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HomeMy WebLinkAbout06-04 OrdinanceRECORD OF ORDINANCES Ordinance No. ~6-~4 Passed • 20. AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY OF AN ECONOMIC DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DUBLIN AND CORESOURCE TO INDUCE A RELOCATION OF ITS OPERATIONS TO THE CITY IN ORDER TO INCREASE EMPLOYMENT WITHIN THE CITY. WHEREAS, contingent on the passage of this Ordinance and the execution of the Economic Development Agreement as an inducement therefor, Core Source desires to relocate 114 jobs to the City of Dublin, Ohio (the "City"); and WHEREAS, the City, consistent with its Economic Development Strategy, desires and intends to induce CoreSource to consolidate its operations within the City for the purpose of creating jobs and employment opportunities and to improve the economic welfare of the citizens of the City of Dublin and the State of Ohio as authorized in Article VIII, Section 13, of the Ohio Constitution; NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, Franklin, Union and Delaware Counties, State of Ohio, ~_ of the elected members concurring, that: Section 1. The City hereby finds and determines that it is necessary, appropriate and in the best interests of the City to provide certain assistance to CoreSource for the purpose of creating jobs and employment opportunities and to improve the economic welfare of the citizens of the City and the State of Ohio as authorized in Article VIII, Section 13, of the Ohio Constitution. Section 2. The Economic Development Agreement by and between the City and CoreSource, in the form presently on file with the Clerk of Council, providing for, among other things, the provision of incentives to CoreSource in consideration for the company's agreement to relocate its operations and workforce to the City, is hereby approved and authorized with changes therein not inconsistent with this Ordinance and not substantially adverse to this City and which shall be approved by the City Manager and Director of Finance. The City Manager and Director of Finance, for and in the name of this City, are hereby authorized to execute that Economic Development Agreement, provided further that the approval of changes thereto by those officials, and their character as not being substantially adverse to the City, shall be evidenced conclusively by their execution thereof. This Council further authorizes the City Manager and the Director of Finance, for and in the name of the City, to execute any amendments to the Economic Development Agreement, which amendments are not inconsistent with this Ordinance and not substantially adverse to this City. Section 3. This Council hereby authorizes and directs the City Manager, the Clerk of Council, the Director of Law, the Director of Finance, or other appropriate officers of the City to prepare and sign all agreements and instruments and to take any other actions as maybe appropriate to implement this Ordinance. Section 4. This Council finds and determines that all formal actions of this Council concerning or relating to the passage of this Ordinance were taken in an open meeting of this Council and that all deliberations of this Council that resulted in those formal actions were in meetings open to the public in compliance with the law. RECORD OF ORDINANCES Inc. Ordinance No. 06-04 Passed Page 2 , 20. Section 5. This Ordinance shall take effect and be in force in accordance with Section 4.04 of the Dublin City Charter. Signed: Presiding Officer Attest: Clerk of Colmcil Passed: ~ G~.y'c~ ~ , 2004 Effective: ~~j''~ ~ y , 2004 I hereby certify that copies of this Ordinance/Resolution were posted in the City of Dublin in accordance with Section 731.25 of the Ohio Revised Code. ~~~~C-Gt'X~ Dep Cle of Council, Dublin, Ohio Office of the City Mana er 5200 Emerald Parkway • Dubin, OH 43017 Phone: 614-410-4400 • Fax: 614-410-4490 f.ITI' f1F DCBLIN Memo To: Members of the Dublin City Council From: Jane S. Brautigam, City Managei~a.Y.,c.~5• "~- Date: February 11, 2004 Re: Ordinance No. 06-04 -Coresource, Inc. Initiated by: Michael Stevens, Director of Economic Development ~/V0~ Update: Ordinance No. 06-04 was withdrawn from the February 2, 2004, City Council agenda due to last minute changes to the agreement by the company's consultant. The number of employees that the company plans to relocate has been changed from 145 to 114, resulting in a total payroll of $3.75 million. The agreement also includes an extraordinary performance clause that will provide Coresource with a sixth incentive year if the company's total actual payroll withholdings exceed $600,000. Summary: Ordinance No. 06-04 authorizes the execution of an Economic Development Agreement with Coresource, Inc. for the purpose of encouraging the relocation and expansion of their operations to the City of Dublin. Coresource is a leading provider of full service national health benefits and is a subsidiary of Trustmark Insurance