HomeMy WebLinkAboutOrdinance 40-12RECORD OF ORDINANCES
Inc.
Ordinance No,
40 -12
Passed 20
AN ORDINANCE AUTHORIZING THE PROVISION OF CERTAIN
INCENTIVES TO BOUND TREE MEDICAL, LLC TO INDUCE IT
TO EXPAND AN OFFICE AND ASSOCIATED OPERATIONS AND
WORKFORCE WITHIN THE CITY, AND AUTHORIZING THE
EXECUTION OF AN ECONOMIC DEVELOPMENT AGREEMENT
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 development and create
and preserve jobs and employment opportunities within the City; and
WHEREAS, Bound Tree Medical, LLC (the "Company") recently performed a
comprehensive examination of its workforce needs, and based on the results of this
examination, and induced by and in reliance on the economic development incentives
provided in the proposed Economic Development Agreement (as described below), the
Company is desirous of retaining its office and expanding its related operations and
workforce within the City in order to achieve the payroll withholding targets set forth in
the Economic Development Agreement; and
WHEREAS, this Council has determined that it is necessary and appropriate and in the
best interests of the City to provide for certain economic development incentives to the
Company, as described in the proposed Economic Development Agreement; and
WHEREAS, this Council has determined to offer the economic development incentives,
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 retain its office and expand its associated operations and workforce, all within the
City, which will result in the creation of new jobs and employment opportunities and the
preservation of existing jobs and employment opportunities, thereby 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.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, State
of Ohio, of the elected members concurring, that:
Section 1 . 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 certain economic development incentives in consideration
for the Company's agreement to retain its office and expand its associated operations and
workforce within the City, which will result in the creation of new jobs employment
opportunities and the preservation of existing jobs and employment opportunities, 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. The City Manager, for and in the name of this City, is hereby authorized
to execute that Economic Development Agreement, provided further that the approval of
changes thereto by that official, and their character as not being substantially adverse to
the City, shall be evidenced conclusively by the execution thereof. This Council further
authorizes the City Manager, 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 2 . This Council fiu hereby authorizes and directs the City Manager, the
Director of Law, the Director of Finance, 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.
RECORD OF ORDINANCES
Ordinance No.
40 -12
Page 2 of 2
Passed 20
Section 3. This Council finds and determines that all formal actions of this Council and
any of its committees concerning and relating to the passage of this Ordinance were taken
in open meetings of this Council or committees, and that all deliberations of this Council
and any of its committees that resulted in those formal actions were in meetings open to
the public, all in compliance with the law including Section 121.22 of the Revised Code.
Section 4 . This Ordinance shall be in full force and effect on the earliest date
permitted by law.
Signed:
Officer
Attest:
Clerk of Council
V010
Effective:
2012
2012
Office of the City Manager
Emerald Prkwa* City of Dublin Pho 614 - 410-4400- Faax: 14 - 1 0 -449 0 43017-1090
To: Dublin City Council
From: Marsha I. Grigsby, City Manager `k`
Date: May 31, 2012
Initiated By: Michael Clarey, Economic Development Administrator
Memo
Re: Ordinance 40 -12 - Economic Development Agreement with Bound Tree Medical,
LLC
Background
Staff has been in discussions with Bound Tree Medical, LLC (dba Sarnova, Inc.), regarding an out -
of -state consolidation and potential job growth in Dublin. The company plans to consolidate a
facility currently located in California to an existing facility in Pennsylvania, Wisconsin, or Dublin,
Ohio. The company's facility in Dublin, serving as the corporate headquarters, is located at 5000
Tuttle Crossing Boulevard. Currently, there are 145 existing jobs at this site.
Sarnova is a specialty provider of emergency medical and acute care products. The company
offers more than 100,000 different products to emergency care facilities, hospitals, and other
patient care facilities across the nation. Sarnova utilizes an extensive network of highly trained
account managers, customer service representatives, and product specialists to meet the needs of
their clients across the continuum of emergency medical care.
The Economic Development Agreement proposed to Sarnova includes a five -year, 25%
Performance Incentive on new withholdings collected (2012- 2016), which is capped at $50,000 for
the term of the agreement, in consideration of the company creating 55 jobs with an average
annual salary of $47,000 in Dublin by the end of 2017.
The City estimates it would net approximately $137,883 in new income tax withholdings over the
term of the agreement should the company grow according to expectations.
Recommendation
Staff recommends Council approval of Ordinance 40 -12 at the second reading /public hearing on
June 18, 2012. Please contact Michael Clarey with any questions.
