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HomeMy WebLinkAbout2003-093 Council ResolutionLINO LAKES CITY COUNCIL RESOLUTION NO. 03 -93 RESOLUTION ADOPTING REVISED BUSINESS SUBSIDY CRITERIA WHEREAS, Minnesota Statutes, Sections 116J.993 through 116J.995 called the Business Subsidy Act (the "Act ") which became effective on August 1, 1999, required the adoption of criteria for the granting of business subsidies as defined in the Statutes; and WHEREAS, requirements of the Act were amended in 2000, with an effective date of 2003; WHEREAS, The City Council of the City of Lino Lakes (the "City ") adopted Business Subsidy Criteria after a public hearing held on July 23, 2001; WHEREAS, The City has determined that it is necessary and appropriate to adopt revised business subsidy criteria pursuant to the Statutes; and WHEREAS, The City has performed all actions required by law to be performed prior to the adoption and approval of the proposed business subsidy criteria, including the holding . of a public hearing upon published notice as required by law on June 23, 2003. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lino Lakes, Minnesota, that the business subsidy criteria, contained in Exhibit A of this resolution are hereby approved, ratified, established, and adopted and shall be placed on file at the City Hall. Dated: June 23, 2003 Mayor ATTEST: City Clerk • • • Exhibit A CITY OF LINO LAKES BUSINESS SUBSIDY CRITERIA (Revised June 23, 2003) Section 1. Purpose; Statutory Compliance 1.01 The purpose of this document is to establish the criteria to be considered by the city council of Lino Lakes (the "City ") in processing, evaluating and reviewing requests for business subsidies. It is the intent of the City in adopting these revised criteria to comply with Minnesota Statutes, Sections 116J.993 through 116J.995 (the "Act "). The City hereby adopts the definitions contained in the Act for application in the criteria. 1.02. Business subsidy criteria were adopted by the City on July 23, 2001 and are hereby revised. The City has the option to amend these criteria again in the future if doing so is determined necessary or appropriate. Amendments to these criteria are subject to the public hearing requirements of the Act. 1.03. These criteria are intended to set specific minimum requirements which recipients must meet to be eligible to receive business subsidies. The City will not adopt business subsidy criteria on a case by case basis. 1.04. In accordance with the Act, all business subsidy requests must comply with the Act and other applicable Minnesota statutes. The City's ability to grant business subsidies is subject to the limitations established in the Act. Section 2. Goals and Objectives 2.01 It is the City's intent to advance the following goals and objectives in granting business subsidies: (a) Projects must be consistent with Lino Lakes' comprehensive plan and any other similar plan or guide for development of the community. (b) Business subsidies will not be provided for projects which have the financial feasibility to proceed without a public subsidy. (c) Potential recipients will be required to provide such studies, reports, appraisals, financial information or other data as may be requested by the City prior to consideration of a request for a business subsidy. 2.02 Business subsidies must be justified by evidence that the project cannot proceed without the benefit of the subsidy. If tax increment financing is used to grant a subsidy, the recipient must demonstrate compliance with all statutory RHB- 232656v1 LN140 -12 1 • requirements of the TIF Act, including the "but for" test, and any TIF policy adopted by the City. The recipient will be required to provide all documentation necessary for the City to make the requisite fundings under the TIF Act and the Act. 2.03 Recipients will be required to enter into an agreement with the City which is consistent with statutory requirements and which contains measurable, specific and tangible goals. The agreement must include a commitment to remain in business in Lino Lakes for a minimum of five years after the benefit date, unless waived by the City, and a requirement to comply with the specific job and wage goals established for the project, if any. Section 3. Business Subsidy Criteria 3.01 The City recognizes that every proposal is unique. Nothing in these criteria shall be deemed to be an entitlement or to establish a contractual right to a subsidy. The City may modify these criteria from time to time and reserves the right to evaluate each project on its individual merits. The City may deviate from these criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to the Minnesota state agency charged with administration thereof. • 3.02 The following criteria shall be utilized in evaluating a request for a business subsidy: RHB- 232656v1 LN140 -12 (a) Publicpurpose. A business subsidy must meet a