Company. Coresource's central Ohio office currently is located at 229 Huber Village Boulevard in Westerville. The company provides cost and information management services to more than 1,600 employers nationwide. Coresource will relocate to 5200 Upper Metro Place in the second quarter of 2004. The attached Economic Development Agreement (the Agreement) provides for annual incentive payments for a period of five years. The Agreement will provide Coresource with a financial incentive to relocate 1 14 employees and continue to grow its business in Dublin. The average wage for current employees is approximately $33,800. The annual incentive payments will be based upon a percentage (the Incentive Factor) of actual payroll withholdings. The Incentive Factor is twenty-five percent (25%) for the term of the agreement. The target payroll withholdings will increase annually by two percent (2%). The aggregate amount of payments made by the City to Coresource will not exceed $200,000. The City further agrees that if Coresource's total aggregate actual withholdings for the calendar years 2004-2008, inclusive, equals or exceeds $600,000, then the City shall pay to Coresource an amount equal to twenty-five percent (25%) of the actual withholdings for calendar year 2009. The City acknowledges and agrees to make that payment. The Agreement does not contain any non-financial incentives. Coresource, Inc.-2/11/04 Recommendation: page 2 Staff continues to pursue job growth within the community. Using incentives to attract companies like Coresource will result in additional income tax revenue. Assuming Coresource achieves the maximum incentive of $200,000 the City would net at least $600,000 over five years from this agreement. At current projections, Coresource will receive approximately $87,000 during the term of the Agreement. Staff recommends that City Council approve Ordinance No. 06-04 at its March 1, 2004 meeting. ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into this ~ day of r ~, , 2004, by and between the CITY of DUBLIN, OHIO (the "City"), a municipal corporation duly organized and validly existing under the Constitution and the laws of the State of Ohio (the "State") and its Charter, and CORESOURCE, INC., ("Coresource") an Ohio corporation with its offices located in Westerville, Ohio, under the circumstances summarized in the following recitals. RECITALS: WHEREAS, consistent with its Economic Development Strategy (the "Strategy") approved by Dublin City Council Resolution No. 07-94 adopted on June 20, 1994, the City desires to encourage commercial office development and provide for the creation of employment opportunities within the City; and WHEREAS, based on the results of Coresource's recent comprehensive examination of workforce needs, and induced by and in reliance on the economic development incentives provided in this Agreement, Coresource is desirous of relocating its workforce to the City; and WHEREAS, pursuant to Ordinance No. 06-04 passed March 1, 2004 (the "Ordinance"), the City has determined to offer economic development incentives described herein to induce Coresource to relocate and expand its workforce within the City to create jobs and employment opportunities and to improve the economic welfare of the people of the State of Ohio and the City, all as authorized in Article VIII, Section 13 of the Ohio Constitution; and WHEREAS, the City and Coresource have determined to enter into this Agreement to provide these incentives to induce that relocation and expansion by Coresource of its operations within the City; Now THEREFORE, the City and Coresource covenant agree and obligate themselves as follows: Section 1. Coresource's Agreement to Relocate Jobs. Coresource presently employees approximately 114 employees at 229 Huber Village Boulevard, Westerville, Ohio. The aggregate annual payroll of those employees in approximately $3.75 million. In consideration of the economic development incentives to be provided by the City herein, Coresource agrees that no later than May 30, 2004 it will relocate all of the employees described in this Section 1 to 5200 Upper Metro Place, Dublin, Ohio Section 2. City Agreement to Provide Incentives. (a) General. In consideration for Coresources's agreement to relocate its workforce and associated payroll to the City, the City agrees to provide economic development incentives to Coresource in accordance with this Section. (b) Calculation of Actual Withholdings. On or before March 15 of each of the years 2005 through and including 2009, the City shall determine whether the payroll withholding taxes collected during the preceding calendar year by the City from all Employees (the "Actual Withholdings") exceed the Target Withholdings for that preceding calendar year, all in accordance with the schedule set forth below. For purposes of this Section 2, "Employees" shall include all individuals employed by Coresource and working at a location within the City. Coresource agrees