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HomeMy WebLinkAbout3. Approval of Minutes: October 07, 2003 J ~ OFFICIAL PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY SHAKO PEE, MINNESOTA REGULAR SESSION OCTOBER 7,2003 Members Present: Link, Joos, Mars, Helkamp and Chair Lehman. Members Absent: None Staff Present: Mark McNeill, City Administrator; Judith S. Cox, City Clerk; R. Michael Leek, Community Development Director; Bruce Loney, Public Works Director/City Engineer; Gregg V oxland, Finance Director; Paul Snook, Economic Development Coordinator; Jim Thomson, City Attorney; Tracy Schaefer, Assistant to the City Administrator; Terry Stang, Fire Chief and Dan Hughes, Police Chief. I. Roll Call: Chair Lehman called the meeting to order at 7:35 p.m. Roll was taken as noted above. Chair Lehman now turned the meeting over to Vice-Chair, Joos because he was ill. II. Approval of the Al!enda: Link/Helkamp moved to approve the agenda as written. Motion carried 5-0. III. Approval of the Consent Al!enda: The following items were on the Consent Agenda. Item #3.a. Approval of the Minutes for August 6,2003 and August 19,2003. Item #4.a. Approval of the Bills. Mars/Lehman moved to approve the Consent Agenda as modified. Motion carried 5-0. 3.a. Approval of the Minutes for August 6, 2003 and August 19, 2003. Mars/Lehman moved to approve the Minutes for August 6,2003 and August 19, 2003. (Motion carried under the Consent Agenda.) IV. Financial: 4.a. Approval of the Bills. Mars/Lehman moved to approve the bills in the amount of$2,179.30 for the EDA General Fund. (Motion carried under the Consent Agenda.) V. Joint Meeting with City Council: 5.a. Amended Business Subsidy Policy. Vice Chair Joos opened the public hearing on the Revised Business Subsidy Policy. Mr. Joos turned the gavel over to Mr. Mars. Mr. Snook reported that this was an attempt to update the Business Subsidy Policy for the City of Shakopee by incorporating changes into the policy that were in the Business -" Official Proceedings of the October 7, 2003 Economic Development Authority Page -2- Subsidy Law of the State of Minnesota. Mr. Snook noted the City Council and the EDA needed to give direction on the wage floor for the Amended Business Subsidy Policy and an opportunity needed to be given for public testimony on the Amended Business Subsidy Policy as well as a public hearing regarding the Amended Business Subsidy Policy needed to be held on October 21, 2003 based on changes to the law. Mr. Snook noted there was a scheduling error and the original public hearing was to be tonight but the notice for the public hearing did not get published on time; therefore, the public hearing would be on October 21,2003. Tonight would not be the official public hearing, however, ifthere were residents in the audience that wished to speak on this Amended Business Subsidy Policy they were encouraged to speak and their comments would be put on record. Mr. Snook stated the Business Subsidy Act was enacted in 1999 and the City of Shakopee developed and adopted a Business Subsidy Policy in 1999. The law provided a detailed definition of business subsidy and described the procedures and requirements that applied when a City provided a business subsidy to a person or an entity. There were substantial changes made by the legislature to the Business Subsidy Act. The City had incorporated these changes into its proposed Amended Business Subsidy Policy. Mr. Snook noted the amendments to the Business Subsidy Act imposed new standards for business subsidy criteria. These new standards were reflected in the proposed policy. The criteria in the new standards could no longer be adopted on a case-by-case basis as was done in the past. Mr. Snook also noted that the new Amended Business Subsidy Policy must stipulate criteria requirements for minimums that a person must meet in order to quality for a business subsidy. Also, Mr. Snook noted that a specific wage floor and wages needed to be set for the jobs that were expected to be created. Mr. Snook noted the proposed policy had the federal minimum wage as the minimum wage and the wage floor. Mr. Snook noted that he surveyed different cities regarding how they established wages for their Business Subsidy Policy. The different ways he found were: 1) a wage could be determined using a percentage ofthe federal minimum wage (currently $5.15 per hour) or 2) some cities used the federal minimum wage as the floor alld then asked that the wages be sensitive to other factors. Mr. Snook gave information on the hourly wage goals for the current business subsidy recipients in the City of Shakopee. These current business subsidies were for: ADC Telecommunications projects, the Seagate Technology project and CertainTeed Corporation expansion. These wages ranged from 233 percent of the federal minimum wage to 377 percent of the federal minimum wage ($12.00 per hour to $19.46 per hour). ~ Official Proceedings of the October 7,2003 Economic Development Authority Page -3- Mr. Snook replied to Mr. Lehman's question regarding the requirement that a business needed to stay at the site for at least five years after the benefit was received. Mr. Snook noted that there would be provisions stipulated in the agreement between the business and the City to address the site requirement. It was noted that not everyone would get a business subsidy there were certain criteria that needed to be met to get the subsidy. Mr. Mars also questioned tying the benefit