Travis County Commissioners Court
September 8, 2009,
Item 30
>> number 30 is to consider and take appropriate action on recommendations from the Travis County economic development subcommittee regarding a tax abatement policy.
>> this is a revisit from the work session for the threshold question of which one of the options did the Commissioners court as a whole would like to pursue.
as was laid out in the original back up-from the work session and then a little bit of plagiarism for the backup for this.
there were four options laid out.
one was to take no action, weaving Travis County with -- leaving Travis County with no tax abatement policy.
number two was to readopt our previous policy.
number three was to adopt a minimalist policy that provides the maximum flexibility.
and number four was to adopt the draft policy or to move forward with the draft policy in exploring the elements that are still outstanding, that need to be addressed from a policy standpoint.
the subcommittee as a whole recommended that we move forward with number 4, although again there are many issues that still need to be addressd from a policy perspective within the draft policy that was proposed.
my understanding -- and please correct me if I'm wrong -- that I believe it was mr.
rollins who suggested from the chamber that we move forward with number 3, a general policy that provides the maximum flexibility.
and those are the two recommendations that I know of.
>> well, looking at the news this morning about all of the jobs that are being lost mainly because there's just a change in, I guess, the industry and given the fact that we have a huge unemployment rate, you know, and it just kind of makes me wonder that we need to land on something that helps us address those issues that are upon us right now.
i mean, I get calls from people everyday who are looking for jobs.
and it almost sounds like we need to get busy.
i think they expect us to do something.
and so what is going to be helpful to us to get moving?
>> I think the next step, if we were to -- if we were to bless moving forward with the draft policy, then the next steps would be to bring each one of the issues that had surfaced through the many meetings that we had with regard to a minimum health care coverage, with regard to the inclusion of manufacturing in the list of targeted industries, with regard to the inclusion and in what manner of lead construction benefit.
there were several outstanding policy issues.
although the draft is a good first draft, there were, I believe, five to six policy issues that needed to be specifically addressed before bringing it to a final vote.
>> you notice as I have continued to echo my suggestions as far as what I'd like to really see happen, I think Commissioner Gomez and Commissioner Eckhardt, I really appreciate working with you guys on the subcommittee.
and hopefully we can come to some end.
so we can move forward.
but as you have heard us say repeatedly, repetitively to the employers of this region, in this community, in Travis County, that we are concerned about basically three things.
how do we get there to address those concerns is what we're trying to do now.
but we're looking at job creation, we're looking at job retention, we're looking at job readiness, which means job training.
those three things I think are very essential.
we have a host of persons that have been laid off in this community.
and we are trying to address those concerns to make sure that Travis County is a good place for employment opportunities.
you look across the spectrum and luke at the pockets of poverty throughout Travis County, and not only those that are impoverished, but those that have lost opportunities in the job market.
i mean, it's real.
i think Austin -- Travis County may be a little better off than other parts of the country, however, we still have unemployment situation here that in my opinion is really something that we need to address.
so I think that whatever we end up doing, I think that we need to make sure that we embrace those things.
and I think the chamber folks that were here and I want to thank marietta gearhart for working so much with the county attorney's office.
she's just been right there with us for all our legal concerns.
but we need to really land, I think, on a situation where I want to make sure those things are addressed and embraced because the joblessness in Travis County is -- in my opinion is where it shouldn't be.
we really need to make sure that whatever we do, something is in race plais to attract the kind of businesses that are willing to stay here in Travis County, employ folks here within Travis County, and of course spend their money here in Travis County.
i have no doubt about that.
so this is where we're at.
i think option 3 and option 4 basically suggest both of these things, but there are other components I think that we need to kind of work out.
i think Commissioner brought up some good points as far as the health, making sure there's a minimum of health coverage afford bid some of the employees.
i think that's very critical because some of the problems we have right now with a lot of our persons that are employed, they do not have adequate health coverage.
i think those are critical as far as some of the components.
there are a few things that we still can have agreement on with the chamber and I'm sure that they have had a say in all of this and they have continued to have a say.
i don't think we're at an impasse.
