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HomeMy WebLinkAboutItem 3: Res./Interim Job Stds.EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Action: Adoption of Resolution 4845 Establishing Interim Local Criteria Applicable in the Proposed West Eugene Enterprise Zone and Adopting a Public Benefit Scoring System Meeting Date: June 27, 2005 Agenda Item Number: 3 Department: Planning and Development Staff Contact: Denny Braud www. cl. eugene, or. us Contact Telephone Number: 682-5536 ISSUE STATEMENT Consistent with the action taken at the June 20, 2005, work session, the council is being asked to approve a resolution establishing interim local criteria that would apply to tax exemptions granted in the proposed West Eugene Enterprise Zone. Permanent local criteria would be adopted as soon as practical following a public involvement process. BACKGROUND On April 20, 2005, the council took the following actions: 1. Approved a resolution authorizing the City Manager to make application to the State of Oregon for designation of a West Eugene Enterprise Zone. 2. Supported a provision that no investment within the proposed West Eugene Enterprise Zone will receive a tax exemption greater than an amount per new job created, with numbers to be determined prior to the zone's implementation. 3. Directed the City Manager, in the event that Eugene's enterprise zone application is approved by the State of Oregon this year, to bring back a resolution prior to July 1, 2005, for adoption of interim local criteria consistent with the Public Benefit Criteria adopted in 1997, with the understanding that new job quality standards would be adopted as soon as practical following notification of a successful designation application, in accordance with a public involvement process approved by the council, with the intent that 25 percent of the tax exemption benefit for qualified enterprise zone investments would be subject to the job quality standards. The State of Oregon has not yet provided notification regarding selection of zone designations for this year's application round. Selection is expected to occur prior to July 1, with the zone becoming active as of July 1, 2005. The proposed resolution is consistent with the council direction provided on April 20, 2005. The 1997 "Public Benefit Criteria" is being proposed as the interim criteria. The formula for calculating the L:\CMO\2005 Council Agendas\M050627\S0506273.doc "public benefit contribution" has been adjusted to reflect the desire to condition 25 percent (formerly 15 percent) of the tax exemption on the public benefit criteria. Additionally, a cap on the tax exemption has been added in response to City Council direction. Staff recommends a cap of $30,000, which would limit the three-year tax exemption benefit to a maximum of $30,000 per new full-time job created. In the event that the proposed West Eugene Enterprise Zone is designated, staff will propose a public involvement process for establishment of job quality standards that would replace the interim criteria. It is anticipated that the final job quality standards would be adopted by the council in Fall 2005. RELATED CITY POLICIES The enterprise zone tax exemption addresses the following related City policies: Sustainable Community Development. The council's Sustainable Community Development goal addresses high quality of life and a healthy economy. The availability of quality jobs is a basic quality- of-life issue. With a local unemployment rate that exceeds the national average, and local income levels below state and national averages, the creation of new production sector jobs is fundamental to the health of the local labor market. The creation of an enterprise zone will also provide an incentive for redevelopment, infill development, and brownfield redevelopment, which are primary sustainability goals. Growth Management. The enterprise zone advances the City's Growth Management goals by encouraging more intensive industrial development in a defined area that has been zoned accordingly, and where existing public infrastructure investments have already occurred. Fair, Stable, and Adequate Financial Resources. The long-term property tax revenues that result from new investments that are encouraged by the short-term tax exemption address the council's goal for financial resources adequate to maintain and deliver municipal services. COUNCIL OPTIONS Regarding the establishment of job quality standards, the following two options have been identified: 1. Adopt interim criteria prior to July 1, 2005, that would be in place until new standards can be fully processed and adopted. 2. Do not adopt interim criteria prior to July 1, 2005, and fully process and adopt standards as soon as practical. CITY MANAGER'S RECOMMENDATION The City Manager recommends that the council adopt the proposed resolution establishing interim local criteria. In the event that Eugene's application is successful, new job quality standards would be created in a timely manner thereafter, in accordance with a public involvement process approved by the council. L:\CMO\2005 Council Agendas\M050627\S0506273.doc SUGGESTED MOTION Move to adopt Resolution 4845 establishing interim local criteria applicable in the proposed West Eugene Enterprise Zone and adopting a public benefit scoring system. ATTACHMENTS A. Proposed Resolution FOR MORE INFORMATION Staff Contact: Denny Braud Telephone: 682-5536 Staff E-Mail: denny.braud~ci.eugene.or.us L:\CMO\2005 Council Agendas\M050627\S0506273.doc ATTACHMENT A RESOLUTION NO. A RESOLUTION ESTABLISHING INTERIM LOCAL CRITERIA APPLICABLE IN THE PROPOSED WEST EUGENE ENTERPRISE ZONE AND ADOPTING A PUBLIC BENEFIT SCORING SYSTEM. The City Council of the City of Eugene finds that: A. On April 20, 2005 the City Council adopted Resolution No. 4832 authorizing the City Manager to make application to the State of Oregon for designation of a West Eugene Enterprise Zone. B. At the time Resolution 4832 was approved the Council directed the City Manager to bring back to the Council, prior to July 1, 2005, a resolution adopting interim local criteria consistent with the Public Benefit Criteria adopted