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HomeMy WebLinkAboutMinutes - City Council - 1997-03-13 55 • City Council, Special Meeting City Hall Conference Room A 760 Parkview Avenue Redding, California March 13, 1997 11:00 a.m. The meeting was called to order by Mayor McGeorge with the following Council Members present: R. Anderson, Kehoe, Murray, and McGeorge. Council Member P. Anderson's absence was excused. Also present were City Manager Warren, Assistant City Manager Perry, City Attorney Wingate, Fire Chief Wagner, Community Services Director Gorman, Deputy City Manager Starman, Principal Planner Keaney, Senior Planner King, Associate Planner Manuel, City Clerk Strohmayer, and Secretary to the City Council Rudolph. CLOSED SESSION- City Manager's Performance Evaluation (A-050-080) Mayor McGeorge related that the City Council would be adjourning to closed session pursuant to California Government Code Section 54957 to discuss the City Manager's performance evaluation. At the hour of 11:00 a.m., Mayor McGeorge adjourned the meeting to closed session. At the hour of 11:55 a.m., Mayor McGeorge reconvened the meeting to regular session. Mayor McGeorge stated that the bonus package provided to the City Manager in 1996 would be made permanent and the matter of a cost-of-living increase would be addressed at a later time. ECONOMIC DEVELOPMENT INCENTIVES (E-050) City Manager Warren provided an overview of his memorandum to City Council dated March 11, 1997, incorporated herein by reference, regarding industrial incentives. He stated that a well-planned community plans for growth and offers incentives. He explained that he is a proponent for offering incentives over and above what is currently being offered with the following conditions: (1) a safe position is always maintained; (2) criteria is established for determining when incentives are to be discussed; and(3)industry will provide guarantee regarding employment; and (4) the industry must provide a commitment to the community, and, in some cases, sales tax performance. He provided a form containing 11 areas to be considered and used as a guideline when determining when additional incentives will be offered. He stressed that in order for Redding to remain competitive and attract new business to the area, the City must consider offering additional incentives on a case-by- case basis. He stated that he, in cooperation with the Economic Development Corporation (EDC), invited Marcel Cohen and James Renzas to address the City Council regarding the incentives being provided in different areas, the importance of these additional incentives, and the benefits realized by the communities providing these additional incentives to attract businesses to their area. Marcel Cohen stated that he has more than 25 years of real estate, facility management, and finance experience. He discussed the types of incentives being offered by other cities and their associated benefits to the community. He provided an overview of his handout, A Study for Major Relocation of Companies, dated March 13, 1997, incorporated herein by reference, which included the following: (1)who is providing these incentives; (2) who took advantage of incentives; (3) types of incentives offered; (4) company concerns pertaining to relocations; (5)things to remember about semiconductor industry; and (6) benefits to the community. James Renzas stated that he assists clients in deciding where to locate offices or plants in new areas, determining whether a location will achieve the client's objectives, and negotiating incentives for the client. He explained that businesses looking to locate in an area are making decisions from an investment standpoint. He stated that the City needs to consider what a business can bring to the community and its ability to reduce social problems, such as unemployment. He indicated that companies need incentives in order to lower annual operating costs and offset one-time startup costs. He discussed the following areas pertinent to relocation incentives: (1) key location criteria; (2) common incentive packages; (3) how much money a company may save annually by relocating; (3) 03/13/97 56 what the Board of Directors want to know; (4)impact of financial incentives on the location decision; (5) direct economic impact of new 450-person office facility over the first five years; (6) Texas economic development sales tax; (7) Kentucky's jobs development act incentives; (8) where the money goes; (9)return on investment of incentive; (10) impact of Kentucky's jobs development act on annual operating costs; (11) a sampling of incentives; and(12)how much it costs to start-up a new 200-person office facility. He noted that one of the key issues when a business is deciding to locate in an area is the governmental entity's speed of response. Mr. Renzas also pointed out the following disadvantages to locating in a community like the City of Redding: (1) trained individuals in the software industry are not readily available; (2) the distance from suppliers; and (3) the lack of a major airport. He stressed that it is important for the City to recognize these weaknesses and turn them into advantages. Council Member Murray inquired what cities in California are offering in the way of incentives. Mr. Renzas responded that most companies have a negative attitude about locating in California due to its strict environmental laws, higher tax rates, and higher premiums for workers' compensation. He recommended that the City consider the types of incentives it is capable of offering and ensure that it properly manages the project internally and sees that the business' needs are met, i.e., permits are issued timely, assist with relocation