27-04 Ordinance RECORD OF ORDINANCES
Dayton Leeal Blank, Inc. Form No. 30043
Ordinance No. ~~-~4 Passed 20
AN O RDINANCE A UTHORIZING T HE P ROVISION O F
CERTAIN INCENTIVES, WHICH INCLUDE THE
PROVISION OF A MUNICIPAL INCOME TAX CREDIT
AND RELATED INCENTIVE PAYMENTS FOR
PURPOSES OF ENCOURAGING THE RELOCATION OF
BOUNDTREE MEDICAL, LLC'S OPERATIONS AND
WORKFORCE WITHIN THE CITY AND AUTHORIZING
THE EXECUTION OF AN ECONOMIC DEVELOPMENT
AND TAX CREDIT 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, BoundTree Medical, LLC ("BoundTree Medical LLC") currently has its
operations located at 6106 Bausch Road, Galloway, Ohio; and
WHEREAS, BoundTree Medical LLC is a single member Ohio limited liability
company with its sole member being BoundTree Medical Products, Inc. ("BoundTree
Medicallnc."); and
WHEREAS, based on the results of BoundTree Medical LLC's recent comprehensive
examination of workforce needs, and induced by and in reliance on the economic
development incentives provided in this Agreement, BoundTree Medical LLC is
desirous of relocating its principal office and a majority of its workforce to the City;
and
WHEREAS, BoundTree Medical LLC has received a State of Ohio Job Creation Tax
Credit ("JCTC") which w as approved on March 29, 2004 providing f or afifty-five
percent (55%) State tax credit for seven (7) years beginning in 2005 (the "State
Incentive"); and
WHEREAS, this Council has determined to offer certain economic development
incentives and a municipal income tax credit in conjunction with the provision of the
State Incentive, the terms of which are set forth in a substantially final form of
Economic Development and Tax Credit Agreement presently on file in the office of
the Clerk of Council, to induce BoundTree Medical LLC to relocate its operations and
a majority of its workforce to 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 pursuant to Section 718.08 of the Ohio Revised Code
and Article VIII, Section 13 of the Ohio Constitution; and
WHEREAS, t his C ouncil f Inds t hat i t is i n t he best i nterest o f t he C ity t o p rovide
these economic development incentives and a municipal income tax credit to induce
BoundTree Medical LLC to relocate its operations and a majority of its workforce to
the City and to provide for the execution and delivery of that Economic Development
and Tax Credit Agreement with BoundTree;
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 and a municipal income tax credit, in conjunction
with the provision of the State Incentive, as described in the Economic Development
and Tax Credit 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
RECORD OF ORDINANCES
Dayton Lceal Blank Inc. Form No. 30043
Ordinance No. 27-04 Passed _ Page 2 , 20
and the City, all as authorized in Section 718.08 of the Ohio Revised Code and Article
VIII, Section 13 of the Ohio Constitution.
Section 2. The Economic Development and Tax Credit Agreement by and between
the City and BoundTree Medical LLC, in the form presently on file with the Clerk of
Council, providing for, among other things, the provision of economic development
incentives and a municipal income tax credit in consideration for BoundTree Medical
LLC's agreement to relocate its operations and a majority of its workforce to the City,
is hereby approved and authorized with changes therein not inconsistent with this
Ordinance and not substantially adverse to this City and which shall be approved by
the City Manager and Director of Finance. The City Manager and Director of
Finance, for and in the name of this City, are hereby authorized to execute that
Economic Development and Tax Credit Agreement, provided further that the approval
of changes thereto by those officials, and their character as not being substantially
adverse to the City, shall be evidenced conclusively by their execution thereof. This
Council further authorizes the City Manager and the Director of Finance, for and in
the name of the City, to execute any amendments to the Economic Development
Agreement, which amendments are not inconsistent with this Ordinance and not
substantially adverse to this City.
Section 3. This Council 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.
Signed:
~ r ,
L
Presiding Officer
Attest:
Clerk of Council
Passed: ~ , 2004
Effective: ~ , 2004
I hereby certify that copies of this
Ordinance/Resolution were posted in the
City of Dublin in accordance with Section
731.25 of the Ohio Revised Code.
Dep Clerk of Council, Dublin, Ohio
Office of the City Mana er
5200 Emerald Parkway • Dubin, OH 43017
Phone: 614-410-4400 • Fax: 614-410-4490
CITY OF DLBLIIV
Memo
To: Members of the Dublin City Council
From: Jane S. Brautigam, City Managei~'~~ s
Date: April 13, 2004 {
Initiated By: Michael Stevens, Director of Economic Development / ~ ~
Re: Ordinance No. 27-04, BoundTree Medical LLC
Summary:
Ordinance No. 27-04 authorizes the execution of an Economic Development Agreement with BoundTree
Medical LLC, for the purpose of encouraging the relocation and expansion of their operations to the City of
Dublin. BoundTree will relocate 49 employees to the City and plans to add 54 new employees within three
years. The attached Economic Development Agreement (the Agreement) is for 5 years and will pay
BoundTree 25% of its actual withholding and provide a 50% municipal corporate income tax credit. The
incentive payment will be capped at $200,000.
