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HomeMy WebLinkAbout76-06 OrdinanceRECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 Ordinance No. ~~~~~ Passed 20 AN ORDINANCE AUTHORIZING THE PROVISION OF AN ECONOMIC DEVELOPMENT INCENTIVE TO SABER CORP. TO INDUCE THE RELOCATION AND EXPANSION OF THE SABER SOLUTIONS INC. OPERATIONS AND 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 Saber Solutions Inc., dba Saber Corp. (the "Company') and comprehensive examination of workforce needs, and induced by and in reliance on the economic development incentive provided in the proposed Economic Development Agreement, the Company is desirous of relocating its operations to the City, and expanding its workforce to achieve the payroll withholding targets set forth in the Economic Development Agreement; and WHEREAS, this Council has determined to offer an economic development 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 relocate its operations and 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 relocate its operations and 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 o 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 the provision of the economic development 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 an economic development incentive in consideration for the Company's agreement to relocate its operations and 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 RECORD OF ORDINANCES Dayton Lega] Blank, Inc. Form No. 30043 Ordinance No. 76-06 Passed Page ~~vo 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 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 may be 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. Passed this_ day of/Ud U~h,b tr~ , 2006. Mayor -Presiding Officer Attest: ~_ Clerk of Council Passed: ~o U~b ~ o~ 6 , 2006 Effective: .A~e e/y,,b e/ ~,C? , 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. De}yCi Clerk of Council, Dublin, Ohio CITY OF DURLIN Office of the City Manager 5200 Emerald Parkway, Dublin, Ohio 43016 Phone: 614-410-4400 Fax: 614-410-4490 Memo To: Members of Dublin City Council From: Jane S. Brautigam, City Manager ~~,,,~ 5 ~ "f Date: November 1, 2006 Initiated By: Colleen M. Gilger, Acting Director of Economic Development Re: Ordinance 76-06 -Economic Development Agreement with Saber Corp. Summary Staff has been in discussions with Saber Corporation regarding the possibility of a Dublin location for its newly created data center and expanding regional office. The company has identified 5555 Glendon Court (the "CareWorks building") for its new regional office location, after outgrowing space in Columbus. Incorporated in 1997 and headquartered in Portland, Oregon, Saber has more than 650 employees nationwide. Aprivately-held technology company, Saber is one of the nation's largest providers of IT solutions exclusively focused on serving the needs of state and local governments. It provides software and services that underpin essential functions such as voter registration, election management, public retirement programs, human services, public heahh services, motor vehicles, unemployment insurance, and forms and document processing. Ordinance 76-06 authorizes an Economic Development Agreement (EDA) between the City and Saber that provides fora $100,000 Technology Grant for data center technology upgrades to the facility, payable in one installment. The EDA includes a provision for repayment of the Technology Grant if the established annual Target Withholdings are not met. This "claw back" provision requires the company to repay 20% of the Technology Grant for any year in which the Target Withholdings are not met. Saber is committing to ten employees upon data center move-in during November 2006, and the hiring of at least ten more data center employees over the next two years. In addition, the 125 corporate jobs will locate to Dublin by October 2007, equating to a total. annual payroll of $9 million once all moves are complete by the end of next year. Saber is projected to pay approximately $990,614 in new withholding income tax revenues over the term of this agreement. Recommendation Staff recommends the Economic Development Agreement and Ordinance 76-06 be approved by City Council at the second reading/public hearing on November 20, 2006. ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC 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 SABER SOLUTIONS, INC., DBA SABER CORP. (the "Company"), an Oregon corporation authorized to do business in the State, with its Midwest regional office currently located at lIl West Liberty Street, Columbus, Ohio, 43215 (the "Columbus Facility"), 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, and the updated strategy approved by Dublin City Council Resolution No. 30-04 adopted on July 6, 2004, the City desires to encourage commercial office and retail development and provide for the retention and creation of employment opportunities within 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 incentive provided in this Agreement, the Company is desirous of relocating and expanding its workforce within the City; and WHEREAS, pursuant to Ordinance No. 76-06 passed , 2006 (the "Ordinance', the City has determined to offer the economic development incentive described herein to induce the Company to relocate and expand its workforce within the City 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 this incentive in order to induce the Company to relocate its operations and expand its workforce within the City; Now Tt-~REI+oRE, the City and the Company covenant agree and obligate themselves as follows: Section i. The Company Agreement to Relocate and Expand Workforce in the City. The Company presently employs 125 office personnel employees at the Columbus Facility. The aggregate annual payroll of those employees is approximately $9,000,000. For consideration of the economic development incentive to be provided by the City herein, the Company agrees that it will relocate at least 10 data center employees to the City by December 31, 2006, and approximately 125 office personnel employees to the City