Inverted Tariff - Manufacturing-specific benefits - with case-by-case approval by the FTZ
Board - that can include reduction of duties if a lower tariff rate applies to the finished product
leaving the zone than the tariff rates that would have applied on foreign components.
• Logistical Benefits - Reductions in merchandise processing fees because zone users may be
able to file a single customs "entry" (and pay a single fee) per week rather than making
multiple entries during the course of a week
• Other Benefits - Elimination of duties on waste, scrap and rejected or defective parts
See: Foreign Trade Zone Fact Sheet
Business Development and
Incentive Zone Mapping
System
In an effort to assist and encourage private industry investment and development in San Diego, the
Economic Growth Services Department has worked with SanDAG to create a convenient way to access
information on the wide array of business development and incentives zones available throughout the
City. For property-based information, access SanDAG's Regional Economic Development Information
module (REDI). This mapping system allows visitors to enter either a property address or Assessor
Parcel Number (APN) to obtain a Business Incentive Report containing information on special incentive
zones and districts that may apply to a particular parcel.
In addition to incentives offered
by the City, are there incentive
programs at the state or
regional level available?
The City of San Diego has 19 business improvement districts, 15 redevelopment project areas, one
enterprise zone, a foreign trade zone, recycling market development zones and a renewal community,
the City is simply "zoned for incentives."
See: San Diego Top Destination for Business 2012; California Investment Guide 2012
“The permit expediting program has been very beneficial because time is money. The program provides
a certain level of hand-holding that helps companies navigate the planning process and gives them an
advocate to untie knots. This is especially helpful for businesses that aren’t already familiar with the
city’s regulations. We’ve found that we can cut anywhere from 2 weeks to 2 months off of the process.
The program started in the 1980’s when the state required applicants to have expedited permitting for
enterprise zones. San Diego took it a bit farther in the 1990’s when they were attracting biomedical and
technology companies. Identified in Council policy 900-12.”
Are there any unique assets
(incubator, state-of-the-art
facilities, etc.) that function as a
de facto incentive?
“Our staff is a big asset. We have a really strong retention rate. They are all very experienced locally,
know where the skeletons are, and know how to make it work or that a colleague has that experience.
Combined staff of 20. Many functions are under the umbrella of economic development.”
ROI MEASURES
What kind of reporting
requirements are expected of
companies who receive
incentives?
The City doesn't have a claw-back policy currently. For the most part, the programs are through foreign
trade zones or enterprise zones, so we waive fees up front and tax credits are claimed on the back
side. The Business Cooperation Program does involve a rebate. Only a few cities in California who offer
it (LA, San Diego); it requires business to track sales taxes so that the city benefits from it directly, and
then the city can share gains with the company in the form of a rebate. Storefront Improvement
Program is also a rebate. Agreements do include job creation and retention information. Except for the
Business Finance Program, most don’t require jobs/$ limit (requires 1 job per $20,000).
Reports are not publicly available currently.
INCENTIVES BENCHMARKING STUDY 2012
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PORTLAND, OR
Portland Development Commission
Fred Atiemo, Business Finance Manager (atiemof@pdc.us)
222 NW Fifth Ave • Portland, OR 97209-3859
503.823-3304 • http://www.pdc.us
DEPARTMENT STRUCTURE AND FUNCTION
Overview Founded 1958
Mission: to ensure Portlanders enjoy a diverse, sustainable community with healthy
neighborhoods, a vibrant central city, a strong regional economy, and quality jobs and housing for
all.
Structure: The PDC is headed by an executive director, who reports to a five-member board of
commissioners, local citizens appointed by the mayor and approved by Portland City Council. The
structure allows PDC to exercise independence in program implementation and resource
allocation. Primarily funded by TIF at 11 districts in the City.
PDC’s leadership in economic development resulted in City Council’s adoption of Portland’s first
Economic Development Strategy in more than 15 years. Guided by that strategy, the agency
focuses on explicit investments in the fundamentals of economic development: business
expansion and retention, workforce training, innovation, catalytic projects and an ecosystem that
nurtures entrepreneurs and small businesses. Progress depends on developing predictable
funding for economic development and advancing regional competitiveness through a variety of
partnerships. See: Economic Development Strategy 2010
Goals & Objectives • drive urban innovation
• maximize competitiveness
• neighborhood business vitality
• business and social equity
• cluster development
INCENTIVES POLICY & FRAMEWORK
Does the City have a formal
incentives policy?
Yes. See: City of Portland Incentive Summary
There is a focus on social equity in many incentives agreements. With growth comes
gentrification; so when loans are given, some of the terms reflect the values of the community.
Because the PDC can purchase and retain properties, when those properties are transferred to
private developers the sale agreement will also require that the developer create space for
community use, ensure that the space is accessible to a wide variety of people, etc.
How are projects evaluated for
incentives?
Is there a formal evaluation process,
such as a decision matrix or cost-
recovery model?
Projects are evaluated on an as-needed basis. The PDC considers private funds attracted to the
project, location, job creation and the proposed link to the economic development strategy and
cluster development. There is not a formal and rigid process, but all the significant areas are
discussed and evaluated.
The process largely depends on whether the company wants a loan and the size of a parcel that
the company needs (there are only small parcels in Portland). Some industries shape the process
because they head to sites in the Enterprise Zone. There is a form/matrix to determine whether a
company is incentive-worthy.
See: Business Finance Program Financial Guidelines
INCENTIVES BENCHMARKING STUDY 2012: PORTLAND, OR
PAGE | 27
Is there a recent example of a deal
that was won or lost due to/as a
result of incentives?
Yes, Solo Power
See: SoloPower News Coverage
How has the policy helped or
hindered economic development
agreements over time?
The PDC reports to a Board of Commissioners (appointed by the mayor for 2 year terms,
approved by council). Because the Board reports directly to the mayor, the PDC is shielded from
some politics, depending on the size of a project. “Portland is very process-oriented and
community-focused. In almost any city that has economic development subject to a City Council,
they have the challenge of shifting politics.”
Are there other organizations or
entities that play a role in economic
development? If so, who are the
other players and what are their
role(s)?
Yes, the various organizations play different roles as follows:
• Greater Portland – regional economic development
• Utilities – recruitment/expansion
• Ports – recruitment/expansion
• Manufacturing Extension Partnership – technical assistance
• Worksystems – workforce etc.
ECONOMIC DEVELOPMENT TOOLKIT
What are the tools for economic
development and related funding
available in your community?
(Inventory)
See: City of Portland Incentive Summary
Business Oregon (State of Oregon); ODOE (State of Oregon); Energy Trust Incentives (City of
Portland).
See: State of Oregon Incentives 2012; Youth Employment Tax Credit
Are there any unique assets
(incubator, state-of-the-art facilities,
etc.) that function as a de facto
incentive to attract private
investment?
There are Signature Research Centers across the state as well as partnerships with the
University System.
Are there other tools at your disposal
to incentivize companies to locate in
the community?
Yes, there are other programs that are not formalized and their accessibility depends on the
actual project.
ROI MEASURES
What kind of reporting requirements
are expected of companies who
receive incentives?
The reporting requirements vary by project. Examples include job creation, supply chain
requirements, community benefit agreements, etc.
What is the timeline associated with
incentives agreements and how, if at
all, are companies held accountable
to the community (Claw back
agreements)?
It varies, and depends on the type of incentives offered.
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 28
MILWAUKEE, WI
Redevelopment Authority of the City of Milwaukee
David Misky, Assistant Executive Director (dmisky@milwaukee.gov)
809 North Broadway •Milwaukee, WI 53202
414.286.8682 • http://www.mkedcd.org/racm/
DEPARTMENT STRUCTURE AND FUNCTION
Overview The mission of the Redevelopment Authority is to eliminate blighting conditions that inhibit
neighborhood reinvestment, to foster and promote business expansion and job creation,
and to facilitate new business and housing development. Toward that end, the
Redevelopment Authority:
• Prepares and implements comprehensive redevelopment plans
• Assembles real estate for redevelopment
• Is empowered to borrow money, issue bonds and make loans
• Can condemn property (eminent domain) in furtherance of redevelopment
objectives
The Redevelopment Authority is a leader in the field of economic development. Over the
years, it has issued bonds in excess of $500 million to leverage and support private
investments. It has participated directly in the planning, design and development of retail
and cultural centers, business parks, residential subdivisions and stand-alone commercial
ventures.
Organization & Structure The Redevelopment Authority relies upon the Department of City Development for the
professional, technical and administrative support necessary to carry out its mission.
RACM's board members are appointed by the Mayor and confirmed by the Common
Council. The Redevelopment Authority has an annual cooperation agreement with the City
of Milwaukee, with operating funds provided through the City's Community Development
Block Grant Program for:
• Management of financial affairs
• Land use planning and urban design guidance
• Real estate acquisition and disposition
• Relocation assistance for displaced families and businesses
• Property management and environmental investigation
• Housing and economic development project management
Representative Projects • Assemblage and sale of land, Tax Increment District loan administration and the
issuance of bonds for the construction of offices and institutional facilities,
affordable rental and owner occupied housing, and for catalytic commercial
projects
• Publication of RFPs for the purchase and renovation of historic structures in
neighborhoods such as King Drive, Brewer's Hill, Walker's Point, Concordia and
Cold Spring Park
• Capital investment and continued participation in the Housing Partnership
Corporation revolving loan fund for below-market rate loans to non-profit
organizations for affordable housing production
• Preparation of comprehensive plans to guide future development in the
Menomonee River Valley, Midtown and Beerline areas
• Miscellaneous bond transactions for business recruitment, retention and
expansion in locations throughout the city for real estate purchase, facility
construction and equipment.
INCENTIVES BENCHMARKING STUDY 2012: MILWAUKEE, WI
PAGE | 29
INCENTIVES POLICY & FRAMEWORK
Does the City have a formal incentives
policy?
Do not have a formal policy, but do have a number of economic development tools. Political
shifts of the council have a direct bearing on projects. The RACM was created in 1958 and
is more of a real estate entity and project financing mechanism that has the same bonding
authority that the city or state has, but no unique powers. We are the only city in the state
that behaves this way.
Over time, the RACM has been used as a tool to get deals done. There is a 7-person board
comprised of representatives from various sectors (real estate, attorneys, private sector,
and one Council member). The Board understands development, but much of what they
recommend does go through the Council as well. Very activist Council; often poke holes in
deals (recently had a hearing about the design of a building, for example).
How are projects evaluated for incentives?
Is there a formal evaluation process, such
as a decision matrix or cost-recovery
model?
There is no structured process at all. Projects come in through any door imaginable and
from any direction. Once a deal is initially vetted, the ultimate person that really needs to
grab ahold of it and champion it is the department Commissioner. The common council can
also push a project or issue and write a resolution to initiate the process.
A feasibility analysis is a standard part of the vetting process, particularly when there is a
TIF agreement in question. If the incentive is a cash request, such as a forgivable loan or a
grant, it would only go through a pro forma review in house or by a third party consultant.
Is there a recent example of a deal that
was won or lost due to/as a result of
incentives?
The wind turbine company Ingeteam from Spain located in Milkwaukee because of the
green business park (Menomonee Valley) as well as the financial package. The city does
not have the ability to give tax breaks, but the state can. In this case the state did offer a tax
break. The City created a TIF to create a $2 million forgivable loan for this company. If they
meet certain job counts, a certain amount can be forgiven.
Are there other organizations or entities
that play a role in economic development?
If so, who are the other players and what
are their role(s)?
• Milwaukee 7 – 7 County Region
• Invest in Downtown Milwaukee
• BizStarts Milwaukee
• Metro Milwaukee Association of Commerce
• U.S. Small Business Administration
• Visit Milwaukee
How are the tasks of economic
development distributed among different
entities in the community, and how are
these relationships structured?
It’s not easy. The overarching organization is the Milwaukee 7, and they get funding from
the communities themselves. Made of up 7 counties and municipalities. Regional marketing
organization, but not supported by all small municipalities. Some don’t feel that they are
represented by the organization. Member-funded. That group though, has alleviated some
of the problems from the past, which was communities competing against one another and
throwing incentives around. Milwaukee 7 is a point of focus that directs the potential end
users. Centralized and easier to manage. Prevents poaching among neighbors. Unwritten
non-compete among communities. Mil 7 membership suggests regional approach to
development. State of WI will not provide incentives differently depending on which
community. Mil 7 is that clearinghouse. Reach out to community if there is a move within
the region. Communication is the key.
INCENTIVES BENCHMARKING STUDY 2012: MILWAUKEE, WI
PAGE | 30
How do they work collaboratively with their
neighbors?
We don’t all the time. Just last week we met with a company that restores rail cars in an
adjacent community. Very specific requirements. Community they are in doesn’t have that.
What it comes down to is a shakedown by the company. Won’t incentivize when it won’t pay
off. Will help them. NW mutual life (the quiet company) has financial world HQ there –
greenfield campus + downtown presence. Have decided to use a 48 million $ TIF (largest
they’ve ever done) to build a 35 story structure- increase downtown presence. Had the
opportunity to move out of downtown completely- wanted a presence in an urban setting.
Developer financed. Strong financial company. $350 million. 15% of overall investment.
ECONOMIC DEVELOPMENT TOOLKIT
What are the tools for economic
development and related funding available
in your community? (Inventory)
Generally TIF districts, bonding, and forgivable loans. We have done TIF districts for
companies to expand locally (make cable ties and other plastic ties); growing for the last 20
years; self-funded TIF district (very little risk to the city).
City has development fund grants (out of common funds), including $1 million for the
department to spend on specific uses. Rather than creating a TIF, the department can
apply cash to a project.
Brownfield site remediation is a practical challenge. A team of 4 is committed to getting
grants for remediation.
See: TIF Explanation; TIF Districts; Wisconsin Business Incentives; Wisconsin Tax
Incentives; Rust Belt to Fresh Coast Presentation
Does the city charge manufacturing use
tax? If so, at what rate?
Do not.
Is there any opposition to using TIF as a
tool?
Yes, in several different ways. Unwritten policy not to TIF residential development
downtown. Have done it during the recession. Don’t want to dictate the market. The market
should drive that, not the city. Capital funds that are available shouldn’t be the driving force.
Create conditions that will favor those developments through the market. TIF residential is
30 story apartment/condo; TIF is a mezzanine loan of 9m$ with many requirements- very
high interest rate. If developer can’t pay in 4 years, city rewarded. Loan from AFL CIO
(union project), HUD guarantee (alternative to private bank loan guarantee; have an office
locally but hired St. Paul folks to deal with this kind of request), very different financing. 2 of
the 3 have been built. No apartments or hotels are TIF agreements. Individuals oppose
TIFs. Donor TID should be improving that TID rather than bailing out other districts. Publicly
vetted at RDC board and Common Council. Have opportunity to oppose.
INCENTIVES BENCHMARKING STUDY 2012: MILWAUKEE, WI
PAGE | 31
Milwaukee Economic Development Corporation (MEDC) - Inventory
Second Mortgage Program Businesses located in the City of Milwaukee can take advantage of fixed rate financing with
interest rates as low as current U.S. Treasury rates. In conjunction with a conventional
lender, MEDC can finance 25% to 40% of the total project cost, with a maximum of
generally $500,000. Eligible uses include building construction, renovations or
improvements, real estate purchases, equipment purchases, and long term working capital
(working capital can be financed as part of a project that involves fixed assets). Projects
totaling $80,000 to $2,000,000 are best suited to this program. MEDC's mortgage/lien
generally takes a subordinated position behind the conventional lender's loan for the
project. A minimum 10% equity injection is required from the borrower.
Capital Access Program Businesses locating or expanding in the City of Milwaukee's Development Zones,
designated by the Wisconsin Economic Development Corporation (WEDC), may qualify for
tax credits for initiating environmental remediation. Nearly all areas zoned for manufacturing
uses in the City are included in the Development Zone.
Industrial Revenue Bonds The City of Milwaukee and its Redevelopment Authority issues tax–exempt industrial
development revenue bonds to finance projects for manufacturers. Bonds issued through
the Authority are double tax–exempt. This program has provided nearly $685 million in
financing to more than 200 Milwaukee firms.
• Uses: Long-term financing depending upon life of assets.
• Advantages: Fixed or variable rates.
• Fees: $1,000 to Authority with initial application and .75% of the bond amount
upon issuance.
• Participating underwriters will charge from 1 to 1.5% plus out-of-pocket costs.
• Bonds are typically secured by a bank letter-of-credit.
• Certain banks purchase these instruments for their own accounts, thus
eliminating the underwriter and related costs.
• Until the end of 2012, these bonds can also finance commercial real estate
projects.
