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HomeMy WebLinkAbout75-06 Ordinance AMENDEDRECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. 75-06 (amended) Passed 20 AN ORDINANCE AUTHORIZING THE PROVISION OF ECONOMIC DEVELOPMENT INCENTIVES TO BUTLER ANIMAL HEALTH SUPPLY TO INDUCE THE EXPANSION OF THE BUTLER ANIMAL HEALTH SUPPLY WORKFORCE WITHIN THE CITY OF DUBLIN; AUTHORIZING THE EXECUTION OF AN ECONOMIC DEVELOPMENT AGREEMENT. WHEREAS, consistent with the Economic Development Strategy approved by Dublin City Council Resolution No. 07-94 on June 20, 1994, this Council desires to encourage commercial office development and provide for the creation of employment opportunities within the City; and WHEREAS, based on the results of Butler Animal Health Supply, LLC (the "Company") and comprehensive examination of workforce needs, and induced by and in reliance on the economic development incentives provided in the proposed Economic Development Agreement, the Company is desirous of retaining its existing workforce within the City, and expanding its workforce to achieve the payroll withholding targets set forth in the Economic Development Agreement; and WHEREAS, the Company has received a State of Ohio Job Creation Tax Credit (" JCTC") which was approved on September 25, 2006, providing for aforty-five percent (45%) State tax credit for five (5) years beginning in 2007 (the "State Incentive"); and WHEREAS, this Council has determined to offer certain economic development incentives in conjunction with the provision of the State Incentive, the terms of which are set forth in a substantially final form of Economic Development Agreement presently on file in the office of the Clerk of Council, to induce the Company to expand its workforce within the City, thereby creating additional jobs and employment opportunities and improving 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, this Council finds that it is in the best interest of the City to provide these economic development incentives to induce the Company to expand its workforce within the City and to provide for the execution and delivery of that Economic Development Agreement with the Company; NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, Franklin, Union and Delaware Counties, Ohio, that: Section 1. The City hereby finds and determines that the provision of certain economic development incentives, in conjunction with the provision of the State Incentive, as described in the Economic Development Agreement (as described below) is necessary and appropriate and in the best interests of the City to provide for the creation of 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. Section 2. The Economic Development Agreement by and between the City and the Company, in the form presently on file with the Clerk of Council, providing for, among other things, the provision of economic development incentives in consideration for the Company's agreement to expand its workforce within 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 RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No, 75-06 Passed Page2~ 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 further hereby authorizes and directs the City Manager, the Director of Finance, the Director of Law, the Clerk of Council, 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 and 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. Section 5. This Ordinance shall be in full force and effect on the earliest date permitted by law. ` ~~ Presiding Officer Attest: ~~ Clerk of Council Passed:~p (J~/yuh f~ ~Q , 2006 Effective: ~~c°_fY~,bGr oZl~ , 2006 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. uty Clerk of Council, ublin, Ohio Office of the City Manager 5200 Emerald Parkway, Dublin, Ohio 43016 Phone: 614-410-4400 • Fax: 614-410-4490 CITY OF DUBLIN To: Members of Dublin City Counci ~ _ _ . ,C,c~Cl From: Jane S. Brautigam, City Manage~'.._ , ~c.X-~-w -`~~ i~;'n.cZ ~.c~--~-,-~-~.' Date: November 14, 2006 _ Initiated By: Colleen M. Gilger, Acting Director of Economic Development Re: Ordinance 75-06 (amended) -Economic Development Agreement with Butler Animal Health Supply Memo Summary Staff has been in discussions with Dublin-based Butler Animal Health Supply (Butler) at 5600 Blazer Parkway regarding the possibility of assisting in its expansion to better accommodate growth. The company has plans to relocate aKentucky-based operation that will create an additiona125 new jobs for Ohio and Dublin. The company plans to retain its current workforce of 125 in Dublin as well. Butler is the nation's largest distributor of companion animal health supplies to veterinarians. The company, headquartered in Dublin, operates across the U.S. with 24 distribution centers and 11 telecenters. Butler Animal Health Supply serves over 29,000 veterinary clinics in all 50 states and distributes