Travis County Commissioners Court

April 3, 2012 - Item 1
Agenda

View captioned video.

Item 1 is a public hearing to receive comments regarding request from Apple Inc. for financial incentives and an economic development agreement.
we have one page here.
did anyone -- does anyone want to speak on this item who has not signed in?
this sheet is full.
because we can have another sheet brought down.
okay, there's a second sheet right here on the end.
I will call three individuals.
first we will have introduction of the item by county staff.
good morning.

>> thank you, judge.
we wanted to cover a few slides for you that kind of recap and give you a brief introduction of the apple proposal and the project.
slide number 1 gives you an introduction to the apple project and the proposed investment.
you got it up there.
thanks.
basically, it is to establish an americas headquarters in Austin.
the project consists of two phases, phase I includes an investment of $56.5 million.
and that would bring in about 200,000 square feet of new office space.
phase ii is an investment of $226 million, and that would bring in up to $800,000 of new office space and that investment basically includes the new construction of the beings, the machinery and equipment to outfit those buildings and the furnitures, fixtures and equipment as well.
moving on to slide 3, the jobs that the apple project proposes to bring into Austin, part of that would be maintaining the existing 3100 jobs that are already here.
in addition, there would be the creation of 3,635 new jobs over the next 10 years.
with the average salary of those new jobs reported in the business application that apple has provided ranging from about $54,000 per year to $73,500.
and included in that is a commitment to maintaining and -- a diverse workforce.
other proposed benefits, commitment to use h.u.b.
especially during the construction period.
a workforce development program for economically disadvantaged individuals.
and the then seeking leed certification on the new buildings that are part of the project.
in terms of where we're at with various economic development agreements, the state of Texas in February of 2011 sent a letter to apple offering to allocate $21 million from the Texas enterprise fund.
the city of Austin on March the 22nd, recently approved a 100% tax rebate over 10 yearsment and that's a performance-based agreement.
so there is performance criteria in place in order to receive that tax rebate.
Travis County, the Commissioners court is, of course, currently considering an 80% tax rebate over 10 years, with an additional five years to be negotiated with apple in terms of what that might be in terms of a percentage.
and that agreement would also be performance-based as well.
the last slide is related to process and schedule and then we can get into receiving the public comments.
here we are on April the 3rd.
agenda item no.
1 is to receive those public comments on the apple proposal.
the -- the item no.
24 on today's agenda is an executive session to consider and take appropriate action on an economic development agreement with apple and then next steps from there would be for -- for -- for staff to go forward and negotiate terms and conditions of an economic development agreement with apple to refine and finalize those.
and bring a -- bring a final draft agreement back to the Commissioners court for consideration.
thank you.

>> any questions for staff?

>> during this deliberation, I know specifics -- judge, I don't know how you want us to intervene during the process, but there was some specific questions, I know that I had asked, I guess whenever you -- whenever you allow the court to maybe intervene with some of these specific questions that I need answers to.
when it would be appropriate.
that's basically what I'm trying to determine.
as we go through the process.
your call, though.
I'm just --

>> okay.
we are posted for a discussion of specific terms and conditions to negotiate in item 24 which is an executive session discussion.
so I would think that negotiation issues we could discuss under 24.
any other comments during this public I guess is as good of a time as many.

>> my question may be directed to -- probably the hr director, whoever is in charge of hr with apple because if they're here, I -- I don't know if that's -- if that need to be asked out here or either in executive session.
I would like, you know, because I think they are here and, you know, I don't know, that's why I just polled you like that, but I understand that there will be an hr apple representative here today.

>> my preference would be -- apple will not be able to go into executive session.

>> no, no, no, no, no not that.
I am just saying out here in open court.

>> my recommendation would be any specific terms related to employment that we think we should negotiate, we ought to give whoever our lead negotiator is to discuss with apple.

>> that's the way you want to do it.
okay.
I have no problem.
I would just like to follow whatever direction that you would like to pursue as far as getting things on the table.

>> we do have allan miller from workforce here, though, he may have suggestions about elements for us to consider in negotiation.

>> just a few things that I -- okay.

>> let's see how it goes.

>> thank you, judge, thank you.

>> would the following three persons please come forward.
by the way when one speaker finishes, I will call another one.
if we can make available -- those three chairs may be fine.
stay right there.
clark hydominican republic, victor gonzalez -- hydrick.

>> I'm here from the chamber of commerce, we have a group.
would you prefer to have our group all at once.

>> depends on how many you have.

>> we have I know four people ready to speak, gary farmer is our starting pitcher.

>> all right.
I tell you what then, let's have mr. Gonzalez, mr. Miller speak and then we'll call you and the other -- the other owe.

>> great.

>> mr. Gonzalez, thank you, judge, good morning, good morning, Commissioners court.
my name is victor gonzalez.
some of you may or may not know me.
I'm the mayor pro tem for the city of Pflugerville.

>> go Pflugerville!

>> [laughter]

>> thank you.

>> I would be remiss if I didn't indicate that I was a candidate for county Commissioner, precinct 1.
but I think the -- the item of apple's incentive request is significant.
obviously, the city of Austin has taken a major role in that and -- and as a county resident and having been involved with incentives to development in a community, it's very significant, I think, for residents to understand that while the $6 million I believe that the county is being asked to -- to -- to participate in, actually will yield, if my numbers were a little conservative, but I think they fall in line with the numbers that your county staff talked about earlier.
you have at least $2 billion in disposable income over a period of 10 years, basically translating into a little over 10 to $16 million a year in sales tax.
there's a significant boost to the economy as a result of that.
the fact that -- that apple is bringing over a period of 10 years an additional 3,000 jobs is a significant impact on employment and employment rates in the Austin and Travis County area.
in response to questions that I received from Commissioner Eckhardt, I think there are issues that certainly need to be addressed and taken into account, which I believe you have in the agreement in terms of -- of addressing employment available to -- to the economically disadvantaged in areas where perhaps you have a higher unemployment rate.
I think that can be accomplished certainly through your workforce development agency.
transportation is another issue.
in talking to residents, they would rather work closer to where they live.
obviously with apple being on the west side of 35, you may or may not find most of the residents there, I would just guess that most of them live in that area, although 45 and the toll way 45 and 130 certainly provides some accessibility to that geographical area.
I think as a policy direction for the court in the future certainly is to in -- any incentives that are being -- being provided that -- that certainly that consideration be made to -- to development on east -- the east side of 35.
there's a tremendous amount of growth potential in that area.
it would also address the mobility and accessibility of residents on that side versus having to travel way to the other side of 35 and over on the west side close to mopac.
and it would also additionally add economic stimulus to the area, which I think is significant for the east side of i-35.
I -- I do support economic incentives to -- to corporate business partners and apple certainly is a major player in this role.
and I would just ask that the court -- that the court incorporate due diligence in the agreement and hold our corporate partners accountable to the performance metrics that you have in those agreements, thank you.

>> thank you very much.
questions?
appreciate it.
mr. Miller?

>> good morning, thank you, judge, Commissioners.
my name is allan miller.
I'm the executive director for workforce solutions, capital area, which is the local workforce investment board here in Travis County.
I'm here this morning as a private citizen to express my support for the incentive package available to apple and its location to Austin.
the number of jobs that will be created, the additional 3600 on top of the 3100 that are also -- that are already here, will bring more jobs to Travis County than toyota initially brought to san antonio.
I'm very encouraged by that.
I'm also encouraged by the language.
that the city staff or the county staff presented this morning relative to the hiring of the low income individuals, economically disadvantaged individuals, and the recruitment and the training of those individuals.
I believe that's a critical element to the agreement.
and the -- the details of that you will work out during the course of negotiations, but I believe those are absolutely critical.
we have a growing number of individuals that are out of the labor force right now and apple represents a great opportunity of which to marriage new jobs along with those that increasing number of people who find themselves unemployed.
you know, incentives are not necessarily for everyone desirable, but they are a reality in today's economic competitive world.
and I fully support the Commissioners court in their incentive package arrangements with -- with apple and hope that you will work out the details with them regarding specifically the recruitment and the training and the retention of economically disadvantaged individuals in our community.
at workforce solutions we look forward to working with apple, welcoming them as a good corporate citizen on our community and we will do whatever we can on our ends to work with them to ensure that they have access to that pool of labor and the training resources that we have available in our county.
thank you very much.

>> thank you.

>> questions?
Commissioner Eckhardt?