in 1997. It was the understanding that new job quality standards would be adopted as soon as practical following notification of a successful designation application, with the intent that 25 percent of the tax exemption benefit for qualified enterprise zone investments would be subject to the job quality standards. C. Notification has not been received from the State of Oregon regarding the selection of zone designations for this year's application round. The selection is expected to occur prior to July 1, with the zone becoming active as of July 1, 2005. D. The Interim Local Public Benefit Criteria set forth herein consists of the 1997 Public Benefit Criteria, with the public benefit contribution of 15 percent modified to 25 percent, as directed by the Council. The Council also requested that a cap be placed on the tax exemption, and staff has recommended a cap of $30,000 per new full-time job created. E. The Public Benefit Criteria attached as Exhibit A hereto reflects the scoring system adopted by Resolution No. 4548 on December 1, 1997 with the formula for calculating the public benefit contribution adjusted to reflect the Council's desire to condition 25 percent (formerly 15 percent) of the tax exemption on the public benefit criteria. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a Municipal Corporation of the State of Oregon, as follows: Section 1. Based on the above findings, which are hereby adopted, the City Council hereby establishes the following Interim Local Criteria for the proposed West Eugene Enterprise Zone: (a) Qualifying companies shall be required to make a public benefit contribution based on the following criteria: Resolution- 1 1. The extent to which the company hires from local training/referral agencies; 2. The extent to which the company hires persons with barriers to employment; 3. The extent to which the average compensation of new jobs is equal to or greater than the average county wage; 4. The extent to which the company dedicates funds for non- mandated training and benefits; 5. Whether the company is utilizing a previously developed site, including expansion of an existing site, or redevelopment of an industrial or brownfield site; 6. The extent to which the assessed value of new investment exceeds $500,000 per acre; 7. Whether the company is a small and/or local business or small and/or local start-up company. (b) Except as provided in subsection (c), in no event shall the amount of the contribution exceed 25% of the tax exemption. (c) Notwithstanding the provisions of subsections (a) and (b), the three-year tax exemption benefit shall be limited to a maximum of $30,000 per new full-time job created. Section 2. The City Council adopts the Public Benefit Criteria Scoring System contained in Exhibit A attached hereto and incorporated herein, to implement the Interim Local Criteria set forth in Section 1 of this Resolution, for determining exemptions for future investments made by companies participating in the proposed West Eugene Enterprise Zone. Section 3. This Resolution shall become effective immediately upon adoption by the Council and adoption of a substantially similar resolution by the Lane County Board of County Commissioners. The foregoing Resolution adopted the __ day of June, 2005. City Recorder Resolution - 2 Exhibit A PUBLIC BENEFIT CRITERIA (2005) The average wage for all new jobs is: Points >_ 100% and _< 110% of average county wage 25 > 110% and _< 115% of average county wage 35 > 115% of average county wage 40 Points >_ 10% - _< 35% of all new jobs 5 > 35% - _< 50% of all new jobs 15 > 50% of all new jobs 25 Points >_ 5% -_< 10% of all new jobs 5 >10%-_<20% of all new jobs 10 > 20% of all new jobs 15 Points >_ 1% - _< 5% of entire company payroll is dedicated 5 to non-mandated training & benefits > 5% - _< 10% of entire company payroll is dedicated 10 to non-mandated training & benefits > 10% of entire company payroll is dedicated to 15 non-mandated training & benefits Points _< 50 employees at time of precertification 10 Points Expansion at existing site 1 Redevelop preexisting industrial site 2 or brownfield site Points Investment >_ $500,000 per acre 1 CRITERIA NOTES: Examples of qualified local training or referral agencies: Lane Work£orce Partnership Oregon Employment Department Lane Community College Adult/Family Services Vocational Rehabilitation Private Rehabilitation Agencies Goodwill Industries Catholic Community Services St. Vincent de Paul Salvation Army Examples of persons with employment barriers: Low/moderate income Disabled Injured Veteran Welfare recipient Displaced worker Teens/youth Ex-felon Older workers Short-term jobs history Displaced homemaker Drug/alcohol abuse history Protected classes (Female head of household, Hispanic, Black, Asian or Pacific Islander, American Indian or Alaskan Native) Qualifying non-government mandated benefits include: health/life/disability insurance, retirement, profit-sharing, paid vacation/holiday, child care, transportation, sick leave, tuition assistance, career development/training. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Points Public Benefit Earned Contribution 80+ 0% contribution 0-79 Apply formula: Contribution due = a percentage equal to Example: If point total is 40 Example: If point total is 10 DISTRIBUTION OF PUBLIC BENEFIT CONTRIBUTION Public benefit contribution will be paid annually, distributed as follows: · 40% to Lane County; · 40% to City of Eugene; · 20% to programs sponsored by educational institutions, including Section 501(c)(3) tax exempt education foundations. The Enterprise Zone Committee will reconvene in any year in which there is at least $10,000 in this category to distribute. A competitive Request for Proposal process will be conducted by the Enterprise Zone Committee to allocate the available funds. The Enterprise Zone Committee will consist of two City Councilors appointed by the Eugene City Council, two County Commissioners appointed by the County Board of Commissioners, and two at-large members appointed by the four Councilors/Commissioners. Administrative costs of the distribution process may be taken from the funds available.