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HomeMy WebLinkAboutMIN MAR 28 2000 M I N U T E S - CITY OF BEAUMONT Lulu L.Smith DAVID W. MOORE,MAYOR Guy N.Goodson,Mayor Pro Tem Andrew P.Cokinos CITY COUNCIL MEETING Becky Ames Bobbie J.Patterson March 28,2000 Audwin Samuel Lane Nichols,City Attorney Stephen J.Bonczek,City Manager Barbara Liming,City Clerk The City Council of the City of Beaumont, Texas, met in a regular session on March 28, 2000, at the City Hall Council Chambers, 801 Main Street, Beaumont, Texas, at 1:30 p.m. to consider the following: OPENING * Invocation Pledge of Allegiance Roll Call * Presentations and Recognition * Public Comment: Persons may speak on scheduled agenda items * Consent Agenda Mayor Moore called the meeting to order at 1:35 p.m. The Reverend Carl Lewis, East Mount Olive Baptist Church gave the invocation. Planning Director Stephen Richardson led the pledge of allegiance. Present at the meeting were: Mayor Moore, Mayor Pro Tem Goodson, Councilmembers Smith, Cokinos, Ames, Samuel and Patterson(arrived at 1:42 p.m.). Also present were: Stephen J. Bonczek, City Manager; Lane Nichols, City Attorney; and Barbara Liming, City Clerk. *Presentations and Recognitions - One proclamation was issued: "Fair Housing Month,"April 2000. *Public Comment: Persons may speak on scheduled agenda items. *Citizen comment was invited on the Consent and Regular Agenda Items 5 and 6. Mr.Allen Lee,5095 Maddox,addressed Council to suggest that the City offer a reward for information about the individual who shot Beaumont Police Officer James Callesto, in favor of retaining the local sales tax holiday, and announced that he has dropped lawsuits against the City.. * Consent Agenda * Approval of the minutes of the regular meeting held March 21, 2000. * Confirmation of committee appointments-Resolution No.00-85 (Appointments: Leonard Clifton, Convention and Tourism Advisory Committee for a term to expire on March 27, 2002; Stephanie Goodman, Drug Free Beaumont Commission, for a term to expire March 27, 2002; Ida Duplechian, Transit Advisory Committee, for a term to expire March 27,2002. Reappointments: Addie Allen, Airport Advisory Committee, for a term to expire February 5, 2002; Mary Jon Wells, Beaumont Advisory Commission for Prevention of Child Abuse, Ellen Hoepner, Beaumont Advisory Commission for Prevention of Child Abuse and Neglect,for terms to expire on March 23,2002;Ryan Smith, Convention and Tourism Advisory Committee, for a term to expire September 11,2001; Dr. Robert Swerdlow, Convention and Tourism Advisory Committee, for a term to expire January 31, 2002; Kathy Cornehl, Drug Free Beaumont Commission, for a term to expire February 15, 2002; Vernon Dun, and Marie Easley,Drug Free Beaumont Commission, for a term to expire February 15, 2002; Lillie Green, Drug Free Beaumont Commission, for a term to expire March 23,2002; Wanda Grimes, Drug Free Beaumont Commission, for a term to expire February 15, 2002; Ken Dollinger, Drug Free Beaumont Commission, for a term to expire February 15, 2001; Michelle B. Leday and Joyce Lombard,Drug Free Beaumont Commission,for terms to expire February 15,2002;Reverend Rogers Jones,Drug Free Beaumont Commission,for a term to expire March 16,2002;Leonie Bodin, Historical Landmark Commission, for a term to expire March 23, 2002; Denise Shelton, Historical Landmark Commission, for a term to expire January 15, 2002; Kathryn Walker, Keep Beaumont Beautiful Commission,for a term to expire December 8,2001;Charlene Kiker,Library Commission, for a term to expire February 14,2002;David Bradley,Reinvestment Zone No. 1 Board of Directors, for a term to expire January 31, 2002; Addie Allen, Sister City Commission, for a term to expire February 5,2002; Bruce Johnson, Small Business Revolving Loan Fund Advisory Committee, for a term to expire November 8, 2001; Tony Jones, Transit Advisory Committee for a term to expire February 5, 2002. A) Approve a lease agreement with PF.Net Network Services Corporation for the placement of fiber optic cable in the public right-of-way- Resolution No. 00-86 B) Approve a contract for auctioneering services for the City's annual fleet and surplus equipment auctions (at a cost of 3.489% of gross sales collected at the annual fleet and equipment auction)- Resolution No. 00-87 C) Approve the purchase of stainless steel baffles for use at the Water Production Plant (with Brystar Contracting, Inc., in the amount of$81,941.40)- Resolution No. 00-88 D) Approve the purchase of one cab and chassis mounted with an articulated aerial device for use in the Public Works Department, Transportation Division (with Commercial Body Corporation of San Antonio, in the amount of$64,418) - Resolution No. 00-89 E) Approve the purchase of one cab and chassis through the Houston Galveston Area Council for use by the Clean Community Department (in the amount of$34,046.67) - Resolution No. 00-90 Councilmember Cokinos moved to approve the Consent Agenda. Councilmember Samuel seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tern Goodson, Councilmembers Smith, Cokinos, Ames, Samuel, and Patterson Noes: None GENERAL BUSINESS 1. Consider a request for a zone change from RS (Residential Single Family Dwelling) to GC-MD (General Commercial-Multiple Family Dwelling) District or a more restrictive district for property located at 622 W. Lucas Drive Minutes;March 28,2000;Page 2 Discussion included ingress and egress of traffic offof the cul-de-sac, appropriateness ofthe GC-MD- 2 zoning classification, development of the property as residential, control over the development of this property, and the need for a specific use permit with a GC-MD-2 classification. Councilmember Ames moved to approve Ordinance No. 00-27 ENTITLED AN ORDINANCE AMENDING CHAPTER 30 OF THE CODE OF ORDINANCES OF BEAUMONT,TEXAS,AND IN PARTICULAR THE BOUNDARIES OF THE ZONING DISTRICTS,AS INDICATED UPON THE ZONING MAP OF BEAUMONT, TEXAS, BY CHANGING THE ZONING OF PROPERTY PRESENTLY ZONED RS (RESIDENTIAL SINGLE FAMILY DWELLING)TO GC-MD-2(GENERAL COMMERCIAL-MULTIPLE FAMILY DWELLING-2)DISTRICT LOCATED AT 622 W. LUCAS DRIVE, BEAUMONT, JEFFERSON COUNTY, TEXAS; PROVIDING FOR SEVERABILITY; PROVIDING FOR REPEAL AND PROVIDING A PENALTY. Mayor Pro Tern Goodson seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tern Goodson, Councilmembers Cokinos, Ames, Samuel, and Patterson Noes: Smith 2. Consider a request for zone change from A-R (Agricultural-Residential) to RS (Residential Single Family Dwelling) District for property located west of Dowlen, adjacent to Barrington Heights Division Councilmember Cokinos moved to approve Ordinance No. 00-28 ENTITLED AN ORDINANCE AMENDING CHAPTER 30 OF THE CODE OF ORDINANCES OF BEAUMONT,TEXAS,AND IN PARTICULAR THE BOUNDARIES OF ZONING DISTRICTS, AS INDICATED UPON THE ZONING MAP OF BEAUMONT, TEXAS, BY CHANGING THE ZONING OF PROPERTY PRESENTLY ZONED A-R (AGRICULTURAL- RESIDENTIAL)DISTRICT TO RS(RESIDENTIAL SINGLE FAMILY DWELLING)DISTRICT FOR PROPERTY LOCATED WEST OF DOWLEN, ADJACENT TO BARRINGTON HEIGHTS SUBDIVISION, BEAUMONT, JEFFERSON COUNTY, TEXAS; PROVIDING FOR SEVERABILITY; PROVIDING FOR REPEAL AND PROVIDING A PENALTY. Councilmember Smith seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tern Goodson, Councilmembers Smith, Cokinos, Ames, Samuel, and Patterson Noes: None 3. Consider a request for a specific use permit to allow a residential care facility(HOW Center) in an RM-H(Residential Multiple Family Dwelling-Highest Density)District at 2509-11 Cable, 1094-98 Cottonwood and 1130 Cottonwood Councilmember Samuel commented that about set guidelines for any organization seeking a specific use permit, taking into consideration unique situations that require special consideration, and specified directives he thinks should be given to specific use permit applicants. Councilmember Smith moved to approve Ordinance No. 00-29 ENTITLED AN ORDINANCE GRANTING A SPECIFIC USE PERMIT TO ALLOW A RESIDENTIAL CARE FACILITY(HOW CENTER)IN AN RM-H(RESIDENTIAL MULTIPLE FAMILY DWELLING-HIGH DENSITY)DISTRICT LOCATED AT 2509-11 CABLE, 1094-98 COTTONWOOD AND 1130 COTTONWOOD, IN THE CITY OF BEAUMONT, JEFFERSON COUNTY,TEXAS. Councilmember Samuel seconded the motion. MOTION PASSED. Minutes; March 28,2000;Page 3 Ayes: Mayor Moore, Mayor Pro Tem Goodson, Councilmembers Smith, Cokinos, Ames, Samuel, and Patterson Noes: None 4. Consider a request for a specific use permit to allow a new church in an RS(Residential Single Family Dwelling)District at the northwest corner of Dusty Lane and Black Lane Councilmember Cokinos moved to approve Ordinance No. 00-30 ENTITLED AN ORDINANCE GRANTING A SPECIFIC USE PERMIT TO ALLOW A CHURCH IN AN RS(RESIDENTIAL SINGLE FAMILY DWELLING)DISTRICT LOCATED AT THE NORTHWEST CORNER OF DUSTY LANE AND BLACK LANE,IN THE CITY OF BEAUMONT,JEFFERSON COUNTY,TEXAS. Councilmember Ames seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Goodson, Councilmembers Smith, Cokinos, Ames, Samuel, and Patterson Noes: None 5. Consider amending Article IV(Weed Control),Section 13-53 of the Code of Ordinances to read: The expenses assessed to the owner shall be$.01 per square foot,not less than twenty-five($25),plus an administrative fee of fifty dollars ($50) to cover all administrative costs Councilmember Smith moved to approve Ordinance No. 00-31 ENTITLED AN ORDINANCE AMENDING CHAPTER 13,ARTICLE IV,SECTION 13-53 OF THE CODE OF ORDINANCES OF THE CITY OF BEAUMONT TO AMEND THE FEES FOR GRASS CUTTING SERVICES; PROVIDING FOR SEVERABILITY; PROVIDING FOR REPEAL; AND PROVIDING A PENALTY. Councilmember Patterson seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Goodson, Councilmembers Smith, Cokinos, Ames, Samuel, and Patterson Noes: None (Councilmember Samuel left Council Chambers at 2:05 p.m. and returned at 2:08 p.m.,and was not present for the vote on item 6). 