>> mr. Miller, with regard to -- to contractual language because we are aiming for a performance based contract.
with regard to contractual language in the hiring of the economically disadvantaged, there's -- there's sort of two tracks that could be both explored.
one is to hire directly out of workforce programs, that way we know that the individuals who are current Travis County residents but they were economically disadvantaged in seeking employment and had training and support.
there has been some concern voiced that should there not be a sufficient number of qualified applicants out of workforce, to apple, what then?
so -- so a second parallel tract, perhaps, has been proposed about looking at the definition inside the economic development zone statute.
how difficult would it be for the company to verify that -- that some of their employees that didn't come through workforce fit the definition, at least two of the definitions in the -- in the economically -- in the economic development incentives statute?

>> I think that can be accomplished fairly easily if they work cooperatively with us, we are more than willing to help them in that regard.

>> great, I'm ling forward to that.

>> go ahead, Commissioner.

>> thank you, for being here this morning.
and -- and as you know, there's been some major league concerns brought up, especially with a lot of development going on within Travis County.
however, with the growth pattern, economically, looking at those particular situations east of i-35, I think it's very critical.
in this particular regard.
my concern, though, and the question to you, is that I would like to make sure that we have a team, in in house, in staff, I think that we can do that.
looking at our hhs, persons that are here, to ensure that we do get those particular certified employees that are eligible for those type of skill sets that apple are requiring.
now, we mentioned several things about -- about -- let me just put it right in your face.
precinct 1 has the highest poverty level in all of Travis County and unemployment.
also.
it stands to reason to me that those persons have been left out of the "job market" per se.
so it appears to me that whatever we end up doing, I think you need to take this into consideration, you have worked with the hhs, health and human services, that we make sure that we find those persons eligible within Travis County to make sure that they get the necessary skill sets for the type of employment opportunities that -- and specific skill sets that employment opportunities that apple is requiring, especially in the start-up positions, these entry level positions, I'm trying to make sure that there's a nexus between this Commissioners court and apple, the private sector and all of the other public entities to ensure that that message comes across very clear because when it looks to unemployment situation like that, even though we are the economic upswing as far as getting companies here, offer incentive packages, I do not want anybody left behind.
believe me, there are folks being left behind.
so we want to make sure that happens.
that does not happen as far as apple not being able to do these things.
I just wanted you to keep that on your mind as we look at this process and also use the department that we have within our shop that know how to also seek the eligibility of those persons in the communities for employment opportunities.
so that's where I'm coming from, I think that I heard you saying that once before.
I just need to repeat it so I can stay constantly on everybody's minds on the -- we just need to make those things happen with apple and anybody else coming into the community with those employment opportunities.

>> I think that I would have to follow up to say on the other side of the river is precinct 4 as well.
and we have folks who need to get jobs.
they need to get training, they need to be part of the main stream of this community.
so I look forward as well to making sure that we make this a very inclusive project if that's where we go.
thanks.

>> one more question.

>> Commissioner Eckhardt.

>> mr. Miller, considering your deep background both in the Austin msa and also in the san antonio msa with regard to the workforce, what do you think is a reasonable outside target for the hiring of individuals out of our workforce training programs?

>> that would be a difficult question to answer offhand and I really wouldn't to do that.
I think that will come later.
if I give -- if I quote you a number this morning, it's off the top of my head and not based on anything.
so I would rather not.

>> I would love to be able to -- this court would, I believe, love to be able to work with you to define what that appropriate target would be.
for our negotiations because again based on for instance federal reserve put out a very good review of the literature on economic development.
and -- and it would be wonderful for us to be able to have some very clear performance expectations that are -- that are -- that are embraced by both parties.
so that we can really move the needle on what we're talking about here today with the -- with the 19.3% poverty rate and significant, although comparablely better than most areas, but a significant unemployment rate.
I would love to be able to move the needle and have apple's help in moving that needle.

>> you know those are important issues to me, not only from workforce development but the community action network.
we will look forward to working with the court and your staff and following your direction, your lead on that and contributing to the process.

>> thanks so much.

>> any other questions for mr. Miller?
or testimonials?

>> thank you,.

>> thank you.

>> clark hydrick and chamber reps who would like to join him.
thank you,, there are four of us here, gary farmer, vice and chair of opportunity Austin, our economic development affiliate.
martha smiley, a lawyer who is vice chair for infrastructure for the chamber this year, mark curry, wells fargo, who is here to speak, been a long-time member of the board of the chamber of commercer, here to speak in favor of apple, our lead off pitcher is gary farmer.

>> judge, Commissioners, thank you very much for having us this morning, we appreciate your consideration of this matter.
let me first say that county staff this morning did a very credible job of giving an overview of the project, so I will try to be very efficient with your time, not be too repetitive.
let me also say as I understand it county staff has represented the county and the citizens of Travis County very well throughout this process to date.
thanks come the support specifically of judge Biscoe's letter of February 21st to apple welcoming them to Travis County, pending gobs of an agreement and -- negotiation of agreement and setting out real obligations that the county would have to agree to in order to achieve an incentive agreement, as well as the February 28th action of the court showing its willingness to negotiate a 15-year agreement with apple.
as the court knows, t%is particular agreement has been vetted very carefully by state economic development staff.
by city staff and by your very own staff.
you also know that the Austin city council has unanimously passed a chapter 380 agreement in order to secure apple.
the state, of course, giving one of the largest or offering one of the largest awards out of the enterprise fund in its history.
again, intended to secure the project.
and so now it's Travis County's turn to deliberate and make sure that you do a good deal for the citizens of Travis County.
what one important thing to note, the state award is predicated upon action by both the city of Austin and Travis County.
so without your support of this particular deal, things start to unravel fairly quickly.

>> is that based on law or is that based on the negotiation?

>> as I understand it Commissioner that is included in the agreement between the state and the company.
they predicated that on both city and county participation.

>> so that is at the state of Texas's option.
the state has declared that?

>> correct.

>> in terms of this negotiation, but it's not required by the statute.

>> that is correct.

>> okay.

>> as I understand it, yes, ma'am.
as the court knows, the chamber looks at these types of deals with three basic standards.
let's see how this proposal measures up.
as staff has already told you, it creates jobs, that's one of our primary tenants.
does it create jobs for the citizens.
and for the families of Travis County.
3635 jobs: at an average wage of 54,000.
that creates about 200 million in payroll on an annual basis when this deal is in full bloom.
additionally, and importantly, the agreement would cause apple to provide full benefits, including domestic partner benefits, training, tuition reimbursement, a great focus on education and improvement folks.
number 2, does it create return?
a couple of ways to look at it.
from a simple real estate perspective, the tract that apple would go to currently is valued at about $7.3 million.
and it generated $35,000 -- $35,822 to Travis County, which was paid on the 13th of January in this year.
the better way to look at this, is on a holistic basis.
the city staff by request of county staff has run the web loci analysis.
that analysis assuming certain things shows a $14.5 million benefit, net of any rebate, that the county might engage in.
14.5 million of net, net benefit to the county, I think that is real return on average to be about $968,000 a year.
and even the better news, judge, is that these building are going to be getting built, giving back to the county long after all of us are gone, I mean really gone, because they're going to give for the next 40 or 50 years, as long as those buildings are functional and they will be for a very long time.
in addition, if the county moves forward, you create tremendous benefit for central health, a.c.c.
and Round Rock.
$240,000 a year in tax revenue for central health, 288,000 for acc, and about $4 million a year for the Round Rock independent school district.
I think that's very real money.
is the county going to be be be accountable?
the state, city and county will all be watching, you have the opportunity to verify that they are doing the things that they are obligated to do.
again the county has put forward six obligations that the county has to meet.
and I think that the company will certainly do that.
one comment, Commissioner Eckhardt, you asked about the employment zone or the under employment zones.
my recollection is that when we did the home depot data center, that's the very approach that we took.
we used those specifically designated zones of under employment as a source of -- of employment.
and that could be a very good thing.
so with all of that said, we would certainly encourage you to consider this carefully.
do your work and ultimately approve this for the citizens of Travis County.
thank you so much and be glad to answer any questions.

>> I have a question for mr. Farmer.
it goes to what I was speaking with allan about.
with regard to the economic development zone state, there's a provision that defines the economically disadvantaged, I'm pulling it up right now.
I thought that I had it right at my fingertips.
it has I believe nine definitions.
do you believe that it would be workable for -- for -- I think that it's most workable to hire directly from our workforce development programs. That's the cleanest way to do it.
and it's a way to partner and to develop a long-term relationship with -- with the building of our -- the economic disability for the folks in the region.
but as an alternative, in case workforce doesn't supply enough trained up individuals quickly enough, as an alternative to have the company itself verify that other hires that they make just making the hires, fit at least two of the definitions under Texas government code section let's see this is government code 2303.402 for the enterprise zones.
at least in my review of the literature on economic development programs, the enterprise zone program is a very good one.
it's -- it fits the best practices model.
do you think that that would be workable for a company, any company, whether it was apple or samsung or -- or heliovolt or any of them, to be able to verify that they are employing from individuals that fit at least two of those definitions?