over 15,000 products for more than 300 vendors. Butler Animal Health Supply, LLC, a privately owned company, is the result of a business combination between The Butler Company and Burns Veterinary Supply. The company is equally owned by Oak Hill Capital Partners II, L.P. and the Darby Group Companies, Inc. Ordinance 75-06 authorizes an Economic Development Agreement (EDA) between the City and Butler that provides for afive-year $27,155 performance incentive. The EDA will require Butler to reach predetermined annual payroll withholdings tied to its job creation commitments in order to receive financial assistance. Should the predetermined payroll withholdings be met (during 2007-2011), annual payments in the amount of $5,431 will be made to Butler. As mentioned during first reading, Butler was completing the final review of the Target Withholding amount and requested the amount be decreased by approximately $11,000 due to a minor accounting error. Staff supports this minor change and has amended the proposed agreement and ordinance. The company secured a Job Creation Tax Credit (JCTC) from the State of Ohio on September 25, 2006. The attached Economic Development Agreement (EDA) offering by the City of Dublin would serve as the required 25% local-match component toward the State's five-year, 45% tax credit package. Butler expects to add over $300,000 in new payroll withholding income tax revenue over the next five years. The City also will retain Butler's current $120,000 in annual payroll withholdings. Recommendation Staff recommends Ordinance No. 75-06 (amended) authorizing the economic development agreement with Butler Animal Health be approved by City Council at the second reading/public hearing on November 20, 2006. ECONOMIC DEVELOPMENT AGREEMENT THIS ECONONIIC DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into this day of , 2006, by and between the CITY of DUBLIN, Oxlo (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 BUTLER ANIMAL HEALTH SUPPLY, LLC a Delaware limited liability company, authorized to do business in the State (the "Company"), with its headquarters located in Dublin, under the circumstances summarized in the following recitals. RECITALS: WHEREAS, consistent with its Economic Development 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, the City desires to increase employment opportunities and improve the economic welfare of the people of the City; and WHEREAS, based on the results of the Company's recent comprehensive examination of workforce needs, and induced by and in reliance on the economic development incentives provided in this Agreement, the Company is desirous of retaining its current workforce and expanding its workforce within the City; and WHEREAS, the Company has received a State of Ohio Job Creation Tax Credit ("JCTC") which was approved on September 25, 2006, providing for aforty-five percent (45%) State tax credit for five (5) years beginning in 2007; and WHEREAS, pursuant to Ordinance No. 75-06 passed 2006 (the "Ordinance"), the City has determined to offer certain economic development incentives as described herein to induce the Company to retain 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 the Company have determined to enter into this Agreement to provide the incentives described herein and to induce the retention and expansion by the Company of its workforce within the City; Now THEREFORE, the City and the Company covenant agree and obligate themselves as follows: Section 1. Company s Agreement to Retain Current Workforce at its Current Facility and Create Jobs. The Company presently employs 125 employees at its site located at 5600 Blazer Parkway in the City of Dublin. The aggregate annual payroll of those employees is approximately $6,900,000. For consideration of the economic development incentives to be provided by the City herein, the Company agrees that it will retain its current workforce of 125 fulltime employees in the City, and expand its workforce within the City, in an amount sufficient to achieve the annual Target Withholdings (as defined below) set forth in Section 2. The Company also expects that the total estimated City payroll withholdings for all of its employees in the City for the period 2007 through 2011 will equal or exceed $939,109. Section 2. Cit~~reement to Provide Incentives. (a) General. In consideration for the Company's agreement to expand its operations, workforce and associated payroll within the City, the City agrees to provide economic development incentives to the Company in accordance with this Section. (b) Workforce Expansion Incentive. (i) Calculation of Actual Withholdings. On or before March 15 of each of the years 2008 thru 2012 the City shall determine whether the actual payroll withholding taxes collected during the preceding calendar year by the City from all Employees (the "Actual Withholdings") meet