6. Consider approving a contract for improvements to the Police Building Councilmember Cokinos moved to approve Resolution No. 00-91 accepting a bid from N & T Construction Company, Inc. in the amount of$239,955 for furnishing all labor, materials, supplies and equipment for Phase I Improvements at the Police Building. Councilmember Goodson seconded the motion. MOTION PASSED. Ayes: Mayor Moore,Mayor Pro Tem Goodson,Councilmembers Smith,Cokinos,Ames,and Patterson Noes: None Minutes;March 28,2000;Page 4 7. PUBLIC HEARING: Repeal of the local sales tax holiday Consider an ordinance to repeal the City portion ($.015) of the sales tax rate relative to the holiday which exempts most clothing and footwear priced under$100 for the first weekend in August of each year. City Manager Stephen Bonczek provided explanation regarding placement of this item on the agenda and explained dynamics of a sales tax holiday. Mr.Bonczek commented about the budgetary impact being revised, unavailability of information when the estimates were released, the difficulty of obtaining accurate information,stated that Beaumont reflects 70-75%of sales in the Golden Triangle, and asked Finance Officer Beverly Hodges to explain the process used in projecting the budgetary impact of the sales tax holiday. Ms. Hodges commented about the difficulty to pinpoint an exact number, unavailability of historic trend information, use of information from the months preceding and succeeding the holiday, and stated that sales were under budget in the amount of$508,000 for those three months. The Finance Officer explained that the unavailability of quarterly tax information provided by the State necessitated use of older information to establish a reasonable range. She stated that the clothing category discovered during a meeting with the Beaumont Enterprise is confusing and could cause individuals utilizing this information to think that this area,which has a much lesser sales tax impact than the general merchandise category, is the only category to consider. She further commented on challenges of deriving a reasonable range and expressed uncertainty about the correct numbers. In response to Councilmember Samuel's queries, the Finance Officer explained that in utilizing last year's information,receipts for tax exempt and non-tax exempt purchases were considered,and there is no way to determine what part of the shortfall was due to the sales tax holiday, partly due to combination sales. She stated that there is no way of comparing the loss of sales tax on exempt items to the gain of sales tax on combination purchases, and stated that beginning on April 1, 2000, non- prescription drugs will no longer be taxed, and there is no way to determine the budgetary impact of this exemption. Further discussion included,a higher rate of participation this year,items qualifying under the general merchandising category not being included in the clothing category,and no confirmed singular figure relative to the budgetary impact. Councilmember Patterson voiced support of the tax exemption, explained a statement that she made to the Beaumont Enterprise, stated that she would like the media to quote her correctly, commented on the benefits of the sales tax holiday to single parents, and stated that she had mixed feelings about this issue due to the figures previously submitted. The City Manager commented about actions that have been taken by Council to generate more revenue this year,administrative cost-cutting within the last six months,and in the event that Council votes to participate in the holiday,said administration will work toward regaining any loss of revenue. The public hearing opened at 2:27 p.m. Minutes;March 28,2000; Page 5 Mr. Allen Lee, 5095 Maddox, addressed Council in favor of participating in the sales tax holiday, stated that this is good for families, for children, and for businesses, commented on combination purchases, and stated he has a petition favoring the tax holiday to present to the City Clerk. Mrs. Marie Hubbard, 1990 Nora Street, addressed Council in favor of participating in the sales tax holiday and commented on the importance of clothing for school-age children. Mr. David Hawkins,Dillards Store Manager,addressed Council in favor of participating in the sales tax holiday and commented on the importance of those days to the retail market. Mr. Chad Johnson, General Manager of Parkdale Mall, addressed Council in favor of participating in the sales tax holiday,commented on sales being down last year including August even with the tax exemption holiday and commented on the importance of the holiday to retail businesses. Mr. Dave Field, Sears General Manager, addressed Council in favor of participating in the sales tax holiday,commented on the enormous increase in sales volume during this three-day period last year, and stated that this is a revenue driver, not a revenue robber. Mr. Steve Miller,owner of Bin and Barrel,addressed Council in favor of participating in the sales tax holiday and commented on the importance of mall traffic to his business. Mr. Benny Mendoza, 5655 South Kenneth, addressed Council in favor of repealing the sales tax holiday and commented about the need for increased protection for the City. The public hearing closed at 2:42 p.m. Councilmember Ames thanked those who addressed the public hearing to inform Council of the sales tax holiday impact on their businesses. Mayor Moore commented that no conclusions have been made,the intention of the public hearing is to hear how citizens feel on a given issue,said Beaumont is the hub for surrounding cities,and voiced support of this particular state mandate. He commented about the responsibility of the City Manager and Finance Officer to bring such matters as this to Council's attention. City Attorney Lane Nichols confirmed that if no action is taken,or if the item as presented is defeated, the sales tax holiday would continue,and Council would have to act positively to adopt an ordinance to repeal the City's portion of the sales tax exemption. Councilmember Samuel commented that he appreciates the Manager's fiscal responsibility to explore opportunities to keep the budget under control, and stated that the responsibility of the Council is to be fiscally prudent while balancing prudence with compassion for all citizens in the community. Mayor Pro Tern Goodson made a MOTION to deny repealing the sales tax holiday. Councilmember Samuel seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tern Goodson, Councilmembers Smith, Cokinos, Ames, Samuel, and Patterson Noes: None Minutes;March 28,2000;Page 6 (Mayor Moore left the Council Chamber at 2:48 p.m. and returned at 2:51 p.m.) 8. PUBLIC HEARING: HUD Five-Year Consolidated Plan and the 2000 One-Year Action Plan A resolution approving the HUD Five-Year Consolidated Plan and the 2000 One Year Action Plan In response to Councilmember Ames's queries, Mayor Pro Tern Goodson stated that Council has to choose between the CDAC recommendation and the staff recommendation, after hearing from the public. He commented that Council held a previous public hearing and agreed to move forward with the CDAC recommendation, which included funding for Henry's Place through the Emergency Shelter Program. Councilmember Patterson commented on changes under the Site Development Heading on the CDBG portion and stated she has a concern with using CDBG funds for administration expenses. The City Manager commented about usual funding of administration expenses and relief to the general fund. Executive Assistant and Economic Development Director Kyle Hayes explained