>> while I'm not in a position to speak for apple, nor am I an expert on that statute.
my sense is that would be a very reasonable approach.
we have used that approach in Travis County recently on very successful deals.

>> I think the previous approach was just that the employee lived in an economic development zone census block.
this would be a little bit more of a refined approach since many of our economic development zone census blocks are gentrifying rather rapidly.
it's less of an indicator that the individual hired was actually economically disadvantaged.
the nine definitions really go to whether the individual has been unemployed for the last three months, whether they are on any kind of ssi benefits, are food stamps, meet some of the federal requirements, are living at a poverty level of 200% or below that kind of thing.

>> well with, again, I'm -- well, again, I'm not in a position to speak for apple, but sounds like a very reasonable approach to me.

>> any other questions for mr. Farmer?

>> judge, mr. Farmer, you've been around a while, been around the block for a few years, so have i.
we have basically looked at a lot of things that the chamber has brought before us.
one of the things that I recall, even when kirk watson was a part of the chamber at one time as far as its chair, I think.
anyway, what I'm getting at, there was an incentive back then, years past, to -- to -- jobs retention and job creation.
now, I know this is a good opportunity for that to happen.
but I guess my whole concern, not my whole concern, but one of my concerns is that the retention and creation should run parallel.
I don't think one is more important than the others.
of course these jobs that we are looking for, those particular persons, a percentage of those particular persons that live throughout Travis County but a lot of them living in -- in the eastern part of Travis County, the same question goes to you, mr. Miller.
I really am really concerned that we work real, real hard to make sure those employment opportunities are given to some persons that really deserve employment.
they have been waiting for a long time for opportunities such like -- such as presented here today.
of course, I'm going to be here to continue to make sure that happens.
but I'm going to need you and everyone else in this room to ensure that those folks that need this employment opportunity is afforded it.
and I really mean what I'm saying this morning.
as I always do.
but I'm really concerned about that.
real big deal for me and a lot of folks asked me, Commissioner I need a job, I need a job, is there anything here in this community that I can get a skill whereby I can have employment opportunities like everybody else, take care of my family and do a lot of things like that.
those are the kind of echoes that I hear.
and I want to make sure that we send something back at this community to let folks understand that -- that there is a commitment.
that we're going to do these things.
I don't know any better way to say it than I just said.

>> I think that you said it very well.

>> next speaker.

>> your honor, members of the court, I'm clark hydrick, I'm currently chair of the greater Austin chamber of commerce also very proud to be a Travis County appointee to central health.
I'm here this morning with my chamber hat on representing the 2500 plus members of the greater Austin chamber of commerce.
who are strongly in support of apple expanding and the way that's been presented to the court.
I would make three points.
the first is that in my judgment, there is nothing more important that -- that one can do for someone else than to provide an opportunity for a good job.
not health care, not education, having a good job is the most important thing that we as a community can provide, particularly to our young people.
we can work hard to get them ready for that job, we can provide health care, but we have to have that job in order to make the whole system work.
the -- Commissioner pointed out that -- Commissioner Davis pointed out that retention is an important part of what we're talking about here.
I would note that we have 3100 employees of apple already in this community.
by adding 3600 more, we create even more vitality, more opportunity for those 3100 people who are living here by strengthening apple's commitment and the dynamism that's going to come to the apple center here.
secondly, I would reinforce what gary said about not just the financial and economic impacts of these -- of these direct apple jobs, but the indirect impact on -- on the economy that we have in central Texas.
gary noted the additional tax revenues, property tax revenues for some of our institutions.
I'm of course very focused on central health.
where there's projection that we would have more than $240,000 added to -- to the tax revenue from the tax base created.
I don't think that adding these apple employees is going to add much to the business that we are getting and the need that we are attempting to address at central health, we have substantial additional resources with which to deal with that situation and that -- and that need.
the final point that I would make is that I hope we will not hold apple's success as one of the leading companies in the world against it as we consider this incentive package.
in fact, we want to recruit to Austin, the most successful companies that he with can find.
those are the companies that have the ability to make the capital investments, to grow, to train pep, to provide opportunities -- to train people, to provide opportunities to move up and to be good corporate citizens.
I would point out as a final point that apple has a program in place that matches the charitable contributions of every employee in the organization up to $10,000.
I find that to be an amazing program.
symptomatic of great corporate citizenship and I hope very much that you will support the efforts to bring apple to expand apple's operations in Austin, thank you.

>> any questions for mr. Hydrick.

>> thank you, clark.

>> mr. Hydrick, first of all through you, I would like to thank apple from not seeking an incentive from the health care district, Austin independent school district or the Round Rock independent school district.
I think that that is key and they they deserve acknowledgment for not seeking an incentive for those organizations, we do need to make a higher investment in education and health care locally in the state.
with regard to the 31 jobs that are currently here, I am a little concerned that even though requested, apple has not provided the demographic break down of the 3100 employees.
in response to that request, this he did however provide their -- they did however provide their $10,000 match program and their eeoc policy, which I agree is a hallmark of some really wonderful corporate citizenship.
the matching program as well as their diversity policy in hiring.
I am a little troubled, though, that they did not produce the demographics of their current 3100.
I surmise is because that would indicate that a majority of the employees are not coming from economically disadvantaged areas of our workforce.
so that's why I'm pushing so hard that this next wave of employment, which I am so gratified by it, that the individuals who are most in need of those jobs have a -- take there's frankly a preference for their employment.
is that something that the chamber of commerce would support.

>> well, I don't think we feel comfortable speaking for apple in terms of the reasons why they would provide some information and not others.
I think they're here and they can answer questions about that.
I think we need to be careful about picking at something that is so important to this community.
I recognize that you need to be sure these incentives fit the mainstream of the kinds of incentives that companies like apple would expect so that we can get the deal done and I respect the values that you are expressing here.
but I want to be careful from the standpoint of the chamber to not get in a position to -- to pick at one particular aspect of what apple is doing.
I think you are working towards a negotiation that you are going to have in terms of an agreement and I know that -- that -- I'm hoping that it will fit the mainstream of what's usually done in situations like this.
so that a community like ours, which has a lot to offer, can attract a great company like apple.

>> I am concerned about what's usually done.
because what has usually been done is not actually reflective of what at least the academic literature is indicating are best practices.
I also want to acknowledge that the first 3100 employees in this area by apple were not incentivized by a tax rebate.
in recognition of that, I'm not saying that's a bad thing.
that's a wonderful thing that appears brought their first 3100 here without incentive.
therefore I'm not frankly surprised that without incentives the market would hire the easiest hires, but in exchange for a rebate, I would ask that apple extend itself to hire individuals that the market would not float to the top right away.

>> any other questions for mr. Hydrick.

>> judge, Commissioners, my name is martha smiley, I serve this year on the executive committee of the chamber of commerce and appear here.
I do wear several other hats in the community and have worked on workforce issues for a number of years.
I come to speak in support of your obligation to require the employer to support educational opportunities.
the economically disadvantaged.
you have shown a steadfast support as a Commissioners court for workforce programs. I sit on the board of capital idea and work with a number of other workforce programs and have seen the benefit of identifying people in the community who are underserved and bringing them to the educational resources that we have, and putting them on a pathway to great jobs.
it's a remarkable result when that happens.
and I think that there is a sense of opportunity in this community, there are many resources that are available.
the workforce programs are collaborating, thanks to allan miller's leadership and that of other people in the community.
we have great leadership at the community college now.
that is eager to work with the workforce programs. Eager to work with employers to understand their needs and the competencies for those jobs and eager to put those together to create a pathway for economic success and independence for people in our community, Commissioner Davis, who have not seen that before.
I think this is an extraordinary opportunity and apple is a very good company.
they are bringing great jobs.
when we create pathways for economic success and independence and educational opportunities for the people in our community, at the other end of that pathway, we must have good jobs.
will and apple brings those jobs and for that reason this is an extraordinary moment in time to support this great company and the opportunities that can come to the citizens of our community.

>> it would be good to know, I guess as we go through this process, eventually I guess it will be revealed what those particular skill sets, those specific skill sets that are required by apple for -- for entry into their -- into their employment settings.
with that particular skill sets -- without the particular skill sets that they say must have this, you must have that, you must do this, you must do that.
without that knowledge, before us, then -- then it's going to be kind of difficult to -- to -- to move in the direction we want to go until we finally know what that -- what those skill sets are.
so persons that need the training in the community to prepare themselves for those entry jobs for apple, say hey I got the skill set, this is what you said that I had to have, we will -- we have -- we have acquired that.
now, I'm ready to be hired.
so those things are still a little -- you know, not an array at this point, but we're going to get there, though, because I'm going to find out what those skill sets are as far as the training that I know the persons in the community will need to have for entry job opportunities with apple.