Timing: Generally, a company should not incur project costs (except site purchase) prior to
City or Authority's adoption of an Initial Resolution. Under IRS code, only costs incurred no
more than 60 days prior to the adoption of the initial resolution can be rolled into
subsequent bond issue. Final bond issuance generally takes place 60 to 90 days later,
depending on negotiations between underwriters, borrower and letter-of-credit bank.
BizStarts Milwaukee (MEDC) BizStarts Milwaukee assists anyone interested in starting a business. The website
www.bizstartsmilwaukee.com lists all service providers and classes available in the region
for startups and has templates, articles, and information localized to the Milwaukee 7
region.
Tax Credits - Inventory
New Market tax credits The New Market Tax Credit (NMTC) Program provides investors with a 39 percent federal
tax credit over a 7 year period for making qualified equity investments in designated areas.
Wisconsin Economic Development
Corporation (State)
The Wisconsin Department of Commerce has several tax credit programs available for
businesses. The credits are awarded based on factors such as the jobs created, capital
investment, economic impact, location in an economically distressed area, or other targeted
applications. See: Wisconsin Tax Incentives
INCENTIVES BENCHMARKING STUDY 2012: MILWAUKEE, WI
PAGE | 32
Environmental Assessment and Brownfields - Inventory
Environmental Site Assessment Grants The Brownfield Site Assessment Matching Grant Program is available for city of
Milwaukee properties after a Phase I Site Assessment is completed and there are further
environmental issues to be addressed. Reimbursable grants up to $25, 000 are available.
• Property must be located in the City of Milwaukee
• Applicant either owns or intends to buy the property
• Applicant has completed an ASTM Phase I Environmental Site Assessment
• The site is to be redeveloped
• Applicant agrees to report on results of testing and redevelopment plan
• Competitive bids for covered services must be obtained from at least two qualified
providers
• Applicant must be current on all property taxes and free from code violations
• Eligible Activities: Phase II Site Assessments, remedial action plans, confirmatory
sampling, DNR fees (Not to be used in place of PECFA).
Revolving loan fund from EPA The City has received $17 million from the EPA over the last 10 years. The initial loan is
critical, but once it revolves it becomes much less onerous. Office of environmental
sustainability.
Environmental remediation tax credits Businesses locating or expanding in the City of Milwaukee's Development Zones,
designated by the Wisconsin Department of Commerce, may qualify for tax credits for
initiating environmental remediation. Nearly all areas zoned for manufacturing uses in the
City are included in the Development Zone.
Brownfields MEDC, in partnership with the City of Milwaukee, has made the reuse and redevelopment
of brownfields a high priority. We have a track record of participating in over 100 successful
brownfield redevelopment projects. See: Rust Belt to Fresh Coast Presentation
Site Selection - Inventory
Industrial sites in Milwaukee MEDC has industrial land sites ready for development. We can help you with the
management and marketing of the development.
Commercial sites in Milwaukee Search for sites in neighborhood commercial districts and find out more about Milwaukee's
commercial districts.
Milwaukee 7 ChooseMilwaukee.org is the website for the Milwaukee 7 regional economic development
organization. It includes a land and building data base which can be searched for properties
in southeast Wisconsin and the demographics surrounding that property.
DCD Neighborhood Business Development Team - Inventory
Business associations There are more than 40 local merchant groups representing many of Milwaukee's diverse
neighborhood commercial areas.
Business improvement districts (BIDs) Property owners in BID areas voluntarily collect annual assessments that are spent on
streetscape, marketing, recruitment and other projects to enhance the local business
environment. DCD staff is available to assist merchant organizations in developing a BID.
Capital improvement program DCD has access to funds for improvements to the public way, such as lighting, landscaping,
or special paving in conjunction with significant private investment from your project as well
as on a cost–sharing basis with other local property owners.
INCENTIVES BENCHMARKING STUDY 2012: MILWAUKEE, WI
PAGE | 33
Commercial sites Search for sites in neighborhood commercial districts and find out more about Milwaukee's
commercial districts.
Façade grants Established by DCD to increase the physical appearance of Milwaukee’s commercial areas,
the Façade Grant is a 50-50 matching grant not to exceed $5,000. Both property owners
and leasers are eligible to apply.
Energy Efficiency Opportunities Businesses located in the City of Milwaukee can take advantage of the Milwaukee Energy
Efficiency (Me²) program. Me² helps you finance energy efficiency projects to improve your
net income and cash flow from day one, with low interest rates, no-money down, and the
potential to pass energy efficiency project costs to your tenants. Saving energy at your
facility is a proven means to lower overhead and maximize profits. Your project must target
a minimum 15 percent estimated energy savings (relative to the percent of floor space
affected by the retrofit, or comparable reasonable baseline). Get started: complete and
submit a commercial interest form. Visit the Me2 website for more information.
Public improvement projects DCD has the ability to partner with neighborhood merchant groups to make major
improvements in commercial districts. Such improvements could include installation of harp
lights, special paving materials at intersections, or other improvements in the public way.
Purchasing power profiles Milwaukee is a strong market for retail development. The purchasing power profiles,
developed by the University of Wisconsin-Milwaukee Employment and Training Institute,
are designed to help businesses, developers, and organizations assess the advantages of
urban density for underserved city neighborhoods and to spur economic development in
central city Milwaukee.
Retail Investment Fund (RIF) RIF funds retail development projects located in neighborhood business districts.
Spending power & economic indicators Milwaukee has a strong market for retail business. Per capita personal income in metro
Milwaukee, which totals $34.8 billion, is about 10 percent higher than regional and national
averages.
Youth Development and Employment - Inventory
Earn & Learn Earn & Learn is the City’s program to help young people make a successful transition to adulthood by
providing opportunities to develop work-readiness skills while they earn wages. Earn & Learn is operated
jointly by the Milwaukee Area Workforce Investment Board (MAWIB) and the Milwaukee Department of City
Development (DCD).
Earn & Learn is part of a regional effort ensuring the economic growth and vitality of the Milwaukee
metropolitan area by preparing young people to successfully enter the future labor force. Young people, 14-
21 years-old, may participate in Earn & Learn in 3 ways: The Community Work Experience Program; Private
Sector Job Connection; and Mayor Barrett's Summer Youth Internship Program.
Life Ventures
Partnership
Life Ventures Partnership is a collaborative public/private initiative to promote the future vitality of
Milwaukee’s regional economy by preparing young people to become life-long learners, productive workers,
and self-sufficient citizens.
Summer Youth
Internship Project
Mayor Tom Barrett’s Summer Youth Internship Program (SYIP) provides youth with employment and life
skills and helps them meet educational, job readiness and career exploration goals.
INCENTIVES BENCHMARKING STUDY 2012: MILWAUKEE, WI
PAGE | 34
Financing Resources
Tax Increment
Financing
Tax Incremental Financing (TIF) is an economic development tool used by the City of Milwaukee and other
municipalities to leverage private development investment. This tool has been available since the state of
Wisconsin adopted a TIF statute in 1975.
Milwaukee has created more than 70 Tax Incremental Districts (TIDs) to support a wide variety of projects.
In recent years, TIF has leveraged such high-profile investments as the construction of a new headquarters
for Manpower International, the development of the Harley-Davidson Museum, the creation of the
Menomonee Valley Industrial Center, and the installation of the River walk. The tool also has been used for
neighborhood-scale projects, such as the City Homes subdivision and the Lindsay Heights housing
development. See: TIF Explanation; Tax Incremental Districts 2011; Tax Incremental Districts Annual
Report 2011
Wisconsin Women's
Business Initiative
Corporation
The Wisconsin Women's Business Initiative Corporation (WWBIC) is an economic development corporation
providing quality business education, technical assistance and access to capital for entrepreneurs.
Established in 1987, WWBIC consults, educates and mentors owners of small and micro businesses
throughout Wisconsin. We concentrate our efforts with women, people of color and those of lower incomes.
Are there any unique
assets (incubator, state-
of-the-art facilities, etc.)
that function as a de
facto incentive to attract
private investment?
The University system is a significant asset. Marquette (dental school, law school, engineering school),
University of Wisconsin Milwaukee (has a center for great lakes research, $50 million expansion doing
aggressive studies and research on Lake Michigan and fresh water); engineering school partnering with GE
medical and the medical complex; also created a public health program.
We partner with business community consistently - attract businesses that will make use of the universities.
Ingeteam was also attracted to the local engineering schools. The workforce historically is seen as
hardworking, reliable, etc. Ready and willing workers across industries. Water frontage and access to fresh
water is a bigger and bigger issue. Location advantageous to fresh, fairly cheap water.
Are there other tools at
your disposal to
incentivize companies
to locate in the
community? If so, what
are they and how do
they function.
Created the WAVE program (water works department); incentives for companies who use a certain volume
of water would get a reduced rate for water. Location and cost of water is attractive for many industries,
especially the beverage industry.
Urban Ecology Center where we teach environmental education to urban youth. They are increasing
community awareness by teaching 30,000 students a year. There is heightened awareness of the
environment in the community, especially because a significant portion of the economy is based on water
frontage.
ROI MEASURES
What kind of reporting
requirements are
expected of companies
who receive incentives?
Each agreement is unique, but they all include some form of claw back agreements. Tax Incremental
Districts Annual Report 2011
Received an EDA grant of $1.3 million for Menomonee Valley and they visited the site 7 years later. We
documented the investment that was made in the business park and demonstrated that it has returned
1,300 jobs with family supporting wages.
INCENTIVES BENCHMARKING STUDY 2012: MILWAUKEE, WI
PAGE | 35
After being awarded an
incentive, how many
companies do not collect
on the award? Can this
be put into a
percentage? Example:
out of 10 awards, 20%
of companies do not
comply/request award?
Structured with a TIF, so rare. 200k forgivable loan if the company expanded never used the loan/grant. Did
no expand, so politically a challenge to be tied to the job goals. Almost all others have complied and taken
advantage of.
Are there any
municipalities that have
an employee
commitment, not based
on net new jobs, but the
overall established level
of employment
commitment? If so, for
how long?
All based on job growth. Board acted on a TIF donation. Could be closed out, but functioning as a donor TID
for others that are underperforming. One of the underperforming isn’t meeting employee growth goals.
Offsetting some of the problems at another district. Job count is actually the same as it was 4 years ago.
Prop assessments have dropped even though they have invested 20 million. Some built in flexibility; can
treat it as an investment portfolio. 25% doing really well, 50% are OK over the long term, last quarter need
help.
Are some companies
double-tax exempt as a
result of some of these
districts and
agreements?
No. Company would select which benefits are preferable.
Would you be willing to
share an example of an
incentives agreement
and the associated
tactics to measure ROI
on incentives?
Yes.
See: Resolution Approving Loan to Ingeteam; Resolution Authorizing Contracts and Expenditures
for Ingeteam, Inc. Project; “Energy Firm Picks Milwaukee for Plant;” “Milwaukee Teams with Helios,
Ingeteam to Promote Solar Projects;” “US Secretary of Energy Visits the Ingeteam Facilities in
Milwaukee”
How are claw backs
structured?
Pretty flexible. Relative to the original deal. TIF created for Harley Davidson museum 7 million $. Company
also acquired a few city parcels as part of the museum development. 85 million investment goal. Phase 2
would be a building for offices (200 or 300 jobs); didn’t do it and weren’t planning to do it. Some discussion
around the claw back clause of returning the city lots to the city. Had already invested in creating parking
lots on those parcels. Negotiated a settlement. Paid the city to remove those agreements. Municipality is
flexible around claw backs. Don’t want to take advantage of the situation. Closed out the deal relative to that
component of the deal.
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 36
GAINESVILLE, FL
Gainesville Community Redevelopment Agency
Lynn Janoski, Finance Manager (janoskil@gainesvillecra.com)
802 NW 5th Avenue, Suite 200 •Gainesville, FL 32601
352.334.2015 •http://www.gainesvillecra.com/
DEPARTMENT STRUCTURE AND FUNCTION
Overview The CRA operates in four community redevelopment areas: Eastside, Fifth Avenue/Pleasant
Street, Downtown and College Park/University Heights. Funds for CRA projects are drawn from
tax increment funds, which are collected from the four redevelopment areas.
See: Map of CRA Districts
Structure The CRA Board, which is comprised of the members of the City Commission, reviews
recommendations of the four citizen advisory boards, adopts redevelopment plans and
budgets, and provides direction to staff. The City Manager acts as the CRA Executive Director
and the Assistant City Manager provides day to day assistance for the CRA. The City
Commission convenes separately as the CRA Board. The Board is generally supportive of the
projects and of additional economic development.
Budget FY2013 CRA Budget (10/1/12 - 9/30/13); Approved 9/20/2012
Revenues: $ 5,617,772
Minus: Payroll & Operating Expenses : $ 1,216,165
Minus: Total Debt Service & Development Agreements: $ 1,025,761
Project Funding: $ 3,375,846
INCENTIVES POLICY & FRAMEWORK
Does the City have a formal incentives
policy?
There is no formal policy. Each incentive is unique and has its own eligibility requirements, so
one policy would not fit all scenarios. In the case of the façade grants, for example, it would be
beneficial to have more similar policies across the distinct districts.
See: Transformational Incentives Program; Redevelopment Incentive Program; High-
Wage Job Creation Incentive Policy; Company Relocation Incentive Program Policy
How are projects evaluated for
incentives?
Is there a formal evaluation process,
such as a decision matrix or cost-
recovery model?
The evaluation process varies by incentive program. The Transformational Incentives
Program requires a lot of cost/benefit analysis by a third party. Smaller programs are done in-
house.
Is there a recent example of a deal that
was won or lost due to/as a result of
incentives?
We are currently renovating a warehouse for private sector use. The City is involved but the
CRA will manage the project. The City’s contributions are substantial.
MindTree (software firm) was recently attracted to Gainesville (competing with other SE cities).
We won based on total coordination, a Chamber incentive for rent, and CRA incentives for job
creation. Workforce board support also connected to the Chamber and reflected the overall
cooperation of the community. The Innovation Square project is also a collaboration with the
University of Florida (former AGH hospital site connecting downtown to the University with a
tech focus; major redevelopment).
INCENTIVES BENCHMARKING STUDY 2012: GAINESVILLE, FL
PAGE | 37
Are there other organizations or entities
that play a role in economic
development? If so, who are the other
players and what are their role(s)?
Innovation Gainesville (iG) began as a community initiative to harness innovation to create jobs
in health and green technologies. Since then, it has transformed into a cultural mindset with
hundreds of individuals and organizations working to grow an environment that fosters
innovation and success.
The Council for Economic Outreach (CEO) is the designated economic development entity for
all of Alachua County. CEO’s charge is to assist existing businesses through expansion, to
help grow new companies in our community and to attract new opportunities to Alachua
County. CEO launched Momentum 2015 in Dec. 2010, aiming to build upon CEO’s successes
with its last campaign, Opportunity 2010, to create an environment in which our businesses
continue to thrive. Momentum 2015 is a five-year economic and community development
campaign for Gainesville/Alachua County. The CEO actively manages site location requests,
workforce training grants and incentives assistance. CEO works with Alachua County and local
governments in securing all resources available to new and expanding business and industry.
Through its five-year strategic plan, Opportunity 2010, CEO is charged to assist new and
expanding business and industry through Expansion, Growing Our Own and Attraction efforts.
Programs Include:
• Site Location Assistance
• Quick Response Training
• Incumbent Worker Training
• Qualified Target Industry Tax Incentive (QTI) --> state funded
• Permitting assistance with local government
See: Alachua County Chamber- Knowledge Economy Roadmap; Bioscience Overview
ECONOMIC DEVELOPMENT TOOLKIT
What are the tools for economic
development and related funding
available in your community?
(Inventory)
See: Transformational Incentives Program; Redevelopment Incentive Program (varies
slightly by district); High-Wage Job Creation Incentive Policy; Grow Gainesville Fund;
Company Relocation Incentive Program Policy
High-Wage Job Incentive Program
(New!)
The High-Wage Job Incentive Program offers a grant payment to companies that create or
relocate a minimum of five high-wage jobs within a CRA district. The grant is paid out over a
two year period after the employees have been hired or relocated.
Company Relocation Incentive Program The Company Relocation Incentive Program is designed to assist technology companies
with specialized equipment by addressing the costs of relocating into one of the CRA districts.
The program will offer eligible companies up to a 50% match on eligible relocation costs up to a
maximum award of $50,000. (See Brochure)
Grow Gainesville Fund The Grow Gainesville Fund is an SBA-backed loan program that provides favorable loan
terms to established businesses (at least three years of operations) located with one of the
CRA areas. Loans may be used to purchase buildings or land, acquire equipment or inventory,
as working capital or to refinance existing debt.