the reason for using site development money is that the City has approximately $375,000 in unexpended 1998-1999 CDBG funds for site development that needs to be moved. There are two City employees eligible for their salaries to be funded with Block Grant money and frees General Fund money for other uses. Mayor Moore explained there are certain amounts of CDBG funds allocated for administration expenses, and unexpended funds that give opportunity to give relief to the General Fund in a tight budget year. He stated that in the event money is not there in the coming years, the employees' salaries would be paid from the General Fund, and paying employees from CDBG funds is not intended to be an ongoing process. The public hearing opened at 3:02 p.m. Ms. Marie Hubbard, 1990 Nora, addressed Council to inquire about existence of the Community Development Block Grant Advisory Committee, spoke of being a member of this committee in the past, and requested names of current committee members. The public hearing closed at 3:04 p.m. Consider approving the HUD Five-Year Consolidated Plan and the 2000 One-Year Action Plan Councilmember Patterson recommended that Girl's Haven funding be increased to$10,000,and Life Resources' be decreased to $15,425. Councilmember Ames clarified that $22,000 originally under the $100,000 for Henry's Place will now be funded from the homeless fund, and enables funding of Life Resources and P.A.L. Minutes;March 28,2000;Page 7 Councilmember Samuel expressed appreciation for the time spent by advisory committee members,. spoke of past recommendations of the CDAC being ignored, and stated that Council should respect the time these individuals have spent in determining their recommendations. Councilmember Patterson again suggested that$2,500 be moved from Life Resources to be given to Girl's Haven. She stated that as the liaison for the CDAC, she has total respect for all advisory committees,but as elected leaders of the City, there are times when Council has to take a stand and make a decision on which projects should be funded after considering recommendations of the advisory committees. Councilmember Patterson stated that she concurs with all of the CDAC recommendations with the exception of the two items that she has recommended to change. Councilmember Samuel clarified that his intent was not to insinuate that anyone was disrespectful; he just wanted to reemphasize Council's appreciation to those that serve on the committees. Councilmember Cokinos voiced disagreement with reducing any funding from Life Resources and complimented the service they provide. Mayor Pro Tern Goodson commented about the huge disparity between the amount of funding available and the amount of funding requested,stated that all of the requests are worthy,spoke of the efforts of the CDAC to weigh the value of the various services and take into consideration other funding sources these organizations may have available. He spoke of Council spending time on public service, available funds, and opportunity for future reprogramming as special needs arise. Mr. Kyle Hayes stated there is a $384.23 difference between what was recommended by staff and what was recommended by the CDAC, and said the entire $100,000 needs to be allocated, and requested that Council allocate this amount to one of the line items. Mayor Moore suggested that the $384.23 be added to the $4,075 allocated to the P.A.L. Program. Councilmember Patterson rescinded her recommendation to move funds from Life Resources to Girl's Haven. Mayor Pro Tern Goodson moved to approve Resolution No. 00-92 adopting the Five-Year Consolidated Plan and the 2000 One-Year Action Plan with an increase of$384.23 to the Police Activity League to bring the total allocations to $100,000. Councilmember Ames seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tern Goodson, Councilmembers Smith, Cokinos, Ames, Samuel, and Patterson Noes: None WORK SESSION * Economic Development Department Tax Abatement Policy Minutes;March 28,2000;Page 8 The City Manager introduced the subject and asked Economic Development Director Kyle Hayes to explain proposed changes in the policy that will encourage retention and creation of jobs in our community. Mr. Hayes thanked staff members Johnny Beatty, Janette Blunt, Steve Richardson, and Richard Chappell for their assistance in preparation of the HUD Consolidated Plan and the four community meetings. Mr. Hayes reviewed background information regarding Beaumont's designation as an Enterprise Zone and adoption of a tax abatement policy. After Mr.Hayes summarized the new and revised recommendations shown in Exhibit"A,"Council consensus was to place the item on the next agenda for consideration. Beaumont Development Corporation (Councilmember Patterson left the Chamber at 3:37 p.m. and returned at 3:43 p.m.) City Manager Bonczek announced that the City has been working with Chamber of Commerce President and Executive Director John Breier, Vice President and Director of Community Development Jim Rich, and Mr. Dalton Babineaux on tax abatement and an economic development structure the City may want to consider. He spoke of financial limitations and establishment of a stronger leadership role in economic development for Beaumont and consideration for incentive money and a strategic action plan. Mr. Bonczek reviewed the various alternatives shown in Exhibit`B." Mr. Breier, Mr. Rich, and Mr. Babineaux added comments and support of establishing the Beaumont Development Corporation. COMMENTS * Councilmembers comment on various subjects Mayor Pro Tem Goodson announced that the first event of the Spindletop 2001 celebration is the Tracy Byrd concert this Friday night at Gladys City and extended good luck wishes to everyone involved in the organization. Councilmember Samuel informed Ms.Gloria Parker,Andy Smith,Robin Denata,Raleigh Drake,Ms. Davis,and Mr.Speedy Williams that their concerns have been addressed to City Staff and they should be hearing from someone shortly. Councilmember Patterson announced that the South Park Neighborhood Association will meet on Thursday, March 30, 2000, 6:30 p.m. at South Park Baptist Church with Mr. Vince Menino of the Agricultural Extension Service as guest speaker;Lamar University's Springfest 2000 will host an open house on April 1,2000,9:00 a.m. at the Setzer Center; Our Mother of Mercy's Single Ministry will hold their 2nd Annual Single's Conference, 10:00 a.m. to 4:00 p.m., April 1, 2000; Our Mother of Mercy will host a Gospel Musical,March 31 st;the Tyrrell Park Neighborhood Association will meet at 7:00 p.m., on April 3rd at the Old Tyrrell Park Elementary School, and Judge Carl Griffith will speak about the Southeast Texas Entertainment Complex. Councilmember Patterson stated that more information will be presented next Tuesday regarding the Neighborhood Block Party being planned for Saturday, April 8, 2000. Minutes:March 28,2000;Page 9 Mayor Moore thanked members of Council for conducting business during his absence last week at a regional council meeting, asked all Councilmembers to keep in mind the officer shot in the line of duty, and stated that he visited with the officer in the hospital before the meeting. He congratulated Lamar University on their trip to the "Big Dance" (basketball tournament) in North Carolina and stated that he attended the game with more than 300 Lamar fans in attendance. The Mayor applauded those in the community that made the Beaumont State Center's event their largest to date and helping to provide jobs for those who attend the Center, and encouraged everyone to speak to someone else regarding completing the census forms. * City Manager's Report-Administrative Nurse Consultant for Public Health,Restaurant Inspections, Martin Luther King, Jr. Contribution, Stormwater Utility and Street User Fee Presentation, Youth Rescue Mission Inspection, Beaumont Habitat for Humanity and City Wading Pool Renovations The City Manager reported that Central Services Director Kirby Richards has been working with Waterscape Consultants about wading pool renovations, and they will provide design bid specifications,construction administration,bidding,and post construction review,at a cost of$10,500, and basic administration and post construction service at a cost of no more than$1,500 per pool. Mr. Bonczek stated that the consultants are suggesting that the cost per pool may be up to $55,000 per pool,said there is$125,000 in the Parks Maintenance Fund,and money in the CDBG Fund that could be used for this expense. He commented that the four pools that have been selected for renovation are at Combest Park in Ward 1, Rogers Park in Ward II, Magnolia and Roberts Parks in Ward III, Sprott and Alice