>> yes, Commissioner.
and like my colleagues who spoke before me, certainly I'm in no position to speak for apple, but I know that there have been conversations already.
I'm encouraged to think that between the communities college, the employer, and the workforce programs who are experienced in teasing out those requirements and finding the right educational path, that we can get that.

>> okay.
that's -- that's what I'm looking for.

>> thank you.

>> that's what -- that's exactly what I'm looking for.

>> i, too, have been encouraged by the response from apple, one of the executives in the meeting that I had with them made mention, this tied back to the $10,000 giving program, that through the $10,000 giving program that he and several other employees had become quite familiar with some of our workforce training programs and including I think capital idea, and -- and I think american youth works and spoke glowingly of the training that was provided.
through workforce.
so -- so I don't mean to intimate that apple isn't engaged in negotiating this point.
they do appear interested in participating in our workforce development program.

>> Commissioner Gomez.

>> martha, thanks so much for mentioning capital idea.
I think that's one of the investments that I'm most proud of because it has shown that people can really be trained, they can learn, and they can get ready for a good job.
and there's nothing more moving than to see someone stand up and say I can take care of myself now.
I can stand on my own two feet, and -- and do what I need to do and then they -- they hand that over to the children.
the children then, too, get into that mode of thinking that -- that, you know, there's something to be done with education.
and so -- so I think that's why this -- this sort of -- this issue really, really, I'm very committed to.
because I know that we can make some good matches between people in our community and employers coming to this community as well.
but thank you so much for mentioning.

>> thank you.

>> thank you.

>> mark curry.

>> thank you, judge.
good morning, Commissioners.

>> good morning.

>> I'm here wearing several hats, I suppose.
I've been a -- been a tax paying citizen of Travis County for 26.5 years.
and so I have an understanding of has that might mean to me and to you.
I also had been very civically active in things that are what I would consider educational space and community development.
which is a little different than economic development.
so I'm going to just speak from some of my own experiences as a member of the chamber.
and somebody that has been blessed with the employer and things that we do on a day-to-day basis and have some sense of what that might look like.
you and I both know that economic development is a strategic decision and it's an investment.
both on the part of what is being asked of this court and representation of our taxpayers, but don't forget the significant size of the investment that apple will be making as well.
so I keep those in mind as I think about what I would do if I were in your shoes.
lead employers have an opportunity to -- and a role to play in communities that are important.
whether they are noticeable or tend to do it as my colleague it camed with their teammates -- indicated with their teammates, there are other things that have accrued when you have major employers doing such important work.
their teammates which is what we call them at wells fargo, you invest in teammates.
employees are a different sense, but when you have team members, you make investments in them.
you make investments in their development, you make investments in their capacities, and you -- and you enjoy their families as they grow and participate in whatever benefit programs you bring to the table.
you have an ability to withstand economic cycles a little bit differently than smaller companies.
major employers play a really important role in any region.
so we also understand that apple could go anywhere in the world.
so -- so it's important to us as citizens and as folks in my role that play in economic and community development successes, that -- that we understand that -- that they can be very picky.
they can take their team members, and their -- their advice and their abilities to transform families, to sustain economic engines, they can take that anywhere in the world, aren't we blessed that they want to be here.
I also understand because of my own experiences at work, they are as careful with where they deploy their money as you would be in deploying the citizens money.
so I'm sure there's been -- there's been lots of internal -- analyses and considerations about where would be best for them and their team members.
aren't we blessed they chose Austin once again.
I also want you to consider the depth and breadth of the job that we're talking about.
when you consider some type of corporate support function, what I am struck by most --

>> [one moment please for change in captioners] so that's true of the family side.
if you take a step and look at the implication that large employers have on small and medium sized businesses and all the services that will be required to support such a robust employment base, then there's other folks that we haven't talked about in terms of the service providers and vendors who will be supporting the building and maintenance of the facility along with all the other things that come with having a million square feet.
those are not inconsequential economic impact in the small business arenas.
and finally, I would just suggest that we have a unique opportunity to consider community development and economic development and I think that's where this discussion has been centered around.
the economic development pieces certainly have incentives around them, but I would like for you to consider the community development impact, whether it's education, it's workforce development, it's job creation, but it also allows -- well, it's all up and down the economic ladder to have an opportunity to grow and succeed.
so I really stand before you and hope that you'll consider this opportunity as the place to improve Travis County and the region and make a better place to live, work and play.
thank you.

>> any questions for mr. Curry?

>> thank you.

>> thank you very much.
appreciate you coming down.
jimmy flannigan, cyd covington.
ross malloy.

>> judge, ross malloy

>> [inaudible].

>> mr. Flannigan.

>> judge Biscoe, Commissioners, thank you for allowing me to speak today.
and Commissioner Eckhardt, thanks to your staff for being so responsive to my questions.
I'm the vice president of the Austin gay and lesbian chamber of commerce and I've been a small business owner in Travis County for over 15 years.
I think that arch hearing the remarks from chamber and staff that there's general agreement apple's expansion in Travis County is a good thing.
so I don't really need to go into all of the specifics about apple that it's such a great cultural fit for the county, that it has a perfect hrc quality index score that is correct it's on the leading edge of progressive employment practices, especially as it relates to the most disadvantaged members of my community, the queer and transgendered who of an incredibly difficult time even in Austin finding employment safe and accepting to their lifestyles that allows them to lead full and successful lives and in that apple is a shining star.
and to require them to recruit from a diverse workforce, to reach out to all of the demographics in Austin and in their supplier choices that they choose suppliers that are local and diverse.
so even given all of that, even if we ignore those benefits, even if we ignore what a fit apple is to the area, I believe we've talking about a deal where not a single penny of taxpayer dollars goes to apple.
this is a tax rebate so the money apple pays in is not rebated back.
this is not spending a current dollar of taxpayer money.
this is going to grow the local economy.
we're talking nearly 300 million in property improvements, over 600 million in new payroll over ten years, so regardless of the 10 or 15-year time lines that are being discussed, the county comes away with this deal either six or 14 or however you want to calculate it millions of dollars in increased tax base.
for that reason, even regardless of the other reasons that my community benefits from apple being a large corporate employer, I'm asking for your support from my community and from my chamber's support bringing these lbgt jobs to Austin.
thank you.

>> thank you.
mr. Covington, you say mr. Malloy left?

>> yes, sir.

>> okay.
dr. John k.
kim and laura presley.

>> one thing I want to mention to mr. Flannigan, the Commissioners court is contemplating a policy that also requires that there be lgbt equity in the benefits policies of any company that gets a rebate or abatement.
and we do look at that as well.

>> I would hope --

>> [inaudible].

>> absolutely.
as well as in our own policies.

>> of course.

>> mr. Covington.

>> judge Biscoe, Commissioners, thanks for letting me speak this morning.
my name is cyd covington.
I'm the chairman of the lone star rail district.
have been with the district since it was formed 10 years ago and have been chairman for about 8, which seems like forever.
and I wanted to be very brief this morning, but I am in favor of the incentives for apple.
I think it's very good for our community.
but I wanted to speak in regard to apple's -- the suggestion that apple fund the rail stop for lone star rail district and I want to really appreciate or say that I appreciate Commissioner Eckhardt for bringing that up and making it public and kind of getting it on the table.
we can certainly use any money, any funding source, bake sales, whatever, that we can use to fund these stops in this type of thing.
unfortunately, it's early in the game for us to even know what to ask for.
I have talked with apple representatives and I'm very confident that they will work with us and we'll be able to come up with something that's the right thing to do for both parties.
it behooves us obviously when we have a large employment and residential center in that area to -- to consider that for a rail stop, and we have one planned in that area, but right now it's plainly for planning purposes and the specifics will come out during the environmental process and that's when we'll actually know what the cost would be, where it will be specifically and, like I say, I talked to amy and I'm sure we'll be working very closely together.
for those of you who know me, I'm pretty tenacious at sticking with things and pushing things so I commit to doing that and working -- you know, making sure apple does their part.
and it's the right thing for them, it's the right thing for us, so that's really my position on it.

>> any questions?

>> mr. Covington, there are two stops within a half a mile radius of the apple campus?