to the number of years at the site. It was noted that specific information for each business subsidy would have its own agreement with the City and it was in this agreement that specific criteria would be mentioned. The Amended Business Subsidy Policy being discussed tonight was a general policy with general criteria that all Business Subsidy applicants needed to meet. Mr. Snook noted that from the time that the Amended Business Subsidy Policy took effect until now all the goals of the stated Amended Business Subsidy Policy were met. Mr. Link was concerned that this Amended Business Subsidy Policy would make it easier for companies to get abatements in this City. Mr. Snook stated that he thought the Amended Business Subsidy Policy created more standards and tighter standards that needed to be met. Mr. Helkamp was not happy with the statement that subsidies under $100,000 did not need a public hearing. He felt all subsidies should be required to have a public hearing along with Mayor Mars agreeing that a public hearing was needed for all business subsidy applications regardless of the amount. He would also like to see the time that it took a company to meet goals open ended as opposed to meeting them within two years. Mr. Helkamp noted that he was of the opinion that a livable wage was in the area of$35,000 per year and that $35,000 per year could not be attained working 40 hours per week at the federal minimum wage. He felt the City of Shakopee needed to be at least at 330 percent of the minimum federal wage and it needed to be specified that this wage was exclusive of benefits. Mr. Lehman wanted to see the wage studied. Mr. Mars noted that this was a public hearing and it would be continued to October 21, 2003. He would take public testimony tonight alld include it with the public testimony taken on October 21, 2003. He called for public testimony on the Revised Business Subsidy Policy at this time. Kathy Gerlach, 4855 Eagle Creek Boulevard, approached the podium to get a few things clarified. She wanted to know if she had the most current document. Mr. Mars noted that she would be given a recent copy of what was on the table tonight. Ms. Gerlach asked a question relating to the public hearing and the goal of the business applying for the business subsidy. She was also concerned about the possible deviation from some of the . Official Proceedings of the October 7, 2003 Economic Development Authority Page -4- criteria. The intent of the deviation was not to allow the creation of zero jobs but to let some other criteria become more important than wages andjobs. Ms. Gerlach stated she would wait with the rest of her questions until the public hearing scheduled for October 21,2003. Joos/Lehman moved to continue the public hearing on the Revised Business Subsidy Policy to October 21, 2003. Mayor Mars noted that everyone should be prepared to discuss at the October 21 meeting: 1) if a public hearing should be required for business subsidy applications less than $100,000 and 2) what the wages and wage floor should be (Mr. Mars would like to see the wages at 200 percent or better of the federal minimum wage). Mr. Mars also questioned the tax capacity. How was it defined? He wondered how someone went about judging the increase in the tax capacity (increase in the tax base of the new facility)? There was discussion on the tax capacity. Mr. Snook did say that more would be known about the tax capacity of a particular business as the process moved along for each business subsidy application. Mr. Mars would like further infonnation regarding the length oftime a business needed to achieve goals before they would need to begin paying back the business subsidy if the goals were not being met. He was also concerned about an extension for a business to comply with the requirements. Mr. Link did not like the idea of a business subsidy because of all the growth the City had; the subsidy was not needed. Mr. Mars noted that the goals should be set high; the policy would be tightened up with high goals. Mr. Snook noted this Revised Business Subsidy Policy was also a tool that could be used by current businesses for expansion purposes. Motion carried 5-0. Mr. Lehman noted that he would like to see at least 200 percent of the federal minimum wage as the wage floor. Mr. Helkamp stated he would like to see the wages at least 330% of the federal minimum wage exclusive of benefits and he would like the Economic Development Advisory Commission (EDAC) to take a look at the Revised Business Subsidy Policy. Mr. Mars polled the EDA members and the Council members to get their idea on a livable wage. Mr. Link would like to see at least 330 percent of the federal minimum wage exclusive of benefits. -. .. Official Proceedings of the October 7, 2003 Economic Development Authority Page -5- Mr. Mars would like to see 200 percent ofthe federal minimum wage exclusive of benefits. Mr. Lehman would like to see 200 percent of the federal minimum wage exclusive of benefits. Mr. Joos would like to see the wages determined on a case-by-case study. Mr. McNeill suggested that the EDAC take a look at the Revised Business Subsidy Policy and make a recommendation. The joint City Council and EDA meeting was now finished. VI. Other Business: There was no other business. VIII. Adiourn: Lehman/Helkamp moved to adjourn the meeting to October 21,2003. The meeting adjourned at 8:15 p.m. Motion carried 5-0. a~o~' ~ EDA Secretary Carole Hedlund Recording Secretary