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RES 1156 10/08/1996 RESOLUTION NUMBER 1156 A RESOLUTION SUPPORTING TAX ABATEMENTS IN THE CITY OF CIBOLO, AS PERMITTED BY CHAPTER 312 OF THE STATE OF TEXAS TAX CODE, TO RETAIN AND EXPAND EMPLOYMENT AND TO ATTRACT MAJOR INVESTMENTS, CONTRIBUTING TO THE ECONOMIC DEVELOPMENT OF THE CITY OF CIBOLO. WHEREAS,the attraction of long-term investments and the establishment of new jobs in the City of Cibolo will promote economic growth and maintain the vitality of the current enterprise; and WHEREAS,the City of Cibolo recognizing the competition of other communities requires the development of incentives to assist in the retention of businesses and their expansions or locating in the City; and WHEREAS,the establishment of both retained and new jobs will benefit the local economy; NOW, THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF CIBOLO, TEXAS: The City of Cibolo has adopted guidelines and criteria providing for tax abatement incentives to expand employment and attract major investments. APPROVED AND ADOPTED ON THIS 8TH DAY OF OCTOBER, 1996. HONORABLE SAM BADDER, MAYOR ATTEST: RUDY RENE FARIAS, CITY SECRETARY BUSINESS DEVELOPMENT ECONOMIC INCENTIVES AND TAX ABATEMENT POLICY FOR THE CITY OF CIBOLO, GUADALUPE COUNTY TEXAS September 24 , 1996 SECTION I. Pur ose . The City of Cibolo seeks to provide an environment that will promote economic growth and maintain the vitality of current businesses . The community recognizes the principals of free enterprise and understands that competition with other cities requires the development of incentives to assist business retention and expansion and as an aid in the attraction of new businesses . The City Council of Cibolo will make a decision on each application under the provisions of this policy and only the City Council may bind the City to such an agreement . This policy is understood to be elective guidelines for economic development incentives and in no way is the City bound to offer any of the incentives contained in this policy. SECTION II. Parameters for Tax Abatement and Other Economic Development Incentive . A. The following criteria must be met at a minimum in order for a project to be eligible for the City of Cibolo' s Economic Development Tax Abatement Incentive Program: 1 . The purposed project must create at least 10 jobs for a minimum of three years OR Real property improvements must be at least $250, 000 2 . The project must comply with all laws of the State of Texas and all building codes, zoning and subdivision ordinances of the City of Cibolo 3 . At least twenty percent of the work force must be current residents of Guadalupe or Bexar County. 4 . The business applying under this policy must owe no outstanding debts to the City of Cibolo, the State of Texas or any Counties of this State. B. The following criterion outline the specific levels of activity required to gain tax abatement of "real property" improvements . Qualification under "Section II, A. must be met prior to consideration of this Section. "Personal property,, is not eligible for tax abatement under this provision of the policy: Level 1 . 100% for six years : Real Property improvements of at least $20 million and creation of at least 100 full-time positions for six years Level 2 . 80% for six years : Real Property improvements of at least $15 million and creation of at least 75 full- time positions for six years Level 3 . 6001 for six years : Real Property improvements of at least $10 million and creation of at least 50 full- time positions for six years Level 4 . 40% for six years : Real Property improvements of at least $5 million and creation of at least 25 full- time positions for six years Level 5 . 20% for six years : Real Property improvements of at least $1 million and creation of at least l0 full- time positions for six years Level 6 . 10% for six years : Real Property improvements of at least $250, 000 and creation of at least 5 full- time positions for six years If both the capital investment (Real Property) improvements and the job creation parameters are met, the project is eligible for that level of abatement . If one of the two parameters are met, the project is eligible for the next lower level of abatement . EXAMPLE: Project X creates 85 jobs with $10 million investment . It does not qualify for 80% because of failure to meet minimum investment amount ($15 million) so therefore is eligible for 60% abatement . C. The following incentives may also by offered by the City of Cibolo in accordance with standards set forth in this policy: 1 . Reduction or elimination of capital recovery fees (impact fees) and the costs of certain other infrastructure improvements 2 . Special utility rates as provided by GVEC 3 . Reduction or elimination of building permit fees, inspection or contractor' s fees . 4 . Reduction or elimination of processing fees for subdivisions, zoning and land use . In order to be eligible for these incentives, the project must meet the requirements set forth in Section II, Paragraph A of this document . D. The following criterion will be used to assess viability of projects that meet the minimum parameters specified in the previous paragraphs of this Section. 1 . Does the proposed project comply with the intent of the Master Plan of the City of Cibolo? 2 . What is the cost of required public improvements? 3 . Do expected benefits exceed public costs? 4 . What additional services will be required from the City? 5 . What is the value of public improvements proposed by the applicant? 6 . Will funding be available to finance the public improvements and services required of the City? 7 . How will abated tax be recaptured if the applicant fails to fulfill the responsibilities in the abatement agreement? 8 . What is the time frame for job creation and completion of capital improvements detailed in the agreement? 