>> the planned stop where the union pacific life cross at mcneil is 1.4 miles away.
that is a stop that should be there for all sorts of reasons.
it also may or may not be able to be there for the landowners.
we put it there for planning purposes to estimate ridership but where it will be up and down that corridor, with the density at the intersection of where the union pacific line crosses parmer and just the number of apartments and employees in there, that also makes a lot of sense looking at it at face value.

>> so there's also the possibility of the parmer stop.
again, like the discussion around employing the economically disadvantaged, the discussion working with lone star rail who has been very positive with apple.

>> very much.

>> and I think we all greed that rather than a performance basis for that element, it would be more of a good faith effort with regard to that element since we are in the nacent phases.
the reason this was brought up is because when you rebate the taxes in an area, you are not able to then utilize tax increment financing for that same area.

>> right.

>> and if we are contemplating 15 years of tax rebate, we are locking out the possibility of using tax increment financing for a stop at that location.
that's the reason for entering into this discussion with apple.
there is an alternative path from tax increment financing called a public improvement district.

>> right.

>> but a p.i.d., as it's commonly known, requires the participation of the landowner.
whereas a tax increment finance does not.
that's the reason why this good faith element with regard to lone star during the pendency of the rebate is important.
and I fully concede that it can't be performance based because we don't know enough detail to make it so.
but we do need to acknowledge that when we rebate taxes, we lose the opportunity to use tax increment financing in that geographic area where the taxes are rebated.
so that's the reason why this is under discussion.

>> and they had actually suggested a p.i.d.
and my response back to that was it's really too early and we have to bring everybody else in.
but that's clearly something that needs to be on the table that we need to discuss.
so like you said, it's really a lot of good faith, but it's also in their economic benefit to have a rail stop there and have their employees come by transit as opposed to them having to build structured parking.

>> and they as a corporate citizen -- they have been a real star as encouraging their labor force to come to -- come to work via --

>> absolutely.
absolutely.
I'm very comfortable that they will want to do the right thing because our goals are congruent there.

>> should I interpret your comments to me that in your view we should leave this issue to you and apple?

>> you know, I don't know another way to deal with it right now, judge Biscoe.
I mean, I don't know how we could write something other than, you know, that we plan to continue working together.
I'm comfortable that -- that they will and I can assure you that I will and I've got some things that are

>> [inaudible] but I can hold that up in their face and say I tend to be pretty tenacious at doing this.
and I truly believe it is in their favor and benefit to continue working on this.

>> but the tax increment financing you would be looking for in the future is a tax increment from the county.

>> right.

>> that's why I think it's important to be in the county's contract.

>> right.
absolutely.
and I concur with you on that.

>> thank you very much.
dr. Kim.

>> oh, yes, sir, thank you very much.
I greatly support apple expansion.
the people support I like to have several -- just a couple of balance, accountability balance sheet.
how much money actually apple need from Travis County Commissioners court approval.
how much money, exactly how many dollars apple need from Travis County Commissioners court approval.

>> as far as need -- need -- need to locate here?
what they are asking for in dollars?

>> no, how much money, yes, right now, as of today.

>> well, it depends.

>> ms. Peterson, you have an answer?

>> there is a staff recommendation for an amount and that would be an estimated support level over 15 years of about 7.4 million.

>> we need that before we approval.
we need to see the actual amount balance sheet.
and also when or do they refund or return the money to the county?
if you receive the money from the Travis County, apple will refund the money to the Travis County with interest.

>> no, it's not a loan.
they never give the money back.
it goes back to them and we never see it again.

>> it's a donation?

>> apple would pay their entire tax bill and then after we determine they are compliant with their contract, we would rebate them a percentage of their tax bill which right now would be 80% for ten years at least.

>> we give back 10% of their tax responsibility.
relieve them of 80% of tax responsibility.

>> we need also balance sheet of that and the law supporting that.
why apple only or we know american government have a multi trillion dollar deficit and also Texas government trillion dollar deficit.
why we need to support specifically government money to expansion apple right here at this time.
we need the reason.

>> because they can command it.

>> I like to see the reason.

>> that's the reason.

>> that's not enough.
and also the apple, do you have supervisor, independent supervisor not be associated with apple to run how they use their money?

>> does Travis County have -- does Travis County have one or does apple have one?

>> oh, Travis County will appoint one supervisor?

>> no, we will monitor compliance with the contract if we enter into one.

>> just

>> [indiscernible], that's it, no supervisor?
we need at least one supervisor how to run that money.

>> okay.

>> and 300 jobs increase means -- no, 3600 job increase means at least 10,000 population increase.
where do they stay?
where do they stay?

>> the new employees of apple?

>> yes.
not only employees, 3,600,000 employees means at least a 10,000 population increase.
they have family.
father or mother or wife or husband, we need that, where do they stay?
downtown?
not acceptable in downtown.
traffic, traffic, heavy traffic even already.
you have to go another place.
not downtown.
I need all of those informations, the answer.
and also this -- have I the information right here.
if you have this kind of project to donate money to the private county, we need to see at least a

>> [indiscernible] of events to review this.

>> we can get our planning and budget staff to send you the information we have about economic impact and the incentive, the amount of money rebated to apple, what the county gets.
if you give ms. Peterson your address.

>> I will appreciate my honorable judge Biscoe, you are my best judge ever.
thank you very much.

>> [laughter] you are best judge.
I really appreciate you.

>> thank you.

>> and I hope you do not decide today.

>> that's true.
ms. Presley.
and can we get gavino fernandez?

>> I think he left.

>> ed willard, jr.?
and bill aleshire.
ms. Presley.

>> hello, judge and Commissioners.
thank you for having this public discussion.
I really appreciate it.
I'm dr. Laura presley and I've spent 17 years in the semiconductor business here in Austin and I was the growth margin manager for free scales 1 billion-dollar networking business.
I've looked at return on investment calculations incessantly and I have a couple of questions about this investment for Travis County.
one of the comments I want to make is jobs are not a means to an end.
jobs are a means to an end, they are not the end result we want.
if we can't afford to live here in Travis County, what is it worth having a job in we have to be able to afford to live here.
this is an absolute bottom line business decision for Travis County with regard to the return on investment.
and you know, I was just asking the woman next to me about the ri study and what are the components of that.
I would challenge you to go through each of the assumptions.
one of the assumptions the city of Austin had on their return of investment simulation and model was that model did not take into consideration the location of the property and the investment.
and that's a problem for the city of Austin especially when the the location of apple is going to be so far north and you have people in Pflugerville, Round Rock, in georgetown potentially getting those jobs because dell has lost a lot of jobs to asia because of outsourcing.
I would challenge the city of Austin with their return on investment calculation because that component was not added into it.
I would challenge you to look at every one of the side service sum shuns of roi.
I think, Commissioner Eckhardt, I appreciate your strive for the employment provisions in the contract, but I want to remind thaw recruitment and preference for employment is not a commitment.
that you guys really need to make the language very strong if you are going to do this, make it a commitment, not a preference or an intent or a recruitment by commitment to hire.
big picture, let's look at, this it's $110 billion cash rich company, corporate, global company.
and they are making a $282 million investment.
Texas and Austin has already committed about 30 million, so we've already given them a 10% discount.
all right?
$100 billion cash rush company gets a 10% discount from Texas and Austin.
I'm a little questioning of that.
is there another way to create 300 jobs a year in Travis County other than give this money.
that's what it is, 300 jobs a year.
that's what we're talking about.
if we are so convinced that the return on investment is huge for Travis County, I think what we just got told was 7.4 million is what they are asking from Travis County.
the return on investment is calculated at being 44 million.
that's over 6 x return roi.
with you guys commit, and this is going along the questions of this man prior to me, would you commit to returning that money back as a rebate to the citizens of Travis County on our tax bill.
give us a 2 x rebate.
this my be an easier pill to swallow for the citizens because it's not the county's money, it's our money.
and if I'm going to invest in apple, I would expect a return on investment.
so I think if you guys -- if we're so confident that the roi is 6 x, then you guys should think about committing.
I want to plant this seed as an unusual idea, but it is a new idea, giving a rebate on our county tax bills, a portion of that to the citizens.
if we're so confident this is going to pay off, put your money where your mouth is.
and I think the city should have done the same thing.
that's all I want to say.
thank you.

>> any questions for ms. Presley?

>> question for ms. Presley.
about with a year and a half ago Travis County named a subcommittee to take a look at any way, shape or form we could inject productivity into our property tax system because Travis County is reliant almost exclusively on property taxes.
and while the state of Texas ranks 45th in combined state and local taxes per capita for the average individual, at the local level property taxes are regressive in that the higher you go on the economic food chain, the lighter the burden gets.
and the lower you go on the economic food chain the the heavier it gets.
so even without the rebate, apple being at the very tippy top of the economic food chain would have a fairly light tax burden in the state of Texas.
one thing that could be looked at for the future -- I hear what you are saying about a rebate for the citizens.
I don't think we have a mechanism for that.
statutorily we do have a mechanism to increase the size of the exemption for the over 65 and disabled.

