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61-06 Ordinance RECORD OF ORDINANCES Dayton Legal Blank, Inc. Form No. 30043 61-06 Ordinance No. Passed 20 AN ORDINANCE AUTHORIZING THE PROVISIONS OF CERTAIN INCENTIVES FOR PURPOSES OF ENCOURAGING THE RETENTION AND EXPANSION BY FORESIGHT CORPORATION OF ITS 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 and retail development and provide for the creation of employment opportunities within the City; and WHEREAS, Foresight Corporation ("Foresight is desirous of retaining and expanding its operations and workforce within the City in consideration for the provision by the City of economic development incentives; and WHEREAS, this Council has determined to offer 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 Foresight to retain and expand its operations and workforce within the City, to create jobs and employment opportunities and to improve the economic welfare of the people of the State of Ohio and the City, all as authorized in Article VIII, Section 13 of the Ohio Constitution; and WHEREAS, this Council finds that it is in the best interest of the City to provide those economic development incentives to induce Foresight to retain and expand its operations and workforce within the City and to provide for the execution and delivery of that Economic Development Agreement with Foresight; NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, Franklin, Union and Delaware Counties, State of Ohio, of the elected members concurring, that: Section 1. The Economic Development Agreement by and between the City and Foresight, in the form presently on file with the Clerk of Council, providing for, among other things, the provision of incentives to Foresight in consideration for Foresight's agreement to establish its operations and 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. Section 2. This Council further hereby authorizes and directs the City Manager, the Clerk of Council, the Director of Law, the Director of Finance, 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 3. 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 RECORD OF ORDINANCES Dayton Legal Blank Inc. Form No. 30043 61-06 Page 2 Ordinance No. Passed _ , 20 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 4. This Ordinance shall be in full force and effect on the earliest date permitted by law. Signed: Mayor -Presiding Officer Attest: Clerk of Council Passed: ~(~'r© ~j ~ 2006 Effective:;/Vd(,~~'1-l~j~` ~ , 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 Clerk of Council, Dublin, Ohio Office of the City Manager 5200 Emerald Parkway, Dublin, Ohio 43016 Phone: 614-410-4400 • Fax: 614-410-4490 CITY OF DUBLIN Mem o To: Members of Dublin City Council From: Jane S. Brautigam, City Managet~~,,,,~ ~ , ~~ti,~ U -w~~ Date: September 12, 2006 Initiated By: Colleen M. Gilger, Acting Director of Economic Development Re: Ordinance 61-06 -Economic Development Agreement with Foresight Summary Staff has been in discussions with Foresight regarding the possibility of retaining this Dublin-based company to an expanded location to better accommodate growth. The company has outgrown its space at 4950 Blazer Parkway, and has identified expanded sites in both Hilliard and Dublin for relocation. Foresight provides technology solutions that help capture business intelligence for healthcare, meet e- commerce regulatory demands of manufacturing, retail and other industries, and provide organizations a way to automate data exchange. Ordinance 61-06 authorizes an Economic Development Agreement between the City and Foresight that includes a $35,000 Technology Grant for technology upgrades to the identified facility at 655 Metro Place South, and afour-year 20% Performance Incentive for any new jobs and payroll growth above what exists today. The total Performance Incentive is capped at $70,000 and is tied to the company meeting predetermined, annual payroll withholdings growth commitments. The City estimates the company could receive approximately $47,000 if each minimum annual target is met. Foresight is committing to growing its current workforce of 42 to 72 employees by 2010. Foresight expects to add at least $285,000 in new income tax revenue over the next five years. The city also will retain Foresight's current $80,000 in annual withholdings. Recommendation Staff recommends the Economic Development Agreement and Ordinance No. 61-06 be approved by City Council at the second reading/public hearing on October 2, 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, OLIO (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 Foresight Corporation ("Foresight") an Ohio corporation, 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, Foresight desires to retain its operations and expand its workforce of approximately 37 fulltime employees within the City of Dublin in 2006, growing to 72 employees by 2010; and WHEREAS, pursuant to Ordinance No.61-06 passed , 2006 (the "Ordinance"), the City has determined to offer economic development incentives described herein to induce Foresight to retain and expand its operations and workforce within the City to create jobs and employment opportunities and to improve the economic welfare of the people of the State of Ohio and the City, all as authorized in Article VIII, Section 13 of the Ohio Constitution; and WHEREAS, the City and Foresight have determined to enter into this Agreement to provide these incentives to induce Foresight to retain operations and expand its workforce within the City. Now, THEREFORE, the City and Foresight covenant agree and obligate themselves as follows: Section 1. Foresi is Agreement to Create Jobs. Foresight agrees that it will establish its expanded office operation at 655 Metro Place South in the City of Dublin (the "Dublin Facility") before the end of calendar year 2006. Foresight will employ at least 37 fulltime employees within the City of Dublin as part of its operations, growing that workforce with the addition of 35 employees by December 31, 2011. The average annual wage of these employees for this period is estimated to be approximately $80,000 with total estimated payroll withholdings during the term of the agreement of approximately $351,919. Foresight will execute at least a 40-month lease. Proof of such lease will be presented to the City of Dublin as soon as practical after execution and prior to receiving any incentive from the City of Dublin. -1- Section 2. City