The company will be leasing space at 5210 Rings Road. The company has also received a JCTC from the
State of Ohio and a loan from the Franklin County Growth Fund, which is funded by the County.
Recommendation:
Staff continues to pursue job growth within the community. Using incentives to attract companies like
BoundTree will result in additional income tax revenue.
Staff recommends that City Council approve Ordinance No. 27-04 at its May 3, 2004 Meeting.
ECONOMIC DEVELOPMENT AND
TAX CREDIT AGREEMENT
THIS ECONOMIC DEVELOPMENT AND TAX CREDIT AGREEMENT (the "Agreement") is made
and entered into this 4th day of June, 2004, by and between the CITY OF DvBLIN, 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 BOUNDTItEE MEDICAL, LLC, an Ohio
Limited Liability Company ("BoundTree Medical LLC" with its sole member being BoundTree
Medical Products, Inc. an Ohio corporation, "BoundTree Medical Inc.", and together with
BoundTree Medical LLC, "BoundTree") with its principal office presently located in Galloway,
Ohio, 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 BoundTree Medical LLC's recent comprehensive
examination of workforce needs, and induced by and in reliance on the economic development
incentives provided in this Agreement, BoundTree Medical LLC is desirous of relocating its
principal office and workforce to the City; and
WHEREAS, BoundTree Medical LLC has received a State of Ohio Job Creation Tax
Credit ("JCTC") which was approved on March 29, 2004 providing fora 55 percent State tax
credit for seven years beginning in 2005; and
WHEREAS, pursuant to Ordinance No. 27-04 passed May 3, 2004 (the "Ordinance"), the
City has determined to offer certain economic development incentives as described herein to
induce BoundTree Medical LLC to relocate and expand its workforce within the City, to create
jobs and employment opportunities and to improve the economic welfare of the people of the State
of Ohio and the City, all pursuant to Section 718.15 of the Ohio Revised Code and Article VIII,
Section 13 of the Ohio Constitution, and to further authorize the execution of this Agreement; and
WHEREAS, the City and BoundTree Medical LLC have determined to enter into this
Agreement to provide the incentives described herein and to induce that relocation by
BoundTree Medical LLC of its operations within the City;
Now THEREFORE, the City and BoundTree Medical LLC covenant agree and obligate
themselves as follows:
"Taxable Year" shall mean each of the following years in respect of which BoundTree is
required to file an income tax return with the City in respect of BoundTree's Net Profits Tax
Liability, as required by Section 35.03 of the City Code:
Taxable Year Period Covered
2004 January 1, 2004 to December 31, 2004
2005 January 1, 2005 to December 31, 2005
2006 January 1, 2006 to December 31, 2006
2007 January 1, 2007 to December 31, 2007
2008 January 1, 2008 to December 31, 2008
"Total Annual Withholdings" shall, for each applicable Taxable Year, mean an amount
equal to the total of the City income tax withheld by BoundTree Medical LLC from the Taxable
Income of Employees during that applicable Taxable Year.
Section 2. BoundTree's Agreement to Relocate Jobs. BoundTree Medical LLC
presently employs 59 employees at its Current Facility of which 49 will be relocated. The aggregate
annual payroll of those relocated employees is approximately $2,500,000 million. In consideration
of the economic development incentives to be provided by the City herein, BoundTree Medical
LLC agrees that (a) no later than December 31, 2004 it will relocate all of the employees described
in this Section 2 to the New Facility and (b) no later than thirty-six (36) months following that
relocation, it will hire such additional employees that its total number of Employees located within
the City is equal to at least 103 Employees.
Section 3. City s Agreement to Provide Economic Development Incentives and Tax
Credit to BoundTree. In consideration for BoundTree Medical LLC's agreement to relocate its
workforce and associated payroll to the City and to increase its total number of Employees located
within the City over the succeeding three year period, the City agrees to provide certain economic
development incentive payments and grant to BoundTree a Tax Credit in accordance with this
Section which shall be claimed by BoundTree against BoundTree's Net Profits Tax Liability, all
in accordance with this Section.
(a) Economic Development Incentive Payment.
(i) Calculation of Total Annual Withholdings. On or before March 25 of
each of the years 2005 through and including 2009, the City shall determine whether the
Total Annual Withholdings collected during the preceding calendar year by the City from
all Employees exceeds the Target Withholdings for that preceding calendar year; all in
accordance with the schedule set forth below. BoundTree Medical LLC agrees that, in
accordance with the City Code, the annual payroll reconciliation relating to Employees
will be provided to the City prior to February 28 of each calendar year.