public purpose, including but not limited to increasing the tax base. Job retention may only be considered a public purpose if the loss of jobs is specific and demonstrable. (b) Increase in tax base. While an increase in the tax base cannot be the sole rounds for granting a subsidy, the City believes it is a necessary condition for any subsidy. (c) Jobs and Wages. In instances in which job creation is determined to be a goal, it is the City's intent that the recipient create the maximum number of livable wage jobs at the site. This may include jobs to be retained but only if retention is specific and demonstrable. The job and wage goal must be attained within two years of the benefit date. The City may, after a public hearing, extend for up to one year the period for meeting the job and wage goal. Qualifying jobs are those which pay, at a minimum, 110 percent of the federal minimum wage, plus benefits. Any deviation from the established wage level must be documented in conformity with the requirements set forth in the Act. If the City, following a public hearing, determines that job creation or retention is not part of the public purpose of the subsidy, the wage and job goal may be set at zero. 2 • (d) Economic Development. Projects should promote one or more of the following: 1. Encourage economic and commercial diversity within the community; 2. Contribute to the establishment of a critical mass of commercial development within an area; 3. Increase the range of goods and services available or encourage fast growing or other desirable businesses to locate or expand within the community; 4. Promote redevelopment objectives and removal of blight, including pollution cleanup; 5. Promote the retention or adaptive reuse of buildings of historical or architectural significance; 6. Promote additional or spin -off development within the community; or 1111 7. Encourage full utilization of existing or planned infrastructure improvements. • Section 4. Minimum Requirements 4.01. In order for a recipient to be eligible for a business subsidy, the following minimum requirements must be met; (a) Compliance with Sections 2.01 a, b, and c; (b) Compliance with Section 3.02 b; and (c) Compliance with Sections 3.02 c or d. Section 5. Compliance and Reporting Requirements 5.01 Any subsidy granted by the City will be subject to the requirement of a public hearing, if necessary. 5.02 It will be necessary for both the recipient and the City to comply with reporting and monitoring requirements of the Act. 5.03 A recipient may be authorized to move from Lino Lakes within five years of the benefit date only if, after a public hearing, the City approves the request to move. RHB- 232656v1 LN140 -12 3 AGENDA ITEM 7A STAFF ORIGINATOR: Mary Alice Divine DATE: 06/23/03 TOPIC: Public Hearing: Consideration of Resolution No.03- 93 adopting a Revised Lino Lakes City Council Business Subsidy Criteria BACKGROUND: The Business Subsidy Act (Minnesota Statutes 116J.993 -995) became effective on August 1, 1999. The Act required grantors to adopt business subsidy criteria prior to granting business subsidies. The city council adopted criteria in 1999. The Act required that criteria include a policy for wages on jobs created by subsidies. Each business receiving a subsidy had to establish how many jobs it would create and at what wage. Recognizing that not all subsidies were for the purpose of creating jobs, the Minnesota Legislature amended the Act in 2000, but delayed the effective date of those changes until 2003. Among the changes at the Legislature are the following: • The number of new jobs may be set at zero if the grantor determines that job creation is not the intent of the subsidy. A public hearing is required prior to setting the requirement at zero. Retained jobs may be considered only if job loss is "specific and demonstrable." The old requirement was "imminent and demonstrable." • Criteria may not be set on a case by case basis. • Wage levels must be specific, either in dollar amount or by reference to an index or formula, which can be translated into a dollar amount. • Grantors may extend by up to one year the time recipients have to meet the job and wage goals. • The grantor may deviate from the criteria in specific cases but must document the reasons for doing so and report to the state. • Recipients are required to remain within the jurisdiction for five years after receipt of the grant, but that may be waived by the grantor following a public hearing. The previous requirement was to remain at the site for five years with no provision for waiver. • The criteria must articulate the standards by which requests will be evaluated. All of these amendments have been incorporated into the attached revised Business Subsidy Criteria. If adopted, the criteria will comply with state law and be a concise statement of relevant statutory requirements. RECOMMENDATION: Open the public hearing