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HomeMy WebLinkAbout2013-025-03/19/2013-ADOPTING A POLICY FOR DEVELOPING PRIMARY EMPLOYER BUSINESS ASSISTANCE PACKAGES RESOLUTION 2013-025 OF THE COUNCIL OF THE CITY OF FORT COLLINS ADOPTING A POLICY FOR DEVELOPING PRIMARY EMPLOYER BUSINESS ASSISTANCE PACKAGES WHEREAS, the City Council recently adopted an Economic Health Strategic Plan, which emphasizes City purposes and objectives related to retention and expansion of primary employers in Fort Collins; and WHEREAS, in order to effectively promote and accomplish the purposes and objectives of the Economic Health Strategic Plan,it is necessary for the City to have a clearly articulated business assistance policy that describes the tools and criteria to be taken into consideration by City staff in negotiating business assistance packages for existing and prospective employers in furtherance of the identified Plan goals; and WHEREAS, the City Council considered concepts for such a policy at its Work Session on January 22, 2013, and provided feedback and perspective as the basis for preparation of the policy; and WHEREAS,in light of the foregoing,staff has developed the Policy for Developing Primary Employer Business Assistance Packages (the "Policy"), attached hereto as Exhibit "A" and incorporated herein by this reference; and WHEREAS,the Economic Advisory Commission considered the Policy and related concepts at its December 19, 2012, meeting and its February 20, 2013, meeting, and on each occasion provided feedback to City staff, which feedback has been considered in the development of the Policy; and WHEREAS, the City Council has determined that the Policy provides the necessary conceptual framework for development of business assistance proposals for primary employers and the negotiation of such proposals in preparation for submission to the Council for approval. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the Policy for Developing Primary Employer Business Assistance Packages attached hereto as Exhibit"A", is hereby approved and adopted as City policy. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 19th day of March, A.D. 2013; Mayor /•1 OF FO ATTEST: G'' :r City Clerk ......... p •••• O EXHIBIT A POLICY FOR DEVELOPING PRIMARY EMPLOYER BUSINESS ASSISTANCE PACKAGES CITY OF FORT COLLINS MARCH 19, 2013 Introduction In the City of Fort Collins,the community deliberately refers to "economic health" rather than the more common term of"economic development."The community makes this purposeful distinction because it implies that the goal of City involvement is to ensure a balanced, sustainable, and resilient economy. City Plan, the community's comprehensive land use plan, supports this approach by emphasizing the role of sustainable practices in community development.The three main tenets of sustainability— systems thinking, continuous improvement, and triple bottom line analysis are therefore integrated into this policy. The Economic Health Strategic Plan (EHSP) adopted by City Council on June 26, 2012 (Resolution 2012-044) reinforces this community approach. Furthermore,the EHSP recognizes the unique and important role of primary employers to any economy. The City of Fort Collins uses a variety of local assistance tools to encourage the retention, expansion, and, in some limited cases, attraction of primary employers. Historically, the City has not used a one- size-fit all approach to developing business assistance packages for primary employers. Instead,the City has chosen to work collaboratively with each primary employer to build a package specific to their particular needs,which also match the City's strategies. Policy Intent The City's historical approach to business assistance for primary employers has served the community well in the past. Several businesses have been retained and expanded as a result of business assistance packages developed by the Economic Health Office and approved by City Council. However, the time has come to move towards a more sophisticated approach to development of future business assistance packages. Therefore, this policy is intended to outline the basics of a formal process for developing business assistance packages for primary employers that maintains the flexibility of the historical approach but applies additional rigor and structure to the process. The business assistance packages described in this document are not to the exclusion of other business assistance efforts. Therefore, it is the intent of this policy to: Encourage quality primary job retention and creation through private sector investment in our community that supports a balanced,sustainable and resilient economy. 1 Policy Objectives This policy statement will broadly outline a process for developing primary employer business assistance packages that will address.the following objectives: • Provide a more equitable and more predictable process for all participants, including the business, City, and community; • Establish parameters to aid in determining the type and amount of assistance a primary employer may be eligible to receive; • Ensure community benefits of a project out weight the direct and indirect costs to the community; and • Enhance the overall process of providing business assistance in the community. Policy Framework The following sections outline the refined process for developing primary employer business assistance packages. 