Loan amounts range from $100,000 -$500,000 with terms up to 25 years and competitive
interest rates ranging from Prime + 1% to Prime +2.75%. (see brochure)
Capital Access Program (CAP) The Capital Access Program (CAP) helps reduce the 10% equity requirements of a borrower
with an SBA 504 loan structure. The typical SBA 504 loan structure is: 50% Primary Bank
Lender; 40% SBA-approved Lender; 10% Borrower Equity. Borrowers may borrow a maximum
of 50% or $35,000 (whichever is less) to help reduce the 10% borrower equity requirement.
INCENTIVES BENCHMARKING STUDY 2012: GAINESVILLE, FL
PAGE | 38
Façade Grant Program The Façade Grant Program is a competitive, matching grant program that is designed to
encourage reinvestment in building facades of businesses located on highly visible target
corridors within the CRA redevelopment areas. Applicants must commit to expending (at a
minimum) a cash match equal to the grant funds sought in the application.
Redevelopment Incentive Program The Redevelopment Incentive Program offers a reimbursement of development costs for
select projects (i.e. wastewater, meter fees, undergrounding utilities). The incentive is
administered on a case-by-case basis. Applicants must show that the project would not be
feasible without receiving the incentive.
Transformational Projects Incentive
Program
The Transformational Projects Incentive Program provides large scale redevelopment
projects that "transform" the CRA Redevelopment Area a set percentage of the tax increment
for a particular period of time. Applicants must demonstrate that the project would not be
feasible without receiving the incentive.
In addition to incentives offered by the
City, are there incentive programs at the
state or regional level available to
companies that invest in the
community?
Central Gainesville is also an Enterprise Zone.
See: Florida Incentives Summary; Florida Incentives Matrix; Florida Clean Energy
Incentives; Alachua County Chamber- Knowledge Economy Roadmap; Bioscience
Overview
Are there any unique assets (incubator,
state-of-the-art facilities, etc.) that
function as a de facto incentive to attract
private investment?
The City owns an incubator called GTECH, and there are a number of incubators in town:
Santa Fe SIED small biz incubation program; UF Innovation Hub (will be part of Innovation
Square); outside of the city there is the Sid Martin Biotech Incubator. We have the highest per-
capita incubator space.
Are there other tools at your disposal to
incentivize companies to locate in the
community? If so, what are they and
how do they function.
Innovation Gainesville is a community effort to get the word out about Gainesville and support
innovation of all kinds in the community. Closely tied to CEO and the chamber, but a broader
community effort than chamber membership.
ROI MEASURES
What kind of reporting requirements are
expected of companies who receive
incentives?
ROI is Built into the programs. In the high-wage program they have to verify that the jobs are in
place after one year. Incentive delivered after jobs created (grant paid after the fact). The CRA
oversees compliance directly.
Would you be willing to share an
example of an incentives agreement
and the associated tactics to measure
ROI on incentives?
The town has really embraced innovation and high tech, spinning out a large number of
companies and really trying to support them. We are also retaining local companies. The town
is really unified around this vision and working together to support it.
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 39
PITTSBURGH, PA
Allegheny County Department of Economic Development
Dennis M. Davin, Director (ddavin@county.allegheny.pa.us)
Lance Chimka (Lance.Chimka@alleghenycounty.us)
425 Sixth Avenue Suite 800 •Pittsburgh, PA 15219"
412.350.1000 •economic.alleghenycounty.us "
DEPARTMENT STRUCTURE AND FUNCTION
Overview Allegheny County Economic Development (ACED) manages economic and residential
development for the County, a dynamic, multifaceted mission that includes these objectives:
• Attract new business to the County.
• Help businesses and institutions already here expand, modernize and create jobs.
• Acquire and assemble sites for development and redevelopment.
• Assure that minority, woman-owned and disadvantaged businesses participate fully in
the County’s growth.
• Help residents, developers and nonprofit agencies increase the stability of the
County’s residential neighborhoods.
• Support homeowners in the acquisition and renovation of their dwellings.
• Improve the County’s housing stock.
• Ensure the vitality of neighborhood business districts.
• Aid the County’s municipalities in updating infrastructure, including sewer and water
systems, highways and recreation amenities.
• Provide leadership for special projects, such as the community’s response to natural
disasters.
• Monitor and report on the compliance status of all projects and programs with Federal
or State support.
• Clearly, the mandate is broad, the challenges many. Yet we achieve progress on all
these fronts by coordinating success, that is, by serving as the catalyst for public-
private-neighborhood partnerships that provide greater expertise and participation
than any one organization could generate.
INCENTIVES POLICY & FRAMEWORK
Does the City have a formal incentives
policy?
Allegheny County Economic Development does not have a formal incentives policy but closely
adheres to a mission statement that guides our activity and investment (see above)
ACED also ensures that investment is consistent with Allegheny Places, the County’s
comprehensive plan. See: Comprehensive Plan Executive Summary; Comprehensive Plan
Economic Development Chapter; Business Quick Guide; Pennsylvania Incentives
How are projects evaluated for
incentives?
Is there a formal evaluation process,
such as a decision matrix or cost-
recovery model?
ACED closely evaluates the merits of all the projects that it invests in. That said, ACED typically
operates as a fiduciary agent for another agency. ACED administers state and Federal funding
according to the parameters of these third party programs.
Those parameters are not set by ACED. ACED ensures that the investment is consistent with
the guidelines and requirements of each funding program. As a result, much of the ambiguity
and subjectivity around which projects receive subsidy and at what rate is addressed.
INCENTIVES BENCHMARKING STUDY 2012: PITTSBURGH, PA
PAGE | 40
Is there a recent example of a deal that
was won or lost due to/as a result of
incentives?
It should be noted that ACED focuses on facilitating the growth of existing local companies
rather than attempting to lure outside companies into the region.
A good example of this would be the $1.5 billion expansion of Allegheny Technologies in
Brackenridge. ACED facilitated the relocation of 2 roads to enable the company to expand its
operations to include a new hot rolling mill for specialty metals. The investment will preserve
over 1,500 jobs and the company’s legacy in the region. See: Year in Review 2011
Are there other organizations or
entities that play a role in economic
development? If so, who are the other
players and what are their role(s)?
The Pittsburgh region is fortunate to have a large number of economic development agencies.
ACED works with a large network of partners in a variety of ways. See: Business Quick Guide
Two of our most important partners are the Federal government and the Commonwealth of
Pennsylvania. In addition, we team with private businesses, developers and contractors; the
philanthropic community, and vital nonprofit and community-based agencies. To create Tax
Increment Financing Districts, we partner with local governments and school boards. To help
our research universities with company formation ACED serves as a member of the Greater
Oakland Keystone Innovation Zone. These multiple, overlapping partnerships form the
foundation of success. More, they assure that the development of Allegheny County reflects the
aspirations and needs of our businesses, institutions and residents.
ECONOMIC DEVELOPMENT TOOLKIT
What are the tools for economic
development and related funding
available in your community?
(Inventory)
There are a variety of programs available depending on the type of development being financed.
See: Allegheny County Financing Programs
In addition to incentives offered by the
City, are there incentive programs at
the state or regional level available to
companies that invest in the
community?
There are also a variety of programs available at the State level. See: Pennsylvania Incentives
for a list of State programs available.
Are there any unique assets
(incubator, state-of-the-art facilities,
etc.) that function as a de facto
incentive to attract private investment?
The Pittsburgh region’s proximity to markets, cost of doing business, quality of workforce, quality
of life and transportation infrastructure serve as the primary incentive for doing business here.
Economic development agencies can support this solid foundation by addressing site-specific
issues and alleviating project-related barriers but will be secondary and subordinate to the
regional assets that exist.
ROI MEASURES
What kind of reporting requirements
are expected of companies who
receive incentives?
Most programs require the guarantee by the recipient of certain job creation, investment and
project outcome metrics. Recipients are required to demonstrate and document the
achievement of these outcomes. These metrics are codified in agreements with ACED and, in
some cases, supplemental agreements that include developers agreements, MOUs, etc.
What is the timeline associated with
incentives agreements and how, if at
all, are companies held accountable to
the community (Claw back
PAGE | 41
METHODOLOGY &WORK PLAN
PHASE 1: PEER COMMUNITY IDENTIFICATION
We begin by identifying relevant peer communities against whom Fort Collins may compete for private sector investment. Communities
were considered based on 3 sets of criteria: (1) Peer Cities; (2) Major Employer Locations; and (3) Target Industry Clusters.
SUMMARY OF PEER CITY ATTRIBUTES
For the sake of continuity, the four benchmarks from the strategic plan were included in this analysis. These peers were chosen because
they share common attributes with Fort Collins. These characteristics are summarized in the table below.
Fort Collins, CO Ann Arbor, MI Charlottesville,
VA
Corvallis, OR Gainesville, FL
Population1 299,630 344,791 201,559 202,251 264,275
University (Ranking2) Colorado State
University (#128)
University of
Michigan (#28)
University of
Virginia (#25)
Oregon State
University (#138)
University of
Florida (#58)
Distance of Major Airport 70 mi to DIA 27 mi to DTW 78 mi to RIC 90 mi to PDX 80 mi to JAX
Scenic Appeal / Outdoor
Recreation
Culture Values Sustainability, Arts,
Quality of Life
Actively Support Entrepreneurship /
Innovation
Family Friendly / Not a Retiree
Destination
Federal Labs or Research Centers
Boutique Industries Microbreweries Vineyards,
Microbreweries
Vineyards
1 2010 US Census, Total Population County for MSA. Corvallis includes Albany-Lebanon Metropolitan Area.
2 2011 US News and World Report Rankings
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 42
FORT COLLINS’ SELECT MAJOR EMPLOYERS AND SHARED LOCATIONS
In addition to the benchmarks selected for the strategic plan, additional cities with strong ties to the city’s major employers will also be
included in the benchmarking exercise. The table above was generated by cross referencing each employer’s locations that are similar to
the Fort Collins facility. The cities with the strongest degree of overlap among Fort Collins’ major employers are summarized in the table to
the right. Because of this overlap, these cities could be considered strategic benchmarks.
= Headquarters
= Office or plant
Fort Collins, CO
San Jose, CA
Austin, TX
Houston, TX
Ontario, Canada
St Petersburg, Russia
Bangalore, India
Beijing, China
Suzhou, China
Shanghai, China
Singapore
Woodward Governor (1000 – 2499
employees)
Hewlett Packard (500 – 999 employees)
Avago Technologies (500 – 999
employees)
Anheuser Busch (500 – 999 employees)
Advanced Energy (250 – 499
employees)
LSI Logic (100 – 249 employees)
AMD (100 – 249 employees)
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 43
TARGET INDUSTRY CLUSTERS’ PRESENCE BY CITY
Finally, each of the cities from the previous two exercises was evaluated for the presence of industry sectors that overlap with Fort Collins’
strategic clusters. In addition to evaluating peer communities (in bold) and major employer locations, cities with unique strengths in one or
more of the clusters were also evaluated.
A
Austin, TX
San Diego, CA
San Jose, CA
Ann Arbor, MI
Boston, MA
Cleveland, OH
Gainesville, FL
Milwaukee, WI
Ontario, Canada
Pittsburgh, PA
Portland, OR
Shanghai, China
Suzhou, China
Bangalore, India
Beijing, China
Cincinnati, OH
Fresno, CA
Houston, TX
New York, NY
Raleigh, NC
Tacoma, WA
Singapore
Charlottesville, VA
Corvallis, OR
Philadelphia, PA
St. Petersburg, Russia
Bioscience
Clean Energy
Innovation Economy
Software/Hardware
Water Innovation
total 4 4 4 3 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 1 1 1 1
PROPOSED LIST OF PRIORITY CITIES TO EVALUATE
Based on the analysis summarized in the Target Industry Cluster summary table (above) it is recommended that the consulting team
contact the following 15 cities for interviews, with the goal of completing interviews with 6-8 of the target cities. Priority cities were
determined based on the number of similar industry targets.
Austin, TX San Diego, CA
San Jose, CA Ann Arbor, MI
Boston, MA Cleveland, OH
Gainesville, FL Milwaukee, WI
Ontario, Canada* Pittsburgh, PA
Portland, OR Shanghai, China*
Suzhou, China* Charlottesville, VA (alternate)
Corvallis, OR Loveland, CO (requested by client)
*availability of information may vary for international benchmarks
INCENTIVES BENCHMARKING STUDY 2012
PAGE | 44
PHASE 2: ACQUIRE AND ANALYZE INCENTIVES POLICIES AND MEASURES OF ROI.
INCENTIVES POLICY AND FRAMEWORK
Where available, we will gather written incentives policies that outline the community’s decision-making process for the use of incentives in
economic development projects.
1 Does the City have a formal incentives policy? If so, is it in writing and publicly available (online) or is it by request only?
2 How are projects evaluated for incentives? Is there a formal evaluation process, such as a decision matrix or cost-recovery
model?
3 Is there a recent example of a deal that was won or lost due to/as a result of incentives?
4 Are there other organizations or entities that play a role in economic development? If so, who are the other players and what are
their role(s)?
ECONOMIC DEVELOPMENT TOOLKIT
For each peer benchmark, we will collect information about local economic development tools including tax rebates, loans, special districts,
and other tools that promote economic development. We will also include relevant state and federal programs that peer communities
access to influence development.
1 What are the tools for economic development and related funding available in your community? (Inventory)
2 In addition to incentives offered by the City, are there incentive programs at the state or regional level available to companies
that invest in the community?
3 Are there any unique assets (incubator, state-of-the-art facilities, etc.) that function as a de facto incentive to attract private
investment?
4 Are there other tools at your disposal to incentivize companies to locate in the community? If so, what are they and how do they
function.
ROI MEASURES
For each peer benchmark, at least one example of how ROI is measured on incentives packages will be provided. If more than one sample
deal or ROI policy is available, additional examples will be included in the summary table. If there are different ROI measures for
retention/expansion, attraction, and relocation scenarios, an attempt will be made to summarize the categories of ROI indicators and
describe each measure.
1 What kind of reporting requirements are expected of companies who receive incentives?
2 What is the timeline associated with incentives agreements and how, if at all, are companies held accountable to the community
(Claw back agreements)?
3 Would you be willing to share an example of an incentives agreement and the associated tactics to measure ROI on incentives?
ATTACHMENT 3
Prepared for:
City of Fort Collins
300 LaPorte Avenue
Fort Collins, Colorado 80522
Prepared by:
Impact DataSource, LLC
4709 Cap Rock Drive
Austin, Texas 78735
www.impactdatasource.com
A REPORT OF THE ECONOMIC IMPACT OF
PROJECT X IN FORT COLLINS, CO
January 15, 2013
ATTACHMENT 4
TABLE OF CONTENTS
Executive Summary………………………………………………...……………………………………………………………3
Project Summary
Introduction………………………………………………...……………………………………………………………………6
Description of The Project…………………………………………………………………………………………………6
Summary of the Economic Impact of the Project………………………………………………………………6
Analysis of Fiscal Impact
Costs and Benefits for Local Taxing Districts………………………………………………………………………7
City of Fort Collins……………………………………………………………………………………………………… 8
Larimer County……………………………………………………………………………………………………………9
Poudre School District…………………………………………………………………………………………………9
Other Taxing Districts………………………………………………………………………………………………… 9
Analysis of Incentives
Property Tax and Use Tax Rebates……………………………………………………………………………………10
Analysis of Possible Incentives for the Project……………………………………………………………………11
Methodology
Conduct of the Analysis……………………………………………………………………………………………………13
Discussion of Economic Impact Calculations………………………………………………………………………13
Discussion of Fiscal Impact Calculations……………………………………………………………………………13
About Impact DataSource…………………………………………………………………………………………………16
Appendix A
Data & Rates………………….…………………………………………………………………………………………………18
Appendix B
Detailed Economic Impact Calculations…………………………………………………………………………… 29
Appendix C
Detailed Cost‐Benefit Calculations for:
City of Fort Collins............................................................................................................... 36
Larimer County....................................................................................................................40
Poudre School District.........................................................................................................43
Hospital/Health Services..................................................................................................... 45
Other (Water, Library, etc)..................................................................................................45
Page 2
EXECUTIVE SUMMARY
Project background
In Project X, an existing manufacturer is considering an expansion in Fort Collins to include building, equipping and
operating a new manufacturing facility. The firm plans to invest $29.25 million in a new building and $10.5 million in
equipment. Upon completion of the construction, the company expects to expand its workforce from 89 employees to
153 over the next 10 years. The average salary of these new employees will be approximately $85,000.
Economic Impact
Project X will generate economic impacts during construction and operations. The construction activities, occurring
while the firm builds its new facility, will generate a one‐time impact for construction workers and businesses in the
area. The on‐going operations of the firm will create annual economic impacts, employing workers in the community
and supporting additional economic activity throughout the region.
