Public Incentives Review Committee                                                     

Meeting Minutes

December 2, 2005, 3:00 p.m.

PIRC Members Present:  Mayor Dennis Highberger, Commissioner Mike Rundle; Kirk McClure, Brenda McFadden

PIRC Members Absent:  Jere McElhaney, Rich Minder, Mike Maddox

City Staff Present: David Corliss, Frank Reeb

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Mayor Highberger called the meeting to order and noted a quorum was present.  

Mayor Highberger briefly reviewed the four items on the agenda and asked if there was any comment about the October 19^th meeting minutes. 

There was no comment, at which time it was moved by McClure, seconded by McFadden to approve the October 19^th PIRC meeting minutes.  Motion carried unanimously. 

Mayor Highberger then asked for discussion regarding the 2004 Annual Report and a discussion about non-compliance among tax abated companies.  He said the discussion would proceed with assumption that the information in the 2004 Report is accurate. 

Kirk McClure then reviewed the three compliance spreadsheets he prepared based on tax abatement annual reports from years 2001 to 2004.  The three spreadsheets summarize company investment, jobs, and wages and use 90% of the promised amount as noted on the abatement application as the standard for substantial compliance.  He reviewed the investment information and noted that Allen Press (Phase II), DST, and Sauer Danfoss were not in substantial compliance with respect to investment performance.  He said as for Sauer Danfoss, PIRC agreed that there were valid reason to explain their lack of compliance but they might want to ask Sauer Danfoss officials for information as to when it expected to be fully invested and fully employed. 

McClure then discussed Serologicals and the employment numbers.  He suggested staff request information from Serologicals on current employment information and when the company expected to come on line. 

Highberger discussed the investment performance for Packerware.  He then requested that staff request information on the Packerware leased property.

Mayor Highberger suggested that the committee review investment, wage and job information business by business.

The Committee reviewed Allen Press information and noted while the number of jobs was in compliance, there was an issue regarding wages for those jobs and capital investment.

Reeb noted Allen Press has submitted information regarding an explanation for its investment.

Mayor Highberger said at a future meeting the committee could review the investment information already submitted but requested that staff send a letter to Allen Press requesting information on the wages. 

The Committee then discussed AMARR Garage Door Group.  The Mayor noted that investment and number of jobs were in compliance but there was an issue regarding some wages paid. 

Reeb mentioned that AMARR has submitted a letter dated September 9, 2005 explaining the wage discrepancy. 

The Committee reviewed the information for API Foils and noted that the abatement ends at the end of calendar year 2005. 

The Committee then discussed DST Realty, Inc.  The Committee noted the wages were in compliance but there were questions regarding investment and the number of jobs.  Mayor Highberger requested staff send a letter to DST requesting information regarding the investment and number of jobs.

Discussion then turned to Jayhawk Bowling Supply and Martin Logan and the committee noted both companies were in compliance in all three categories.

The committee then discussed Microtech.  Mayor Highberger noted the wages and investment were OK but there was a question about the number of jobs.  He requested staff send a letter requesting information about those jobs. 

Packerware/Berry Plastics was discussed next.  The committee noted questions about investment and wages and requested staff send a letter to request information about the investment and wages.

The committee noted no concerns about the Progress Vanguard compliance.

The Committee reviewed the information from Prosoco.  While the amount of investment was in compliance, there were questions about the number of jobs and wages.

Reeb mentioned Prosoco submitted a letter dated October 28, 2005 with information about those subjects. 

Mayor Highberger requested no letter be sent to Prosoco until the committee reviewed the letter and information already submitted.

The Committee reviewed the information from Reuter Organ.  While the amount of investment was in compliance, there were questions about the number of jobs and wages.

Reeb mentioned Reuter Organ submitted a letter dated August 16, 2005 with information about those subjects. 

Mayor Highberger requested no letter be sent to Reuter Organ until the committee reviewed the letter and information already submitted.

The committee then discussed Sauer Danfoss.  The Mayor requested staff send a letter requesting information as to when Sauer Danfoss expected to be fully invested and fully employed.

The Committee then discussed Serologicals.  The Mayor requested staff send a letter requesting information as to when the officials expected the plant to become fully operational. 

It was then moved by Rundle, seconded by McClure to request staff send the letters as mentioned previously.  Motion carried unanimously.

Brenda McFadden then asked to discuss possible definitions in the current Economic Development Policy.  She mentioned the terms or phrases “environmentally sound” and “small and medium sized” should be defined. 

Highberger suggested that the phrase “small and medium sized…”should be deleted because the paragraph contains a definition already. 

McFadden said she was a strong believer that if the company was asking for an abatement it should be current in paying all of its taxes. 

Corliss said there is nothing in the current application regarding payment of taxes and staff does not check for liens or that all taxes are paid.  He said if the committee wanted staff to verify those things it could be done. 

McFadden said an assertion on the application would be satisfactory.

Rundle asked if that could be done procedurally.

Corliss said yes. 

McClure said the difficult issues would be to verify tax information from businesses that come from out of state. 

McFadden said she wanted to ensure that bad corporate citizens do not get tax abatements. 

Corliss said it may get down to a judgment call as to whether that criteria is acceptable or not. 

Highberger discussed whether to modify the section 4 criteria.  For example, he suggested an addition to subsection (a) “the business is environmentally sound” to add that “the business not be in violation of state or federal laws or regulations in the last five years.”  He also suggested removing the phrase “small and medium size” in subsection (b).

Rundle asked whether a question about temporary employees should be added to the ordinance.

Corliss said the ordinance addresses new employees and a wage floor requirement.

Rundle asked if staff could research that question. 

Corliss said staff could do that if the committee requested the information.

McFadden suggested the application should be amended to expand period of financial information to three years instead of the “most recent” and to change to an “audited” or “compiled” financial statement.

Highberger said it would be good to get the audited statements if they were available.  He said with the company size requirement the company should be large enough to have an audited or compiled financial statement.

Moved by Rundle, seconded by McFadden to recommend the application be changed to request information for three years not just the “most recent” and to add that the financial statements be “audited” or “compiled”.  Motion carried unanimously. 

Corliss asked the committee if it wanted staff to make the change or send it to the City Commission. 

Mayor Highberger said staff should make the requested changes. 

It was moved by McFadden, seconded by Highberger to adjourn at 4:35.  Motion carried unanimously.