>> but they are not the only ones paying for this.

>> I know.
one of those -- that's one of the issues with the statute.
we can't rebate the -- I don't believe statutorily we can rebate taxes to individuals.
curiously we can rebate taxes to corporations under 312 of the tax code and under 381 of the local government code.
but we are unable to rebate to regular citizens.
we can, however, create exemptions under specific categories.
and --

>> [telephone ringing] -- and probably the one that would have the the greatest is the over 65 and disabled.
I can see that wealthy individuals over 65 would get the increased exemption as well, but at least there's some statistical evidence that over 65 and disabled have a higher probability of need.
would you be in favor of exploring that?

>> I think that's an interesting idea, but I would be interested -- what I would be real encouraged by is whatever the tax value we get from the over 65 group, let's make sure that apple doesn't get any more than that.
you see what I'm saying?
that's apples to apples.
if I'm --

>> as it were.

>> yeah.
that's good.
first of all, I don't agree with corporate welfare.
let me put that on the table.
but if you are going to do this, make it to where you put -- make apple and this roi calculation accurate and put your money where your mouth is and give the rebate over and above what it's going to cost us to give this money to them.
I want to challenge you to there any about creative ways and if there's no legal way to do this we need to be lobbying the legislature to do the this because if this is going to continue it's going to become more and more.
we need to have the the citizens understand what is our benefit.
I don't buy this roi calculation.
I didn't buy it from the city.
I can see the errors in it.

>> our roi calculation is a gross extremity with a fairly larger roar rate.
we concede that.
we're working on that in terms of utilizing web

>> [indiscernible] in a way.
in this roi calculation, over years when it proves out what the return on investment was, we could, we could contemplate dedicating the realized return on investment to an incremental increase in our over 65 and disabled exemption, which we haven't increased in a number of years.
it's just -- it's just a thought and it's -- I appreciate your thought going into it.
of how to reinvest that realized return some that -- because you are absolutely right, when you rebate one citizen's taxes, it means all the rest of the citizens pay more.

>> that's right.

>> we will not have less revenue in Travis County.
we'll just push on the balloon and the pressure will increase on the rest of the tax paying public.

>> right.
thank you.
but I think you hear the message and be creative with this and think out of the box on how we can do it better.

>> thank you, dr. Prezly.

>> judge Biscoe, Commissioners, thanks for letting me speak.
I'm a life-long resident of Travis County.
apple is an amazing company.
we'll probably all have an iphone or ipad and I'm sure I paid for half of their expansion but by eye itunes purchases.
I'm an apple nut myself.
apple is also a marketing genius.
and in fact, the apple brand has so much power in america that Commissioners court probably shouldn't say it's considering apple incentives because the next thing you know there will be 600 people camped out on the courthouse steps thinking they are in line for the next iphone.
so -- but in discussions about tax incentives, I think we need to not act like swooning consumers or apple groupies.
and just the name apple influences your thinking.
so I just propose that to help us be objective, from now on we call them company c minus.
I'm glad company c minus is coming here and I welcome them.
I just wish company c minus would come here without asking for incentives.
and wish the state and the city would have said no to those incentives and hope the Commissioners court says no.
but I get the feeling that -- that c minus already has its angry birds in a row and I'll have a hard time getting to level 2.
so rather than go into reasons why I think you ought to vote no, I would like to propose a change in the contract to c minus.
I'm a developer, and in real estate there's a saying that you set the price and I'll set the terms. And that phrase is always used in jest, and for those that -- of you that aren't familiar with that, let me give you a example of how it works.
and not to pick on anybody, but Commissioner Gomez, if I knocked on your front door and said I'll give you a million dollars for your house, you would probably be really excited.
but then if I went on to say, I'll pay thaw million dollars when I win the lottery or the next blue moon, you would roll your eyes and say you've got to be kidding me.
the point is that a contract, the terms of a contract can erode the price that you agreed to.
and in this case company c minus, the deal at least as the public understands it is that they will hire 3600 people and build a facility costing roughly $300 million.
that is the price they've offered.
in return, we will sell them tax abatements.
over ten years the state will give them 20 million.
Austin has already agreed to 8.6 million.
and they are asking the county for some additional amount, 7 million or whatever.
then at the end of the 10-year abatement period, we get to tax that $300 million plant.
and that's the basic economic transaction that we're all talking about.
but the terms of the deal, at least of the contract version that I've seen, erode that economic trade.
instead of hiring 3600 people and building a $300 million plant, company c minus is really contracted to build phase 1 for 56 million and they have to complete that by 12-31-15.
2015.
the first 300 people they hire is the following year in 2016, four years from now.
and that's all company c minus has to do to get the first year's tax break.
the question to me is if a company, an unknown company walked in and said, Commissioners court, I would like a tax break and in exchange I'm going to build a $56 million plant and hire 300 people four years from now, you would probably all go I don't think so.
so why does company c get a tax break?
well, the bait is the 3600 jobs and the $300 million plant.
and everyone is focused on that end of the bargain, just like my offer to buy Commissioner Gomez's house for a million dollars.
but the devil is in the terms. Each year after that, company c minus has the option of hiring a given number of people.
and if they hire that number of people, then they get an additional year's tax break.
however, they get to keep the tax break for the previous year.
even if think don't meet the second year's hiring requirement.
in fact, company c minus can pack up and leave and they would have got to keep the prior year's tax abatements during that period, even if they left.
what about the rest of the $300 million facility?
it doesn't have to be complete until December of 2021, nine years from now.
and so what happens under the contract if they never build that plant?
nothing.
in fact, Commissioner Gomez, you watched your million dollars for your house.
so what's happened isist price that you think you have agreed to, you really are not getting because of the terms of the contract don't require them to actually perform all the things you are getting.
3600 jobs and $300 million in plant facility.
so I'm sure somebody is going to pop up and say, well, if they don't build the second phase, the tax rebate would have been smaller.
that's not the point.
the point is the only reason they are getting a tax break at all is because they committed to build a $300 million plant and hire 3600 people.
so you wouldn't even be considering the tax break if that were not the economic bargain.
so I'd like to propose that the county add a claw-back provision.
what that basically means is we made an economic deal for them -- we're going to give them tax rebates and they've agreed to hire 3600 people and to build a $300 million plant.
if they fail to do that or if they fail in any year to hire the number of people that they are required to hire, we ought to have the right, they are undoing the basic economic trade, we ought to have the right to undo the trade from our part which means we need our tax money back.
we made a deal and the deal ought to be held.
so the county really needs to close what I call the contract circle and ensure that the taxpayers get the deal that we all think we get.
I mean, all the taxpayers assume that they are required to hire 3600 people and they are required to build a $300 million plant.
that is not what's in the actual written document.
so I would hope that you include a claw-back provision in there so that the basic economic trade that we think we're agreeing to is actually carried out.
thank you.

>> thank you.

>> any questions for mr. Witter?
your recommendation is the claw-back provision would require reimbursement of 100% of the amount rebated?
a that's right.
if we're making an economic trade of -- I mean, all of the chamber stood up and said they are going to hire 3600 people, build a $300 million plant and all talk about that tax base and how much money we're going to get.
if that's the economic trade, then we need to name sure that we really get that economics.
in they don't identity, we ought to get our money back.

>> okay.
Commissioner Eckhardt.

>> in the draft policy Travis County has been contemplating, you are right, over a 10-year period it's actually in the final three years, I believe, where fully half of the 3,635 jobs are actually brought online.
the previous seven years it's roughly-"it's 300 for the first two years, 50 for the third year, 150 for the fourth year, 350 for the fifth year, 4 to for the sixth year and 4.

>> for the seventh year, which that's significant still to bring those additional jobs.
but I do note that in year 3 and 4, given their hiring levels for those two years, at least under our draft policy, for year 3 they would only qualify for -- as far as their base abatement goes, for 25%.
and then you put lead on top of that because they are building leed so they would get 10, 10 and 10.
so they would get for 10, 10 and 5 or something like that.
they would still get to like 60% for that year.
and then for year 4, at 150, the base would be 37.5.
so are you suggesting that in claw-back we might say -- in claw-back if you don't reach those numbers, that there -- that we bump you back down from 80% to, say, 60% if you don't meet your target?