or 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 only the following: (A) All individuals employed by the Company working at any Company facility located within the City ("Company Employees"); and (ii) Information Relating to Company Employes. The Company agrees that, in accordance with the Dublin City Code, the annual payroll reconciliation and related W-2 forms relating to Company Employees will be provided to the City prior to February 28 of each calendar year. (c) Payments to the Company. In each of the calendar years 2008 through 2012, the City shall determine whether the actual payroll withholding taxes collected during the preceding calendar year by the City from all employees, net of refunds ("Actual Withholdings"), meet or exceed the Target Withholdings for the preceding calendar year, the City shall, no later than June 30 of the then current calendar year, pay to the Company, solely from nontax revenues, the amount $5,431.00 ("Incentive Payment"). (d) Target Withholdings and Incentive_Payments. The Target Withholdings for each calendar year shall be: Calendar Year Target Withholdings 2007 $170,805 2008 $181,429 2009 $189,872 2010 $195,568 2011 $201,438 The Incentive Payments provided for in this Section 2 shall be made by the City to the Company by electronic funds transfer or by such other manner as is mutually agreed to by the City and the Company. -2- (e) Maximum Incentive P moments. In no event shall the aggregate amount of Incentive Payments made by the City to the Company pursuant to this Section 2 during the term of this Agreement exceed Twenty Seven Thousand One Hundred Fifty-Five Dollars ($27,155). (f) Additional Incentives. The City and the Company agree that if the Company exceeds its job expansion targets described herein, the City and the Company may enter in negotiations for additional incentives not otherwise provided by this Agreement. (g) Forfeiture of Incentive Payment(s). The Company agrees and acknowledges that Incentive Payments provided for in Section 2(c) are being made by the City to the Company in consideration for the Company's agreement to expand its workforce within the City. The Company further agrees that if the Target Withholding is not met for any given year, as set forth in Section 2(d) above, the City shall not be obligated to make any incentive payment to the Company for the year in which the Target Withholding was not met. Failure to meet the Target Withholding in any one incentive year does not prohibit the Company from receiving an Incentive Payment for any subsequent year in which the Target Withholding is met. (h) City's Obligation to Make Payments Not Debt; Payments Limited to Non-tax 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 the Company 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 non-tax revenues. Further, since Ohio law limits 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 non-tax revenues. Section 3. Miscellaneous. (a) Notices. Except as otherwise specifically set forth in this Ageement, 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) the Company at: 5600 Blazer Parkway Dublin, Ohio 43017 Attention: Eric Bosserman, Tax Manager 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 the Company in other than his or her official capacity. No official executing or approving the City's or the Company'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 the Company and its successors and assigns. (d) Recitals. The City and the Company 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 the Company. (f) Executed Counterparts. 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 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 -4- (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) Captions. 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 the Company, 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 the Company and the City in this Agreement shall survive the execution and delivery of this Agreement. (k) Limitation on Remedies. Notwithstanding any clause or provision of this Agreement to the contrary, in no event shall City or the Company be liable to each other for punitive, special, consequential, or indirect damages of any type and regardless of whether such damages are claimed under contract, tort (including negligence and strict liability) or any other theory of law. -5- IN WITNESS WHEREOF, the City and the Company 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 By: Printed: Jane Brauti~am Title: City Manager By: Printed: Marsha I. Grigsby Title: Director of Finance Approved as to Form: By: Printed: Stephen J. Smith Title: Director of Law BUTLER ANIMAL HEALTH SUPPLY, LLC By: Printed: Title: -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 2006 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: , 2006 Marsha I. Grigsby Director of Finance City of Dublin, Ohio -7-