that, in accordance with the Dublin City Code, the annual payroll reconciliation relating to Coresource Employees will be provided to the City prior to February 28 of each calendar year. (c) Payments to Coresource. If the Actual Withholdings exceed the Target Withholdings for the preceding calendar year, the City shall, on or before April 15 of the current calendar year, pay to Coresource, solely from nontax revenues, an amount equal to the product of (i) an amount equal to the Actual Withholdings (net of refunds), multiplied by (ii) the Incentive Factor (as defined below). The payments provided for in this Section 2 shall be made by the City to Coresource by electronic funds transfer or by such other manner as is mutually agreed to by the City and Coresource. (i) Years 2004 through 2008. With respect to the Actual Withholdings collected during each of the calendar years 2004 through 2008, the Incentive Factor shall be twenty-five percent (25%). The Target Withholdings for each of those calendar years shall be calculated as follows: Calendar Year Target Withholdings 2004 $35,000 2005 $65,000 2006 Calendar Year 2005 Target Withholdings multiplied by 1.02 2007 Calendar Year 2006 Target Withholdings multiplied by 1.02 2008 Calendar Year 2007 Target Withholdings multiplied by 1.02 (d) Cit~Obligation to Make Payments Not Debt; Payments Limited to Nontax Revenues. Notwithstanding anything to the contrary herein, the obligations of the City pursuant to this Agreement shall not be a general obligation debt or bonded indebtedness, or a pledge of the general credit or taxes levied by the City, and Coresource shall have no right to have excises or taxes levied by the City, the State or any other political subdivision of the State for the performance of any obligations of the City herein. Consistent with Section 13 of Article VIII, Ohio Constitution, any payments or advances required to be made by the City pursuant to this Section 2 shall be payable solely from the City's nontax revenues. Further, since Ohio law limits z the City to appropriating monies for such expenditures only on an annual basis, the obligation of the City to make payments pursuant to this Section 2 shall be subject to annual appropriations by the City Council and certification by the Director of Finance of the City as to the availability of such nontax revenues. (e) Deficiency Carry forward Amounts. If and to the extent the amount of nontax revenues are insufficient in a particular calendar year for appropriation and payment to Coresource, the City will make payment to Coresource in the amount of nontax revenues available for appropriation and payment to Coresource. The difference between the amount required to be paid by the City to Coresource pursuant to this Section 2 and the amount actually paid (referred to herein as a "Deficiency Carryforward Amount") shall be carried forward to the next succeeding calendar year and paid to Coresource in addition to any other payment for that succeeding year required by this Section 2. This Agreement shall not terminate until the City has paid to Coresource all Deficiency Carryforward Amounts required to be paid to Coresource in accordance with this Section 2; provided, however, the aggregate of all payments to Coresource pursuant to this Agreement shall not exceed the Maximum Payment Amount. (~ Additional Incentive Payment. The City further agrees that if Coresource's total aggregate Actual Withholdings for the calendar years 2004 through 2008, inclusive, equals or exceeds $600,000, then the City shall pay to Coresource an amount equal to twenty-five percent (25%) of the Actual Withholdings for calendar year 2009. The City acknowledges and agrees to make that payment, if required by this Section 2(f), to Coresource no later than April 15, 2010 by electronic funds transfer or by such other manner as is mutually agreed to by the City and Coresource. (g) Maximum Economic Development Incentive Payments. In no event shall the aggregate amount of payments made by the City to Coresource pursuant to this Section 2 during the term of this Agreement exceed Two Hundred Thousand Dollars ($200,000) (the "Maximum Payment Amount' ). (h) Applicable Cit~ayroll Tax Rate. For purposes of calculating the Actual Withholdings in each calendar year under this Section 2, the City's payroll tax rate shall be assumed to be two percent (2%). Section 3. Miscellaneous. (a) Notices. Except as otherwise specifically set forth in this Agreement, all notices, demands, requests, consents or approvals given, required or permitted to be given hereunder shall be in writing and shall be deemed sufficiently given if actually received or ifhand-delivered or sent by recognized, overnight delivery service or by certified mail, postage prepaid and return receipt requested, addressed to the other party at the address set forth in this Agreement or any addendum to or counterpart of this Agreement, or to such other address as the recipient shall have previously