Memorandum

City of Lawrence

TO:              David L. Corliss, City Manager

                   Roger Zalneraitis, Economic Development Coordinator/Planner

FROM:          Rob Chestnut

DATE:           December 15^th, 2008

RE:               Outstanding Issues defined from October 31^st, 2008 memo

In response to items seeking input from commissioners from Roger’s memo, I have included my responses.   They appear in blue.

Outstanding issues

The overarching policy, the tax abatement policy and the economic committees are all inter-related, and Staff seeks feedback on several critical issues in order to complete work on these items:

• With regard to the overarching policy, what “additional factors” should be considered in addition to the benefit-cost analysis?  For example, should environmental considerations be included as an additional factor?  Is there anything currently on the list that Commission would like to see removed?

Environmental impacts of a particular project should be considered.  We assume

that any opportunity would be in compliance with existing environmental regulations, but the impacts should be considered as a non-economic factor. 

• The overarching policy also has a framework for compliance with performance agreements as well as penalties if compliance is not substantially met.  Should there be any specific performance provisions that must be included in each application?  Should some incentives be excluded from these general compliance provisions (for example, IRBs), and if so, which ones?

Performance provisions should be a part of the application that is clearly defined during the application process with exception of IRBs.  Bonding could be almost impossible to revoke once granted.

I do not believe that these provisions should be implemented automatically upon a finding of shortfall.  Economic conditions should be considered in the general economy or particular industry as a mitigating factor before approving any revocation of incentives.

• What additional considerations should be given to tax abatement applications over and above what is included in the general policy?  For example, should wage and health requirements only be included for tax abatements?  Should they be included in their current form?

I am not in favor of extending wage and health requirements outside of the current tax abatement policy.  These should be reviewed in their current form when revising the tax abatement policy that will be required when implementing the changes needed to fit the tax abatement policy into the overarching economic development policy.  

• What is the future role for the Lawrence County Economic Development Board and PIRC?  Should these two agencies be reconstituted or merged to incorporate a different role?

I believe a new process should be constituted that has an expanded role with all incentives.  My preference would be 1 advisory board.

• In relation to the PIRC, should the annual abatement report be expanded to include any other economic incentives?  Should the report be adjusted to include such items as compliance with performance agreements?

The first question is to consider the right form of a new advisory board.  Then, this new board should have an expanded role.  Certainly, performance agreements would be a part of this consideration.