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AGENDA ITEM 3 <br />STAFF ORIGINATOR: Brian Wessel <br />DATE: 11/8/99 <br />TOPIC: Public Hearing on the Adoption of Business Subsidy <br />Criteria <br />BACKGROUND: <br />The legislature has set up new requirements for any local public entity that has <br />the power to grant business subsidies. This is not a part of Tax Increment <br />Financing legislation, but applies to any type of subsidy, and is in addition to any <br />requirements attached to tax increment financing law. <br />The new legislation requires that any entity granting a subsidy must determine <br />that the subsidy meets a public purpose other than increasing tax base. It also <br />requires the public entity establish criteria that includes a policy for wages on <br />jobs created by subsidies. Each business receiving a subsidy will need to <br />establish how many jobs it will create and at what wage. In this criteria proposed <br />tonight, the city establishes that those guaranteed jobs created will be at 110% <br />of the federal minimum wage requirements plus benefits. <br />The major impacts of this legislation on public subsidies are: <br />1. Each project that will receive a subsidy of more than $25,000 will need to <br />meet stricter standards for eligibility. <br />2. Any project receiving assistance must commit to continue operations at the <br />site where the subsidy is used for at least five years <br />3. A company receiving a subsidy must pay 110% of the federal minimum wage, <br />plus benefits for the jobs they have guaranteed. <br />4. A separate public hearing process will be required if the subsidy exceeds <br />$100,000. <br />OPTIONS: <br />1. Open the public hearing <br />2. Continue the public hearing <br />RECOMMENDATION: <br />Option 1 <br />