>> well, I -- I would say that if you don't meet your targets for a year, and maybe there's a rollover to the next year where you can have an ajust, but there needs to be some way if those targets aren't met, they don't get to keep the tax rates for the previous year n effect, they could hire the first 400 people, stop, and will have already gotten a tax rebate for the previous year's income.
and I think the basic trade is that we're all looking at and thinking about the economics of the deal are that it's a $300 million facility and it's 3600 employees.

>> uh-huh.

>> so to the extent that they can wiggle out of that, we ought to take that away from them in the contract negotiations.

>> who goes back to the idea of a performance based contract.
I keep going back to the federal reserve article that's great.
everything about it says, you know, make the deal transparent and performance based so you can measure whether it worked after the fact.

>> in the --

>> so that next time --

>> I don't -- the only draft that we've ever seen is one that is city did a long time ago so I don't know what y'all are looking at.

>> there's no claw-back in it, I'll tell you that.

>> there's no claw-back.
and actually there's no requirement of any sort that they build the second phase.
it's -- it's there and if they build it, they are going to get a tax rebate on it, but there's no requirement that it be built.
thank you.

>> thank you.
bill aleshire.
is ms. Russell here still in in.

>> judge Biscoe, Commissioners.
I want to take a quick moment and thank you all for having this presentation today.
as you know, I represent some homeowners out in river place.
I would caution that with the drought coming that the balcones canyonland plan needs to take a good look at whether or not you have met the safety zones within the preserve next to these homes because there's cedar trees within the preserve within 20, 30 feet of river place and it shouldn't be that way.
more than others who will speak to you today, I understand what it's like to sit where you are.
I voted for tax abatements, though I would say for the last 13 years I've been clean and sober.

>> [laughter] but I wondered when I voted for them if I did the right thing.
I've opposed tax abatements and I admit to you that I worried about whether or not I had contributed to someone going without a job in this community.
I understand the dilemma.
but good jobs happen here because of the best of the private sector.
the free enterprise system.
despite the nation's economic woes, jobs in our Austin economy have grown just fine with businesses that did not give these tax give-aways.
free enterprise works, as you just heard from my buddy ed, free enterprise works when a smart buyer and a smart seller make a deal.
perhaps you can make a deal far better than what the Austin city council did.
and I want to thank you for the process that we see unfolding here.
it's been secretive and I understand the practicality of some of that.
when I compare what all are doing here to what I saw on Austin city council where they had none of this discussion and interplay between elected officials, they got to the end and called for a 6-0 vote and it was done and a contract was here.
they didn't have public discussions about the elements of that contract like y'all are doing.
it was blowed and saucerred by the time they got to that vote and I thank four at least trying to bring to the extent that you are able to bring out these elements and let the public see what you are doing.
perhaps you can do a better deal and encourage your colleagues at the Austin city council to put it back on their agenda and follow your lead.
we all need to better see what people who don't get a government paycheck see.
we all need to see what those who are not quite so privileged see.
it was a good experience for me to be this county's tax collector before I served on this court because I got to see people in person struggling to pay the taxes imposed on them.
and I know the math involved.
when you vote to excuse apple, the richest company around, from paying its full share of taxes, you are raising the taxes of all those other people must pay.
it's for you to vote yes or no on this type of corporate welfare.
there are plenty of reasons apple should choose this town.
but there is no true economic reason they wouldn't choose this place without being bribed.
we need a system that begins with a broader analysis than this apple deal and f-1 before it perhaps is going to spark a broader and more healthy discussion about economic growth and what -- how you might use all the tools available, economic money kickback features being just one feet you are of what should be recognized as a broader, more productive strategy in this community for attracting appropriate economic growth and lifting the floor for the people that are left behind.
the analysis I haven't heard of these 3600 new residents.
a gentleman earlier asked questions like that, where are they going to sit, where are they going to be.
if it's 3600 new people coming to this community, it has a different cost impact on the community at large, on our infrastructure, on our schools and so forth than if it's 3600 jobs that -- for people who are here.
who are trained as accountants or h.r.
people.
it's a big difference and it ought to matter in how you approach these incentives and how you calculate what the true cost is.
because if we just focus on what's going on with that building, but we've got 3600 new people here and we need to roads and we need the schools and we need -- so forth, and we have cut them a tax break, all of rest of us have got to pay for that growth and growth is not paying for itself when that happens.
and it needs to be a system of accountability.
we did a few little audits when I was county judge on tax abatements.
I remember we call selus brewery actually laying off employees instead of expanding the number of employees that we caught.
but we didn't do a particularly great job of it.
and I challenged the mayor this morning at a forum in asking if they -- if the city actually has an annual audit that they do of all these open tax abatement contracts and whether or not they test what the public good is from each one of those tax give-aways, and if he felt any responsibility to put that information available online for everybody to see it.
and he said he thought it was a good idea.
but it's -- nobody is doing that.
ed made the point that accountability doesn't start with some kind of audit process that you -- or even a claw-back system.
it starts in negotiating the terms to begin with.
all the city council did to try to help anybody who lives here get a job, forget about being poor, all they did is says that apple was contractually required to use commercially reasonably best efforts to try to hire people.
that is no base for an accountability system.
you've got to say we want this number of people in year one and year 2 out of our workforce hired, and if you don't do it, no offense, but you don't get the break.
you either do what we want you to do with this tax money and give the public benefit or you don't get it.
now, I see an Austin that is not quite what it pretends to be.
oh, it has potential to be the sensitive, vibrant island of democratic ideas, but its premature claim to that status is largely bs.
gus garcia wrote me saying I know the city of Austin enjoys great economic prosperity especially when compared to other cities in the nation and that's good.
but when I go to where average Austinites go and I talk to them, what they tell me is that the prosperity is benefited a few people, but that the average citizen, especially one on a fixed income is not better off and they have to deal with increased cost of living, increased cost to public safety, et cetera, et cetera.
like gus, sometimes I feel like our elected officials ignore reality.
Austin's poverty rate at 20% is higher than the state's average.
and 28% of Austin children live in poverty.
a rate that has climbed for the last three years.
what are you doing today about that?
instead you are posed to grant favor on a company that doesn't need it.
and I strongly suspect has long ago decided to add its back office accounting, finance and h.r.
functions to the employee, large employee base it already has in this city.
they are playing you because that's the game.
they played the city council.
but that ain't so hard.
bernie ecklestone managed to do that all the way from england.
perhaps the least you can do now, if you just don't have room to say no, is to strike some kind of bargain.
not for apple, but for the folks you'll pry indigent health care to if you don't.
for the folks that you'll have in your juvenile probation system if you don't.
for the folks who will drop out of school if you don't.
and for the folks that eventually you'll put in your county jail if you don't strike a deal for them.
thank you.

>> any questions for the judge?
Commissioner Eckhardt.
always a question on the tip of your tongue.

>> [laughter]

>> I have nothing to add except appreciation.

>> Commissioner Gomez.

>> thank you, judge.
always a pleasure to see you.
the less former judge ever.
miss russell is the last person who signed in to speak.
anybody else who did not sign in?
miss russell.

>> thank you, judge.
Commissioners.
it's been a while since I've made it here to this court.
it's been a while since I've felt a need to weigh in on such a huge deal.
I'm so used to my city council making big mistakes.
and I want to echo judge aleshire's comments that this is going a lot more smoothly and I want to applaud you for that.
I've always known the Commissioners court to be a lot more judicious and conservative when it comes to corporate welfare.
of course, you have a lot less free money to throw around.
as a del valle school board member, I represent a portion of southeast Austin.
we used to have jobs there, high-tech jobs there.
we don't have those anymore.
a lot of those got moved away to the west side and they brought in other people.
a lot of these promises over the years from these high-tech companies did not prove to be true.
and I hope we keep that in mind.
especially whether the contract doesn't actually bind them to these wonderful promises they are giving us.
and I also want to just kind of expand the scope of how these things seem to happen.
and question that, just question the whole premise of where we are now because it seems like last week and even as late as this morning Commissioner Eckhardt clarified for us again whether or not Travis County was actually having to sign on to this for this deal to happen between the state and the city.
and didn't seem like any of us really knew that up until last week.
and that's -- that's troubling too, that we're -- a lot of these things seem to get locked in by letters sent to somebody else.
like susan combs sent a letter to f-is, somehow we all have to do the deal now.
so I'm worried that's how re got here and we didn't really get here from a cleaner, more organic route where people in -- eyes wide open that y'all had to sign on in order for the whole deal to happen.
so, you know, things are now being, I think, scrambled together at the last minute and I know the pressure is always on on these deals to do this quickly.
and I just want to encourage you to not do this quickly.
apple is still going to be around for a long time.
and again, Austin is supposed to be the most -- the best place to live in the country.
I still don't understand why we have to bribe people, even apple, to come here, especially when apple is the richest company in the world, the most cash on hand, they had to have an emergency meeting two weeks ago to figure out what to do with that $10 billion that they need a pittance, 37 million total from us here to move here, which, you know, in their mind as somebody put it recently is the equivalent for us of a cup of coffee.
I mean it's pocket change to them.
now, it does allow us a position to -- in which we can then negotiate these -- these employment statutes, structures and hopefully we will get some really good people employed that otherwise wouldn't have had opportunities.
that's great and I'd like to see that really take place and get more bang for our buck here.
but again, it comes back to even if -- even if those jobs are given to people that haven't had jobs here and that are underemployed and haven't had those opportunities, we have to understand that right now all of those folks are facing rising utility bills on every level.
hundred to 300%, we're not even talking grade ating scales.
while the large companies and developers are enjoying 40% on the dollar tax breaks for their be property tax appraisals while they are enjoying they are -- not paying their fair share of the utilities, that cost burden comes back to us.
even those people who get the jobs, what is that paycheck going to mean when they can't afford to live here.
when they have to live in an apartment, a one-bedroom amount with five in their family just to be able to afford to live here and have that wonderful job.
we're supposed to have good quality of life here.
let's ensure that and I thank you for your diligence and encourage you to be diligent and not vote quickly and to take more time on this.
thank you.