(ii) Payments to BoundTree. If the Total Annual Withholdings collected
during the preceding calendar year exceed the Target Withholdings for the preceding
calendar year, the City shall, on or before April 15 of the then current calendar year, pay to
BoundTree Medical LLC, solely from Nontax Revenues, an amount equal to the product of
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(A) an amount equal to the Total Annual Withholdings collected during the preceding
calendar year (net of refunds) multiplied by (B) the Incentive Factor (as defined below).
The payments provided for in this subsection 3(a) shall be made by the City to BoundTree
Medical LLC by electronic funds transfer or by such other manner as is mutually agreed to
by the City and BoundTree Medical LLC.
With respect to the Total Annual Withholdings collected during each of
the calendar years 2004 through 2008, the Incentive Factor shall be twenty-five percent
(25%). The Target Withholdings for each of those calendar years shall be as follows:
Calendar Year Target Withholdings
2004 $18,000
2005 $40,000
2006 $45,000
2007 $50,000
2008 $55,000
(iii) Maximum Economic Development Incentive Payments. In no event shall
the aggregate amount of payments made by the City to BoundTree Medical LLC pursuant to
this subsection 3(a) during the term of this Agreement exceed Two Hundred Thousand
Dollars ($200,000) (the "Maximum Payment Amount
(iv) Applicable City Payroll Tax Rate. For purposes of calculating the Total
Annual Withholdings in each calendar year under this subsection 3(a), the City's payroll tax
rate shall be assumed to be two percent (2%).
(b) Extraordinary Performance Incentive Payment. The City further agrees that if
BoundTree Medical LLC's aggregate Total Annual Withholdings for the calendar years 2004
through 2008, inclusive, equals or exceeds $400,000, then the City shall pay to BoundTree Medical
LLC an amount equal to twenty-five percent (25%) of the Total Annual Withholdings collected
during calendar year 2009. The City acknowledges and agrees to make that payment solely from
Nontax Revenues, if required by this Section 3(b), to BoundTree Medical LLC no later than April
15, 2010 by electronic funds transfer or by such other manner as is mutually agreed to by the City
and BoundTree Medical LLC.
(c) Incentive Payment Carryforward. If and to the extent the amount of Nontax
Revenues are insufficient in a particular calendar year for appropriation and payment to
BoundTree Medical LLC, the City will make payment to BoundTree Medical LLC in the amount
of Nontax Revenues available for appropriation and payment to BoundTree Medical LLC. The
difference between the amount required to be paid by the City to BoundTree Medical LLC
pursuant to subsections 3(a) and 3(b) and the amount actually paid (referred to herein as a
"Carryforward Amount") shall be carried forward to the next succeeding calendar year and paid
to BoundTree Medical LLC in addition to any other payment for that succeeding year required
by subsections 3(a) and 3(b). This Agreement shall not terminate until the City has paid to
BoundTree Medical LLC all Carryforward Amounts required to be paid to BoundTree Medical
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LLC in accordance with this subsection 3(c); provided, however, the aggregate of all payments
to BoundTree Medical LLC pursuant subsection 3(a) shall not exceed the Maximum Payment
Amount.
(d) Tax Credit.
(i) Actual Computations of Tax Credit. The Tax Credit for each applicable
Taxable Year shall be equal to fifty percent (50%) multiplied by the lesser of (A) the
Total Annual Withholdings for the applicable Taxable Year or (B) BoundTree's Net
Profits Tax Liability for the applicable Taxable Year.
(ii) Claim and Application of Tax Credit. Except as the Tax Credit may be
limited by subsection 3(d)(iii) below, BoundTree shall claim the applicable Tax Credit
provided herein against BoundTree's Net Profits Tax Liability for each of the Taxable
Years. The City and BoundTree agree that the municipal income tax return reporting
BoundTree's Net Profits Tax Liability shall be filed in accordance with the City Code
and the Tax Credit, if any, for any applicable Taxable Year may only be claimed once,
whether such municipal income tax return is filed by BoundTree Medical LLC or
BoundTree Medical Inc. However, the City acknowledges that BoundTree Medical LLC
will start employing Employees at the New Facility prior to January 1, 2005.
(iii) Limitation on the Tax Credit for Each Taxable Year. BoundTree and the
City agree that the Tax Credit cannot reduce BoundTree's Net Profits Tax Liability
below zero dollars ($0) for any applicable Taxable Year. BoundTree and the City further
agree that to the extent any portion of the Tax Credit is unclaimed in any Taxable Year
because that portion of the Tax Credit would have reduced BoundTree's Net Profits Tax
Liability to an amount less than zero dollars ($0), such portion may not be applied to
BoundTree's Net Profits Tax Liability in future Taxable Years.