Keith Park in Ward IV,and stated that administration is ready to engage the services of the consultant. He reported that Habitat for Humanity made a request to purchase the Zenith Building at 2001 Neches to be renovated and utilized for their Restore Program,and said they would make available any unused materials to citizens at great discount prices. Mr.Bonczek stated that Tax Assessor/Collector Miriam Johnson advised that this would be a special sale, Habitat for Humanity would pay for the unrecoverable costs,the School District,County,and City would have to agree,and stated that the City wants to support this effort in order to revitalize the property and assist this organization. Mr. Bonczek reported that there has been difficulties recruiting a Nursing Director for the Public Health Department,and the retired Nursing Director will return to help during the process. The City Manager reported that Clean Community Director John Labrie invited everyone to attend the Martin Luther King,Jr.celebration at 7:00 a.m. on April 4,2000,and stated that one of the efforts of Dr. King was a march in Memphis to bring more awareness to the plight of sanitation workers. He also reported that more information will be presented on the storm water drainage study during the April 11,2000 work session,stated that the Youth Rescue Mission is in compliance with the Building Codes,and administration is still working with them on other issues. The City Manager announced a Budget Summit is scheduled for May 12, 2000, and more information will be presented at a later date. He stated that in response to Mayor Pro Tem Goodson's request for a long-range calendar of events, a schedule will be presented quarterly, and asked Council to inform him of things that need to be added. * Public Comment(Persons are limited to three (3) minutes) Mr. Bill Proctor,4340 Westridge, addressed Council to announce that on May 6, 2000, there will be a"Wildwood Sports Day"for individuals with disabilities,in Wildwood, from 9:30 a.m. - 5:00 p.m. Minutes;March 28,2000;Page 10 Ms.Alice Ramsey,3440 Goliad Street,addressed Council to read a resolution from the Pear Orchard Neighborhood Association to request that the new Southend Branch Library be named after Judge Theodore Johns in recognition of his efforts and accomplishments. Mr. Leroy Lewis, III, 1201 Euclid, addressed Council and presented a petition to the City Clerk addressing vehicular drivers playing loud offensive music in the City. Ms.Pattie Lee,Executive Director of Watts Home,addressed Council to request financial assistance from the City,stated that their services fall under the category of emergency shelter,and outlined the services that they provide. Mayor Moore informed Ms. Lee that Council has already agreed to grant the Watts Home the$9,000 that was requested. Pastor Elmore Chaison, representing the Beaumont Baptist Ministers Union, 1275 Cedar Street, addressed Council to present a resolution requesting that the new Southend Branch Library be named after Theodore R. Johns, Sr. in recognition of his efforts and accomplishments. Ms. Marie Hubbard, 1990 Nora, addressed Council in opposition to prohibiting Police Officers to accept certain gifts. Mayor Moore thanked everyone for their attendance, and wished Ms. Hubbard a happy belated birthday. EXECUTIVE SESSION * Consider matters related to contemplated or pending litigation in accordance with Section 551.071 of the Government Code: Allen Lee and Diana Lee v. City of Beaumont et al Allen Lee and Diana Lee v.David Moore,Mayor of Beaumont,in his official capacity and the City of Beaumont There being no other business, the meeting adjourned at 4:12 p.m. CQ4Q91 0Ub� David Moore, Mayor Barbara Liming, City Clerk Minutes;March 28,2000;Page 11 :UE!U INTER-OFFICE MEMORANDUM K City of Beaumont,Texas City Manager's Orrice To: Mayor and City Council From: Stephen J. Bonczek, City Manager Kyle Hayes, Economic Development Director Date: March 23,2000 Subject: Tax Abatement Policy Revision BACKGROUND The Texas Department of Economic Development designated the Beaumont/Nederland/Jefferson County Enterprise Zone on January 2, 1998 and the designation is good for a seven-year period. When the City Council nominated the Enterprise Zone, it also adopted a tax abatement policy for the City of Beaumont. The tax abatement policy adopted by the City Council pertains to abatement available for projects located within the city limits of Beaumont only. In other words, although the City has a joint Enterprise Zone, each entity adopts their own guidelines and criteria for abatement. By Texas law, governmental entities are required to readopt their tax abatement policies every two years. The proposed policy is very similar to the existing policy; however, it has been revised to allow for greater flexibility in three areas. PROPOSED REVISIONS) 1. The existing tax abatement policy is for manufacturers only. The Administration is recommending that distribution centers and central administrative office services (i.e., call centers) as defined by the Standard Industrial Classification (SIC) Manual be eligible for tax abatement. The City has had a number of call center type operations interested in locating in Beaumont over the past few years. Distribution centers are a perfect fit for Beaumont as a result of Interstate 10 and Highway 69 and the vacant land available on these two roadways. 2. A new section relating to properties that are subject to a Voluntary Cleanup Program Agreement as executed with the Texas Natural Resource Conservation Conunission (TNRCC) for the removal of a hazardous substance or contaminant from the environment would be eligible for tax abatement. For example, if a company or developer were to clean up the old Keown Supply site EXHIBIT "A" located on Pine Street as part of a Voluntary Cleanup Program Agreement with the TNRCC, they would then be eligible for tax abatement if they redeveloped the site with a capital expenditure of $250,000 and created 10 or greater jobs. The Administration believes this would be a tool to encourage the cleanup of contaminated sites. 3. The existing policy provides a percent of created value to be abated for different levels of capital costs. There are two proposed changes. Currently, if the capital cost of a project is between $10,000,000 - $50,000,000, there is a fixed weighed average for the percentage of abatement. Capital investments more than $50,000,000 are considered on an individual basis. The Administration is recommending that projects with a capital investment greater than $10,000,000 be considered on an individual basis. This would provide the Council with more flexibility as it relates to the percentage of abatement provided. Also, the number of new full-time jobs created has been added which trigger different levels of tax abatement. This would allow call center type operations for example to be eligible for different percentages of tax abatement based on jobs created. The proposed changes are highlighted below. PERCENT OF CREATED CAPITAL COST OF NUMBER OF NEW VALUE TO BE ABATED THE PROJECT (OR) FULL-TIME JOBS TO BE CREATED 0% 0 - 1,000,000 Not Applicable 30% 1,000,001 - 2,500,000 26-50 40% 2,500,001 - 5,000,000 51-75 50% 5,000,001 - 10,000,000 76-100 Weighted Average 10,060,06i - 56,000,000 Individual Case Basis 10,000,000 or more 101 or more The proposed policy will be presented to the City Council as a work session item on March 28, 2000. The proposed policy is attached for your review as well as a copy of the existing policy. Please call the City Manager or Economic Development Director if you have any questions or suggestions. CITY OF BEAUMONT TAX ABATEMENT POLICY PHILOSOPHY Tax abatement is an economic development strategy to mitigate the substantial costs usually associated with the construction of a new or expansion of an existing facility that enhances the economic and/or social tea base of the community. Because property tax revenue is the means to provide vital community services, it is the position of the City of Beaumont that tax abatement be utilized sparingly, and only after careful consideration of the economic impact on the community. Nothing herein shall imply or warrant that the City of Beaumont is under any obligation to provide tax abatement to any applicant. ELIGIBILITY This policy document provides criteria for eligibility and policy implementation as adopted by the City Council of the City of Beaumont, in accordance with the Texas Tax Code, Chapter 312, otherwise known as the Property Redevelopment and Tax Abatement Act(Act), governing property tax abatement agreements. All applications will be considered on a case-by-case-basis. The following types of enterprises are eligible