>> I don't think we are either.
>> so I think we can move forward on what we -- flexibility is critical in this whole situation.
and I don't believe we have created an impasse situation, as I stated.
however, I think some of these things can be addressed.
now, the question is how do we go forward?
do we go forward with this here and now with the point of coming back and making modifications as we see fit to make sure that there are things that are fleshed out, so that's just a question in my mind.
>> from a legal perspective, and marietta may want to weigh in on this, although there are, frankly, few outstanding issues and they have been very well vetted, they are issues that need to be addressed.
would you all like to come forward?
you don't have to.
>> do you want to come on up?
>> and I understand the chamber has engaged an angeles angelou.
i don't think it was appropriate to bring him to the subcommittee level since they've been well vetted at the subcommittee level, but those issues now are right and well-defined to be brought to the full Commissioners court for discussion and conclusion.
and one of the legal issues with that is we would like to resolve those issues to the satisfaction of the court with-- in a completed draft because once a draft is approved, it cannot be amended except by a super majority over the two years of the life of the policy.
so I think that through a series of voting sessions, probably within a month, we could complete -- address those final issues, those final five or six issues.
is that you all's feeling as well?
>> Commissioner, yes.
my name jeremy martin with the Austin chamber of commerce.
did morning and thanks for allowing us to speak today on this issue.
we also thank you for the opportunity of working with you over the past several months.
one point of clarification on the options 1 through 4 that Commissioner Eckhardt laid out earlier.
option 2, which allows the court to renew the existing policy, previously the chamber and its representatives expressed comfort with that as an option as well, to adopt the existing policy while the court continues to work through the desires and priorities and establishing a new policy.
so that's still an opportunity that we're open to, for the court to adopt the existing policy -- excuse me.
adopt the existing policy that has expired and then continue to work with you to address the outstanding issues that you've previously outlined.
>> that's a decent suggestion.
thank you for that.
>> the only other comment -- again, my name is dave porter with the chamber.
time is of the essence I think on this.
Travis County continues to bleed jobs and there's very few projects out there.
one of the things that we're seeing from site consultants that consider Austin-Travis County, is they put a check mark, does the city -- is there local buy-in.
is there city policy to allow incentives, then they put a check mark yes or no.
is there a county policy to allow incentives, and if there isn't, then many times we get skipped over.
and so I think time is of the essence.
you know, our national economy is still waiverring.
a lot of job losses continue and we continue to see good projects continue to come and go not because specifically there isn't a Travis County policy, but we need to have all the pieces in play to put the best foot forward to try to create good paying jobs here in Travis County.
so I know that while we talk about another month, and if it's another month, that's another month, but that then puts us into October and again, time is critical as we go forward.
we've let a number of projects over the last few months or last six, seven months that we've had some good projects come and go.
again, I appreciate your consideration for this.
it's very important.
and again, a lot of job opportunities are at stake here.
>> just as a point of clarification, we did take -- about a month's hiatus at the request of the chamber of commerce to get the results of the angelous economic study.
>> that's correct.
that is an important clarification.
and as you acknowledge, the chamber did engage the consulting firm to produce a study, which compared Austin and Travis County to other benchmark cities, regions and states.
and we have now received an initial draft of that study, and when it's appropriate we would like to share the findings of that study with the court.
and if there's any details of which that mr.
porter knows, we can highlight those today.
but we're still reviewing the final draft and getting through that as quickly as we can.
>> I appreciate y'all sharing with us that study.
>> we definitely will do so.