1. Applicability This policy will apply to all requests for direct assistance,as defined in the available assistance tools section below(e.g.,tax rebates, specialized financing, etc.), from primary employers looking to remain or expand their operations in the City, as well as, any primary employer evaluating relocation to the City. For the purpose of this document, a "Primary Employer" or"Primary Job" will be defined as any business orjob located within the City that derives a minimum of 50 percent of its income from the sales of goods or services outside the Fort Collins Growth Management Area ("GMA"). 2. Organization and Management The City's Economic Health Office (EHO)will have the responsibility of managing and developing all business assistance packages subject to this policy. EHO staff will work collaboratively with other City departments throughout the development process. In addition, EHO staff will work with the applicable City departments to ensure compliance with all terms and conditions of the final business assistance package(s)as approved by City Council. 3. Available Assistance Tools The City has historically provided a variety of direct assistance to primary employers to encourage the creation and retention of primaryjobs.The following provides a list and brief description of the type of assistance commonly used by the City: • Private Activity Bond Financing—A Federal program allowing private corporations to access tax exempt financing for qualified business development investments, such as property acquisition, building construction, building renovation, and equipment procurement. 2 • Manufacturing Equipment Use Tax Rebate—A rebate of the applicable use tax due for the purchase of qualified manufacturing equipment by a business. The maximum allowed rebate will not exceed the City's general fund tax rate,which at time of adoption of this policy is 2.25 percent. Business Personal Property Tax Rebate—A rebate of the applicable personal property tax due on qualified manufacturing equipment owned by a business. The maximum allowed rebate will not exceed 50 percent of the City's portion of the personal property tax rate. In addition,the maximum term of the rebate will not exceed 10 years. The above list does not constitute a complete list of the tools available. In the spirit of continuous improvement, the EHO staff will evaluate additional tools for their applicability to primary employers and job creation and retention. In addition, all new tools will be vetted with the Economic Advisory Commission (EAC), Council Finance Committee, and City Council before use in a business assistance package. Emphasis will be placed on tools that maximize public benefit at minimal cost to the community. 4. Application Requirements A request for direct assistance, as described above,from the City by a primary employer must include a complete application.The EHO will develop an application to be approved and modified from time to time as necessary by the City Manager. At a minimum the application will address the following: • Company Information • Project Information • Capital Investment • Jobs Categories and Wage Distribution • Public Benefit • Natural Resource Stewardship • Community Well-Being The EHO will use existing applications, such as the Community Development Block Grant funding request and Urban Renewal Assistance applications as a model for the initial application. The intent of the application is to collect the necessary data to perform a holistic evaluation of the project and assistance request. S. Evaluation Criteria After receipt of a complete application,the EHO office will screen all request using a set of evaluation criteria designed to provide a holistic evaluation of the proposed project. The evaluation criteria will be approved and modified from time to time by the City Manager as proposed by the EHO. The evaluation criteria will address the following key areas with example criteria: 3 • Economic Impact—Overall impact (e.g., Gross Revenues, percent of City employment), employment impact (e.g., number of jobs, wages, benefits), and capital investment(e.g., equipment purchases, facility investment, infrastructure impact). • Contribution to Quality of Place—Added community value through their product/service, has a positive history and/or longevity in the community, and/or meets a community need. • Alignment with City Objectives—The project aligns with clearly stated City objectives from the EHSP, City Plan, or other relevant strategy(such as a target industry cluster) or planning document. • Natural Resource Stewardship—Impact of electricity and water consumption, hazardous waste management, ClimateWise Partner, participation in Utility's Integrated Design Assistance Program (IDAP) or similar conservation program. • Community Well-Being—Contribution to a diverse job base, corporate outreach/volunteerism, impact to community infrastructure, proximity to public transportation, provision of other benefits (e.g., childcare). 