of personnel, etc. He explained that it is better if incentives can be offered which assist in offsetting relocation costs because banks will not provide financing for this particular purpose. He stated that the more up front benefits which can be provided, the more successful the City will be in attracting new businesses to the area. He indicated that many companies are looking for existing buildings, as they start the relocation process too late to permit the construction of a building. He encouraged constructing buildings for this very purpose. Marge Cantrell acknowledged the need for incentives for large business, however, she stated that such incentives already exist. She stressed that the City needs to also offer incentives to small businesses. Joe Gerlinger stated that Gerlinger Steel has been contacted by other communities regarding possible relocation and indicated that the City needs to take care of existing businesses to avoid their possible relocation. Jim Zauher, Economic Development Corporation, replied that growth and expansion has also included local companies. He cited recent projects and indicated that the City is going to be dealing with opportunities and it is necessary to determine what the marketplace is and fully understand it. He stressed that existing businesses are vital to the EDC's Shasta 2001 Plan. Mr. Cohen reiterated that it is important to assist existing businesses to grow, otherwise, it will have a negative effect on new businesses locating in the area. John Fitzpatrick viewed this meeting as a positive change from previous City practice. He concurred with previous comments regarding the need to assist existing businesses to grow. He noted that the City has not been successful in having businesses locate in Redding, and it may be necessary to construct some buildings for speculation, perhaps at the Airport Business Industrial Park, in order to generate activity in this area. Frank Strazzarino, Greater Redding Chamber of Commerce, believed that incentive programs can coexist with business retention programs and that both issues should be explored further. He indicated that the rating form developed by the City Manager is a good starting point and urged the City Council to empower the City Manager to begin negotiations with potential businesses as necessary. He further stated that the Chamber is also interested in developing job retention programs. Mr. Warren asked the City Council for feedback regarding the parameters to be utilized in terms of offering incentives to potential businesses. Council Member Kehoe provided the following observations: (1)economic incentives must be viewed in relation to the City's other needs; (2) decisions relative to economic development cannot be made on an incremental basis; (3) when incentives are provided, a burden and benefits analysis should be 03/13/97 57 completed; (4) do not place all the City's resources in one area - achieve a balance within the community; (5) do not treat existing businesses differently from new businesses wishing to locate in the City; and (6) offer added incentives, but do not provide corporate welfare. Council Member R. Anderson favored providing incentive packages if it could be demonstrated that it would be a financial benefit to the community. He opined that maybe the individual filling the Economic Development/Asset Manager position should also be knowledgeable in business relocation, particularly smaller businesses. He related that the City needs to be realistic with regard to which businesses it actively pursues. Mayor McGeorge believed the matrix the City Manager developed was good, but noted that a target number still needs to be established for use when determining whether incentives should be provided. He noted that each situation would have to be considered on a case-by-case basis. Council Member Murray favored taking a proactive approach toward economic development and supported providing equitable treatment to all businesses. He was particularly interested in focusing on matters which did not require money, i.e., customer service, attitude projected, etc. City Manager Warren summarized his understanding that it was the consensus of the City Council that he should proceed cautiously in the area of economic incentives and consider each situation on a case-by-case basis. He noted that if additional incentives are provided and result in the expenditure of City funds, these expenditures should be considered in relation to other City needs. He acknowledged the need to hire an individual to handle economic development matters and work with the community's small businesses. Council Member Kehoe requested that expenditures associated with economic development be compared with other City needs, i.e., police officers,fire stations, etc. • John Fitzpatrick opined that the City needs to consider increasing its current 1 percent local preference percentage. Chris Corrigan stated that he was excited about the possibility of attracting new businesses to the community. He noted that economic development incentives are working in other communities and creating employment opportunities in those areas which have become aggressive. Craig Heins stressed that the City needs to take care of its existing businesses. He stated that there is no greater incentive than the positive comments about a community which an existing business can pass along to potential businesses. Frances Jenkins did not believe an additional '/2 cent sales tax incentive would pass in light of the recent defeat of the school bond ballot measure. Frank Strazzarino noted that when the Chamber of Commerce asked the City Council to consider increasing its local preference to 5 percent, the