The one‐time construction activity will support 386 workers in the area and support $18 million in new earnings for
these workers. The firm plans to phase‐in employment as operations expand over the first 10 years of operations.
Initially, the firm will create a total of 32 jobs and $1.98 million in workers' earnings. By year 10, the company will support
a total of 146 direct, indirect and induced workers and more than $10.58 million in workers earnings per year.
Economic Impact
Construction (One‐Time):
Total Change in Jobs 386
Total Change in Earnings $17,993,193
Average Earnings per Job $46,614
Operations (On‐going)* Year 2 Year 10
Total Change in Jobs 32 146
Total Change in Earnings $1,978,569 $10,583,761
Average Earnings per Job $61,830 $72,492
* The firm plans to phase in its total employment over the first 10 years.
Fiscal Impact
Project X will generate fiscal impacts for the City of Fort Collins, Larimer County, the school district and other local
taxing districts. The table below provides a high‐level summary of the fiscal impacts for local taxing districts during
construction and over the first 10 years of operations.
Net Benefits During Construction and Over the First 10 Years for Local Taxing Districts
Present
Additional Additional Net Value of
Benefits Costs Benefits Net Benefits**
City of Fort Collins $3,822,600 ($1,134,824) $2,687,775 $2,203,736
Larimer County $2,598,319 ($243,556) $2,354,763 $1,864,050
Poudre School District $5,078,453 ($357,556) $4,720,898 $3,704,048
Hospital/Health Services $212,890 $0 $212,890 $167,056
Other (Water, Library, etc) $112,192 $0 $112,192 $88,038
Total $11,824,455 ($1,735,936) $10,088,518 $8,026,927
** This analysis uses a 5% discount rate.
Page 3
EXECUTIVE SUMMARY
Benefits and Costs for City of Fort Collins
The table below provides more detail on the sources of the additional benefits and costs for the city during construction
and over the first 10 years of the project. Appendix C contains the year‐by‐year calculations.
City of Fort Collins: Benefits, Costs & Net Benefits During Construction & Over First 10 Years
Additional Additional Net
Benefits Costs Benefits
Benefits:
Sales and Use Taxes* $1,755,102 $1,755,102
Property Taxes on the Firm's Real Property* $567,440 $567,440
Property Taxes on the Firm's BP Property* $281,342 $281,342
Property Taxes on new Residential Property $2,945 $2,945
Building Permits and Fees $75,759 $75,759
Lodging Taxes $4,164 $4,164
Miscellaneous taxes and user fees $329,886 $329,886
City‐owned Utility Revenue $805,961 $805,961
Costs:
Costs to provide city services, excl utilities ($394,786) ($394,786)
Costs to provide city‐owned utilities ($740,039) ($740,039)
Total $3,822,600 ($1,134,824) $2,687,775
Present Value (5% discount rate) $3,015,807 ($812,071) $2,203,736
*Net collections after rebates. See "Analysis of Incentives" for the value of the rebates under consideration.
The graph below depicts the costs, benefits and net benefits to the City of Fort Collins over the first 10 years.
($400,000)
($200,000)
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
12345678910
Year
Net Benefits Over the First 10 Years
Benefits Costs Net Benefits
Page 4
EXECUTIVE SUMMARY
Value of Project X
Project X considers the expansion of an existing manufacturer in Fort Collins. The firm is considering locations outside
of the city for possible relocation and expansion of its manufacturing operations. The company currently employs
89 workers in the city and supports real and personal property of nearly $8.8 million. The firm's current operations
represent approximately $127,000 in net revenues to the City of Fort Collins annually. The new construction and
expansion would increase the company's impact on Fort Collins by approximately $270,000 per year over the next 10
years. In total, the value of Project X's current operation and expansion represents approximately $396,000 in net
revenues to the City of Fort Collins over the next 10 years.
Project X's Value to Fort Collins
Net Revenues for Fort Collins
Over 10 Years Annually
Existing Operations $1,271,376 $127,138
Construction and Expanded Operations $2,687,775 $268,778
Total $3,959,151 $395,915
Therefore, the estimated value to Fort Collins if the manufacturer were to leave the city is a loss $4.0 million over the
next 10 years or a loss to the city of $400,000 per year.
While the above is a summary of the results of this analysis, details are on the following pages.
Page 5
PROJECT SUMMARY
Introduction
This report presents the results of an economic impact analysis performed by Impact DataSource, an Austin, Texas based
economic consulting, research and analysis firm. The report estimates the impact that a potential project in Fort Collins,
CO will have on the local economy. The report calculates the costs and benefits for specified local taxing districts during
the initial construction and over the first 10 years of operations.
City City of Fort Collins
County Larimer County
School District Poudre School District
Special Taxing District #1 Hospital/Health Services
Special Taxing District #2 Other (Water, Library, etc)
Description of the Project
Summary of the Economic Impact of the Project
The project will have the following economic impact on the City of Fort Collins area over the first 10 years:
Economic Impact Over the First 10 Years
Direct
Indirect &
Induced Total
Total number of permanent direct and indirect jobs to be created 64 82 146
Salaries to be paid to direct and indirect workers $42,814,147 $18,838,225 $61,652,372
Number of direct and indirect workers who will move to the City 10 3 13
Number of new residents in the City 25 8 33
Number of new residential properties to be built in the City 213
Number of new students expected to attend local school district 10 3 13
Taxable sales and purchases expected in the City $25,623,444 $2,112,779 $27,736,224
$300,755 $150,378 $451,133
The market value the firm's property in Year 1 $39,725,766 $0 $39,725,766
The year‐by‐year economic impacts can be found in Appendix B.
How this economic activity translates into additional costs and benefits for local taxing districts is summarized
next.
The market value of new residential property to be built for direct and indirect
workers who move to the City by Year 10
Project Pinnacle is an existing Fort Collins manufacturer that is considering expanding or relocating. The firm is
considering 11 sites, 2 of which are in Fort Collins. The company plans to purchase a piece of land in the city and construct
a $29.25 million building. The firm plans to initially purchase $10.5 million in equipment for the facility. The company
further expects to spend $1.9 million on additional capital expenditures on average over subsequent years. The current
relocation and expansion includes growing the workforce from its current 89 employees to 153 employees over the next
10 years. The average compensation for these workers is approximately $85,000 per year.
Page 6
ANALYSIS OF FISCAL IMPACT
Costs and Benefits for Local Taxing Districts
The project will generate additional benefits and costs for local taxing districts. A summary of these additional
benefits, costs and net benefits is provided below. The source of specific benefits and costs are provided in
more detail for each taxing district on subsequent pages.
Net Benefits During Construction and Over the First 10 Years for Local Taxing Districts
Present
Additional Additional Net Value of
Benefits Costs Benefits Net Benefits*
City of Fort Collins $3,822,600 ($1,134,824) $2,687,775 $2,203,736
Larimer County $2,598,319 ($243,556) $2,354,763 $1,864,050
Poudre School District $5,078,453 ($357,556) $4,720,898 $3,704,048
Hospital/Health Services $212,890 $0 $212,890 $167,056
Other (Water, Library, etc) $112,192 $0 $112,192 $88,038
Total $11,824,455 ($1,735,936) $10,088,518 $8,026,927
*The Present Value of Net Benefits is a way of expressing in today's dollars, dollars to be paid or received in the future. Today's
dollar and a dollar to be received or paid at differing times in the future are not comparable because of the time value of
money. The time value of money is the interest rate or each taxing entity's discount rate. This analysis uses a discount rate
of 5% to make the dollars comparable.
City of Fort Collins
27%
Larimer County
23%
Poudre School District
47%
Hospital/Health
Services
2%
Other (Water, Library,
etc)
1%
Distribution of Net Benefits
Page 7
ANALYSIS OF FISCAL IMPACT
Benefits and Costs for City of Fort Collins
The table below displays the estimated additional benefits, costs and net benefits to be received by the city during
construction and over the first 10 years of the project. Appendix C contains the year‐by‐year calculations.
City of Fort Collins: Benefits, Costs & Net Benefits During Construction & Over First 10 Years
Additional Additional Net
Benefits Costs Benefits
Benefits:
Sales and Use Taxes* $1,755,102 $1,755,102
Property Taxes on the Firm's Real Property* $567,440 $567,440
Property Taxes on the Firm's BP Property* $281,342 $281,342
Property Taxes on new Residential Property $2,945 $2,945
Building Permits and Fees $75,759 $75,759
Lodging Taxes $4,164 $4,164
Miscellaneous taxes and user fees collected from:
New Households $64,040 $64,040
New Businesses $265,846 $265,846
City‐owned Utility Revenue collected from:
New Households $156,684 $156,684
New Businesses $649,277 $649,277
Costs:
Costs to provide city services, excluding utilities, to:
New Households ($76,793) ($76,793)
New Businesses ($317,993) ($317,993)
Costs to provide city‐owned utilities to:
New Households ($143,930) ($143,930)
New Businesses ($596,108) ($596,108)
Total $3,822,600 ($1,134,824) $2,687,775
Present Value (5% discount rate) $3,015,807 ($812,071) $2,203,736
*Net collections after rebates. See "Analysis of Incentives" for the value of the rebates under consideration.
The graph below depicts the costs, benefits and net benefits to the City of Fort Collins over the first 10 years.
($500,000)
($300,000)
($100,000)
$100,000
$300,000
$500,000
$700,000
$900,000
$1,100,000
12345678910
Year
Net Benefits for the City
Benefits Costs Net Benefits
Page 8
ANALYSIS OF FISCAL IMPACT
Benefits and Costs for Larimer County
The table below displays the estimated additional benefits, costs and net benefits to be received by the county during
construction and over the first 10 years of the project. Appendix C contains the year‐by‐year calculations.
Larimer County: Benefits, Costs & Net Benefits During Construction & Over First 10 Years
Additional Additional Net
Benefits Costs Benefits
Benefits:
Sales and Use Taxes $166,417 $166,417
Property Taxes on the Firm's Real Property $1,533,305 $1,533,305
Property Taxes on the Firm's BP Property $672,727 $672,727
Property Taxes on new Residential Property $6,771 $6,771
Miscellaneous taxes and user fees collected from:
New Households $36,074 $36,074
New Businesses $183,025 $183,025
Costs:
Costs to provide county services to:
New Households ($40,082) ($40,082)
New Businesses ($203,474) ($203,474)
Total $2,598,319 ($243,556) $2,354,763
Present Value (5% discount rate) $2,038,335 ($174,284) $1,864,050
Benefits and Costs for Poudre School District
The table below displays the estimated additional benefits, costs and net benefits to be received by the school
district over the first 10 years of the project. Appendix C contains the year‐by‐year calculations.
Poudre School District: Benefits, Costs and Net Benefits Over the First 10 Years
Additional Additional Net
Benefits Costs Benefits
Benefits:
Property Taxes on the Firm's Real Property $3,266,817 $3,266,817
Property Taxes on the Firm's BP Property $1,433,294 $1,433,294
Property Taxes on new Residential Property $14,426 $14,426
Additional State and Federal Funding $363,917 $363,917
Costs:
Costs to educate new students ($357,556) ($357,556)
Total $5,078,453 ($357,556) $4,720,898
Present Value (5% discount rate) $3,959,340 ($255,292) $3,704,048
Benefits for Other Taxing Districts
The table below displays the estimated additional property taxes to be received by other taxing districts over
the first 10 years of the project. Appendix C contains the year‐by‐year calculations.
Other Taxing Districts: Property Tax Over the First 10 Years
Additional
Benefits
Hospital/Health Services $212,890
Other (Water, Library, etc) $112,192
Total $325,083
Present Value (5% discount rate) $255,093
Page 9
ANALYSIS OF INCENTIVES
Property Tax Rebate
The City of Fort Collins is considering a partial property tax rebate on the firm's new buiding and business personal
property. The projected property tax rebate totals $110,750 over the first 10 years.
Use Tax Rebate
The City of Fort Collins is considering a partial rebate on manufacturing use taxes collected on approximately $9.8 million
of purchases in the first year. The value of this rebate to the company is shown below.
Value of Tax Rebates Over 10 Years
Value of Value of Total
Property Tax Use Tax Value of
Rebate Rebate Rebates
Year 1 $14,900 $219,955 $234,855
Year 2 $13,900 $0 $13,900
Year 3 $13,000 $0 $13,000
Year 4 $12,150 $0 $12,150
Year 5 $11,400 $0 $11,400
Year 6 $10,700 $0 $10,700
Year 7 $10,050 $0 $10,050
Year 8 $8,650 $0 $8,650
Year 9 $8,200 $0 $8,200
Year 10 $7,800 $0 $7,800
Total $110,750 $219,955 $330,705
Page 10
ANALYSIS OF INCENTIVES
Analysis of Possible Incentives for the Project
The city is considering the following additional incentives for the project:
Incentive Proposed Value
Integrated Design Assistance
Value ‐ Design Assistance Program $20,000
Value ‐ Performance Incentives TBD
Total $20,000
In addition, the company may obtain the following training grants:
CO First Job Training Grant
1
$50,000
H1B Training Grants
1
TBD
1 Both training grants requires the company to apply and work with supporting organizations.
The incentive analysis below focuses on the design assistance incentives only and excludes the training grants that require
the company to apply and work with supporting organizations.
Value of Incentives
Year 1 $20,000
Year 2$0
Year 3$0
Year 4$0
Year 5$0
Year 6$0
Year 7$0
Year 8$0
Year 9$0
Year 10 $0
Financial incentives offered to the firm may be viewed as an investment that the city makes in the firm. Four
calculations analyzing possible investments were made:
1. Net Benefits ‐ detailed above
2. Present Value of Net Benefits ‐ detailed above
3. Rate of Return on Investment ‐ discussed and detailed below
4. Payback Period ‐ discussed and detailed below
The rate of return on investment calculates the average annual rate of return to the city, treating the incentives
as the initial investment and the net benefits to the city as the return on the investment. The payback period is
the number of years that it will take the city to recover the cost of incentives from the additional revenues that
it receives as a result of the project.
The table below shows an analysis of these incentives, including a calculation of incentives per job, rate of return
and payback period.
Total Incentives $20,000
Incentives Per Job $313
Rate of Return 1343.9%
Payback period (years) 0.0
* Rate of Return and Payback Period are calculated based on the sum of annual incentives rather than the PV of incentives.
Analysis of Incentives
Page 11
ANALYSIS OF INCENTIVES
Analysis of Possible Incentives and Cumulative Net Benefits
The graph below depicts the total incentives currently under consideration versus the cumulative net benefits
to the city. The intersection indicates the length of time until the incentives are paid back.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
12345678910
Year
Incentives vs. Cumulative Net Benefits
Incentives Cumulative Net Benefits Total Incentives
Page 12
METHODOLOGY
Conduct of the Analysis
This analysis was conducted by Impact DataSource using estimates provided to the City of Fort Collins by the firm, local
rates and information and assumptions by Impact DataSource.
Using this data, the economic impact from the project and the costs and benefits for relevant taxing districts
were calculated for a 10‐year period
Discussion of Economic Impact Calculations
The economic impact as calculated in this report can be categorized into two main types of impacts.
1. Direct economic impacts are the immediate economic activities generated by the firm or project.
These impacts include the employment at the firm and salaries paid to the firm's workers as well
as expenditures made by the firm.
2. Indirect and induced economic impacts represent the additional economic activity that is supported
by the firm or project. Indirect jobs and salaries are created in new or existing area firms, such as
maintenance companies and service firms that may supply goods and services to the firm. In
addition, induced jobs and salaries are created in new or existing local businesses, such as retail
stores, gas stations, banks, restaurants, and service companies that may supply goods and services
to new workers and their families.
Note: This report labels the combined indirect and induced impacts as simply "Indirect".
To estimate the indirect and induced economic impact of the firm and its employees on the area, regional
economic multipliers were used. This economic analysis utilized economic impact multipliers obtained an input/output
model produced by from Economic Modeling Specialists Inc. (EMSI). The EMSI multipliers used in this analysis are specific
to Larimer County and the industrial building construction industry and the specific manufacturing industry for
construction and operation impacts respectively.
Two types of regional economic multipliers were used in this analysis: an employment multiplier and an
earnings multiplier. An employment multiplier was used to estimate the number of indirect and induced jobs
created and supported in the area. An earnings multiplier was used to estimate the amount of salaries
to be paid to workers in these new indirect and induced jobs. The multipliers show the estimated number of
indirect and induced jobs created for every one direct job at the firm and the amount of salaries paid to
these workers for every dollar paid to a direct worker at the firm. The multipliers used in this analysis are
listed below:
Construction Operations
Earnings multiplier 0.33 0.44
Employment multiplier 0.51 1.29
Discussion of Fiscal Impact Calculations
Calculation of Revenues for the City:
The city's revenues from sales, property lodging taxes were calculated directly using data that the firm provided and
assumptions about taxable construction spending and worker spending.