notified the sender of in writing, and shall be deemed received upon actual receipt, unless sent by certified mail, in which event such notice shall be deemed to have been received when the return receipt is signed or refused. For purposes of this agreement, notices shall be addressed to: 3 (i) the City at: City of Dublin, Ohio 5800 Shier Rings Road Dublin, Ohio 43016-7295 Attention: Economic Development Director (ii) Coresource at: Coresource 5200 Upper Metro Place Dublin, Ohio 43017 Attention: Lloyd Sarrel, Vice President of Operations The parties, by notice given hereunder, may designate any further or different addresses to which subsequent notices, certificates, requests or other communications shall be sent. (b) Extent of Provisions• No Personal Liability. All rights, remedies, representations, warranties, covenants, agreements and obligations of the City under this Agreement shall be effective to the extent authorized and permitted by applicable law. No representation, warranty, covenant, agreement, obligation or stipulation contained in this Agreement shall be deemed to constitute a representation, warranty, covenant, agreement, obligation or stipulation of any present or future trustee, member, officer, agent or employee of the City or Coresource in other than his or her official capacity. No official executing or approving the City's or Coresource's participation in this Agreement shall be liable personally under this Agreement or be subject to any personal liability or accountability by reason of the issuance thereof. (c) Successors. This Agreement shall be binding upon and inure to the benefit of Coresourceand its successors and assigns. (d) Recitals. The City and Coresource acknowledge and agree that the facts and circumstances as described in the Recitals hereto are an integral part of this Agreement and as such are incorporated herein by reference. (e) Amendments. This Agreement may only be amended by written instrument executed by the City and Coresource. (f) Executed Counte arts. This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same agreement. It shall not be necessary in proving this Agreement to produce or account for more than one of those counterparts. (g) Severability. In case any section or provision of this Agreement, or any covenant, agreement, obligation or action, or part thereof, made, assumed, entered into or taken, or any application thereof, is held to be illegal or invalid for any reason, (i) that illegality or invalidity shall not affect the remainder hereof or thereof, any other section or provision hereof, or any other covenant, agreement, obligation or action, or 4 part thereof, made, assumed, entered into or taken, all of which shall be construed and enforced as if the illegal or invalid portion were not contained herein or therein, (ii) the illegality or invalidity of any application hereof or thereof shall not affect any legal and valid application hereof or thereof, and (iii) each section, provision, covenant, agreement, obligation or action, or part thereof, shall be deemed to be effective, operative, made, assumed, entered into or taken in the manner and to the full extent permitted by law. (h) Ca tions. The captions and headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. (i) Governing Law and Choice of Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio or applicable federal law. All claims, counterclaims, disputes and other matters in question between the City, its agents and employees, and Coresource, its employees and agents, arising out of or relating to this Agreement or its breach will be decided in a court of competent jurisdiction within Franklin County, Ohio. (j) Survival of Representations and Warranties. All representations and warranties of Coresource and the City in this Agreement shall survive the execution and delivery of this Agreement. (Signature Pages to Follow) IN WITNESS WHEREOF, the City and Coresource have caused this Agreement to be executed in their respective names by their duly authorized representatives, all as of the date first written above. CITY OF DUBLIN, OHIO C ~ ~--- ~'~~_ Printed: Jane Brauti~am Title: Cit Manager By: ~~~ Printed: _ Marsha I. Grigsby Title: Director of Finance Approved Form: ~ '. By: Printed: Stephen J. Smith Title: Director of Law CORESOURCE B Printed:~A c> ~~ ~~Q~1? /t "~ Title: ~ (~. V p t C~FD 6 FISCAL OFFICER'S CERTIFICATE The undersigned, Director of Finance of the City under the foregoing Agreement, certifies hereby that the moneys required to meet the obligations of the City during the year 2004 under the foregoing Agreement have been appropriated lawfully for that purpose, and are in the Treasury of the City or in the process of collection to the credit of an appropriate fund, free from any previous encumbrances. This Certificate is given in compliance with Sections 5705.41 and 5705.44, Ohio Revised Code. Dated: ~.S 2004 R:_~ ~~-- Marsha I. Grigsby Director of Finance City of Dublin, Ohio