Agreement to Provide Incentives. (a) General. In consideration for Foresight's agreement to retain and expand its operations' workforce and associated payroll within the City, the City agrees to provide economic development incentives to Foresight in accordance with this Section. (b) Technolog,Y Grant. Foresight will move to expanded office space, thus executing a new lease within Dublin. In consideration of that agreement to lease such space and otherwise expand its operations' workforce within the City, the City agrees to provide a grant to Foresight in the amount of $35,000 (the "Grant"), to offset moving costs and new wiring upgrades necessary at Foresight's new Dublin facility, payable in one lump sum upon proof of lease execution (of at least a 40-month term), and within 30 days of the EDA execution.. At its sole discretion, and prior to the payment(s) of the Grant, the City may request any reasonable documentation with respect to how Foresight intends to use the Grant, to ensure that the Grant achieves the purpose for which it has been granted under this Agreement. (c) Performance Incentive. (i) Calculation of Actual Withholdings. On or before March 15 of each of the years 2008 thru 2011 the City shall determine whether the actual payroll withholding taxes, net of refunds, collected during the preceding calendar years 2007 thru 2010 by the City from all employees (the "Actual Withholdings") exceed the target withholdings for that preceding calendar year (the "Target Withholdings"), all in accordance with the schedule set forth in subparagraph (iii) below. For purposes of this Section 2, "Employees" shall include all individuals employed by Foresight in the City of Dublin and working at the Dublin Facility. Foresight agrees that, in accordance with the Dublin City Code, the annual payroll reconciliation relating to the Employees will be provided to the City prior to February 28 of each calendar year. (ii) Payments to .Foresight. If the Actual Withholdings collected during the preceding calendar year by the City from all employees, net of refunds, 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 Foresight, solely from nontax revenues, an amount equal to the product of (A) the Actual Withholdings minus the Target Withholdings, multiplied by (B) the Incentive Factor (as defined below) ("Incentive Payment'. (iii) Withholdings and Incentive Payments. With respect to the Actual Withholdings, minus the Target Withholdings, collected during each of the calendar years 2007 through 2010, inclusive, the Incentive Factor shall be twenty percent (20%). The Target Withholdings for each of the calendar years 2007 through 2010 shall be: -2- Year Target Withholdings Ma~mum Payment 2007 $68,626 N/A 2008 $70,340 515,000 2009 $72,100 $15,000 2010 $73,900 520,000 2011 N/A $20,000 The payments provided for in this Section 2 shall be made by the City to Foresight by electronic funds transfer or by such other manner as is mutually agreed to by the City and Foresight. Performance incentive maximum payment caps are set as indicated in the table above in Section 2(c)(iii). The total maximum payment associated with the Performance Incentive is $70,000. (d) Forfeiture of Incentive Payment and Repayment of Grant. Foresight agrees that if the Target Withholdings is not met, as set forth in 2(c)(iii) above for any given year, the City is not obligated to make any incentive payment to Foresight for the year in which the Target Witholdings was not met. Failure to meet the Target Withholdings in any one incentive year does not prohibit Foresight from receiving an Incentive Payment for any subsequent year in which the Target Withholdings is met. No financial obligation is incurred by Foresight for failure to meet the Target Withholdings set forth in Section 2(c)(iii). (e) City's Obligation to Make Payments Not Debt• Payments Limited to Non-tax Revenues. Notwithstanding anything to the contrary herein, the obligations of the City pursuant to this Agreement shall not be a general obligation debt or bonded indebtedness, or a pledge of the general credit or taxes levied by the City, and Foresight 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. (g) 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%). 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 -3- 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: 5800 Shier Rings Road Dublin, Ohio 43016-7295 Attention: Economic Development Director (ii) Foresight at: 655 Metro Place South Dublin, OH 43017 Attention: Kristin Maxwell 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 Foresight in other than his or her official capacity. No official executing or approving the City's or Foresight'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 Foresight and its successors and assigns. (d) Recitals. The City and Foresight 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 Foresight. (fj Executed Counterparts. This Agreement maybe 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 -4- 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) Captions. The captions and headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. (i) Governing Law and Choice of Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio or applicable federal law. All claims, counterclaims, disputes and other matters in question between the City, its agents and employees, and Foresight, 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 Foresight 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 Foresight 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. Remainder of Page Intentionally Left Blank. -5- Itv WITNESS WxExEOF, the City and Foresight 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 S. Brautig~am Title: City Manager Approved as to Form: By: Printed: Stephen J. Smith Title: Director of Law Foresight Corporation By: Printed: Title: -6- FISCAL OFFICER'S CERTIFICATE The undersigned, Director of Finance of the City under the foregoing Agreement, certifies hereby that the moneys required to meet the obligations of the City under the foregoing Agreement have been appropriated lawfully for that purpose, and are in the Treasury of the City or in the process of collection to the credit of an appropriate fund, free from any previous encumbrances. This Certificate is given in compliance with Sections 5705.41 and 5705.44, Ohio Revised Code. Dated: , 2006 Marsha I. Grigsby Deputy City Manager/Director of Finance City of Dublin, Ohio -7-