6. Business Assistance Inputs All business assistance packages will be performance-based agreements. The program.is designed to support and encourage new business development, business expansion and relocations that either retain or generate net new primary jobs.The EHO will use a list of scalable inputs to determine the amount and type of assistance to include in each package: • Annual average wages—It is the intent of this policy to encourage a diverse base of jobs. Therefore annual average wage will be one of several inputs in determining the amount and type of direct assistance for an eligible project.The computed annual average wage of all jobs included in a project will be considered against the Larimer County annual average wage. Projects that achieve an annual average wage higher than the Larimer County annual average will qualify for additional assistance. • Number of retain or net new jobs—The total number of jobs retained or created by a project will figure into the ultimate level of assistance received by a project from the City. Projects with larger number of retained or created jobs with a significant economic impact will receive additional assistance. • Health care premium assistance—Projects that provide greater than a 50 percent contribution by the employer to an employee's health care insurance premium will qualify for additional assistance. These inputs will be approved and from time to time as necessary modified by the City Manager. 7. Economic and Other Analyses The EHO will use a Triple Bottom Line (TBL)approach to evaluating all applications for assistance to primary employers.Therefore,the approach will require a holistic set of analyses that address the 4 economic, environmental, and human aspects of a project. This systematic approach will avoid evaluating a project in isolation. The following analyses will be included for every application: • Economic Impact Analysis—The EHO will use an outside consultant with expertise in economic impact analysis for this aspect of the evaluation.The analysis will include both costs and revenues to the community allowing for a true fiscal impact analysis of the project. At time of adoption, EHO has contracted with TIP Strategies and Impact DataSource for these services.All economic impact analyses will evaluate a minimum of a 10 year period. • TBL Analysis—The EHO will identify and use a tool(s)that address a holistic analysis of a project including natural resource impacts and community well-being impacts. Examples of these tools include: Fort Collins Utilities TBL Analysis Matrix ('?SLAM")or a tool developed by Portland State University (tbltool.org)for the US Economic Development Administration. The results of these analyses will be summarized and presented to City Council for their consideration of a business assistance package for primary employers. 8. Minimum Company Commitments Any applicant for direct assistance from the City for the purpose of creating or retaining primary jobs will commit to the following: • Pledge to Annual Reporting—All recipients of direct assistance through a business assistance package will pledge to provide annually all information stipulated in the final agreement to comply with the performance requirements of that agreement.At a minimum, this reporting requirement will include:the number of jobs created or retained,the wage distribution for those jobs, and the capital investment and timing of investment. • Separate Use Tax Schedule—This requirement applies only to recipients of a Manufacturing Use Tax Rebate ("MUTR"). The applicant must submit a separate schedule at the time the use tax submission for eligible equipment that accurately designates and identifies the eligible equipment for which a rebate will be requested by the company. • Timeline for Confidentiality—The applicant will commit to a timeline for releasing claims of confidentiality regarding the proposed project. At the latest, confidentiality will be maintained up to a term of 30 days prior to consideration of a business assistance package by City Council.These 30 days will provide an opportunity for the Economic Advisory Commission and the general public to comment on the package ahead of City Council action. • Assurance of Existing Workforce Retention—This requirement applies only to retention and expansion projects.The applicant will commit to all reasonable efforts to maintain their existing workforce in the City for the duration of the business assistance package. Individual agreements will specify the amount of existing employment and the exact duration. 5 9. Compliance Monitoring The EHO will monitor each project and business assistance package annually for compliance to the terms of the final agreement approved by City Council. In addition, the EHO will develop a template checklist, to be customized to each project,to ensure compliance with initial aspects of the agreement, such as submission of use tax on a separate schedule, construction of facilities on the proposed timeline, and purchase of equipment on the proposed timeline. Each agreement will stipulate the terms of compliance that the EHO will monitor. 10. Annual Reporting The EHO will provide City Council a written annual report outlining the compliance of each approved applicant with the terms of their business assistance package. In addition, this annual report will include an assessment of the economic impact of the active projects. 4 6