9 . What is the history of the applicant' s relationship with the City of Cibolo? SECTION III. Application Procedure . Any person, organization, joint venture, partnership, association or corporation seeking economic development incentives shall be required to follow these procedures in the timetable set forth below. 1 . Application form must be completed 30 days before the City Council meeting where application for abatement or other incentives is to be considered. 2 . Applicant shall provide a plat showing the exact location of the property, all roadways within 300' of the site, and all existing zoning and land uses on the site or within 300 , of the site at least 30 days before Council consideration. 3 . A complete legal description of the property at least 30 days before Council consideration. 4 . A description of the proposed improvements or expansion that the applicant wants a tax phase-in for, and the type of business proposed. This must be accompanied by a cost estimate of the improvements and the number of jobs along with a schedule detailing estimates for reaching criterion that would allow granting of economic development incentives must accompany the legal description. 5 . The projected beginning date of capital improvements and the completion date of the qualifying improvements must be received at least 14 days before City Council consideration. 6 . Proof of fiscal ability to pay the abated taxes if requirements of the agreement can not be fulfilled by the applicant must be provided at least 72 hours before Council consideration. 7 . The applicant shall provide any other information as required by the City Council . The applicant shall deliver three copies of all information and one each will be reviewed by the Mayor, the City Administrator, and the City Engineer. A non-refundable application fee is required to allow the City to recover the cost of the initial review by the City Engineer. The fee will be the full cost of the analysis of the engineer, not to exceed $2 , 500 . SECTION IV. Approval Procedure for Application for Tax Abatement or other Economic Development Incentives . A. The City Administrator will review the application to verify completion and to help insure accuracy of the proposal . This review, with the City Engineer' s comments, will be forwarded to the Planning and Zoning Commission for review prior to being presented to the City Council and any other taxing authorities or agencies that may be involved in offering the agreements . B . All requirements of Chapter 312, of the Texas Tax Code, known as the Property Redevelopment and Tax Abatement Code, shall be reviewed for compliance . C. If further information is required by the City Council, the applicant has 30 days to provide this information to the satisfaction of the City Council . D. If the Council decides to award incentives to the applicant (for this project) , a resolution shall be adopted approving the terms and conditions of a tax abatement and economic development incentive agreement with the applicant . SECTION V. Contents of Agreement . A. Any tax abatement agreement must contain at least the following: 1 . A description of the type of incentives being offered and their duration 2 . A legal description of the property designated as a reinvestment zone in which the agreement will operate 3 . Detailed descriptions and costs regarding the type, number, location of planned improvements 4 . A method to provide for recapture of property tax and all waived fees and costs which had been abated as a result of this agreement if the applicant fails to perform its obligations under the agreement . 5 . A provision limiting the uses of the property to the agreed purpose 6 . An estimate of the revenue the City will not receive as a result of the agreement . B. The agreement shall contain the name of a "Compliance Officer" for the project that will be responsible for providing evidence of compliance with this agreement upon request of the City Council, the Mayor, or the City Administrator of Cibolo. SECTION VI. Recapture . Any participant to an abatement agreement that fails to meet the adopted level of investment or employment, or any participant in such an agreement that reduces employment below the agreed level during the term of the agreement, shall be subject to the following recapture provisions : A. In any year that the targeted number of full-time employees is below the agreed amount, the participant shall be required to refund all abated taxes (the City of Cibolo is allowed to recapture the abated property tax) for the year during which the full-time employment level falls below the agreed level . B . If the participant ceases to operate in the City of Cibolo at any time during the covered period, the participant is liable for the payment of all abated taxes foregone during the entire life of the abatement agreement . C. If the participant does not meet the agreed level of capital investment, the percentage of taxes to be abated shall fall to the lower level to reflect the actual value of the capital improvements . Any previously abated taxes that would have been ineligible under terms of this paragraph shall be refunded to the City of Cibolo by the participant . Appendix Definitions Abatement - The forgiving by the City of a tax consequence where the incidence is removed from a property owner due to other considerations received to the City. Compliance Officer - The administrative representative of the City with responsibility for oversight and enforcement of an abatement agreement . Full-time employee - An employee who works at least 1, 050 hours per year. Incentive - A consideration offered by a government in return for performance by a new or expanding property owner that promises significant new employment as outlined in the agreement . Participant - Any party to any abatement agreement . Recapture - The ability of the City to collect abated taxes when any other party to an agreement violates that agreement or fails to attain employment or investment goals set out in the agreement .