>> I'd like to just weigh in.
first of all, I really appreciate all the time that the subcommittee has spent on this.
and I think both external and internal.
i think one of the things that has revealed itself in this subcommittee process is the challenges of trying to get a lot of fixed little boxes that we could work with.
and I would just like to offer up that I think we live in an ever-changing environment.
and because we do, we need to have in whatever policy we do here, the flexibility we need to make those changes as they come.
i dare say that our economy is much worse than when this subcommittee started out with its task.
we're dealing with health care issues out there, which we don't know what the final result is going to be.
and so I really actually was going to make a plug for option 3 because of the maximum flexibility.
that doesn't mean that we -- and also, I believe in the sort of kis system, keep it simple, because as we March through the years, we can add specifics to that if we choose to do so.
i'd hate to see us put something in place that would restrict us right now in a way we hadn't anticipated when we really need jobs.
i said I was going to make a plug for 3.
i have to say that I'm not that familiar with the existing expired tax abatement policy, so if that is something simple, you know, I'm open to consideration for that.
but I really believe we should try to keep this at a maximum flexible right now.
that doesn't mean that as -- if we've got a flexible, simple policy, that when the opportunity presents itself, we have the opportunity to evaluate it and see if it meets much of the criteria that we've already evaluate understand a broader policy.
so that's kind of where I'm coming from, but I don't know if anybody can give a quick review of what the existing policy is or not.
i would appreciate it.
i mean, the expired policy.
>> marietta is the most familiar with it I would say probably in the county.
>> I haven't looked at it in quite awhile as we've been working on this one, but I think the old policy more mirrors the statutory requirements and the old policy included some terms that addressed 381 agreements.
it wasn't just tax abatement.
so it was a little bit broader.
but the old policy did give the court -- other than the statutorily required terms, it included the court's ability to waive or extend certain requirements in that.
and I can get you a copy of that and I can even provide the court with just a summary of -- because it's been a long time since we've all looked at it.
and so I'd be real happy this week to get y'all a copy of our old policy and then a real brief summary of what's in it.
but just overrule it mirrored pretty much the tax code chapter 312 on tax abatement.
it included those which has a set of required terms and a set of optional terms.
it addressed some of the same definitions and stuff, and it included some broader provisions for 381 agreements and just some general stuff.
but I can get you that this week.
I'll be happy to get you a copy of that with the summary.
>> I'd also like to say that I agree that timing is of the essence.
we've seem here at Travis County to take even longer than we anticipate.
and there's a good reason for that, we're trying to dot all the I's, cross the t's and be careful with the taxpayers' money.
but that's another reason why I think that simple would be better right now because.
i don't know what simple means actually.
i would ask that question of the subcommittee and the folks from the chamber because if we went with a simple tax abatement policy, now does that require going back to the subcommittee and writing up some simple guidelines?
>> I think now that we're back at the court, bringing the issue back to the court for full discussion here, that we could probably make some of those changes from here.
and the other thing is we set out to work on this policy.
for me it was just very important for us to be able to hold companies accountable for jobs created and then where we -- what was Travis County going to get out of it to ensure that we got employment?
so how do we bring that about, the accountability for the companies as well as for Travis County?
and I think I'm just trying to look out for Travis County's interest, which means taxpayers, I guess, and -- but I want to be sure and measure that if we're going to work with companies and they say we can deliver such a number of jobs, then I want to see that delivered.
and so I don't know if that means -- which one it means, but I think that -- I think time is of the essence, I really do.
and I agree with you on that.
i just think that we need to probably -- if there's some fixes to be made, we need to make them here with the entire court.
i think we've spent, you know, an adequate period of time trying to go through the others, other changes.
>> it would be good, though, to see -- I'm sorry, Commissioner were you --
>> yes.
>> okay.
it would still be good I think to see exactly what the results of the information that angelos angelous has given you since our last meeting.
that I think may have some significance.
you really don't know until you see it; however, it just appears that there are some things that still probably need to be fleshed out, and I hear and I've heard what Commissioner Huber is also saying sphashes option 3 is concerned.
but then we still have option 4.
it may just narrow down to those two and then we flesh something out of that.
i don't really know.
but I think some of the contingency may be contained in that report, the study that the results of what angelos angelous had a chance to share with y'all.
i think we need to have a look at that.
