Travis County Commissioners Court
September 15, 2009,
Item 34
34 is consider and take appropriate action on recommendations from the Travis County economic development subcommittee regarding a tax abatement policy.
Commissioner Eckhardt.
>> oh, great.
this is an updated copy of the backup, the comparison.
there was a small typo.
it was -- it was substantive but it was a small tiny so I wanted to pass this out.
the comparison is between our current economic development policy and the current draft that has been forged over about nine months of work with the subcommittee.
briefly, the -- and the purpose of comparing the two was the suggestion by representatives of the chamber of commerce that we could entertain reauthorizing our previous economic development policy while we continued to work on our draft policy because under state statute a tax abatement cannot be affected without having a policy in place and currently we do not have a policy in place.
policies expire after two years by statute.
so the old policy included both tax abatements and rebates.
the current policy only addresses tax abatements.
the old policy had a waiver and modification provision allowing the court to modify or waive on a straight majority.
the new policy requires a super majority.
the maximum abatement on the previous policy is 80%.
the max on the current draft is 85%.
minimum required investment of jobs, and this is where the typo, the old was 100 million and 500 new full-time employees.
under the current draft, it's 25 million and 50 new employees.
previous draft -- previous policy required ownership of the real property.
current draft allows for leasing of the real property.
for the facility.
term is the same.
the other relevant differences are that the old policy did not target specific businesses or business clusters.
the current draft specifies targeted businesses.
the previous policy had a -- didn't have a base abatement, per se, and the new policy has a base abatement with add-ons.
the old policy also had add-ons, it just wasn't treated in the same manner.
it didn't have specific percentages associated with the add-ons.
and those are basically the differences.
did I cover that?
>> uh-huh.
>> one thing to consider -- the benefit of going ahead and reauthorizing the previous policy is that we would have a policy in place should a tax abatement proposal come forward to us.
there has been a considerable amount of press of late about the scaling back of tax abatement programs in other municipalities.
houston, for instance, has temporarily shut down their program.
the downside as I see of it adopting this policy to the extent that it is a downside, it's a two-edged sword, it takes the steam off -- it takes the heat out from underneath us moving forward with a new policy.
of course that is correct is a double-edged sword.
it also give us breathing room to spend some more time with the draft.
>> I guess -- and those are good points, Commissioner.
i guess my point is how committed is the chamber willing to work with this court to determine when we get these differences ironed out, even if we went with the policy where we -- on the books we have an existing policy,, of course, to move forward.
and I did get a chance to review that -- that input from angelos that I required and the chamber did speak on.
and after reviewing it and looking at it the bench mark of what other cities and counties are doing as far as not only bench mark but looking at partnership, partnering in tax abatement incentives was assured by the city, the state and the county maybe combining forces to have more of a punch than just one of us doing it at a time.
so I think there is some room for further enhancements, further attachments to be embraced by the court and also the chamber who have come before us.
and as you know, I've continued to stress this, anything that's not going to align itself with job creation, job retention, job training, those three components are very critical, in my mind.
and I just think that we can work toward the goal and my point is how serious -- once we -- once -- if we decide -- if this court decides to go with maybe existing policy, just to make sure it takes a little pressure off of us to get to where we're trying to get to, my question is how and when can we revisit it to -- as we go through this process, to amend what we're talking about here today?
>> one thing the judge suggested, I believe it was last week or perhaps two weeks ago, that we set a deadline for revisiting the draft policy, whether or not we reauthorize the old policy.
and I think that is a good suggestion.
>> .
>> I would say the draft policy is very close.
i would say keeping the heat on, you could have a draft policy before the court in two weeks.
but again --
>> I think that the -- we ought to have it in place by the end of the year.
i mean we've taken a few months already, and if it takes a few more months, it's fine with me.
but if you leave it open-ended, you know, there may be a tendency not to complete the work.
>> yeah.
>> but if we give ourselves another three and a half months, that way we give marietta an opportunity to work with us.
>> so what the suggestion is that we go with current economic development policy that the county has already in place, our current version, and by end of year we work towards the end as far as this draft policy as far as it being between this time and then we will maybe have worked out the differences.
>> [indiscernible] in other words that's the deadline date.
>> one possibility
>> [inaudible] authorize the policy for the next four months.
it only lasts for four months.
you could do that.
couldn't we?
>> yeah.
>> is that legal?
>> we're not obligated --
>> I think what you could do is terminate it.
the court could vote to -- have a super majority to terminate the agreement.
>> term nature it at the same time we adopt a new one?
>> probably, yeah, the best approach would be to simply -- you may want to give your expectations but not include that because say we get the new one ready in a month or two months, then you are not locked in.
i think when the new one was approved you would want to terminate the old one and replace it with the new one and that way you wouldn't be locked into a time about oh, we're stuck with that.
at any time you could go in and withdraw.
if you do enter into agreement, proposals come in, those are going to be under that old policy.
you've got to go
>> [inaudible].