Section 4. City's Obligation to Make Payments Not Debt• Payments Limited to Nontax
Revenues. Notwithstanding anything to the contrary herein, the obligations of the City pursuant
to this Agreement shall not be a general obligation debt or bonded indebtedness, or a pledge of
the general credit or taxes levied by the City, and BoundTree 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 Section
3 shall be payable solely from the City's Nontax 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 Section 3 shall be subject to annual appropriations by the
City Council and certification by the Director of Finance of the City as to the availability of such
Nontax Revenues.
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Section 5. Miscellaneous.
(a) Governin Law. This Agreement shall be governed by the Ohio Revised Code
and all other laws of the State as are applicable to all matters herein, including, but not limited to,
matters of validity, construction, effect and performance.
(b) Entire Agreement. This Agreement and its exhibits and any documents referred
to herein constitute the complete understanding of the parties and merge and supersede any and
all other discussions, agreements and understandings, either oral or written, between the parties
with respect to the subject matter hereof.
(c) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such provision or invalidity, without invalidating the
remainder of such provisions of this Agreement.
(d) Forbearance Not a Waiver. No act of forbearance or failure of any party hereto to
enforce at any time any of the provisions of this Agreement shall in any way be construed to be a
waiver of any such provision, nor in any way affect the validity of this Agreement or any part
hereof, or the right of such party thereafter to enforce each and every such provision. No waiver
of any breach of or noncompliance with this Agreement shall be held to be a waiver of any other
or subsequent breach or noncompliance.
(e) Notification. Any notices, statements, acknowledgments, consents, approvals,
certificates or requests required to be given hereunder shall be in writing and shall be deemed
duly given if personally delivered or sent by United States mail, registered or certified, return
receipt requested, postage prepaid, to the addressees set forth hereunder or to such other address
as the other party when the receipt is signed hereto may designate in written notice transmitted in
accordance with this provision.
(i) the City at:
City of Dublin, Ohio
5800 Shier Rings Road
Dublin, Ohio 43016-7295
Attention: Economic Development Director
(ii) BoundTree (prior to September 30, 2004) at:
BoundTree
6106 Bausch Road
Galloway, Ohio 43119
Attention: Ms. Liz Roush
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BoundTree (on or after October 1, 2004) at:
BoundTree
5210 Rings Road
Dublin, Ohio 43017
Attention: Ms. Liz Roush
(f) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together shall constitute one
and the same Agreement.
(g) Captions. The captions contained in this Agreement were included only for
convenience or reference and do not define, limit, explain or modify this Agreement or its
interpretation, construction or meaning and are in no way to be construed as a part of this
Agreement.
(h) Successors and Assi ns. The terms and provisions hereof shall bind and inure to
the benefit of the parties hereto and their respective heirs, successors and permitted assigns
(including successive as well as immediate successors and assigns).
(i) Assi nment. BoundTree shall not have the right to assign this Agreement to any
successor or assign without the prior written consent of the City, which consent shall not be
unreasonably withheld.
(j) Amendments or Modifications. Either party may at any time during the term of
this Agreement request amendments or modifications, but such changes or amendments shall not
be effective until executed by the parties hereto. Requests for amendment or modification of this
Agreement shall be in writing and shall specify the requested changes and the justification of
such changes. The parties shall review the request for modification in terms of the legislation,
regulations and goals relating to the New Facility. Should the parties consent to modification of
the Agreement, then an amendment shall be drawn, approved and executed in the same manner
as the original Agreement. Such amendment shall not be effective until approved by formal
action of the legislative authority of the City, and a written amendment is signed.
(Signature Pages to Follow)
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IN WITNESS WHEREOF, the City and BoundTree 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: ~ s. ~3
Printed: Jane Brautigam
Title: Cit Mana er
By:
Printed: Marsha I. Grigsby
Title: Deputy City Manager/Director of Finance
Appro s orm:
Y~
rinted: Stephen J. Smith
Title: Director of Law
BOUNDTREE MEDICAL LLC,
BY BOUNDTREE MEDICAL PRODUCTS, INC.,
[TS SOLE MEMBER
By: ~
Printed: r1•an't~tF~ r~- G?ifL~-
Title: Cl.~~-~~.. CE~~
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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 during the year 2004 under the
foregoing Agreement have been appropriated lawfully for that purpose, and are in the Treasury of
the City or in the process of collection to the credit of an appropriate fund, free from any previous
encumbrances. This Certificate is given in compliance with Sections 5705.41 and 5705.44, Ohio
Revised Code.
Dated: _ a ~
3 , 2004
Marsha I. Grigsby, Deputy City anager
Director of Finance
City of Dublin, Ohio
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