>> that is a benchmarking study, correct?
it's a benchmarking study to see what -- what other communities do with regard to how many tax abatements they provide?
so it doesn't really go into the nuts and bolts of what they're tax abatement policy is.
>> it talks about the process that companies have to go through at both the city, county and the state level.
>> but it's procedural more than it is policy related.
>> correct.
>> well, it does include an examination of some of the types of incentives that are offered with those benchmark communities, some of which are available for use by Travis County, some of which are not, depending on the differences between the respective states that the benchmark communities reside in.
>> okay.
>> and again, it just -- it may take a blend of options three and four.
i don't really know.
but I am very excited and very anxious to move forward as I think we all are; however, I want to make sure that the thing that -- not only it's in the best interest of the companies that want to locate here, is it also equal best interest for the taxpayers and the persons here within Travis County, those persons that will receive employment opportunities?
so just a hand and foot operation, I think we need to come to some conclusion as far as how it can benefit both equally.
i hope y'all share my point of view on that.
>> we do, Commissioner.
>> okay.
no comment here.
>> [ laughter ] all right.
and I think I stated earlier all those other things that I want to happen.
and opportunity Austin and a whole lot of other things that have come before this court, we've always looblgd at job retention, job creation and job training.
and that's very, very critical in my mind as far as where we go with this initiative.
>> definitely, Commissioner, the chamber shares your priorities.
and in fact, we've structured much of our opportunity Austin program around much of those priorities with job creation, job retention and job training.
>> okay.
>> so we came in today with four options.
we now have five.
the fifth one is to readopt the current policy and continue to work on a newer one.
that's what I heard you say a minute ago, right?
that way when you check the box, does the county have a policy, you would be able to say yes.
>> that's correct, judge.
just to add a little more information, with respect to option 2, the existing abatement policy is something that we have worked with with the court.
and what the draft abatement policy as created by the committee allows for greater flexibility than the existing expired policy in terms of the level of investment and job creation and also allows for job retention.
those are very key points that the chamber really shares as a priority with the court and want to continue exploring those to be incorporated in the final Travis County policy.
but yes, we would see option 2 as a temporary measure so that the court does have a policy in place while we continue to fine tune and work with you to adopt a great policy.
>> is there a recommendation from the committee?
>> well, judge, I really would like to maybe have a stab at postponing this one week.
i'd like to see that report.
and also have the chamber to -- well, let me see that report.
i would like a postponement of one week if we can as far as action today.
>> will the report be ready in a couple of days?
ready for us to look at?
>> there's some information I need to see.
>> yeah, we will definitely share the report that we have in its draft form, and make that available to the court as soon as we get back to the office to send it to you.
>> okay.
>> and in regard to the fifth option, this is the first that -- I know it's the first that I've heard of the chamber's recommendation of readopting the old policy while continuing to work on this one, but it's an interesting -- it would be an interesting cover for our current -- our current gap period.
and my assumption is from a legal perspective, marietta, we could readopt the old policy and then by a supermajority, unauthorize and authorize a new policy.
could we not?
it would have to be by a supermajority if it occurred within the two years.
>> I think you would need a supermajority to terminate the one you -- if you put one in place, yes.
and then you would go back to the normal procedure to approve a new one.
>> okay.
>> I mean, I guess, though, how long -- if the court was to by supermajority decide to do just what was stated here, just what you suggested, my question is how long would that -- I question the length of how long that was still in force.
and the reason I'm saying that is because I think there's still some modification that we need to make with those other options here on the table.
and I don't want to be locked into a situation where those modifications, then I think -- we still need to work out some things that I would like to still see done that's not in the existing gaap period coverage that we're looking for.
so I don't want us to lose that opportunity of working those things out as far as the time line is concerned.
so we're going by a time line -- and I hope not.
>> no.
the only time limits you have are the ones that you have for your process, your public hearings, that sort of thing.
if you put the other one in place, you're not required to maintain it for any period of time.
>> okay.
>> any time you have a super majority you can terminate that policy.
>> okay.
i just want to --
>> any agreementsni that -- you could still have agreements.