>> although the -- to some extent with the exception of the minimum required investment and the requirement of ownership of real property, the rest of it would fit -- the rest of the draft policy could fit within the confines of the old policy by agreement.
>> yes.
i mean it's up to the court, and that was the old policy and even the minimum on the jobs and the investment were, again you had much easier authority to waive those requirements.
so you could in your negotiations with companies use some of our all of what's in your new one.
it just wouldn't be there for people to look at and to know that's what you are using.
but yes, certainly in your negotiations and agreements you are not obligated to accept any proposals or to grant any tax abatements, so you could negotiate terms that would reflect what you are shooting for in your new policy.
>> well, if I understood the chamber when they appeared before Commissioners court the last time this office the agenda, it appears to me that when persons wanted to come and maybe locate here in Travis County, a business, they wanted to know about a tax abatement policy.
in other words, do we actually have a tax abatement policy in place and tough like that.
and that's part of what they look at is a tax abatement policy that is in existence at the time that the company is thinking of considering locating.
and I think that was probably highlighted and pinpointed a little bit in some of the discussion.
so I'm concerned that, number 1, that we have a policy in place.
number 2 is that we have an opportunity to work on modification between the chamber and the Commissioners court and others that have been involved in this process.
and number 3, I guess the deadline on this should be defined as far as the policy that we are -- the draft policy that we'll be looking at.
>> how about this?
a motion to reauthorize the previous policy with the intent to rescind the policy in January of 2010 contingent on adopting a new policy regarding tax abatement.
>> does that leave something in place at this point?
>> marietta.
>> I would make one request that we postpone action until next week because
>> [inaudible] resolution, I'm not sure about the
>> [inaudible].
so if we could not take action today so that I can get that together for you and know exactly what we need to do next week.
if this is the court's decision this week is to go ahead and reimplement the old policy pending completion no later than January of 2010, then if I could get that together for you next work.
>> that sounds better to me because it's something definite so that we can begin working on those things that need negotiation.
and then too, I just feel better about having a deadline because I do know that people are out there waiting for jobs, y'all, and some of them need retraining and some say we've done everything that we're supposed to do.
we got all the education that we needed, we've applied for the job, showed up to work and yet in spite of that sounds like some of the jobs are disappearing and they are going to have to retrain.
you know, and so these are families who are kind of desperate.
>> and to put it in perspective --
>> I'm glad to see something definite so we can know something is coming and if it's coming next week, that's good.
>> I'm in agreement with your statement we need to do what we can
>> [inaudible] but just to put tonight perspective, even with the most rebust of tax abatement policies, it still will even if you attribute all of the job growth that a tax abatement policy could bring into the tax abatement policy itself, it's still only going to -- it's still a great thing and a wonderful thing, but just context, it's still going to be less than 1% of your overall jobs in the region.
>> I think at this point though whatever we can get out there is fine because all the governmental agencies are freezing jobs.
and/or eliminating jobs.
so we know it can't be us, but perhaps it needs to be some of these companies that might bring some of those jobs with them.
>> the other thing, the court could direct that we -- I think the biggest difference is the minimum -- the 100 million -- 500 jobs versus 25 and 50 jobs.
we can change that.
i mean I can put that into this old policy and include -- if you want to lower that -- that minimum.
>> I frankly would be in favor of -- if we're going to reauthorize the previous policy, that we reauthorize it as it existed because we have track record with it, we know how it operates, we know there won't be any unintended consequences of making tweaks in it on the fly.
and I feel confident that if we do find that we want to make a substantive change operating under the old policy, we can than that by waiver.
>> the court has the authority under that old policy to waive anything other than statutory requirements.
>> okay.
>> take the appropriate action next week.
>> okay.
i would recommend
>> [inaudible] to December 31st.
>> that would be mine.
>> mr.
martin is here.
any comments?
you see the direction in which we seem to be headed.
>> I hope I didn't misstate a few minutes ago as far as what I understood you guys said last time you were here.
>> certainly.
thank you, judge, Commissioners.
jeremy barton with the Austin chamber of commerce.
and to address your question, Commissioner Davis, yes, we are fully committed to continuing our work with you, the committee, the whole Commissioners court.
we have been participants in every meeting every step of the way and we continue to pledge our support and work with you.
and we're supportive of the action that you are considering for next week, readopting the expired policy, but we are committed to working with you to have the new policy in place by the end of the year.
>> the other thing, judge, that I don't want to get away from us, and rod me reminded me coming in, that at some point we also want to recommend an interlocal with the city of Austin for training of people who want to start small businesses.
or want to expand a small business.
and so -- so they can attend the classes that they conduct.
>> okay.
well, can you take those as directions, ms.
gearhart?
>>
>> [inaudible].
>> we'll have it back on the agenda next Tuesday.
how is that?
>> that sounds good.
thank you.
>> anything else?
planning and budget, city of Austin.
>>
>> [inaudible].
>> we'll blame him.
>> [laughter]
>> okay.
and we'll make it happen.