Property taxes were calculated on the new residential property for some new direct and indirect workers who
may move to the county and on the firm's property that will be added to local tax rolls.
Page 13
METHODOLOGY
Lodging taxes were also calculated on lodging sales, in local hotels/motels, to out‐of‐town visitors to the firm.
Sales taxes were calculated on the taxable spending in the area by direct and indirect workers, the spending
of out‐of‐town visitors to the firm, and on the firm's taxable sales and purchases of supplies, materials and
services in the area.
The firm was not asked for nor could reasonably provide some data for calculating some other revenues for the
city. For example, while the city will likely receive revenues from fines paid on speeding tickets given
to new workers at the firm, the firm may not reasonably know the propensity of its workers to speed.
Therefore, some other city revenues were calculated using an average revenue approach. This approach uses
two assumptions:
1 ‐ The city has two general revenue sources ‐‐ revenues from residents and revenues from businesses.
2 ‐ The city will collect (a) about the same amount of other revenues from each household of new workers
that may move to the city as it currently collects from an average household of existing residents, and
(b) about the same amount of other revenues from the new firm (on a per worker basis) will be collected
as the city collects from other businesses in the city.
Using this average revenue approach, revenues likely to be received by the city were calculated from the
households of new workers who may move to the city and from the new firm using average city revenues
per worker calculations.
Utility revenues collected from new residents and new businesses were also calculated using the average revenue
approach as shown in Appendix A.
The total annual city revenues used to make average revenue calculations in this analysis were obtained
from the city's latest comprehensive annual financial report.
Calculation of Costs for the City:
This analysis sought to answer the question, what additional monies will the city have to spend to provide
services to households of new workers who may move to the city and to the firm. A marginal cost approach
was used to calculate additional city costs from the new firm and its workers.
This approach uses two assumptions:
1 ‐ The city spends money on services for two general groups ‐‐ residents and businesses.
2 ‐ The city will spend (a) about the same amount for variable or marginal cost for each household
of new workers that may move to the city as it currently spends for an average household of existing
residents, and (b) about the same amount for variable or marginal costs for the new firm (on a per worker
basis) as it spends for other businesses in the city.
The detailed assumptions to estimate the marginal cost per household and per worker are provided in Appendix A.
The cost to provide city‐owned utility services to new residents and new businesses were calculated using the average
cost approach as shown in Appendix A.
Page 14
METHODOLOGY
Calculation of Net Benefits for the City:
Net benefits calculated in this analysis are the difference between additional city revenues over a 10‐year
period and additional city costs to provide services to the new firm and its workers and indirect workers who
may move to the city.
Calculation of Revenues for the County:
The county's revenues from sales and property taxes were calculated directly using data that the firm provided.
Property taxes were calculated on the new residential property for some new direct and indirect workers who
may move to the county and on the firm's property that will be added to local tax rolls.
Sales taxes were calculated on the taxable spending in the area by direct and indirect workers, the spending
of out‐of‐town visitors to the firm, and on the firm's taxable sales and purchases of supplies, materials and
services in the area.
Also, the model estimates other additional revenue to be received by the county from new residents and new
businesses. An average revenue approach is used in the same way additional county revenues were calculated.
Calculation of Costs for the County:
The model estimates additional costs to provide services to new residents and businesses using a parallel
methodology used for the city.
Calculation of Net Benefits for the County:
Net benefits calculated in this analysis are the difference between additional county revenues over a 10‐year
period and additional county costs to provide services to the new firm and its workers and indirect workers who
may move to the county.
Calculation of Revenues for Public Schools:
The school district's revenues from property taxes were calculated on the new residential property for some
new direct and indirect workers who may move to the county and on the firm's property that will be added to
local tax rolls.
School district revenues from state and federal funds and other local funding were calculated using an average
revenue approach. This approach used the assumption that the school district will collect about the same amount
of these revenues for each new student in the household of a new worker who may move to the county as it
currently collects for each existing student.
Calculation of Costs for Public Schools:
A marginal cost approach was used to calculate additional school district costs from the new firm and its workers.
This approach uses the assumption that the school district will spend about the same amount for variable or
marginal cost for each new student as it spends for each existing student.
Calculation of Net Benefits for Public Schools:
Net benefits calculated in this analysis are the difference between additional school district revenues over a
10‐year period and marginal costs for the school district to provide services to students in the households of
new workers who may move to the county.
The school district's total annual revenues and expenses to make average revenue and marginal costs calculations
in this analysis were obtained from the school district's latest annual budget.
Page 15
METHODOLOGY
Calculation of Property Taxes to be Collected by Countywide Special Taxing Districts
Revenues for other special taxing districts from property taxes were calculated on the new residential
property for some new direct and indirect workers who may move to the county and on the firm's property that
will be added to local tax rolls.
While each of these special taxing districts may incur additional costs from new residents and from the new firm,
these additional costs were not calculated in this analysis.
About Impact DataSource
Impact DataSource is a 19‐year‐old Austin, Texas economic consulting, research and analysis firm. The company has
conducted over 2,500 economic impact analyses of firms, projects and activities in most industry groups throughout
the U.S.
In addition, Impact DataSource has prepared and customized over 50 economic impact models for its clients to
perform their own analyses of economic development projects. These clients include the New Mexico Economic
Development and the Metro Orlando (Florida) Economic Development Commission.
The New Mexico Department of Economic Development uses Impact DataSource's computer model to project the
economic impact of new or expanding firms in the state and costs and benefits for the State of New Mexico and
each local taxing district. The model also calculates the amount of eligible state and local incentives and calculates
a rate of return and payback period for these incentives.
Impact DataSource's team includes the following members:
‐ Jerry Walker, principal/economist, and
‐ Paul Scheuren, principal/economist.
Jerry Walker is an economist and Impact DataSource's Principal. Over the past seventeen years, he has conducted
economic and fiscal impact analyses and cost‐benefit studies of a variety of firms, facilities, projects and activities.
He has also developed several economic impact analysis computer programs for clients to do their own economic
impact analyses of firms, projects, activities and organizations.
He also has a background in government accounting and auditing. Prior to his economic consulting career, he
had a fifteen‐year career as a supervisory auditor with two federal departments – the U.S. Department of
Education and the U.S. Department of Health and Human Services. He reviewed federal programs operated by
states, local governments, colleges and universities, local education agencies, and nonprofit organizations in a
six state area from Austin, Texas. He performed financial audits and operational reviews. During the operational
reviews, the operations of the federal programs were reviewed for economy, efficiency and effectiveness. The
financial audits included analyzing costs incurred for federal programs and components of indirect cost rates.
He has also served as a part‐time accounting instructor at Austin Community College, Austin, Texas.
Jerry has Bachelor of Science and Master of Business Administration degrees in accounting and economics from
Nicholls State University, Thibodaux, Louisiana.
Paul Scheuren is an Impact DataSource economist. Over the past three years, he has conducted economic and
fiscal impact analyses and cost‐benefit studies of a variety of firms, facilities, projects and activities. Recently,
Paul analyzed more than 30 renewable energy projects funded by the Iowa Power Fund, Iowa's energy‐related
economic development fund.
Page 16
METHODOLOGY
Prior to joining Impact DataSource, Paul worked as a compensation analyst at the Texas Association of School
Boards where he supported compensation consulting projects and helped streamline data analysis for a
statewide salary survey.
Paul has a Master of Arts in Economics from Clemson University as well as a Bachelor of Business Administration
in actuarial science from Temple University.
Data used in the analysis, along with schedules of the results of calculations, are on the following pages.
Page 17
Appendix A
Data and Rates
Page 18
APPENDIX A
Local Tax Rates:
Sales tax rates:
City of Fort Collins Taxable goods 3.85%
Mfg equipment eligible for use tax rebate 3.00%
Food consumed at home 2.25%
Larimer County 0.60%
Property tax rates, per $1,000 of assessment:
City of Fort Collins 9.797
Larimer County 22.524
Poudre School District 47.989
Hospital/Health Services 2.167
Other (Water, Library, etc) 1.142
City lodging tax rate (in addition to sale tax): 3.00%
Relevant City Rates:
Miscellaneous Primary Government Revenue collected from households and businesses:
Revenue and Expenditures from Fort Collins 2011 Comprehensive Annual Financial Report, Page 28
Primary Government Revenues In Thousands
Charges for services $186,129
Operating grants and contributions $13,843
Capital grants and contributions $26,445
Sales and use taxes $97,589
Property taxes $17,742
Occupational taxes $2,433
Lodging taxes $909
Intergovernmental not restricted to programs $10,274
Investment earnings $5,520
Miscellaneous $2,517
Total Revenues $363,401
Primary Government Revenue Sources Estimated in the Model In Thousands
Sales and use taxes $97,589
Property taxes $17,742
Lodging taxes $909
Total $116,240
Page 19
APPENDIX A
Primary Government Revenues Excluded from Miscellaneous Revenue Calcluation
In Thousands
Charges for Services
Power and Light $99,657
Water $24,101
Wastewater $19,020
Intergovernmental not restricted to programs $10,274
Investment earnings $5,520
Total $188,787
Miscellaneous Primary Government Revenue collected from households and businesses
In Thousands
Total Revenues $363,401
Less Sources estimated direct in Model ($116,240)
Less Excluded Revenues ($188,787)
Miscellaneous Revenue $58,374
Includes Primary Government Revenues not estimated in the model or excluded from
from Miscellaneous Revenue Calculation
City financial data and Impact DataSource calculations.
Percent of miscellaneous revenues and fees collected from:
Households 70%
Businesses 30%
Impact DataSource assumption.
Number of households and workers in Fort Collins:
Households 58,111
Workers 67,449
U.S. Census 2011 American Community Survey (Households), U.S. Census OnTheMap 2010 (All Workers)
Estimated miscellaneous revenues to be received from households per new $703
worker household moving to the city
Impact DataSource calculation based on above city data and assumptions.
Estimated miscellaneous revenues to be received from businesses per new $260
worker in the city
Impact DataSource calculation based on above city data and assumptions.
Page 20
APPENDIX A
Marginal Government Expenses imposed on the city by new households and businesses:
Primary Government Expenses In Thousands Fixed Variable
General Government $33,674 80% 20%
Public Safety $51,313 60% 40%
Cultural parks, recreation and environment $29,755 60% 40%
Planning and development $11,053 70% 40%
Transportation $38,540 60% 40%
Interest on long‐term debt $2,523 95% 0%
Storm drainage $8,407 10% 100%
Golf $2,547 10% 100%
Total Revenues $177,812
Total Marginal Costs $69,953
City financial data and Impact DataSource assumptions.
Percent of marginal costs attributable to:
Households 70%
Businesses 30%
Impact DataSource assumption.
Estimated marginal city costs attributable to households per new worker $843
household moving to the city
Impact DataSource calculation based on above city data and assumptions.
Estimated marginal city costs attributable to businesses per new worker in the city $311
Impact DataSource calculation based on above city data and assumptions.
City‐owned Utility Revenue Collected from new residents and businesses:
City‐Owned Utility Revenues In Thousands
Power and Light $99,657
Water $24,101
Wastewater $19,020
Total City‐Owned Utility Revenues $142,777
Estimated cost per new household to provide city‐owned $1,720
utilities to new households
Impact DataSource calculation based on above city data and assumptions.
Estimated cost per new worker to provide city‐owned $635
utilities to new businesses
Impact DataSource calculation based on above city data and assumptions.
Page 21
APPENDIX A
Costs to provide City‐owned Utilities to new residents and businesses:
City‐Owned Utility Expenses In Thousands
Power and Light $97,057
Water $19,941
Wastewater $14,163
Total City‐Owned Utility Expenses $131,161
Estimated cost per new household to provide city‐owned $1,580
utilities to new households
Impact DataSource calculation based on above city data and assumptions.
Estimated cost per new worker to provide city‐owned $583
utilities to new businesses
Impact DataSource calculation based on above city data and assumptions.
Rate of annual increase in the above expenditures and other revenue: 2%
Impact DataSource assumption.
Relevant County Rates:
Miscellaneous Primary Government Revenue collected from households and businesses:
Revenue and Expenditures from Larimer 2011 Comprehensive Annual Financial Report, Page 26
Primary Government Revenues In Millions
Charges for services $43.63
Operating grants and contributions $55.64
Capital grants and contributions $2.13
Property taxes $91.22
Sales and use taxes $31.95
Other Taxes $5.50
Other Revenues $5.36
Total Revenues $235.43
Primary Government Revenue Sources Estimated in the Model In Millions
Property taxes $91.22
Sales and use taxes $31.95
Total $123.17
Page 22
APPENDIX A
Primary Government Revenues Excluded from Miscellaneous Revenue Calcluation
In Millions
Operating grants and contributions (75%) $41.73
Capital grants and contributions (75%) $1.60
Total $43.33
Miscellaneous Primary Government Revenue collected from households and businesses
In Millions
Total Revenues $235.43
Less Sources estimated direct in Model ($123.17)
Less Excluded Revenues ($43.33)
Miscellaneous Revenue $68.93
Includes Primary Government Revenues not estimated in the model or excluded from
from Miscellaneous Revenue Calculation
County financial data and Impact DataSource calculations.
Percent of miscellaneous revenues and fees collected from:
Households 70%
Businesses 30%
Impact DataSource assumption.
Number of households and workers in Larimer County:
Households 121,911
Workers 115,819
U.S. Census 2011 American Community Survey (Households), U.S. Census OnTheMap 2010 (All Workers)
Estimated miscellaneous revenues to be received from households per new $396
worker household moving to the county
Impact DataSource calculation based on above county data and assumptions.
Estimated miscellaneous revenues to be received from businesses per new $179
worker in the county
Impact DataSource calculation based on above county data and assumptions.
Marginal Government Expenses imposed on the county by new households and businesses:
Primary Government Expenses In Millions Fixed Variable
General Government $33.88 80% 20%
Judicial and Public Safety $63.13 60% 40%
Streets and highways $25.42 60% 40%
Recreation $16.65 70% 40%
Health and Human Services $56.49 60% 40%
Interest on long‐term debt $2.63 95% 0%
Solid Waste $5.25 10% 100%
Total Revenues $203.45
Total Marginal Costs $76.70
County financial data and Impact DataSource assumptions.
Page 23
APPENDIX A
Percent of marginal costs attributable to:
Households 70%
Businesses 30%
Impact DataSource assumption.
Estimated marginal county costs attributable to households per new worker $440
household moving to the county
Impact DataSource calculation based on above county data and assumptions.
Estimated marginal county costs attributable to businesses per new worker $199
in the county
Impact DataSource calculation based on above county data and assumptions.
Rate of annual increase in the above expenditures and other revenue: 2%
Impact DataSource assumption.
Relevant School District Rates:
The school district’s estimated marginal cost of providing services to each $3,896
new child in the district
Impact DataSource calculation based on values below.
Average annual cost of providing services to each child in the district $7,793
2013 Budget Poudre School District General Fund ‐ Estimated values for 2011‐12
Average annual cost for each new child, as a percent of average annual cost 50%
Impact DataSource assumption.
Estimated annual state, federal and other funding received by the district $3,966
for each child enrolled
2013 Budget Poudre School District General Fund ‐ Estimated values for 2011‐12
Relevant Community Rates:
Expected inflation rate over the first 10 years 3.0%
Impact DataSource assumption.
Discount rate used in analysis to compute discounted cash flows 5.0%
Impact DataSource assumption.
Percent of the gross salaries a typical worker spent on taxable goods and services 27%
Impact DataSource calculation from U.S. Bureau of Labor Statistics, Consumer Expenditure Survey
Percent of the gross salaries a typical worker spent on taxable food consumed at home 6%
Impact DataSource calculation from U.S. Bureau of Labor Statistics, Consumer Expenditure Survey
Page 24
APPENDIX A
Property tax asssessment rates:
Nonresidential assessment rate 29.00%
Residential assessment rate 7.96%
Median value of a new residential property constructed in the city $238,600
U.S. Census American Community Survey 2011 Fort Collins, CO
Percent annual increase in the taxable value of residential and commercial ‐5.0%
real property on local tax rolls over the first 10 years
Impact DataSource assumption.
Depreciation rates:
To estimate the annual taxable or depreciable value of furniture, fixtures and equipment owned by the firm,
this analysis uses the following depreciation schedule. Therefore, property taxes on the firm's furniture, fixtures
and equipment are calculated on the following percentages of the costs of such equipment purchased each year:
Year 1 100%
Year 2 85%
Year 3 72%
Year 4 61%
Year 5 52%
Year 6 44%
Year 7 38%
Year 80%
Year 90%
Year 10 0%
Impact DataSource assumption.