to apply for tax abatement. • Industrial/Manufacturing - activities such as engaging in the mechanical or chemical transformation of materials or substances into new products; assembling component parts of manufactured products, if the new product is neither a structure nor other fixed improvement; and blending of materials, such as lubricating oils, plastic toxins or liquors. • Distribution - activities described as the wholesale tlew distribution of durable and/or nondurable goods, such as motor vehicles, furniture, lumber and other construction materials, professional and commercial equipment, electrical goods, hardware and plumbing and heating equipment, paper and paper products, 1 apparel, and groceries. • Central administrative office services - examples include NCW performing management, support services or telecommunication functions for related entities. • Properties subject to a Texas Natural Resource Conservation Commission (TNRCC) Voluntary Cleanup Program Agreement Eligible property for which abatement may be granted includes non-residential real property and/or tangible personal property located on the real property other than that personal property that was located on the real property at any time before the abatement agreement is executed. Abatement of taxes shall be the value of real or personal property located on the property for each year of the Tax Abatement Agreement only to the extent that the value for the year exceeds the value for the year in which the agreement was executed. Excluded from eligible personal property are inventory or supplies. A. The City of Beaumont herein ("Governmental Entity") adopts these guidelines and criteria for tax abatement ("Policy") for real property owners who propose a project("Project")to develop, redevelop and improve taxable qualifying real property("Real Property"). The Governmental Entity is willing to provide a subsidy to a Real Property Owner in the form of a special exemption from certain taxes provided the Real Property Owner agrees to accept and abide by this Policy. If the Real Property owner leases said property to a third party,the Governmental Entity may require assurances that the conditions outlined in this policy for the Real Property Owner will be met. B. The abatement of ad valorem taxes on Real Property will be evaluated and determined according to the following formula and will be subject to the remaining terms of this policy. NUMBER OF NEW PERCENT OF CREATED CAPITAL COST OF FULL-TIME JOBS VALUE TO BE ABATED THE PROJECT (OR) TO BE CREATED I J 0% 0 - 1,000,000 Not Applicable 30% 1,000,001 - 2,500,000 26-50 40% 2,500,001 - 5,000,000 51-75 50% 5,000,001 - 10,000,000 76-100 Individual Case Basis 10,000,001 or more 101 or more A full-time equivalent employment position is one that provides at least 2,080 Neu hours annually within the City's taxing jurisdiction. The number of full-time equivalent employment positions is determined by adding the total number 2 of hours worked and/or actual paid leave (such as vacation, sick leave, jury duty) of all employees, less overtime hours, and dividing that sum by 2,080. All existing jobs as well as those created must be maintained throughout the term of a tax abatement agreement. C. With respect to a Project with a minimum construction cost of 10,000,001, each tax abatement request will be individually reviewed by the Governmental Entity and approved or declined based on the merits of the application. The percentage of taxes abated is one hundred percent abatement until Project Completion, not to exceed the first and second Tax Year. The percentage of taxes abated for the first through fifth Tax Years next following Project Completion shall be that percentage of abatement granted by the Governmental Entity at the time of application. With respect to a Project under 510,000,000, the period of abatement is seven years; limited, however, to no more than five Tax Years next following Project Completion. The period of time that the taxes are abated will be referred to as the"Abatement Period". The "first Tax Year" is defined as the first full calendar year next following the commencement of construction of the Project. PROPERTIES SUBJECT TO VOLUNTARY CLEANUP AGREEMENT Tax abatement may apply to properties that are subject to a Voluntary Cleanup Program Agreement as executed with the Texas Natural Resource Conservation Commission (TNRCC) in accordance with §361.601 et. seq. of the New Health and Safety Code for the cleanup or removal of a hazardous substance or contaminant from the environment, as follows: Capital Expenditure Jobs Created Abatement Years Minimum of $250,000 10 100% 1 75% 2 50% 3 25% 4 Tax abatement for such properties shall not exceed four years and will take effect on January 1 of the year following the date the property owner receives a certificate of completion for the property. The City of Beaumont may cancel or modify the agreement if it determines that the use of the land is changed from the use specified in the certificate of completion, and the new use may result in an increased risk to human health or the environment. 3 D. Prior to beginning the actual construction work on the Project proposed for tax abatement, the Real Property Owner requesting tax abatement within a lawfully created reinvestment zone must: (1) Provide the Governmental Entity with(a)a description of the Project clearly defining and delineating the work to perform; (b) a statement agreeing to expend a designated amount ("Project Cost") for the Project and, if the abatement is based on Required Jobs, a separate statement agreeing that the required minimum number of full-time jobs will be created ("Required Jobs) and maintained during the term of the Contract; © an explanation as to how the Project will provide a long term significant positive economic benefit to the community, the Governmental Entity and its taxpayers; (d) information as to what attempt will be made to utilize Jefferson County contractors and workers; and (e) information as to what attempt will be made to utilize Jefferson County minority contractors and workers. (2) Furnish the Governmental Entity with a written statement that tax abatement will be a significant factor in determining whether the Project for the development, redevelopment or improvement of the Real Property will take place. (3) Agree to execute a Contract with the Governmental Entity containing the covenants and conditions required by the Governmental Entity. E. Should the Governmental Entity agree to grant an abatement to the Real Property Owner after compliance with the procedure outlined above, then: (1) Subject to the terms and conditions of the Contract, a stipulated percentage as set forth above of those particular ad valorem real property taxes ("Taxes") which are generated by virtue of fair market value created"("Created Value")solely due to the construction and completion of the Project on the real Property will be abated. (2) The Period of Construction ("Construction Period") for the Project shall not go beyond the end of the second Tax Year. During the Construction Period the Real Property Owner must actually expend the Project Cost. (3) Within six months next following the end of the Construction Period,the Project must be operational; i.e., it must actively serve the purpose for which it is designed. (4) In the event the Project is either: (a) Not complete at the Minimum Cost by the end of the Construction Period;or (b) Is timely completed at the Minimum Cost but is not operational within six months next following the end of the Construction Period; or (c ) Is timely completed but the Required Jobs are not created or maintained as 4 set forth in paragraph (B); or (d) Is timely completed at the Minimum Cost, is operational within six months next following the end of the Construction Period and, if applicable, meets the job requirements, but its operations are discontinued for a continuous period of twelve months, then the Contract shall terminate with respect to the Project and so shall the abatement of Taxes for the Created Value of the Project. The Taxes otherwise abated Nvith respect to the Project shall'be paid to the Governmental Entity on the date specified by law, or, if such date has passed, then within sixty (60) days of the accelerated termination of the Abatement Period. (5) Employees and/or designated representatives of the Governmental Entity will have access to the Project during the term of the contract for inspection purposes so as to determine if the terms and conditions of the Contract are being met. All inspections will be made only after the giving of twenty-four(24)hours prior notice and will only be conducted in such a manner as