>> thank you.
roger, if you are next door, we can call up 15.
15 is consider and take appropriate action on a request from a local business person to set up a food vending cart on Travis County property located at 5501 airport boulevard.
>> judge, Commissioners.
roger l.
khoury.
a couple weeks ago the Commissioners court directed facilities management to seek input from the committee members and we did.
and we got a five -- five-member spended from the committee and really all of them are the same -- on the same line.
you know, they want to have healthy food and like fresh vegetables and food served in a cup and also they would like to have baked chips, wheat buns, low sodium and reduced fat hot dogs.
and all of them are the same -- in the same line of request.
>> hot dog and a bun?
>> so that's the -- that's the answer from the committee, that they want to have also a salad cart, like a hot dog cart, salad cart.
so these are the answers.
>> previously we talked about the possibility of looking into an r.f.p.
process where we would see what kind of vendors might respond to our identifying a specific area and how many vendors it could support and putting down an r.f.p.
to see what came back.
correct?
>> first it was a step that you all need to approve the concept, you know, we should have somebody -- we have somebody there.
and then at that time we can get with purchasing to draw -- to work with the r.f.p.
for the vendors.
that was the last time we were asked to go talk to the wellness committee.
>> well, did the recommendation coming from the wellness committee, would the vendor be able to -- to provide those particular recommendations -- recommendations that have been put out from the wellness committee?
i'm not sure.
>> or does it need to be included in the r.f.p.?
>> yes.
>> if we decide to go out and -- and
>> [indiscernible] so we can have a variety of persons in the area
>> [inaudible] and so that's why I'm wondering what -- you can go announce it, roger.
>> this is the intention, right there to first find out what type of a food they are going to sell and then we'll go to the r.f.p.
and include all of that in the r.f.p.
if you wish to or the court wish to approve this.
but we did not talk directly to ms.
goldburg on that if she provides salad because I cannot talk to one vendor if we are about to put it out for the
>> [indiscernible].
>> here are my views on it.
we already have plenty of food establishments in the immediate area.
and one of the owners of property that we would like to acquire also sells a variety of refreshments.
probably good and bad.
this request came to us from a -- one of our residents and not employees who were seeking better lunch opportunities.
and then what the county would get out of it financially is very, very small.
so I'm wondering why we should invest more time and energy into this.
why wouldn't we just indicate to the proposing party that we are not interested?
and if we don't do that, and my recommendation would be to establish a committee of employees in the immediate area.
i don't see me driving way out there to have a hot dog for lunch.
or anybody in the downtown area here because you pass up too many restaurants to get there.
and so when the request came, it seemed pretty simple, but it's really not.
it can get fairly complicated.
and so it's not like we get 40, $50,000 out of it.
the other thing we have a contract with a con investigation their where we get a lump sum of money and how much?
>> $30,000.
>> but he's got snack places, vending machines, et cetera, throughout the county.
so this would be competing with him, and we accept $30,000 because our goal is not so much the money as it is a good sort of fast lunch opportunity and snack opportunity for county employees.
at the same time, though, we have -- we reduce a larger amount down to $30,000 because he complained about not making a whole lot of profit.
so I guess I'm -- I mean there are other factors that we have to weigh other than trying to accommodate one of our residents who came forward with what seemed to be a sort of harmless proposal at the time.
>> well, originally the proposer suggested they be located right in the traffic area of the building.
>> right.
>> to generate volume of business.
i'm quite sure that was the intent.
of course, that area out there would kind of be out of the way probably for most people.
and I don't have any problems with the suggestion because I know we have had to go through that and it is a lot of -- if you look around there, it's a variety of vendors all around, across the street, in that general area is quite a few vendors.
and, of course, I can -- and another point is the congestion.
early on I mentioned the parking areas there, how critical that is and disrupting the flow of traffic as we embark through those facilities.
i can go either way, judge, but I can see your point and it is --
>> $500 a year.
we would spend a few thousand dollars worth of labor just to do the r.f.p.
>> yeah.
>> and we do the r.f.p., there may well be another proposing party with a more attractive one for us.
not going to like the idea that she brought the idea forward and we chose somebody else because I wouldn't.
move we express our deep appreciation to this proposing party for coming forth with this offer and that we advise her that after mulling over the matter for the better part of a month, which is how long it's been, right?
>> yes.
>> we have decided to say thanks but no thanks.
>> I'll second it.
>> discussion?
all in favor?
that passes by unanimous vote.
thank you for your work, mr.
khoury.
you may have a second career as placing -- placing lunch.
does that bring us to executive session?
>> I think maybe we could just --
>> we expect people to come.
can we wait and see if they --
>>
>> [inaudible].
>> no, there was somebody on the back row, but I think she was with the media.
>> okay.
>> she was here when I announced --
>>
>> [inaudible].
>> why don't we hold off on it and if there's been some mixup maybe they will come next week.
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Last Modified:
Tuesday, September 15, 2009 2:14 PM