The Firm's Investments, Assets and Construction:
The investments at the firm's facility each year:
Buildings and Furniture,
Other Real Fixtures,
Property and
Land Improvements Equipment Total
Year 1 $0 $29,250,000 $10,475,766 $39,725,766
Year 2 $0 $0 $1,372,700 $1,372,700
Year 3 $0 $0 $1,980,000 $1,980,000
Year 4 $0 $0 $1,743,500 $1,743,500
Year 5 $0 $0 $1,923,600 $1,923,600
Year 6 $0 $0 $1,983,210 $1,983,210
Year 7 $0 $0 $1,922,781 $1,922,781
Year 8 $0 $0 $2,087,795 $2,087,795
Year 9 $0 $0 $1,929,310 $1,929,310
Year 10 $0 $0 $2,047,400 $2,047,400
Total $0 $29,250,000 $27,466,062 $56,716,062
Page 25
APPENDIX A
Spending During Construction:
Estimated spending for construction (if applicable):
Construction
Spending
Year 1 $29,250,000
Year 2$0
Year 3$0
Year 4$0
Year 5$0
Year 6$0
Year 7$0
Year 8$0
Year 9$0
Year 10 $0
Percent of construction costs for:
Materials 60%
Labor 40%
Estimated percent of construction materials that will be subject to the city's use tax 100%
Percent of taxable spending by construction workers that will be in the city 25%
Percent of furniture, fixtures and equipment to be subject to 3% use tax rate: 100%
Expected city building permits and plan check fees to be paid during construction, if applicable:
Plan Check Total Permits
Permit Fees Fees and Fees
Year 1 $45,915 $29,844 $75,759
Year 2 $0$0$0
Year 3 $0$0$0
Year 4 $0$0$0
Year 5 $0$0$0
Year 6 $0$0$0
Year 7 $0$0$0
Year 8 $0$0$0
Year 9 $0$0$0
Year 10 $0 $0 $0
The above fees were estimated using the city's Building‐Combination Estimate of Fees web application. The estimate is
based on construction with a $29.25 million valuation without subcontractors. If the project were to include subcontractors,
the fees are estimated to be 21% higher.
http://www.fcgov.com/building/fees.php
Page 26
APPENDIX A
Activities During the Firm's Operations:
The firm's estimated taxable purchases of materials, supplies and services in the community and the
firm's estimated taxable sales that will be subject to sales tax in the city
Taxable Taxable
Purchases Sales
Year 1$0 $0
Year 2$0 $0
Year 3$0 $0
Year 4$0 $0
Year 5$0 $0
Year 6$0 $0
Year 7$0 $0
Year 8$0 $0
Year 9$0 $0
Year 10 $0 $0
New employees to be hired by the firm each year:
New employees
to be hired
each year
Year 10
Year 214
Year 314
Year 47
Year 56
Year 64
Year 78
Year 85
Year 92
Year 10 4
Total 64
Number of new workers who will move to the city to take job at the firm:
Estimated percent of total new workers moving to the city 15.0%
Number of new
employees moving
to the city
Year 10
Year 22
Year 32
Year 41
Year 51
Year 61
Year 71
Year 81
Year 90
Year 10 1
Total 10
Page 27
APPENDIX A
Average annual salaries of new employees in the first year $84,824
Percent of expected increase in employee salaries after Year 12.5%
Multipliers for calculating the number of indirect and induced jobs and earnings in the area during operations:
Earnings 0.4400
Employment 1.2900
This cost‐benefit analysis uses the above multipliers to project the indirect and induced benefits
in the community as a result of the direct economic activity. The employment multiplier shows
the number of spin‐off jobs that will be created from each direct job. Similarly, the earnings
multiplier estimates the salaries and wages to be paid to workers in these spin‐off jobs for
each $1 paid to direct workers.
Percent of workers in new indirect and induced jobs that will move 5%
to the city for the job
Estimated percentage of workers moving to the city that will have new 25%
residential property built for them the first year that they move to the city
Household size of a typical new worker moving to the city: 2.50
Number of school children in a typical worker's household 0.95
Percent of taxable shopping by a typical new worker that will 55%
be in the city
Visitors to the Firm from Out‐of‐Town:
Number of out‐of‐town visitor days resulting from the project:
Includes vendors, customer audits and visiting corporate employees.
Visitors
Year 1 101
Year 2 204
Year 3 211
Year 4 238
Year 5 266
Year 6 297
Percent of annual increase in the number of visitors after year 60%
Average daily taxable visitor spending, excluding lodging in the city $35
Percent of visitor days that will result in a night in a hotel/motel in the city 50%
Average nightly room rate in a local motel $95
Page 28
Appendix B
Economic Impact Calculations
Page 29
APPENDIX B
Number of local jobs added each year and worker salaries to be paid:
Direct Indirect Total Direct Indirect Total
Year Jobs Jobs Jobs Salaries Salaries Salaries
1 0 0 0 $0 $0 $0
2 14 18 32 $1,374,006 $604,563 $1,978,569
3 14 18 32 $2,782,588 $1,224,339 $4,006,927
4 7 9 16 $3,541,668 $1,558,334 $5,100,003
5 6 8 14 $4,203,823 $1,849,682 $6,053,505
6 4 5 9 $4,749,958 $2,089,982 $6,839,940
7 8 10 18 $5,719,857 $2,516,737 $8,236,594
8 5 6 11 $6,342,956 $2,790,900 $9,133,856
9 2 3 5 $6,749,457 $2,969,761 $9,719,218
10 4 5 9 $7,349,834 $3,233,927 $10,583,761
Total 64 82 146 $42,814,147 $18,838,225 $61,652,372
Number of direct and indirect workers and their families who will move
to the area and their children who will attend local public schools:
New Workers Total Total
Moving to New New
Year the Area Residents Students
10 0 0
23 8 3
33 8 3
41 3 1
51 3 1
61 3 1
72 5 2
81 3 1
90 0 0
10 1 3 1
Total 13 33 12
Page 30
APPENDIX B
Number of new residential properties that may be built in the city for direct and indirect workers
who will move to the community:
Total New
Residential
Year Properties
10
21
31
40
50
60
71
80
90
10 0
Total 3
Page 31
APPENDIX B
Local taxable spending on which sales taxes will be collected:
Taxable
Construction
Materials &
Construction Direct and
Workers' Indirect Taxable Taxable
Taxable Workers' Visitors' Sales by Purchases by
Year Spending Spending* Spending the Firm the Firm Total
1 $18,339,750 $0 $8,333 $0 $0 $18,348,083
2 $0 $293,817 $17,335 $0 $0 $311,152
3 $0 $595,029 $18,468 $0 $0 $613,496
4 $0 $757,350 $21,456 $0 $0 $778,806
5 $0 $898,945 $24,699 $0 $0 $923,645
6 $0 $1,015,731 $28,405 $0 $0 $1,044,136
7 $0 $1,223,134 $29,257 $0 $0 $1,252,392
8 $0 $1,356,378 $30,135 $0 $0 $1,386,513
9 $0 $1,443,304 $31,039 $0 $0 $1,474,343
10 $0 $1,571,689 $31,970 $0 $0 $1,603,659
Total $18,339,750 $9,155,377 $241,097 $0 $0 $27,736,224
* Spending includes only expenditures on items subject to general sales tax.
Manufacturing purchases subject to use tax and local taxable spending by direct and indirect workers
on food consumed at home:
Spending on
Rebateable Food
Manufacturing Manufacturing Consumed
Year Purchases Purchases at home
1 $10,475,766 $9,775,766 $0
2 $1,372,700 $0 $118,714
3 $1,980,000 $0 $240,416
4 $1,743,500 $0 $306,000
5 $1,923,600 $0 $363,210
6 $1,983,210 $0 $410,396
7 $1,922,781 $0 $494,196
8 $2,087,795 $0 $548,031
9 $1,929,310 $0 $583,153
10 $2,047,400 $0 $635,026
Total $27,466,062 $9,775,766 $3,699,142
Page 32
APPENDIX B
Local spending by visitors on lodging by out‐of‐town visitors:
Spending
Year on Lodging
1 $4,798
2 $9,981
3 $10,633
4 $12,353
5 $14,221
6 $16,354
7 $16,845
8 $17,350
9 $17,871
10 $18,407
Total $138,813
Page 33
APPENDIX B
Market value of new residential property built for direct and indirect workers who move to the
community and the market value of the firm's property:
Value of Value of Firm's
Firm's Business
New Real Personal Total
Residential Property Property Taxable
Year Property Tax Rolls Tax Rolls Property
1 $0 $29,250,000 $10,475,766 $39,725,766
2 $226,670 $27,787,500 $10,277,101 $38,291,271
3 $430,673 $26,398,125 $10,715,536 $37,544,334
4 $409,139 $25,078,219 $10,851,706 $36,339,064
5 $388,682 $23,824,308 $11,147,550 $35,360,540
6 $369,248 $22,633,092 $11,458,627 $34,460,968
7 $526,179 $21,501,438 $11,662,614 $33,690,231
8 $499,870 $20,426,366 $8,642,727 $29,568,962
9 $474,876 $19,405,048 $8,835,571 $28,715,495
10 $451,133 $18,434,795 $8,922,893 $27,808,821
Assessed value of new residential property built for direct and indirect workers who move to the
community and the assessed value of the firm's property:
Value of Value of Firm's
Firm's Business
New Real Personal Total
Residential Property Property Taxable
Year Property Tax Rolls Tax Rolls Property
1 $0 $8,482,500 $3,037,972 $11,520,472
2 $18,043 $8,058,375 $2,980,359 $11,056,777
3 $34,282 $7,655,456 $3,107,505 $10,797,243
4 $32,567 $7,272,683 $3,146,995 $10,452,246
5 $30,939 $6,909,049 $3,232,789 $10,172,778
6 $29,392 $6,563,597 $3,323,002 $9,915,991
7 $41,884 $6,235,417 $3,382,158 $9,659,459
8 $39,790 $5,923,646 $2,506,391 $8,469,826
9 $37,800 $5,627,464 $2,562,316 $8,227,580
10 $35,910 $5,346,091 $2,587,639 $7,969,640
Page 34
Appendix C
Cost and Benefit Calculations
Page 35
APPENDIX C
Costs and Benefits for City of Fort Collins
Benefits:
Sales and use tax collections:
On Construction
Materials &On
Construction Direct and
Workers' Indirect On Taxable Taxable
Taxable Workers' Visitors' Sales by Purchases by
Year Spending Spending Spending the Firm the Firm Total
1 $706,080 $0 $321 $0 $0 $706,401
2 $0 $11,312 $667 $0 $0 $11,979
3 $0 $22,909 $711 $0 $0 $23,620
4 $0 $29,158 $826 $0 $0 $29,984
5 $0 $34,609 $951 $0 $0 $35,560
6 $0 $39,106 $1,094 $0 $0 $40,199
7 $0 $47,091 $1,126 $0 $0 $48,217
8 $0 $52,221 $1,160 $0 $0 $53,381
9 $0 $55,567 $1,195 $0 $0 $56,762
10 $0 $60,510 $1,231 $0 $0 $61,741
Total $706,080 $352,482 $9,282 $0 $0 $1,067,845
Sales and use tax collections:
On Rebate on On Food
Manufacturing Manufacturing Consumed
Year Purchases Purchases at home Total
1 $314,273 ($219,955) $0 $94,318
2 $41,181 $0 $2,671 $43,852
3 $59,400 $0 $5,409 $64,809
4 $52,305 $0 $6,885 $59,190
5 $57,708 $0 $8,172 $65,880
6 $59,496 $0 $9,234 $68,730
7 $57,683 $0 $11,119 $68,803
8 $62,634 $0 $12,331 $74,965
9 $57,879 $0 $13,121 $71,000
10 $61,422 $0 $14,288 $75,710
Total $823,982 ($219,955) $83,231 $687,258
Page 36
APPENDIX C
Costs and Benefits for City of Fort Collins ‐ Continued
Property tax collections on:
Firm Property
New Real Prop. Business Real Prop. Business Total Taxes
Residential Taxes Prop. Taxes Taxes Prop. Taxes After
Year Property Collected Collected Abated Abated Abatement Total
1 $0 $83,103 $29,763 ($12,411) ($2,489) $97,966 $97,966
2 $177 $78,948 $29,199 ($11,785) ($2,115) $94,246 $94,423
3 $336 $75,001 $30,444 ($11,202) ($1,798) $92,445 $92,781
4 $319 $71,250 $30,831 ($10,624) ($1,526) $89,932 $90,251
5 $303 $67,688 $31,672 ($10,102) ($1,298) $87,960 $88,263
6 $288 $64,304 $32,555 ($9,597) ($1,103) $86,159 $86,447
7 $410 $61,088 $33,135 ($9,112) ($938) $84,173 $84,584
8 $390 $58,034 $24,555 ($8,650) $0 $73,939 $74,329
9 $370 $55,132 $25,103 ($8,200) $0 $72,035 $72,406
10 $352 $52,376 $25,351 ($7,800) $0 $69,927 $70,279
Total $2,945 $666,924 $292,608 ($99,483) ($11,267) $848,782 $851,727
Other city revenues from building permits and fees, lodging taxes, miscellaneous revenue collected
from new households and new businesses:
Miscellaneous Miscellaneous
Building Revenues Revenues
Permits and Lodging Collected from Collected from
Year Fees Taxes Households Businesses Total
1 $75,759 $144 $0 $0 $75,903
2 $0 $299 $2,151 $8,486 $10,937
3 $0 $319 $4,388 $17,312 $22,020
4 $0 $371 $5,222 $22,073 $27,666
5 $0 $427 $6,088 $26,455 $32,969
6 $0 $491 $6,986 $29,567 $37,043
7 $0 $505 $8,709 $35,429 $44,643
8 $0 $521 $9,690 $39,423 $49,634
9 $0 $536 $9,884 $41,735 $52,155
10 $0 $552 $10,922 $45,366 $56,840
Total $75,759 $4,164 $64,040 $265,846 $409,809
Page 37
APPENDIX C
Costs and Benefits for City of Fort Collins ‐ Continued
City‐owned utility revenue collected by the city from new residents and new businesses:
City‐Owned City‐Owned
Utility Utility
Revenues Revenues
Collected from Collected from
Year Households Businesses Total
1$0 $0 $0
2 $5,263 $20,726 $25,990
3 $10,737 $42,282 $53,019
4 $12,777 $53,909 $66,686
5 $14,894 $64,610 $79,505
6 $17,091 $72,212 $89,304
7 $21,307 $86,529 $107,836
8 $23,709 $96,283 $119,992
9 $24,183 $101,929 $126,112
10 $26,722 $110,797 $137,519
Total $156,684 $649,277 $805,961
Costs:
The costs of providing municipal services and utility services to new residents:
Cost of City Cost of City Cost of City‐ Cost of City‐
Services to Services to Owned Utility Owned Utility
New New Svcs to New Svcs to New
Year Residents Businesses Residents Businesses Total Costs
1$0$0$0$0$0
2 $2,580 $10,151 $4,835 $19,029 $36,595
3 $5,262 $20,708 $9,863 $38,819 $74,653
4 $6,262 $26,403 $11,737 $49,495 $93,897
5 $7,300 $31,644 $13,682 $59,319 $111,945
6 $8,377 $35,367 $15,700 $66,299 $125,743
7 $10,443 $42,379 $19,573 $79,443 $151,837
8 $11,620 $47,156 $21,779 $88,398 $168,953
9 $11,853 $49,921 $22,215 $93,582 $177,570
10 $13,097 $54,264 $24,547 $101,724 $193,632
Total $76,793 $317,993 $143,930 $596,108 $1,134,824
Page 38
APPENDIX C
Costs and Benefits for City of Fort Collins ‐ Continued
Net Benefits for the City:
Net Cumulative
Year Benefits Costs Benefits Net Benefits
1 $974,588 $0 $974,588 $974,588
2 $187,181 ($36,595) $150,587 $1,125,175
3 $256,248 ($74,653) $181,595 $1,306,770
4 $273,777 ($93,897) $179,880 $1,486,650
5 $302,177 ($111,945) $190,232 $1,676,882
6 $321,723 ($125,743) $195,981 $1,872,863
7 $354,082 ($151,837) $202,245 $2,075,108
8 $372,300 ($168,953) $203,346 $2,278,454
9 $378,434 ($177,570) $200,865 $2,479,319
10 $402,089 ($193,632) $208,456 $2,687,775
Total $3,822,600 ($1,134,824) $2,687,775
Page 39
APPENDIX C
Costs and Benefits for Larimer County
Benefits:
Sales tax collections:
During
Construction
and On
Purchases of Direct and
Furniture, Indirect On Taxable Taxable
Fixtures and Workers' Visitors' Sales by Purchases by
Year Equipment Spending Spending the Firm the Firm Total
1 $110,039 $0 $50 $0 $0 $110,088
2 $0 $1,763 $104 $0 $0 $1,867
3 $0 $3,570 $111 $0 $0 $3,681
4 $0 $4,544 $129 $0 $0 $4,673
5 $0 $5,394 $148 $0 $0 $5,542
6 $0 $6,094 $170 $0 $0 $6,265
7 $0 $7,339 $176 $0 $0 $7,514
8 $0 $8,138 $181 $0 $0 $8,319
9 $0 $8,660 $186 $0 $0 $8,846
10 $0 $9,430 $192 $0 $0 $9,622
Total $110,039 $54,932 $1,447 $0 $0 $166,417
Property tax collections:
Firm Property
New Real Prop. Business Real Prop. Business Total Taxes