>> what dictates a supermajority, all five of us or four of the five?
>> four.
>> four of the five.
okay.
well, I just want to make sure that we don't lose the flavor of all the hard work that we have put on your end, county attorney's end and our end.
i don't want to lose that flavor.
i think we're going in a good direction, but I can see what you're suggesting as far as the gap period is concerned.
and somebody say there's no policy.
yeah, we're working on something, but we do have -- I can see that.
but I still want to see that further information.
i think the court need to really see what we review.
that's why I ask for a week delay and I hope you guys don't mind that.
>> may I kind of restate what I think has happened here today?
that nobody --
>> we need to make a motion at some point anyway.
>> yes.
>> I guess what I'm hearing is the implication that it's going to take us a whole lot longer to get the new policy in place.
that's not good news.
>> no, that concerns me because I think that there are some people waiting to get some jobs here.
>> I think so too.
so what I'm hearing is that the number one option is not an option.
>> no.
>> that the -- a hybrid of the number two option to readopt, reauthorize the old policy and to continue to work on the new policy is now the revised option 2.
option 3 is still on the table, but I personally would advocate against that because there could be unintended consequences of a very general policy, least with our old policy we've worked with it before, we know what it contains.
so in the week's delay, would it be appropriate to bring it back framed just as the two options, the revised option 2 and option 4?
>> I don't have any problem.
>> I think it ought to come back as -- with the option to readopt our past policy.
and I think between now and then we ought to receive a copy of the last version.
and if we need to have clarified the super majority requirement, then let's see what that is?
i think we ought to have a timetable on taking action on a new policy.
based on our work session discussion, there are four or five outstanding issues.
they won't get easier with time.
but if we need to take a little additional time to mull over and do additional research, then I think we ought to do it.
but if our goal is to take another year, then we ought to approve that when it comes back.
if our goal is to take 30 to 60 days, as I believe, then we ought to adopt that schedule.
so between now and when it comes back, I think it would help us to revisit the work session that we had and try to summarize the issues that were outstanding.
i think I recall four or five.
one or two being a bit more controversial than some of the others.
but I don't know that they get easier with time.
so at some point it seems to me that we need gather the facts and see where we stand, throw a motion out there and vote it up or down.
so I could -- I would say give yourselves three months or less.
because the committee has worked, what, eight or nine months?
>> seven months, yeah.
>> seven months.
and the outstanding issues really are policy issues for which -- I don't believe that there's a tremendous amount of additional research required.
it's just land on it.
manufacturing in and its manufacturing out.
on the health care provision we've got two options that are on the table, do you like option a, do you like option b?
with regard to activity nodes that need flesh on the bone from the planning and budget office, but could be added at a later date by a supermajority.
the scholarship program was pretty well vetted and there wasn't a great deal of concern about it from a policy perspective as much as the implementation of it.
the minimum number of Travis County employment provision, that also is a policy issue.
do you like it, do you not like it?
>> well, at any rate, I asked to see the information before we take any action.
>> sure.
>> I'd like to see that.
i think we all should have a look-see and see what other additional information they do have.
and it may have it and may not.
but not until I see it and have a chance to review it, I just think it would be premature to take any action today.
that's the only thing I'm suggesting.
>> so do we need one more week or two more weeks?
>> I think one week would --
>> one week would be fine.
>> what I'm hearing is we need a copy of the current draft, a copy of the old policy, an executive summary of how the old policy worked as well as a list of the outstanding issues under the draft policy and a timetable to address them.
>> ought to do it for me.
>> okay.
>> does that work with y'all?
>> and then a copy of the draft, right?
>> yes.
>> and with the information also that he's going to share with every court member.
>> right.
>> that we haven't had a chance to review.
>> we can do that in one week, ms.
gearhart?
>> yes.
>> thank y'all very, very much.
see you next week.
>> thank y'all.
>> thanks for your patience.
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Last Modified:
Tuesday, September 8, 2009 2:14 PM