ECONOMIC DEVELOPMENT AGREEMENT
THIS ECONOMIC DEVELOPMENT AGREEMENT (the `Agreement") is made and entered into
this day of , 2012, 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 BOUND TREE MEDICAL, LLC, an Ohio limited
liability company (the "Company" and together with the City, the `Parties "), 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 development and create and preserve jobs and 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 incentives provided
in this Agreement, the Company desires to retain its office and expand its associated operations
and workforce within the City; and
WHEREAS, pursuant to Ordinance No. -12 passed on , 2012 (the
"Ordinance "), the City has determined to offer the economic development incentives described
herein to induce the Company to retain its office and expand its associated operations and
workforce within the City, which will result in the creation of new jobs and employment
opportunities and the preservation of existing jobs and employment opportunities 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 these incentives in order to induce the Company to retain its office and expand its
associated operations and workforce, all within the City;
Now THEREFORE, the City and the Company covenant, agree and obligate themselves as
follows:
Section 1. Companv's Agreement to Retain Its Office and Expand Its Associated
Operations and Workforce Within the Citv In consideration for the economic development
incentives to be provided by the City herein, the Company agrees that it will retain its office and
expand its associated operations and workforce within the City, all consistent with the terms of this
Agreement. The Company expects to create fifty -five (55) new employee positions within the City
by December 31, 2017. The average annual wage of these new employees is estimated to be Forty -
Seven Thousand and 00 /100 Dollars ($47,000.00), with total estimated payroll withholdings of
approximately One Hundred Eighty -Seven Thousand Eight Hundred Eighty -Three and 00 /100
Dollars ($187,883.00) over the term of this Agreement. The Company also expects to retain one
Squire Sanders #835979v2: 05 -23 -2012
hundred forty -five (145) existing employee positions within the City. The average annual wage of
these existing employees is estimated to be Forty -Seven Thousand and 00 /100 Dollars ($47,000.00),
with total estimated payroll withholdings of approximately Six Hundred Eighty Thousand Six
Hundred Fifty and 00 /100 Dollars ($680,650.00) over the term of this Agreement. The Company
agrees that the City's obligations to remit payments pursuant to subsection 2(b) of this Agreement
shall be contingent upon the Company's satisfaction of the Actual Withholdings requirements in
Section 2
Section 2. City Agreement to Provide Incentives
(a) General In consideration for the Company's agreement to retain its office and
expand its associated operations and workforce within the City, the City agrees to provide
economic development incentives to the Company in accordance with this Section.
(b) Workforce Creation Incentive
(i) Calculation of Actual Pavroll Withholding Taxes On or before March 15
of each of the years 2013 through 2017, the City shall calculate the actual payroll
withholding taxes collected and received during the then preceding calendar year and in
respect of that preceding calendar year by the City from all Employees (as defined
below). For purposes of that calculation, the Company acknowledges and agrees that the
total amount of actual payroll withholding taxes in respect of any calendar year shall be
determined based solely upon the amount of payroll withholding tax payments actually
received by the City from the Company during that calendar year. The Company agrees
that the determination of whether to include in such calculation any amount received by
the City in respect of any calendar year but following the conclusion of that calendar
year, shall be solely within the discretion of the City. For purposes of this Section 2,
"Employees" shall include only those individuals employed by the Company or an
Affiliated Entity working at offices located within the City. For purposes of this Section
2, Affiliated Entity" shall mean any entity listed on EXHIBIT A or any entity controlled
by or under common control with the Company and, "controlled by" or "under common
control with" will refer to the possession, directly or indirectly, of the legal power to
direct or cause the direction of the management and policies of an entity, whether through
the exercise of, or the ability to exercise, voting power or by contract. The Parties agree
that the Company may revise EXHIBIT A from time to time in a manner consistent with
this Agreement, subject to the City's prior written approval which approval shall not be
unreasonably withheld.
(ii) Information Relating to Employees The Company agrees that, in
accordance with the Dublin City Code, the annual payroll reconciliation and related W -2
fortes relating to all Employees will be provided to the City prior to February 28 of each
calendar year.