Residential Taxes Prop. Taxes Taxes Prop. Taxes After
Year Property Collected Collected Abated Abated Abatement Total
1 $0 $191,060 $68,427 $0 $0 $259,487 $259,487
2 $406 $181,507 $67,130 $0 $0 $248,636 $249,043
3 $772 $172,431 $69,993 $0 $0 $242,425 $243,197
4 $734 $163,810 $70,883 $0 $0 $234,693 $235,426
5 $697 $155,619 $72,815 $0 $0 $228,435 $229,132
6 $662 $147,838 $74,847 $0 $0 $222,686 $223,348
7 $943 $140,447 $76,180 $0 $0 $216,626 $217,570
8 $896 $133,424 $56,454 $0 $0 $189,878 $190,774
9 $851 $126,753 $57,714 $0 $0 $184,467 $185,318
10 $809 $120,415 $58,284 $0 $0 $178,699 $179,508
Total $6,771 $1,533,305 $672,727 $0 $0 $2,206,032 $2,212,803
Page 40
APPENDIX C
Costs and Benefits for Larimer County
Other county miscellaneous user fees and taxes collected from new households and new businesses:
Miscellaneous Miscellaneous
Revenues Revenues
Collected from Collected from
Year Households Businesses Total
1$0 $0 $0
2 $1,212 $5,843 $7,054
3 $2,472 $11,919 $14,391
4 $2,942 $15,196 $18,138
5 $3,429 $18,213 $21,642
6 $3,935 $20,356 $24,291
7 $4,906 $24,392 $29,297
8 $5,459 $27,141 $32,600
9 $5,568 $28,733 $34,300
10 $6,152 $31,233 $37,385
Total $36,074 $183,025 $219,098
Costs of providing county services to new residents:
Costs of Costs of
County County
Services: Services:
Year New Residents Businesses Total
1$0 $0 $0
2 $1,346 $6,495 $7,842
3 $2,747 $13,251 $15,997
4 $3,269 $16,894 $20,163
5 $3,810 $20,248 $24,058
6 $4,372 $22,630 $27,003
7 $5,451 $27,117 $32,567
8 $6,065 $30,174 $36,239
9 $6,186 $31,943 $38,129
10 $6,836 $34,722 $41,558
Total $40,082 $203,474 $243,556
Page 41
APPENDIX C
Costs and Benefits for Larimer County ‐ Continued
Net Benefits for the County:
Cumulative
Net Net
Year Benefits Costs Benefits Benefits
1 $369,576 $0 $369,576 $369,576
2 $257,964 ($7,842) $250,122 $619,698
3 $261,269 ($15,997) $245,272 $864,970
4 $258,237 ($20,163) $238,074 $1,103,044
5 $256,316 ($24,058) $232,258 $1,335,302
6 $253,903 ($27,003) $226,901 $1,562,203
7 $254,381 ($32,567) $221,814 $1,784,016
8 $231,693 ($36,239) $195,454 $1,979,471
9 $228,464 ($38,129) $190,335 $2,169,806
10 $226,515 ($41,558) $184,957 $2,354,763
Total $2,598,319 ($243,556) $2,354,763
Page 42
APPENDIX C
Costs and Benefits for Poudre School District
Benefits:
Property tax collections:
Firm Property
New Real Prop. Business Real Prop. Business Total Taxes
Residential Taxes Prop. Taxes Taxes Prop. Taxes After
Year Property Collected Collected Abated Abated Abatement Total
1 $0 $407,067 $145,789 $0 $0 $552,856 $552,856
2 $866 $386,713 $143,024 $0 $0 $529,738 $530,604
3 $1,645 $367,378 $149,126 $0 $0 $516,504 $518,149
4 $1,563 $349,009 $151,021 $0 $0 $500,030 $501,593
5 $1,485 $331,558 $155,138 $0 $0 $486,697 $488,181
6 $1,411 $314,980 $159,468 $0 $0 $474,448 $475,858
7 $2,010 $299,231 $162,306 $0 $0 $461,538 $463,548
8 $1,909 $284,270 $120,279 $0 $0 $404,549 $406,459
9 $1,814 $270,056 $122,963 $0 $0 $393,019 $394,833
10 $1,723 $256,554 $124,178 $0 $0 $380,732 $382,455
Total $14,426 $3,266,817 $1,433,294 $0 $0 $4,700,110 $4,714,536
Additional State and Federal school funding received:
Additional
State & Federal
School
Year Funding
1$0
2 $11,641
3 $23,981
4 $28,817
5 $33,921
6 $39,306
7 $49,482
8 $55,600
9 $57,268
10 $63,902
Total $363,917
Page 43
APPENDIX C
Costs and Benefits for Poudre School District
Costs:
Costs of educating children of new workers who move to the district:
Cost of
Educating
New
Year Students
1$0
2 $11,438
3 $23,561
4 $28,313
5 $33,328
6 $38,619
7 $48,617
8 $54,628
9 $56,267
10 $62,784
Total $357,556
Net Benefits for the School District:
Net Cumulative
Year Benefits Costs Benefits Net Benefits
1 $552,856 $0 $552,856 $552,856
2 $542,245 ($11,438) $530,807 $1,083,663
3 $542,129 ($23,561) $518,568 $1,602,231
4 $530,409 ($28,313) $502,097 $2,104,328
5 $522,103 ($33,328) $488,774 $2,593,102
6 $515,165 ($38,619) $476,546 $3,069,648
7 $513,030 ($48,617) $464,413 $3,534,061
8 $462,059 ($54,628) $407,430 $3,941,491
9 $452,101 ($56,267) $395,834 $4,337,326
10 $446,357 ($62,784) $383,572 $4,720,898
Total $5,078,453 ($357,556) $4,720,898
Page 44
APPENDIX C
Benefits for Hospital/Health Services
Property tax collections:
Firm Property
New Real Prop. Business Real Prop. Business Total Taxes
Residential Taxes Prop. Taxes Taxes Prop. Taxes After
Year Property Collected Collected Abated Abated Abatement Total
1 $0 $18,382 $6,583 $0 $0 $24,965 $24,965
2 $39 $17,462 $6,458 $0 $0 $23,921 $23,960
3 $74 $16,589 $6,734 $0 $0 $23,323 $23,398
4 $71 $15,760 $6,820 $0 $0 $22,579 $22,650
5 $67 $14,972 $7,005 $0 $0 $21,977 $22,044
6 $64 $14,223 $7,201 $0 $0 $21,424 $21,488
7 $91 $13,512 $7,329 $0 $0 $20,841 $20,932
8 $86 $12,837 $5,431 $0 $0 $18,268 $18,354
9 $82 $12,195 $5,553 $0 $0 $17,747 $17,829
10 $78 $11,585 $5,607 $0 $0 $17,192 $17,270
Total $651 $147,517 $64,722 $0 $0 $212,239 $212,890
Benefits for Other (Water, Library, etc)
Property tax collections:
Firm Property
New Real Prop. Business Real Prop. Business Total Taxes
Residential Taxes Prop. Taxes Taxes Prop. Taxes After
Year Property Collected Collected Abated Abated Abatement Total
1 $0 $9,687 $3,469 $0 $0 $13,156 $13,156
2 $21 $9,203 $3,404 $0 $0 $12,606 $12,627
3 $39 $8,743 $3,549 $0 $0 $12,291 $12,330
4 $37 $8,305 $3,594 $0 $0 $11,899 $11,936
5 $35 $7,890 $3,692 $0 $0 $11,582 $11,617
6 $34 $7,496 $3,795 $0 $0 $11,290 $11,324
7 $48 $7,121 $3,862 $0 $0 $10,983 $11,031
8 $45 $6,765 $2,862 $0 $0 $9,627 $9,673
9 $43 $6,427 $2,926 $0 $0 $9,353 $9,396
10 $41 $6,105 $2,955 $0 $0 $9,060 $9,101
Total $343 $77,741 $34,108 $0 $0 $111,849 $112,192
Page 45
PUBLIC WORKSHOP
BUSINESS ASSISTANCE POLICIES AND PROCEEDURES
The City is seeking public input on the
proposed new business assistance policies
and procedures. During the workshop,
attendees will receive a financial incentives
overview by City staff. The different screening
criteria will be discussed as well as potential
tools and decision making process. An exercise
in ranking criteria and applying potential
financial incentives follows the overview. Your
input will be shared with City staff and City
Council as they finalize the business assistance
policies and procedures.
PUBLIC WORKSHOP
Wednesday, Jan. 16, 4–6 p.m.
CIC Room, City Hall
300 Laporte Ave.
Play economic development
director for the afternoon!
City staff is creating new business assistance
policies and procedures. City Council will discuss
the draft policies and procedures at the January 22
Work Session.
For more information, please visit fcgov.com/business.
Contact: SeonAh Kendall, (970) 416-2164, skendall@fcgov.com.
ATTACHMENT 5
Business Assistance Application
Economic Health Office
Date Received
Business
Contact Person
Project
Economic Health
Office Staff
ATTACHMENT 6
Company Name:
Headquarters Location: City: State:
Contact Name: First Name: Last Name:
Business Mailing Address:
City: State: Zip:
Phone: Fax: Cellular:
Email Address: Website:
Business Description:
NAICS: SIC:
Company Age: Start Date in Fort Collins:
Company Information
Brief summary of the project
Location of planned investment:
Is the company considering other Colorado locations? ☐Yes ☐No
If yes, where?
Is the company considering other U.S. locations? ☐Yes ☐No
If yes, where?
Is the company considering other Global locations? ☐Yes ☐No
If yes, where?
Project Timeline
Expected Start Date: Expected Complete Date:
Project Information
Project Capital Investment (U.S. Dollars)
Leasing Plans: ☐Yes ☐No
Land: Total Acres:
Building: Square Feet:
Estimated Construction Cost:
Anticipated Manufacturing Equipment Purchases:
Estimated Non-Manufacturing Costs (i.e., office, leasehold improvements, etc.):
Anticipated Permit and Fee Costs:
Estimated Percentage of Office Space:
Estimated Percentage of Manufacturing Space:
Estimated Percentage of Other/Flex Space (explain):
Anticipated Infrastructure Improvement Costs (i.e., roads):
Please attach an anticipated depreciation schedule for new equipment and tools.
Job Categories and Wage Distribution
Job Category Current
Number
of Jobs
(employed
by
company)
Average
Annual
Salary of
Existing
Jobs
New
Number
of Jobs
Average
Annual
Salary of
New Jobs
Percent
to be
Locally
Hired
Anticipated
Training
Costs
Executive
Manager
Supervisory
Administrative
Staff
Entry Level
Other
_____________
Total
What percent of these new jobs will have benefits?
1
Incentives Benchmarking
Josh Birks
Economic Health Director
jbirks@fcgov.com, 970.221.6324
SeonAh Kendall
Business Retention & Expansion Strategist
skendall@fcgov.com, 970.416.2164
ATTACHMENT 7
2
Overview
• Purpose & Vision
• Current Process
• Benchmarking – Findings
• Proposed Business Assistance Framework
– Ranking Criteria
– Framework Structure
– Process Improvements
3
Purpose & Intent
• Develop a framework to guide
– Staff interaction/work
– City Council decisions
• Provide an equitable and predictable process
• Aid in determining the type/amount of assistance
• Evaluate the public benefit
4
Develop Assistance Council Action
Company
Desire Proposal
Primary
Jobs Average
Wages
Unique
Workforce
Competitive
Environment
Council
Vote
Initial Screening
Current Process
5
Incentives Benchmark Findings
• No single approach to assistance
• Not alone in our “case-by-case approach”
• Many communities impose a more formalized
interaction with businesses
• Many use screening criteria to rank projects
– Influences if and how much incentives received
6
Comparable
Overview
Fort Collins, CO
Loveland, CO
Austin, TX
Charlottesville,
VA
San Diego, CA
Provision for Case-by-Case Incentives ● ● ●●●
Formal Incentives Policy ●● ●
Clear Evaluation Process ●● ●
Economic Impact Analysis ● ● ●●●
Agreement Approval by Council ● ● ●●●
ROI Measures ●●
Compliance Review ●●●
7
Proposed Business Assistance
Process
Step 1:
Connect
Step 2:
Classification
/Rank
Step 3:
Develop
Business
Assistance
Package
Step 4:
City Council
Consideration
Step 5:
Implement
Step 6:
Follow Up
8
Step 3: Develop Assistance Package
• Formal Application
• Defined Expectations of Each Party
– Define timeline
– City actions vs. company actions
• Creation of a term sheet
• Review Criteria to Determine Potential Assistance
– Which tools apply
– Amount of Assistance
– Other requirements
9
Classification/Ranking
• Contributes to the overall quality of place
– Adds value through products/services
– Positive history and/or longevity of business
– Meets other community need
• Size/Impact
– Employment: Gross revenues, wages, benefits
– Capital Investment: Equipment, Facility, Infrastructure
• Corporate Citizenship (e.g., Environmental/Social)
• Alignment with City objectives
– Business diversity
– Primary employer
– Retention, Expansion, Incubation, Attraction
10
Minimum Requirements
• Commitment to Timeline
• Formal Application
• Pledge to Annual Reporting
• Assurance of Maintaining Existing Workforce
• Commitment to Separate Reporting Schedule for
Use Tax Rebate
• Confidentiality
• Performance Timeline
11
Inputs for Assistance
• Job creation
• Health benefits
• Wages
Average Annual Wage Use Tax Rebate
City's Portion
Personal Property
Tax Rebate
100% of Larimer Co. Ave. Annual Wage 50% 0%
110% of Larimer Co. Ave. Annual Wage 75% 25%
125% or > of Larimer Co. Ave. Annual Wage 100% 50%
Maximum Allowable Rebate
DATE: January 22, 2013
STAFF: Laurie Kadrich, Dan
Weinheimer, Wanda Nelson
Pre-taped staff presentation: available
at fcgov.com/clerk/agendas.php
WORK SESSION ITEM
FORT COLLINS CITY COUNCIL
SUBJECT FOR DISCUSSION
Should the City Council submit a ballot measure for the April 2, 2013 Municipal election asking
voters to ban hydraulic fracturing treatment in the City of Fort Collins and/or on City-owned lands?
EXECUTIVE SUMMARY
In December 2012, City Council authorized a moratorium preventing any further drilling of oil and
gas well in the city limits or on City-owned lands until July 31, 2013. Since that time, citizens asked
the Council to consider banning hydraulic fracturing in the city. Hydraulic fracturing treatment or
“fracking” is defined under the Colorado Oil and Gas Commission rules as “all stages of the
treatment of a well by the application of hydraulic fracturing fluid under pressure that is expressly
designed to initiate or propagate fractures in a target geologic formation to enhance production of
oil and natural gas.”
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Should the City Council direct staff to draft a ballot measure for the April 2, 2013 Municipal
election asking voters to ban hydraulic fracturing treatment in the City of Fort Collins or on
City-owned lands?
2. Should the question be addressed by Land Use Code or the Environmental Health section
of the Municipal Code?
3. Should the question be limited to hydraulic fracturing or apply to storage, disposal of waste
materials?
BACKGROUND / DISCUSSION
The use of hydraulic fracturing is one of two recent developments that may result in significant
changes in oil and gas exploration in Larimer County, which has raised considerable public concern.
The first is the successful exploration of the Niobrara formation, which lies deep under much of
northeastern Colorado, and the second is the advancing technology of hydraulic fracturing to extract
the resource from within deeply located shale deposits. Currently, all oil production in the city is
located in the Fort Collins Field. The Fort Collins Field is regulated by the Colorado Oil and Gas
Conservation Commission (COGCC) and has been in production since about 1925. In the City
limits, the field consists of seven producing wells and seven injecting wells within the City limits,
all of which are managed by one operator. Four residential subdivisions have developed around the
Fort Collins Field, with an additional subdivision planned in the area. In addition to the Fort Collins
Field, historically, well development has occurred southward along the I-25 corridor, though there
January 22, 2013 Page 2
have been no permits issued by the City of Fort Collins. There currently are no “gas” producing
wells in the city limits.