by December 31, 2007. The Company further agrees to expand its workforce within the City pursuant to this Agreement. The Company will relocate its workforce and operations within the City upon the execution of a lease for the facility located at 5555 Glendon Court, Dublin Ohio 43016 (the "Dublin Facility"). Section 2. City Agreement to Provide Incentive. (a) General. In consideration for the Company's agreement to relocate and expand its workforce and associated payroll within the City, the City agrees to provide the economic development incentive to the Company in accordance with this Section. (b) Technology Grant. The Company will update equipment at the Dublin Facility to support its operations within the City. In consideration of that agreement to upgrade such equipment and relocate and expand its workforce within the City, the City agrees to provide a grant in the amount of $100,000 to the Company to be used for the purpose of upgrading equipment at the Dublin Facility (the "Technology Grartt'~. (c) Payment to the Company. The Company agrees that the City shall not be required to make any payment which may otherwise be required by this Agreement until the Company (i) has provided the City with written evidence of a lease agreement for the Dublin Facility, obligating the Company through at least December 31, 2012, which lease shall be in a form which is reasonably acceptable to the City, and (ii) has provided the City with written evidence that ten (10) full-time employees have been relocated to the Dublin Facility by December 31, 2006. Upon the Company's satisfaction of the requirements set forth in Sections 2(c)(i) and 2(c)(ii), the City agrees that it will remit payment of the Technology Grant to the Company no later than April 15, 2007. Payment of the Technology Grant 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. (d) Forfeiture of Technology Grant. The Company acknowledges that the City shall not be required. to make any payment under this Agreement until the Company has satisfied the requirements of Sections 2(c)(i) and 2(c)(ii}. The Company agrees that payment of the Technology Grant provided for this Section is being made by the City to the Company in consideration for the Company's agreement to relocate and expand its workforce within the City. The Company further agrees that if the Target Withholding (as defined below) is not met for any given year, as set forth in this Section 2(d)(iii), the Company shall repay to the City an amount equal to twenty (20%) percent of the Technology Grant (the "Forfeiture Payment") for the year in which the Target Withholding was not met. Failure to meet the Target Withholding in any one year does not prohibit the Company from retaining the portion of the Technology Grant for any subsequent year in which the Target Withholding is met. (i) Calculation of Actual Withholdings. On or before March 15 of each of the years 2009 thru 2013 the City shall determine whether the Actual Withholdings collected during the preceding calendar year by the City from all Employees 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: -2- (A) All individuals employed by the Company working at the Dublin Facility located within the City ("Company Employees"); and (ii) Information Relating to the Company Employees. The Company agrees that, in accordance with the Dublin City Code, the annual payroll reconciliation and related W-2 forms relating to the Company Employees will be provided to the City prior to February 28 of each calendar year. (iii) Target Withholdings. If the actual payroll withholding taxes collected during a preceding calendar year by the City from all employees, net of refunds ("Actual Withholdings"), meet or exceed the Target Withholdings for that preceding calendar year, the Company will not be required to make a Forfeiture Payment. If the Actual Withholdings do not meet or exceed the Target Withholdings for that preceding calendar year, the Company shall be required to make a Forfeiture Payment for that year. If the Company is required to make a Forfeiture Payment in any year, such Forfeiture Payment must be paid to the City by June 30 in the calendar year following the year in which the Target Withholdings were not met. The Target Withholdings for each of the calendar years 2008 through 2012 shall be: Calendar Year Target Withholdings 2008 $180,000 2009 $189,000 2010 $194,450 2011 $208,373 2012 $218,791 Forfeiture Payment $20,000, due by June 9, 2009 $20,000, due by June 9, 2010 $20,000, due by June 9, 2011 $20,000, due by June 9, 2012 $20,000, due by June 9, 2013 (e) City's Obligation to Make Payments Not Debt• Payments Limited to Non-tax Revenues. Notwithstanding anything to the contrary herein, the abligations 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. (f) Applicable City Payroll 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%). -3- 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: (i) the City at: City of Dublin, Ohio 5800 Shier Rings Road Dublin, Ohio 43016-7295 Attention: Economic Development Director (ii) the Company at: Saber Solutions, Inc. Attn: Charles Berry 111 West Liberty Street Columbus, OH 43215 And Saber Solutions, Inc. Attn: Legal Department 1800 SW First Avenue, Suite 350 Portland, OR 97201 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. -4- (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 (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} C tions. The captions and headings in this Agreement aze 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) 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- Irr WrrNESS 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 Brautigam Title: City Manager Approved as to Form: By: Printed: Stephen J. Smith Title: Director of Law SABER SOLUTIONS INC. By: Printed: Title: -6- FISCAL OFFICER'S CERTIFICATE The undersigned, Director of Finance of the City under the foregoing Agreement, certifies hereby that the monies required to meet the obligations of the City 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. Crrigsby Deputy City ManagerlDirector ofFinance City of Dublin, Ohio -7-