>> I have a question.
miss russell, before you go, I wanted to ask your opinion.
one thing I note is that without an incentive, apple located here and produced 3100 jobs.
I suspect because we didn't get a demographic breakdown, I'm happy to be proven wrong, frankly, but I suspect that the market dictated the easiest hires and we have a layer of very well educated workforce.
if through a tax incentive we can shift apple's employment practices to favor the economically disadvantaged, is that worth it, in your mind?

>> there was a day when corporations and companies didn't have to be bribed to do the right thing, but we're not there anymore, unfortunately.
I think that if there is some mechanism by which the community receives benefit back in the future, like dr. Presley was talking about, then perhaps there is some payoff there.
and I'm -- you know, I'm happy as pie to put a little bit into the pot so more people are employed.
myself, but -- and I don't have that much to begin with, but again, if they get priced out, there's not really a lot of benefit there.

>> that's a good point.
thank you for that.

>> and along with that, just recently you know the solar farm mechanism that was placed out in webberville, and, of course, that was a rebate-type program.
and, of course, the benefit and I think we participated as far as 80%, the city of Austin also was dealing with that particular solar farm, frv, in fact, is the name of it.
but at any rate, at the end of the day you looked at the course of time as far as who would actually benefit from that and, of course, in a 20-year period I believe del valle independent school district would see 15-point $15.9 million.
we had acc, city of Austin, Travis County.
but the spinoff you heard earlier even in the early testimony about what it would mean to not only the hospital district, their yield as far as revenue coming in, along with acc and, of course, the Round Rock independent school district receiving millions.
as far as some of the tradeoffs.
so I just wanted to make sure that the things you are saying, I understand it and, however, there are some things that we still need to fine tune.
we're in the negotiation process and this is not over yet and, of course, we're going to see what we can come up with.
but I really do appreciate your comments.

>> and investment in clean energy is a lot easier to see the direct benefit and a lot easier to track the money.

>> folks really prefer that landfill out there.
inappropriate land use.
so we have a solar farm out there.
but thank you.

>> thank you.

>> mr. Johnson.

>> good morning again, judge Biscoe and Commissioners.
this open process is very well received by me as well.
and it is an improvement on the city of Austin's process.
this idea that a job gives people dignity and economic means to pay their bills is important to me as well.
I'm a freelancer in everything that I do.
a job, though, does not mean a career.
going back some years to the tax abatement that the court gave in the early '90s to golfsmith and some other tax abatements that were given in successive years shows me that when you look at the amount of people that work at some businesses, not necessarily these jobs, I hope these jobs are career jobs at apple, but some of them are ones where people move in, they assume entry level positions, answering the phone at golfsmith, and if you look at the turnover rate in the last 21 or 22 years since that agreement has been put in place, the number would be a fan takes likely high number -- fantasticly high number because those jobs in the mid 90s were paying just above minimum wage.
that doesn't relate exactly to apple, but this idea that you are talking about job creation, and again, it's over a 10-year period.
that doesn't mean that that person will get a career.
they might come from outside of Austin and use that job as a spring board to another job.
the idea too that although it was quoted by the mayor that the majority of these jobs would be hired from local talent, existing people, if that's the case and if that number approaches 80 or 90% or above, that's ideal, but is that in your contract, is that a requirement of the negotiation that you are dealing with now?
I would be happy if that information was found out now or in the near future.
and if it was, again, shared with the public.
the idea that this growth in employment would bring other people who are not working for apple to Austin knowing that apple is hiring, apple is coming to Austin, you do need salespeople to support the people that have a job or people that move to the area so, the multiplier effect is extremely substantial, and if those people move far away from the city center, then you do put stresses on the infrastructure and schools and jails and things that we talked about earlier.
so all in all, as was stated earlier, growth does not necessarily pay for itself.
if we had a samsung drop in our lap every year and they hired 100% from the local community with career jobs, those deals may make sense.
but something that's located far outside of the city core that's going to stress resources is an issue.
and it's an issue related to air quality as well because the distance for the commute could be very substantial, and I don't care how hard they try, I've been to apple's campus, the majority of people do not come via alternative means of transportation to the existing apple site.
and it is not well positioned currently for transit, be it the bus system, and it's in between rail stops for the current red line.
I would encourage to you take more time with this negotiation and not approve it today or whenever your first opportunity is to look at this issue more closely.
the final thing I would say is that most all of the improvements in how we look at these deals relative to the city looking at them have been driven from the community.
the community wants open space requirements.
they want density bonuses for this and that.
they want workforce requirements.
I would love my friends at the chamber of commerce to say, you know what, we need to have a transportation plan in place where you minimize the vehicle miles traveled and set a goal for that.
look beyond this incremental progress which certainly is much better than this the '90s when we were a cheap date and we're still certainly a cheap date, in my opinion, but we're getting better.
and look at the economic consequences, look at the environmental consequences, look at the social consequences of these decisions and realize these folks have a choice, but they do certainly want to move here and it wasn't -- we don't need to beg them as was stated earlier.
I'd be happy to answer any questions.

>> any questions?

>> yes, sir.
mr. Johnson, would you be in favor -- we have to date and this is one of my beefs is that to date while we have developed some facility format matticly projecting return on investment, which I want to say the term return on investment is kind of inappropriate from a technical standpoint, from an economist standpoint, in this analysis that's the word that's used.
we have developed some more sophistication in calculating a projected net even after giving taxes back.
but we haven't been particularly good in this region and in this state at going back -- going back and checking to see if those projections held up.
you mentioned golfsmith, the requirements in the golfsmith incentive, and we haven't -- regionally we haven't done a very good job at going back and seeing if the projections held up.
would you be in favor of Travis County as a governmental entity spending some of what is termed return on investment, which is really just net after giving taxes back, to award a more robust study on if these work and if so in what instances so we can refine the utilization of this tool?

>> certainly I would like to see some private sector partners join forces with you in that regard.

>> perhaps academia would be the most disinterested party.
the one with the most arm's length view.

>> bill spellman said in his life experience and work experience, he's done, he's looked at economic models and I assume that lbj school would have the resources to help you with that and hopefully the interest in doing that.
have they done that already?
have they joined forces?

>> no, we have had the ray marshall center look at the returns on our workforce development expenditures and either ray marshall or the lbj school may be good to look at the projected benefits from rebate or abatement deals and under what circumstances did they show the most robust dividends.

>> thank you, mr. Johnson.

>> mr. Johnson, I wanted to let you and all the persons that have come here today and I think give some real critical testimony during this public hearing, but also let you know we are currently working diligently on revisiting our 312, our tax abatement policy and also rebate policy 381.
of course, we are doing that with three members of this court.
Commissioner Eckhardt, Commissioner Gomez and also myself who serve on that particular subcommittee.
so there is a lot of fine tuning that we are going to do I think in that particular effort.
so those of you who have made your comments, I would like to let you know that we are still looking at an economic development policy which we're going to bring back to this court hopefully to move forward for the benefit of residents in Travis County.
I just wanted to let you know that.

>> thank you.
glad to know that.

>> we appreciate the input of today's speakers.
move the public hearing be closed.

>> second.

>> all in favor?
that passes by unanimous vote.
we will further discuss this matter and item 24 when we carry it into executive session.
looks like that will be sometime this afternoon.

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