Chamber was not able to demonstrate how it would work. He encouraged the City Council to explore the science of economic multipliers and consider a methodology that would apply to a wide range of projects. At the hour of 1:35 p.m., Mayor McGeorge declared the meeting recessed. At the hour of 2:03 p.m., Mayor McGeorge reconvened the meeting to regular session. SUNSETTING OF COMMISSIONS (B-080-010 & B-080-540 & B-080-350 & B-080-450 & B-080-600-100) Community Services Director Gorman provided an overview of his Report to City Council dated March 7, 1997, incorporated herein regarding the possible sunsetting of the Tourism and Convention Commission, the Recreation and Parks Commission, and the Senior Citizens Facility Advisory Committee. He provided the following recommendations: (1) Recreation and Parks Commission - recommended that the Commission be allowed to continue and all ordinances and City Council policies pertaining to the Commission be reviewed and amended for consistency with the usual 03/13/97 58 function of an advisory body; (2) Tourism and Convention Commission - recommended that the commission be allowed to continue to exist, but change the meeting frequency from monthly to quarterly, or as deemed necessary by the Chair; and (3) Senior Citizens Facility Advisory Commission - recommended that this committee be allowed to continue. Development Services Director Swanson's Report to City Council dated March 10, 1997, incorporated herein by reference, recommended that the Airports Commission be allowed to sunset on October 1, 1997. City Manager Warren noted that the Community Development Advisory Committee was not addressed in the reports prepared for the City Council's consideration, however, he recommended that the committee be maintained as it is currently structured. He noted that this committee is responsible for providing a recommendation to the City Council relative to Community Development Block Grant (CDBG) applications. Council Member Kehoe questioned the City's policy with regard to commissioners' attendance at meetings. Mr. Gorman stated that staff would need to rework the ordinances pertaining to the commission to address the issue of meeting attendance. Council Member R. Anderson questioned whether the Tourism and Convention Commission should be maintained or whether an ad hoc committee should be appointed to address issues pertaining to the Convention Center as necessary. City Manager Warren concurred that the Tourism and Convention Commission could be eliminated and an ad hoc committee formed. He said that while more commissions translate into an increase in staff workload, he supported retaining the Recreation and Parks Commission because of its intense activity. Council Member R. Anderson explained that when the Airports Commission went to quarterly meetings, the commissioners' attendance became worse. Mr. Gorman indicated that the commissioners were concerned that if quarterly meetings were held, and a commissioner was unable to attend one meeting, it would be six months between meetings. Council Member Murray proposed eliminating both the Recreation and Parks Commission and the Tourism and Convention Commission and forming one seven-member commission which could be entitled the Community Services Advisory Commission. He suggested that this commission could meet on a regular basis and deal with any matter relative to the Community Services Department. He added that it would not preclude the formation of an ad hoc committee to address specific issues relative to the Convention Center and tourism. Council Member R. Anderson concurred. Council Member Kehoe supported Council Member Murray's proposal, however, he wanted to give priority to existing members on the Recreation and Parks Commission and the Tourism and Convention Commission to serve on this new commission. Mayor McGeorge also concurred with the proposal. He stressed, however, the need to enforce provisions relative to commissioners' meeting attendance. MOTION: Made by Council Member R. Anderson, seconded by Council Member Kehoe, that the Senior Citizens Facility Advisory Commission not sunset on October 1, 1997. The Vote: Unanimous Ayes Mayor McGeorge suggested that the code section relative to the Senior Citizens Facility Advisory Commission needs to be cleaned up and clarified. MOTION: Made by Council Member Kehoe, seconded by Council Member Murray, to allow the Recreation and Parks Commission and the Tourism and Convention Commission to sunset on October 1, 1997, directed staff to establish a new seven-member commission which will handle activities pertaining to the Community Services Department, and directed staff to prepare a report relative to meeting frequency. The Vote: Unanimous Ayes 03/13/97 59 MOTION: Made by Council Member Murray, seconded by Council Member R. Anderson, to allow the Airports Commission to sunset on October 1, 1997. The Vote: Unanimous Ayes Council Member Murray stated that he would like to see improvement in the quality of the reports prepared relative to the Community Development Advisory Committee's recommendations for CDBG funding. Council Member Kehoe concurred and stated that at minimum, an explanation should be provided which outlines the committee's logic in selecting a grant application which might not be ranked as high as an application which was declined funding. MOTION: Made by Council Member Kehoe, seconded by Council Member R. Anderson, that the Community Development Advisory Committee not sunset on October 1, 1997. The Vote: Unanimous Ayes ADJOURNMENT There being no further business, at the hour of 2:20 p.m., Mayor McGeorge declared the meeting adjourned. APPROVED: // Mayor / f / ATTEST: 4137r.---vee-; City Clerk 03/13/97