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HomeMy WebLinkAbout21-09 OrdinanceRECORD OF ORDINANCES ~)"Cjlil(I71CP NO. 21-09 Pnssecl , ~D AN ORDINAI~'CE AUTHORIZING THE PROVISION OF ECONOMIC DEVELOPMENT INCENTIVES TO DIMENSION SERVICE CORPORATION TO INDUCE THE RETENTION OF ITS WORKFORCE WITHIN THE CITY OF DUBLIN AND 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 Dimension Service Corporation's (the "Company") 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 to achieve the payroll withholding targets set forth in the Economic Development Agreement; and WHEREAS, 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 forn of Economic Development Agreement presently on file in the office of the Clerk of Council, to induce the Company to retain its workforce within the City, thereby sustaining employment opportunities and 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, 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, of its elected members concurring, that: Section 1. The City hereby finds and determines that the provision of certain economic development incentives as described in the Economic Development Agreement is necessary and appropriate and in the best interests of the City to provide for the retention of jobs and employment opportunities and to sustain 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 retain 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 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. RECORD OF ORDINANCES 21-09 Ordinc7nce No. form No.'~Q043 Page 2 P[t.csed . 20 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 concenzing 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 , 2009. Mayor -Presiding Officer ATTEST: Clerk of Counci] CITY OF DUBLIN.. Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017-1090 Phone: 614-410-4400 • Fax: 614-410-4490 To: Dublin City Council From: Terry Foegler, City Manage~~ Date: April 16, 2009 0- T~ Memo Initiated By: Dana McDaniel, Deputy City Manager & Director of Economic Development Colleen Gilger, Economic Development Administrator Re: Ordinance 21-09 - An Economic Development Agreement with Dimension Service Corporation Summary Staff has been in discussions with Dublin-based Dimension Service Corporation at 400 Metro Place North regarding the potential retention of the company and its workforce, either at its current location or elsewhere in Dublin. The City is facing considerable local competition with Hilliard and Columbus for the location of this company. Dimension Service Corporation (DSC) is afull-service third party administrator for vehicle service contract programs. DSC has been providing vehicle service contract and mechanical breakdown insurance administration and claim adjudication in all 50 states and Canada since 1985. After 24 years in the business, DSC has grown to employ over 100 full-time employees; and over 40 percent of its employees have worked at DSC for five or more years. Ordinance 21-09 authorizes an Economic Development Agreement (EDA) between the City and DSC that provides for athree-year, performance-based incentive equal to 20 percent of annual payroll withholdings collected, should the company reach or exceed predetermined growth targets. Should the target withholdings be met (during 2010-2013), the company has the potential to receive $53,239. DSC expects to add over $450,000 in new payroll over the next four years. The City also will retain DSC's current $4.1 million payroll tied to 120 positions. The company also is required to execute a minimum five-year lease extension in Dublin. Recommendation Staff recommends Ordinance No. 21-09 be approved by City Council at the second reading/public hearing on May 4, 2009. ECON014TIC DEVEI,OPI~TENT AGREEI~TENT THIS ECONOMIC DE~TELOPNIENT AGREEIvIII~IT (the `Agreement") is made and entered into this day of , 2009, by and between the CIT~J 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 DIlv1FNSION SERVIC~`E CORPORATION, an Ohio 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 within the City; and ~rHEREAS, pursuant to Ordinance No. 21-09 passed 2009 (the "Orc~incrnce"), the City has determined to offer certain economic development incentives as described herein to induce the Company to retain its workforce within the City to create jobs and ernployrnent opportunities and to improve the economic ~~~elfare 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 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. Compano~~~;reement to Retain CuiTent Workforce at a Dublin Facility and Create Jobs. The Company presently employs 122 employees at its site located at 400 Metro Place North in the City of Dublin. The aggregate annual payroll of those employees is approximately $4,100,000. For consideration of the economic development incentives to be provided by the City herein, the Company agrees that it will retain its current workforce in the City, and expand its --~orkforce «--~ithin the City, in an amount sufficient to achieve the annual Target t~~'ithholdings (as defined belo~~-•) set forth in Section 2; and the Company «~ill submit t~~•ritten proof of an executed five-year lease