In Colorado, oil and gas exploration and production is regulated by the State. Colorado permits oil
and gas activity through the COGCC. Local jurisdictions are limited in their ability to control the
location, procedures, and impacts of oil and gas drilling in and around their boundaries. Local
regulations cannot present an “operational conflict”, and a combination of the State’s laws and
several court cases have resulted in the preemption of local control of setbacks, noise, and visual
impacts.
Since the City enacted a moratorium, the COGCC preliminarily approved new rules to limit the
impact of drilling near residences and other occupied buildings. These new rules combine
additional mitigation measures, expanded notice and outreach to local communities and heightened
distances (called “setbacks”) between drilling and dwellings and are expected to be adopted by the
end of January, 2013.
The new rules include important local provisions:
• Operators proposing to drill within 1,000 feet of an occupied structure would be required to
meet new and enhanced measures to limit the disruptions a nearby drill site can create.
Those measures include closed loop drilling that eliminate pits, liner standards to protect
against spills, capture of gases to reduce odors and emissions, as well as strict controls on
the nuisance impacts of noise, dust and lighting.
• Existing setback standards of 150 feet in rural areas and 350 feet in urban areas are extended
to a uniform 500 feet statewide.
• Operators cannot operate within 1,000 feet of buildings housing larger numbers of people
such as schools, nursing homes and hospitals, without a hearing before the Commission.
• Operators must engage in expanded notice and outreach efforts with nearby residents and
conduct additional engagement with local governments about proposed operations.
Operators proposing drilling within 1,000 feet must meet with anyone within that area who
asks.
• An expanded definition of “Designated Outside Activity Areas” to include more public
spaces than currently allowed. If adopted, this tool will allow for Cities to apply for drilling
exemptions on city-owned parks or other similar place of public assembly owned or operated
by a local government. This expanded definition would likely not include Natural Areas.
N Current COGCC Proposed Language - Designated Outside Activity Area: Upon
Application and Hearing, the Commission, in its discretion, may establish a
Designated Outside Activity Area (DOAA) for:
P (a) An outdoor venue or recreation area, such as a playground, permanent
sports field, amphitheater, or other similar place of public assembly owned
or operated by a local government, which the local government seeks to have
established as a Designated Outside Activity Area; or
January 22, 2013 Page 3
P (b) an outdoor venue or recreation area, such as a playground, permanent
sports field, amphitheater, or other similar place of public assembly where
ingress to, or egress from the venue could be impeded in the event of an
emergency condition at an Oil and Gas Location less than three hundred and
fifty (350) feet from the venue due to the configuration of the venue and the
number of persons known or expected to simultaneously occupy the venue
on a regular basis.
P The Commission shall determine whether to establish a Designated Outside
Activity Area and, if so, the appropriate boundaries for the DOAA based on
the totality of circumstances and consistent with the purposes of the Oil and
Gas Conservation Act.
Geographical Summary
Currently, the COGCC’s setback rules exclude 89.33% of the city limits from drilling. If the
Growth Management Area (GMA) is considered 90.71% is excluded. Combining the GMA and the
city limits 89.58% of the area is non-drillable. Applying the COGCC’s proposed setback rule
changes to the city staff determined as follows:
• Inside the City Limits, about 89% of the land is excluded from drilling
• Inside the GMA, about 91% of the land is excluded from drilling
• Inside the Combined Area of the City Limits and GMA, about 90% of the land is excluded
from drilling
The reasons for the slight differences and the possibly counterintuitive number for the city is
because of the Coyote Ridge Natural Area in the southwest and the development in the northwest
of the Growth Management Area (GMA). Coyote Ridge Natural Area is part of the city limits, but
outside the GMA, and that adds to the open land in the City but not the GMA. There is a lot of
buildup of the area northwest of the city and inside the GMA which increases the GMA numbers.
The new rules add about 5% more land to the non-drillable areas.
Hydraulic Fracturing Background - What do both sides generally agree upon?
More scientific research is needed.
• Hydraulic fracturing is a relatively new method, and more time is needed to evaluate its
impacts.
• The associated environmental and human health issues are complex. Both short-term and
long-term research studies are needed to more fully understand the issues (e.g., differences
in exposure length to contaminants, seasonal variations that affect air or water quality).
• There is wide variability in research results due to the differences in geology, well
extraction techniques, and the hydrocarbons that are being extracted.
• More collaboration is needed in research between regulators and operators.
January 22, 2013 Page 4
Air Quality
• Burning natural gas creates fewer greenhouse gas (GHG) emissions and smog ingredients
than coal or oil. However, research shows evidence of fugitive methane emissions during
drilling and shipping. More studies are needed to determine to what extent because methane
itself is a potent GHG. Because the amount of fugitive methane emissions is unknown, there
is no consensus on whether the life-cycle emissions from natural gas are lower than for other
fossil fuels.
• Long-term studies are needed to determine if there are any links between air pollution on a
regional scale from large scale energy operations as a result of the shale gas boom and
human health.
• Open pit storage or treatment of wastewater contributes to emissions of volatile organic
compounds (VOCs).
Water Quality
• Studies are few, but research does suggest a link between high-pressure underground
injection and gas migration near the well (movement of methane gas into groundwater).
There is no consensus on the mechanism responsible yet. A USGS study by Ellsworth near
wastewater wells (Class II Underground Injection Control (UIC) wells) in Menlo Park, CA
suggests the high pressure injection might make well cement cracks more likely. This may
have implications for high pressure injection techniques used in hydraulic fracturing.
• Most shallow groundwater contamination resulting from hydraulic fracturing operations
have been linked to surface activities resulting in releases of wastewater due to accidents,
poor management of wastewater storage and disposal, and illicit dumping.
• Most drinking water contamination from conventional oil and gas production has been
linked to well casing failures. There isn’t enough research for hydraulic fracturing operations
to show a similar link.
Waste and Wastewater
• Hydraulic fracturing produces higher volumes of wastewater that surface as flowback in a
shorter period of time than conventional drilling techniques. This creates unique challenges
for capture, storage, and disposal than for conventional drilling operations (e.g., more VOC
emissions if not captured adequately, more potential for accidental spills).
• Deep injections of wastes in Class II UIC wells, not fracturing operations, have been linked
to earthquakes to date.
• Wastewater management and disposal may be the single most important issue associated
with environmental and human health protection. The BLM has proposed new requirements
for submission of wastewater management plans prior to drilling.
January 22, 2013 Page 5
Both sides tend to agree on the need for chemical disclosure rules
• Important to enable medical professionals and emergency responders to know what they are
dealing with.
• To help regulators determine if hydraulic fracturing is linked directly to water
contamination.
• Trade secrets on fracturing chemicals tend to create distrust and higher public concern.
More stakeholder involvement is needed in:
• Regulatory and rule-making process
• Dissemination of research results.
Consequences of a Ban
It is likely no new drilling would be possible since current oil and gas operators utilize hydraulic
fracturing processes to initiate a new well. Depending upon the geological formation that is being
drilled additional hydraulic fracturing processes may be used to further stimulate the well and
increase production. If hydraulic fracturing was the only method banned, operators may choose to
use previously used “conventional” methods or yet to be devised “new” methods to drill new wells.
It is also likely a lawsuit would be filed against the City since similar ballot measures have resulted
in lawsuits being filed. The City of Longmont is being sued by the State for its regulation of drilling
and by the industry (Colorado Oil and Gas Association (COGA)) for its citizen-approved ban on
hydraulic fracturing.
If the City would ban hydraulic fracturing, this action would prohibit any use of this treatment in
the Fort Collins field. Whether the local operator, Prospect Energy would be able to present a claim
for damages is unknown.
There could be a loss of local revenues generated from oil and gas development within the city
limits. Revenues for the last two years average $215,460. This revenue is based on state formulas
that include well sites, jobs, roads and other measures to determine the revenues sent to individual
communities. It is difficult to estimate what impact the loss of future wells or reduced production
would have on this amount received by the City.
Methods Available to Implement a Ballot Measure
Council may choose to place a measure on the ballot to either amend the City Code or City Charter.
If Council chooses to amend the City Code it could amend either the Land Use Code (LUC) or the
Municipal Code. Staff suggests that discussions related to this topic may fit in Municipal Code
Chapter 12 (Health and Environment). If Council agrees, an amendment similar to what is listed
below may be an option for a ballot measure question.
January 22, 2013 Page 6
Sample Ballot language (includes storage language):
SHALL CHAPTER 12 OF THE CODE OF THE CITY OF FORT COLLINS BE
AMENDED BY ADDING A NEW ARTICLE VIII HEALTH AND ENVIRONMENT
TO PROHIBIT WITHIN FORT COLLINS CITY LIMITS THE USE OF
HYDRAULIC FRACTURING TO EXTRACT OIL, GAS, OR OTHER
HYDROCARBONS, AND PROHIBIT WITHIN THE FORT COLLINS CITY
LIMITS THE STORAGE IN OPEN PITS OR DISPOSAL OF SOLID OR LIQUID
WASTES CREATED IN CONNECTION WITH THE HYDRAULIC
FRACTURING PROCESS, INCLUDING BUT NOT LIMITED TO FLOWBACK
OR PRODUCED WASTEWATER AND BRINE?
BALLOT OPTIONS
Type of Measure Action Required Timeline
Charter Amendment Ordinance (two readings) February 5 and 19
Code Amendment Resolution
Planning & Zoning Board (if LUC)
February 19
February 7
Cost to place a measure on the ballot: less than $1,000 (ballot design and tabulation
programming costs).
ATTACHMENTS
1. COGCC “setback” exclusion numbers
2. PowerPoint presentation
Area (sq ft)
City Preliminary New Rules Original Rules
OG Exclusion 1386935376.23 1328196088.99
CITY LIMITS 1552623751.79 1552623751.79
percentage excluded: 89.33% 85.55%
GMA
OG Exclusion 1958607001.31 1862566039.67
GMA part 376158.95
GMA part 2158924461.20
GMA Total 2159300620.15 2159300620.15
percentage excluded: 90.71% 86.26%
Combined GMA and City Limits
OG Exclusion 1987057966.74 1889865780.43
GMA and City Limits 2218140987.12 2218140987.12
percentage excluded: 89.58% 85.20%
ATTACHMENT 1
1
Should the City Council submit a
Ballot Measure Banning
“Hydraulic Fracturing Treatment”?
Laurie Kadrich
Director, Community Development & Neighborhood Services
Dan Weinheimer
Policy and Project Manager
Wanda Nelson
City Clerk
January 22, 2013 City Council Work Session
ATTACHMENT 2
2
Feedback Sought From City Council:
Should the Council authorize a ballot measure for
the April 2, 2013 Municipal election asking voters to
ban hydraulic fracturing treatment (fracking) in the
City or on City-owned lands? If so:
– Should the measure be considered by Ordinance or
Resolution?
– Should the question be adopted by Land Use or
Municipal Code?
– Should it apply to storage, disposal of waste materials?
3
Existing
Wells in
Fort Collins
4
Why consider a ban?
The Current Moratorium:
• Expires on July 31, 2013
• Limited to New Drilling
– City limits
– City-owned lands
• Does not prevent hydraulic fracturing from being
used on existing wells
5
What is Hydraulic Fracturing?
• Generally allows for more oil or gas recovery
• A treatment used by the oil and gas industry to
stimulate oil and gas recovery by:
– Injecting fluids, including chemicals, under pressure into
the well
– Designed to fracture geological formations
– Enhance production of oil & gas
– Commonly referred to as “fracking”
6
Where Does Hydraulic Fracturing
Occur?
• Nearly every new drilling process uses hydraulic
fracturing to stimulate well production
• Can also be used to increase production after the
well production reduces, application for the
extraction of oil and gas products
• Some potential for application in the Fort Collins
field
7
Why are people concerned?
• Chemicals used in the fracturing process may
cause groundwater contamination.
• The fracturing process requires high pressure
injection that may lead to well casing failures
• The fracturing process produces significantly
more wastewater than conventional drilling
methods
• More research is needed to determine the
impacts of fracturing
8
Can it happen here?
• Oil and gas exploration is limited to 14.45% of the
total geographical area of the City; the rest of the
city limits are exempted by setback requirement
under COGCC rules
– Proposed rules reduce area to 10.67%
• Mostly the northeast quadrant of the city limits
• City-owned lands, especially Natural Areas
(absent a moratorium or ban) may be subject to
drilling and the treatment of hydraulic fracturing
9
85.55%
City Limits
excluded from
Drilling
10
Consequences of a Ban
• Likely No New Drilling
• Impact to Local Operator
– Fort Collins Field
• Potential For Lawsuit
• Loss of Revenues
11
Methods for a Ballot Measure
• Council Could Amend the City Charter or City Code
• Adopt by Ordinance or Resolution
– February 5th & 19th or 19th only for resolution
• Suggested Method
– Municipal Code
– Health and Environmental
– Include Storage of Materials and Waste Products
12
Council Feedback?
Should the Council direct staff to draft a ballot
measure for the April 2, 2013 Municipal election
asking voters to ban hydraulic fracturing in the City
or on City-owned lands? If so:
– Should the measure be considered by Ordinance or
Resolution?
– Should the question be adopted by Land Use or
Municipal Code?
– Should it apply to storage, disposal of waste materials?
agreements)?
Most programs require the documentation of project outcomes within a 3 year period. Claw back
provisions are included in virtually every contractual agreement with ACED.
See: Menomonee Valley ROI 2012; “Union Says it Can’t Analyze Job Data on Palermo’s Pizza”
north). We work well with the south council, which overlaps the City of San Diego. The City acts as a
regional leader among the various entities.
ECONOMIC DEVELOPMENT TOOLKIT
local (City, County). The basic relationship is that leads flow down through the state to the regional
group and then to the local level. We of course have occasion to work directly with the state. “We
have a strong relationship with the regional group and rely on them to handle the majority of the
marketing in support of the attraction efforts.”
How do they work collaboratively
with their neighbors?
The City works closely with Albemarle County (the City is entirely surrounded by the county), to the
point of doing joint presentations to prospects. The City realizes it must support growth in the county
given its small size and largely developed status. The likelihood of new jobs coming to the county is
much greater than the city.
incentives?
See: Apple, Inc. Agreement; Apple, Inc. Agreement, Chapter 380; US Farathane Agreement;
US Farathane Agreement, Chapter 380; Domain Compliance Report; Domain Compliance
Report, Independent Consultant
A list of all active agreements is available online:
http://austintexas.gov/page/economic-development-agreement-documents
to manage these relationships. Letters of Understanding are used to manage relationships and
expectations. See: NCEDC Contract (2010); Engaging Loveland Destination Marketing (2012)
How does the City work
collaboratively with its neighbors?
Regular communication and clear “swim lanes” help the various organizations collaborate
effectively (“good fences make good neighbors”). One example is the tech transfer effort that
included the City’s partnership with the NCEDC, the Innosphere, a private consultant, the State,
NASA, and the Loveland Center for Business Development as well as City staff in the Office for
Creative Sector Development.
Charlottesville Regional Chamber of Commerce Charlottesville Venture Group
University of Virginia Office of Economic
Development
Central Virginia Procurement Technical Assistance
Center
Charlottesville Business Innovation Council
City of San Diego Office of Small Business San Diego Convention and Visitors Bureau
SANDAG: San Diego Regional Economic
Development Corporation
Small Local Business Enterprise Program San Diego Tourism Marketing District
San Diego Regional Chamber of Commerce San Diego Regional Chamber of Commerce
Redevelopment Agency of the City of San Diego
California Governor's Office of Business and
Economic Development
SanCO Diego, CA Charlottesville,TX VA Austin, Loveland, CO Fort Collins,
Incentives by Type
the results of the Quiet Zone Risk Calculator with hand calculations/modeling results for
‘special circumstances’ in order to gain additional credit in the form of points toward
reducing the final risk number and better reflecting actual conditions?
4. Is the Risk Calculator software being considered for upgrade or additional modules that
would allow for additional manual information to be input providing credit for features
the program is not currently equipped to assess?
The responses to these questions are being considered by the FRA at the time of this
writing, and will be shared with the City upon receipt from FRA. If it is possible to accurately
assess the risk through downtown with representation of the existing warning devices, the
result may be a lower current calculated risk index, which would then require less additional
equipment installation in order to reduce the risk below the NSRT.
curb on each side of the tracks
17,391.53
(too high)
13,722