to not unreasonably interfere with the construction and/or operation of the Project. All inspections will be made with one or more representatives of the Real Property Owner,and in accordance with its safety standards. (6) In the event that(a)The Real Property Owner allows its ad valorem taxes owed the Governmental Entity to become delinquent and fails to timely and properly follow the legal procedures for their protest and/or contest;or(b)the Real Property Owner violates any of the terms and conditions of the Contract, and fails to cure during the Cure Period (as hereafter provided),then the Contract may be terminated by the Governmental Entity,and all taxes otherwise abated by virtue of the Contract will be recaptured and paid to the Governmental Entity by the Real Property Owner within sixty (60) days of the termination. (7) The term "Base Year Value" as used herein is the market value of all realty improvements of the Real Property Owner located within the taxing entity as of January 1 of the year a contract is executed less the abated value of all projects granted the Real Property Owner by the taxing entity for the"Base Year". The term"Taxable Value" is determined by deducting the amount of any abatements granted for that Tax Year from the appraised market value of all realty improvements of the Real Property Owner located within that taxing entity. If on January 1 st of any Tax Year all of the legally determined realty improvements owned by the Real Property Owner within the jurisdiction of the Governmental Entity is less than the legally determined Base Year Value and/or in the event that the Real Property Owner reduces their ad valorem taxes on personal property otherwise payable to the Governmental Entity by participating in a foreign trade zone or by having otherwise taxable property exempted pursuant to special legislation, e.g., the "Freeport Amendment"("Special Treatment"),then the abatement otherwise available shall be reduced by one dollar for each dollar that the taxable value is less than the Base Year Value and,also,for each dollar of tax reduction attributable to Special Treatment;provided,however, that in no event shall the offset exceed the Created Value of the Project otherwise subject to the abatement of Taxes. 5 (8) Notwithstanding any other provision herein to the contrary in the event that the Governmental Entity adopting this Policy is required to adopt a tax rate which would subject the Entity to a tax rollback election under Section 26.07 of the Property Tax Code, and this increase is caused by requirements set forth by the State; mandated by the judiciary; expenses required to repair, rebuild or rehabilitate improvements which are damaged or destroyed; or due to a significant decline in value of a major industrial complex located in the jurisdiction of the Entity, then the Entity may allocate the taxable value necessary to reduce the actual rate below the rollback rate to the Owners of abated property based on the Owner's prorata share of the total abated value for the current tax year. (9) Should the Governmental Entity determine that the Real Property Owner is in default in the terms and conditions of the Contract, then the Governmental Entity will notify the Real Property Owner at the address stated in the Contract of such claimed default,and if such is not cured within sixty(60) days from the date of such notice("Cure Period"), the Contract may be terminated by the Governmental Entity. Any notice of default shall be in writing and shall be given by personal delivery or by certified mail, return receipt requested. In the event the notice is affected by personal delivery, the date and hour of actual delivery shall be the time and date of such notice to the Business. Absent a postal strike or the stoppage of the mails, in the event of delivery of notice by registered or certified United States mail, the date and hour following 48 hours after the date and hour at which the sealed envelope containing the notice is deposited in the United States mail, properly addressed, and with postage prepaid, shall be the time and date of such notice to the Real Property Owner. F. The Governmental Entity adopting this Policy shall have the final decision with respect to its interpretation and, also, as to whether the minimum standards set forth above have been met by the Real Property Owner. G. This Policy shall terminate on the second anniversary from the date of its adoption by the Governmental Entity. APPLICATION For additional information on tax abatement, contact the City of Beaumont's Department of Economic Development at (409) 880-3708. In determining how and with whom tax abatement will be utilized, the City will examine the potential return on the public's investment, including net jobs created,jobs NeW retained, broadening of the tax base, expansion of the economic base and competitive impact upon existing industries and businesses. Approval is contingent upon final consideration and action by the Beaumont City Council. To the extent permitted by law, information provided by an applicant in connection with a request for tax abatement is confidential and not subject to public disclosure until the tax abatement agreement is executed. 6 P he- EXHIBIT B UNIFORM TAX ABATEMENT POLICY PHILOSOPHY Tax abatement is an economic development strategy to mitigate the substantial costs usually associated with the construction of a new or expansion of an existing facility that enhances the economic and/or social base of the community. Because property tax revenue is the means to provide vital community services, it is the philosophy of City of Beaumont that tax abatement be utilized sparingly, and only after careful consideration of the economic impact on the community. Nothing herein shall imply or warrant that the City of Beaumont is under any obligation to provide tax abatement to any applicant. ELIGIBILITY This policy document provides criteria for eligibility and policy implementation as adopted by the City Council of the City of Beaumont, in accordance with Texas Tax, Chapter 321, otherwise knows as the Property Redevelopment and Tax Abatement Act (Act), governing property tax abatement agreements. All applications will be considered on a case-by-case-basis. The following types of enterprises are eligible to apply for tax abatement. • Industrial • Manufacturing • Distribution • Service facilities • Retail operations located in an Enterprise Zone or development area • Multi-family residential properties on a limited basis in a specific zone • Properties subject to a TNRCC Voluntary Cleanup Program agreement Eligible property for which abatement may be granted includes non-residential real property and/or tangible personal property located on the real property other than that personal property that was located on the real property at any time before the abatement agreement is executed. Excluded from eligible personal property is inventory or supplies. A. The City of Beaumont herein ("Governmental Entity") adopts this policy of tax abatement ("Policy") for real property owners who propose a project ("Project") to develop, redevelop and improve taxable qualifying real property("Real Property"). The Governmental Entity is willing to provide a subsidy to a Real Property Owner in the form of a special exemption from certain taxes provided the Real Property Owner agrees to accept and abide by this Policy. B. The abatement of ad valorem taxes on Real Property will be evaluated and determined according to the following formula and will be subject to the remaining terms of this policy. NUMBER OF NEW PERCENT OF CREATED CAPITAL COST OF FULL-TIME JOBS VALUE TO BE ABATED THE PROJECT (OR) TO BE CREATED 0% 0 - 1,000,000 Not Applicable 30% 1,000,001 - 2,500,000 26-50 40% 2,500,001 - 5,000,000 51-75 50% 5,000,001 - 10,000,000 76-100 Individual Case Basis 10,000,001 or more 101 or more A full-time equivalent employment position is one that provides at least 2,080 hours annually within the City's taxing jurisdiction. The number of full-time equivalent employment positions is determined by adding the total number of hours worked and/or actual paid leave (such as vacation, sick leave, jury duty)of all employees, less overtime hours, and dividing that sum by 2,080. All existing jobs as well as those created must be maintained throughout the term of a tax abatement agreement. C. With respect to a Project with a minimum construction cost of 10,000,001, each tax abatement request will be individually reviewed by the Governmental Entity and approved or declined based on the merits of the application. The percentage of taxes abated are one hundred percent abatement until Project Completion, not to exceed the