(iii) Annual Incentive Payments to the Company If the actual payroll
withholding taxes collected and received by the City during the then preceding calendar
year and in respect of that preceding calendar year from all Employees, net of refunds
Squire Sanders #835979v2: 05 -23 -2012 -2-
(such amount being referred to as the Actual Withholdings'), equal or exceed the Target
Withholdings (as defined in subsection 2(b)(iv)) for that preceding calendar year, the City
shall, on or before April 15 of the then current calendar year, pay to the Company, solely
from nontax revenues (as defined in subsection 2(d)), an amount equal to the product of
(A) the difference between (1) an amount equal to the Actual Withholdings for that
preceding calendar year minus (2) an amount equal to the Base Withholdings for that
preceding calendar year, multiplied by (B) twenty-five percent (25 %) (with each such
product being referred to as an `Annual Incentive Payment'); provided, however, that (1)
the City shall not be required pursuant to this subsection 2(b) to remit an Annual
Incentive Payment to the Company in excess of the Annual Cap (as defined in subsection
2(b)(iv)) in any calendar year, and (2) the aggregate amount of all Annual Incentive
Payments remitted pursuant to this subsection 2(b) by the City to the Company shall not
exceed Fifty Thousand and 00 /100 Dollars ($50,000.00).
(iv) Base Withholdings, Target Withholdings and Annual Cap The Base
Withholdings, Target Withholdings and Annual Cap for each of the calendar years 2012
through 2016 shall be:
Calendar Year
Base Withholdings
Target Withholdings
Annual Cap
2012
$ 137,437
$ 163,594
$ 10,000
2013
137,437
168,500
10,000
2014
137,437
173,560
10,000
2015
137,437
178,760
10,000
2016
137,437
184,300
10,000
* The difference between
the Target Withholdings and
the Base Withholdings for each calendar
year reflects
the anticipated minimum
withholdings attributable to new
employees.
(v) Forfeiture of Right to Receive Workforce Creation Incentive Payment
The Company agrees and acknowledges that Annual Incentive Payments provided for in
subsection 2(b) are being made by the City to the Company in consideration for the
Company's agreement to retain its office and expand its associated operations and
workforce within the City and to create additional employment opportunities and retain
existing employment opportunities, all within the City. The Company further agrees that
if the Target Withholdings requirement is not met for any given calendar year as set forth
in subsection 2(b)(iv), the City shall not be obligated to make an Annual Incentive
Payment to the Company for the calendar year in respect of which the Target
Withholdings requirement was not satisfied. Failure to satisfy the Target Withholdings
requirement in respect of any one calendar year does not prohibit the Company from
receiving an Annual Incentive Payment for any subsequent calendar year in respect of
which the Target Withholdings requirement is satisfied.
(c) Method of Payment The payments to be paid to the Company as provided 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.
(d) 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
Squire Sanders #835979v2: 05 -23 -2012 - 3 -
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. For purpose of this Agreement, "nontax revenues"
shall mean, all moneys of the City which are not moneys raised by taxation, to the extent
available for such purposes, including, but not limited to the following: (i) grants from the
United States of America and the State; (ii) payments in lieu of taxes now or hereafter authorized
to be used for the purposes by State statute; (iii) fines and forfeitures which are deposited in the
City's General Fund; (iv) fees deposited in the City's General Fund from properly imposed
licenses and permits; (v) investment earnings on the City's General Fund and which are credited
to the City's General Fund; (vi) investment earnings of other funds of the City that are credited
to the City's General Fund; (vii) proceeds from the sale of assets which are deposited in the
City's General Fund; (viii) rental income which is deposited in the City's General Fund; and (ix)
gifts and donations.
Section 3. Miscellaneous.
(a) Assignment This Agreement may not be assigned without the prior written consent
of all non - assigning Parties.
(b) Binding Effect The provisions of this Agreement shall be binding upon the
successors or assigns of the Parties.
(c) 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.
(d) Day for Performance Wherever herein there is a day or time period established for
performance and such day or the expiration of such time period is a Saturday, Sunday or legal
holiday, then such time for performance shall be automatically extended to the next business day.
(e) Economic Development Assistance Certification The Company has made no false
statements to the City in the process of obtaining approval of the incentives described in this
Agreement. If any representative of the Company has knowingly made a false statement to the City
to obtain the incentives described in this Agreement, the Company shall be required to immediately
return all benefits received under this Agreement pursuant Ohio Revised Code Section 9.66(C)(2)
and shall be ineligible for any future economic development assistance from the State, any State
agency or apolitical subdivision pursuant to Ohio Revised Code Section 9.66(C)(1). The Company
acknowledges that any person who provides a false statement to secure economic development
assistance may be guilty of falsification, a misdemeanor of the first degree, pursuant to Ohio
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Revised Code Section 2921.13(D)(1), which is punishable by a fine of not more than $1,000 and/or
a term of imprisonment of not more than six months
(f) Entire Agreement This Agreement constitutes the entire Agreement between the
Parties on the subject matter hereof and supersedes all prior negotiations, agreements and
understandings, both written and oral, between the Parties with respect to such subject matter. This
Agreement may not be amended, waived or discharged except in an instrument in writing executed
by the Parties.