extension (approximate term through August 31, 2014). The Company also expects that the total estimated City payroll withholdings for all of its employees in the City for the period 2010 tluough 2012 will equal or exceed $266,197. Section 2. Cit~greement to Provide Incentives. (a} General. In consideration for the Company's agreement to retain its operations, workforce and associated pa5n•oll within the City, and the Company's agreement to execute a minimum five-year lease extension «Tith city limits and provide a copy of the executed lease agreement showing term dates, the City agrees to provide economic development incentij•~es to the Company in accordance with this Section. (b) Workforce Retention Incentive. (i) Calculation of Actual Withholdings. On or before March l~ of each of the years 2011 thru 2013 the City shall determine whether the actual payroll withholding taxes collected during the preceding calendar year by the City from all Employees (the "Actual T~ithholdrngs") meet or exceed the Target Wit1~11oldings 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 «~~ithin the City ("Company Employees"); and {ii) Information Relating to Company Employees. 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 2011 through 2013, 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 cun•ent calendar year, pay to the Company, solely from non-tax revenues, the amount equal twenty percent (20%) of the Target Withholdings ("Incentive Payment"). (d) Target Withholdings and Incentive Payments. The Target Withholdings for each calendar year shall be: Calendar Year Target Withholding 2010 $85,698 2011 $88,687 2012 $91, 802 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. (e) Maximum Incentive Payments. 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 Sixty Thousand Dollars ($60,(}~}~}), -2- (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 ackno«~ledges 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 retail and expand its workforce within the City. The Company further agrees that if the Target ~?Vitl>1lolding 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. Not«~ithstanding 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 Di•ector 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 Agreement, all notices, demands, requests, consents or approvals given, requied or permitted to be given hereunder shall be in writing and shall be deemed sufficiently given if actually received or if hand-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 ofthis Agreement, or to such other address as the recipient shall have previously notified the sender of in ~~~riting, 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 ~~~hen the return receipt is signed or refused. For purposes ofthis agreement, notices shall be addressed to: (i) the City at: City of Dublin, Ohio 5800 Shier Rings Road Ihiblin, Ohio 43016 Attention: Economic Development Du-ector (ii) the Company at: 400 Metro Place North Dublil, Ohio 430I7 Attention: -3- The parties, by notice given hereunder, may designate any further or dit~erent addresses to which subsequent notices; certificates, requests or other communications shall be sent. (b) Extent of Provisions; No Personal Liabilit~r. All rights, remedies, representations, warranties, covenants, agreements and obligations of the City under this Agreement shall be effective to the extent authorized and pei-~nitted by applicable law. No representation, warranty, covenant, agreement, obligation or stipulation contained u1 this Agreement shall be deemed to constitute a representation, warranty, covenant., agreement, obligation or stipulation of any present or fiiture trustee, member, officer, agent or employee ofthe 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 ackno«-ledge 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. (fj 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 uivalid 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. -4- (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 Lativ 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 mattes-s u1 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 ofthis Agreement to the contrary, in no event shall City or the Company Ue liable to each other for punitive, special, consequential, or indil-ect 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. (Remainder of page intentionally left blank) -5- IN WITNESS ~?VHEREOF, the City and the Company have caused this Agreement to be executed u1 thew respective names by thew duly authorized representatives, all as of the date fu•st --~ritten above. CITY OF DUBLIN, OHIO By: Printed: Teri•~~ler Title: Cit. Manager By: Printed: Marsha I. Gri~,sby Title: Duector of Finance Approved as to Form: By: Printed: Stephen J. Smith Title: Director of Law DIn7ENSION SERVICE CORPORATION By: Printed: Title: -s- 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 u1 the process of collection to the credit of an appropriate fund, free from any previous encumbrances. This Certificate is given in compliance ~lith Sections 5705.41 and 5705.44, Ohio RejTised Code. Dated: , 2009 Marsha I. Cn•igsby Director of Finance City of Dublin, Ohio -7-