first and second Tax Year. The percentage of taxes abated for the first through fifth Tax Years next following Project Completion shall be that percentage of abatement granted by the Governmental Entity at the time of application. With respect to a Project under$10,000,000, the period of abatement is seven years; limited, however, to no more than five Tax Years next following Project Completion. The period of time that the taxes are abated will be referred to as the"Abatement Period". The"first Tax Year" is defined as the first full calendar year next following the commencement of construction of the Project. PROPERTIES SUBJECT TO VOLUNTARY CLEANUP AGREEMENT Tax abatement may apply to properties that are subject to a Voluntary Cleanup Program Agreement as executed with the Texas Natural Resource Conservation Commission(TNRCC) in accordance with §361,601 et. seq. of the Health and Safety Code for the cleanup or removal of a hazardous substance or contaminant from the environment, as follows: Capital Expenditure Jobs Created Abatement Years Minimum of$250,000 10 1000/0 1 75% 2 50% 3 25% 4 Tax abatement for such properties shall not exceed four years and will take effect on January 1 of the year following the date the property owner receives a certificate of completion for the property. The City of Beaumont may cancel or modify the agreement if it determines that use of the land is changed from the use specified in the certificate of completion, and the new use may result in an increased risk to human health or the environment. D. Prior to beginning the actual construction work on the Project proposed for tax abatement, the Real Property Owner requesting tax abatement within a lawfully created reinvestment zone must: (1) Provide the Governmental Entity with(a) a description of the Project clearly defining a delineating the work to perform; (b) a statement agreeing to expend a designated amount ("Project Cost")for the Project and, if the abatement is based on Required Jobs, a separate statement agreeing that the required minimum number of full-time jobs will be created ("Required Jobs) and maintained during the term of the Contract; ® an explanation as to how the Project will provide long term significant positive economic benefit to the community, the Governmental Entity and its taxpayers; (d)information as to what attempt will be made to utilize Jefferson County contractors and works; and(e)information as to what attempt will be made to utilize Jefferson County minority contractors and workers. (2) Furnish the Governmental Entity with a written statement that tax abatement will be a significant factor in determining whether the Project for the development, redevelopment or improvement of the Real Property will take place. (3) Agree to execute a Contract with the Governmental Entity containing the covenants and conditions required by the Governmental Entity. E. Should the Governmental Entity agree to grant an abatement to the Real Property Owner after compliance with the procedure outlined above, then: (1) Subject to the terms and conditions of the Contract, a stipulated percentage as set forth above of those particular ad valorem real property taxes ("Taxes") which are generated by virtue of fair market value created"("Created Value") solely due to the construction and completion of the Project on the real Property will be abated. (2) The Period of Construction ("Construction Period") for the Project shall not go beyond the end of the second Tax Year. During the Construction Period the Real Property Owner must actually expend the Project Cost. (3) Within six months next following the end of the Construction Period, the Project must be operational; i.e., it must actively serve the purpose for which it is designed. (4) In the event the Project is either: (a) Not complete at the Minimum Cost by the end of the Construction Period; or (b) Is timely completed at the Minimum Cost but is not operational within six months next following the end of the Construction Period; or (c ) Is timely completed at the Minimum Cost of less than $10,000,000 but the Required Jobs are not created or maintained as set forth in paragraph(B); or (d) Is timely completed at the Minimum Cost, is operational within six months next following the end of the Construction Period and, if applicable, meets the job requirements, but its operations are discontinued for a continuous,period of twelve months, then the Contract shall terminate with respect to the Project and so shall the abatement of Taxes for the Created Value of the Project. The Taxes otherwise abated with respect to the Project shall be paid to the Governmental Entity on the date specified by law, or, if such date has passed, then within sixty(60) days of the accelerated termination of the Abatement Period. (5) Employees and/or designated representatives of the Governmental Entity will have access to the Project during the term of the contract for inspection purposes so as to determine if the terms and conditions of the Contract are being met. All inspections will be made only after the giving of twenty-four (24) hours prior notice and will only be conducted in such a manner as to not unreasonably interfere with the construction and/or operation of the Project. All inspections will be made with one or more representatives of the Real Property Owner, and in accordance with its safety standards. (6) In the event that (a)The Real Property Owner allows its ad valorem taxes owed the Governmental Entity to become delinquent and fails to timely and property follow the legal procedures for their protest and/or contest; or(b) the Real Property Owner violates any of the terms and conditions of the Contract, and fails to cure during the Cure Period (as hereafter provided), then the Contract may be terminated by the Governmental Entity, and all taxes otherwise abated by virtue of the Contract will be recaptured and paid to the Governmental Entity by the Real Property Owner within sixty (60) days of the termination. (7) The term "Base Year Value" as used herein is the market value of all realty improvements of the Real Property Owner located within the taxing entity as of January 1 of the year a contract is executed less the abated value of all projects granted the Real Property Owner by the taxing entity for the`Base Year". The term"Taxable Value" is determined by deducting the amount of any abatements granted for that Tax Year from the appraised market value of all realty improvements of the Real Property Owner located within that taxing entity. If on January 1 st of any Tax Year all of the legally determined realty improvements owned by the Real Property Owner within the jurisdiction of the Governmental Entity is less than the legally determined Base Year Value and/or in the event that the Real Property Owner reduces their ad valorem taxes on personal property otherwise payable to the Governmental Entity by participating in a foreign trade zone or by having otherwise taxable property exempted pursuant to special legislation, e.g., the"Freeport Amendment" ("Special Treatment"),then the abatement otherwise available shall be reduced by one dollar for each dollar that the taxable value is less than the Base Year Value and, also, for each dollar of tax reduction attributable to Special Treatment; provided, however, that in no event shall the offset exceed the Created Value of the Project otherwise subject to the abatement of Taxes. (8) Notwithstanding any other provision herein to the contrary in the event that the Governmental Entity adopting this Policy is required to adopt a tax rate which would subject the Entity to a tax rollback election under Section 26.07 of the Property Tax Code, and this increase is caused by requirements set forth by the State; mandated by the judiciary; expenses required to repair, rebuild or rehabilitate improvements which are damaged or destroyed; or due to a significant decline in value of a major industrial complex located in the jurisdiction of the Entity, then the Entity may allocate the taxable value necessary to reduce the actual rate below the rollback rate to the.Owners of abated property based on the Owner's prorata share of the total abated value for the current tax year. (9) Should the Governmental Entity determine that the Real Property Owner is in default in the terms and conditions of the Contract, then the Governmental Entity will notify the Real Property Owner at the address stated in the Contract of such claimed default, and-if such is not cured within sixty(60)days from the date of such notice ("Cure Period"), the Contract may be terminated by the Governmental Entity. Any notice of default shall be in writing and shall be given by