(g) Events of Default and Remedies Except as otherwise provided in this Agreement,
in the event of any default in or breach of this Agreement, or any of its terms or conditions, by any
Party hereto, such defaulting Party shall, upon written notice from any non - defaulting Party,
proceed immediately to cure or remedy such default or breach, and, in any event, within thirty (30)
days after receipt of such notice. In the event such default or breach is of such nature that it cannot
be cured or remedied within said thirty (30) day period, then in such event the defaulting Party shall
upon written notice from any non - defaulting Party commence its actions to cure or remedy said
breach within said thirty (30) day period, and proceed diligently thereafter to cure or remedy said
breach. In case such action is not taken or not diligently pursued, or the default or breach shall not
be cured or remedied within a reasonable time, the aggrieved non - defaulting Party may institute
such proceedings as may be necessary or desirable in its opinion to cure and remedy such default or
breach, including, but not limited to, proceedings to compel specific performance by the defaulting
Party.
(h) Executed Counterparts This Agreement may be executed in several counterparts,
each of which shall be deemed to constitute an original, but all of which together shall constitute but
one and the same instrument It shall not be necessary in proving this Agreement to produce or
account for more than one of those counterparts.
(i) Extent of Covenants: No Personal Liability All covenants, obligations and
agreements of the Parties contained in this Agreement shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a
covenant, obligation or agreement of any present or future member, officer, agent or employee of
the City or the Company other than in his or her official capacity, and neither the members of the
legislative body of the City nor any official executing this Agreement shall be liable personally
under this Agreement or be subject to any personal liability or accountability by reason of the
execution thereof or by reason of the covenants, obligations or agreements of the City and the
Company contained in this Agreement.
0) GOyerning Law This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio without regard to its principles of conflicts of laws. 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.
(k) Legal Authority The Parties respectively represent and covenant that each is legally
empowered to execute, deliver and perform this Agreement and to enter into and carry out the
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transactions contemplated by this Agreement. The Parties further respectively represent and
covenant that this Agreement has, by proper action, been duly authorized, executed and delivered by
the Parties and all steps necessary to be taken by the Parties have been taken to constitute this
Agreement, and the covenants and agreements of the Parties contemplated herein, as a valid and
binding obligation of the Parties, enforceable in accordance with its terms.
(1) Limit on Liability 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.
(m) 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 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 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: Bound Tree Medical, LLC
5000 Tuttle Crossing Blvd.
Dublin, Ohio 43016
Attention:
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.
(n) No Waiver No right or remedy herein conferred upon or reserved to any Party is
intended to be exclusive of any other right or remedy, and each and every right or remedy shall be
cumulative and in addition to any other right or remedy given hereunder, or now or hereafter legally
existing upon the occurrence of any event of default hereunder. The failure of any Party to insist at
any time upon the strict observance or performance of any of the provisions of this Agreement or to
exercise any right or remedy as provided in this Agreement shall not impair any such right or
remedy or be construed as a waiver or relinquishment thereof. Every right and remedy given by this
Agreement to the Parties hereto may be exercised from time to time and as often as may be deemed
expedient by the parties hereto, as the case may be.
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(o) Recitals The Parties 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.
(p) Severability If any provision of this Agreement, or any covenant, obligation or
agreement contained herein is determined by a court to be invalid or unenforceable, that
determination shall not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if the invalid or unenforceable portion were not contained herein.
That invalidity or unenforceability shall not affect any valid and enforceable application thereof, and
each such provision, covenant, obligation or agreement shall be deemed to be effective, operative,
made, entered into or taken in the manner and to the full extent permitted by law.
(q) Survival of Representations and Warranties All representations and warranties of
the Parties in this Agreement shall survive the execution and delivery of this Agreement.
(remainder ofpage intentionally left blank— signature page follows)
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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
Printed: Marshal. Grigsbv
Title: Citv Manager
Approved as to Form:
C
Printed: Stephen J. Smith
Title: Director of Law
BOUND TREE MEDICAL, LLC
Printed:
Title:
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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 under the foregoing Agreement
during Fiscal Year 2012 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: .2012
Angel L. Mumma
Director of Finance /Deputy City Manager
City of Dublin, Ohio
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EXHIBIT A
List of Affiliated Entities
Name of Affiliated Entity
Samova HC, LLC
Tri -anim Health Services, Inc.
Employer ID Number
26- 2549813
95- 2959155
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