personal delivery or by certified mail, return receipt requested. In the event the notice is effected by personal delivery, the date and hour of actual delivery shall be the time and date of such notice to the Business. Absent a postal strike or the stoppage of the mails, in the event of delivery of notice by registered or certified United States mail, the date and hour following 48 hours after the date and hour at which the sealed envelope containing the notice is deposited in the United States mail, properly addressed, and with postage prepaid, shall be the time and date of such notice to the Real Property Owner. F. The Governmental Entity adopting this Policy shall have the final decision with respect to it's interpretation and, also, as to whether the minimum standards set forth above have been met by the Real Property Owner. G. This Policy shall terminate on the second anniversary from the date of its adoption by the Governmental Entity. APPLICATION For additional information on tax abatement or the Enterprise Zone program, Contract the Department of Economic Development City of Beaumont, at(409) 880-3708. In determining how and with whom tax abatement will be utilized, the City will examine the potential return on the public's investment, including net jobs created,jobs retained, broadening of the tax base, expansion of the economic base and competitive impact upon existing industries. Approval is contingent upon final consideration and action by the Beaumont City Council. To the extent permitted by law, information provided by an applicant in connection with a request for tax abatement is confidential and not subject to public disclosure until the tax abatement agreement is executed. 'Ur i INTER-OFFICE MEMORANDUM I - -K j City of Beaumont,Texas City Manager's Office To: Mayor and City Council From: Stephen J. Bonczek, City Manager Kyle Hayes, Economic Development Director Date: March 17, 2000 Subject: Beaumont Development Corporation BACKGROUND The Administration has been considering a number of options relating to furthering economic development in Beaumont. While the City of Beaumont has been successful in the past five years attracting many new businesses, the City is at a competitive disadvantage in that it does not have the half cent sales tax for economic development. A list of cities that we compete with for prospects having the half cent sales tax and the approximate amount the tax raises each year for that particular city is attached for your review. In an effort to have a pool of incentive money that could be used to defray start-up costs for businesses wanting to locate in Beaumont, the following alternatives are provided with advantages and disadvantages. ALTERNATIVES I. Create a non-profit corporation named the Beaumont Development Corporation, Inc. (hereafter referred to as the BDC or the Corporation). The BDC would be incorporated as a 501(cx3)to coordinate the mutual interests of the business community and city government to improve the competitive position of Beaumont relative to economic and employment opportunities and for the attraction,expansion,or retention of existing and new industry. The BDC will provide direction to City staff for the development of a strategic economic development plan for the City of Beaumont and will facilitate, coordinate and promote the implementation of the plan between the affected city departments and the private business community. The BDC would also assist in the biannual update of the Economic Development component of the Comprehensive Plan, economic development policies,programs,and incentives. Both the strategic action plan and economic development element will be reviewed and approved by Council. EXHIBIT "B" The BDC would have seven appointed members. Five members would be appointed by the Mayor with a majority vote of support by the City Council. Of the five appointees, one would be a representative of a financial institution, one a lawyer, one a representative from the construction, real estate, or development industry, and two from the general business community. The remaining two appointments would be filled with the President and Chairman of the Chamber of Commerce serving on the Board. There would be Ex- officio Directors on the Board such as the Mayor and City Manager. The Economic Development Director for the City of Beaumont would be the Executive Director of the BDC. The City Council would allocate general fund revenue on an annual basis to the BDC to be used for incentive money to help attract businesses to Beaumont. The BDC would be responsible for allocating incentive money to assist projects that are consistent with the Council approved Economic Development element of the Comprehensive Plan the Strategic Economic Development Action Plan. Advantages * The City would have representatives from the business community serving on the BDC offering useful business experience. * The City would have the expertise of the BDC in administering the incentive money to help attract businesses to Beaumont. * The designation of two positions on the BDC for the Chamber confirms the partnership with the City. * The BDC would have more flexibility than the City in accepting donated property and developing property. Disadvantages * The City may not be in a financial position to fund the BDC therefore limiting its ability to impact economic development. * The City may be creating another layer in the economic development process that could be handled administratively with budgeted incentive money for a certain project approved by the City Council. * The City will incur additional expenses related to creating the non-profit corporation and conducting annual audits and reports to the Internal Revenue Service. 2. Create the BDC; however, the City Council would make four of the seven appointments to the Board with the Chamber of Commerce making three appointments. Also, the Director of Economic Development for the Chamber of Commerce would be the Executive Director of the BDC. Advantages -Same as Alternative 1 Disadvantages - Same as Alternative 1's with one addition * The Chamber of Commerce would have a stronger role than in alternative 1 although they are not providing direct funds to the BDC. 3. Create an Economic Development Advisory Committee. The Committee would make recommendations to the Administration and City Council relating to the use of incentive money and provide input relating to the Economic Development element of the Comprehensive Plan. The incentive money would be set aside in a designated city account for Council approval for allocation. Advantages * The City would have incentive money to help attract businesses to Beaumont. * The City would have representatives from the business community serving on the Advisory Committee offering useful business experience. * The City will not incur any additional administrative expenses. * Members of the Chamber of Commerce serving on the Advisory Board confirms the partnership with the City. Disadvantages * The City may not be in a financial position to place incentive money in a separate account; however, it would be easier to stop funding the city account than the BDC. * The business community may feel that politics have not been taken out of the process if the City Council approves the use of the incentive money. FINANCIAL IMPACT OF ALTERNATIVES If the City Council approves the creation of the BDC, the Administration is requesting $30C,000 in initial funding. The funds would be provided from the General Fund Balance or from the proposed Stormwater Drainage Utility fee. The Administration recommends that the contract with the Chamber of Commerce in the amount of$50,000 be continued for marketing, business development and coordinating prospects. The Administration recommends Council consideration of alternative 1 as presented and will present all alternatives at a work session on March 28,2000. The Administration needs Council direction on this issue. If the Council approves the concept of the BDC,the Administration will prepare formal by-laws and address the necessary budgetary issues. If you have any questions or suggestions, please call the City Manager or the Economic Development Director. city Population Approximate amount City expects FD tax to raise each year Abilene 106,000 $5,437,551 Conroe 28,000 $3,118,464 Galveston 59,000 $2,446,784 Groves 17,000 $543,308 Jasper 7,000 $621,203 La Marque 14,000 $402,081 Liberty 8,000 $508,313 Longview 70,000 $2,976,406 Lumberton 6,600 $202,400 Midland 97,500 $2,950,000 Nederland 16,000 $830,581 Odessa 94,000 $2,400,000 Pasadena 127,500 $5,291,000 Port Arthur 59,000 $1,823,281 Silsbee 6,000 $368,181 Tyler 77,000 $6,923,426 Victoria 55,000 $3,797,442