HomeMy WebLinkAbout08509ORDINANCE NO. 8509
AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV
OF THE PUEBLO MUNICIPAL CODE RELATING TO AND
ESTABLISHING CRITERIA, STANDARDS, RULES AND
REGULATIONS FOR THE APPROPRIATION AND
EXPENDITURE OF FUNDS IN THE 1992-2016 SALES AND
USE TAX CAPITAL IMPROVEMENT PROJECTS FUND
AND REPEALING ORDINANCES NOS. 6381, 7583 AND
7836
WHEREAS, the people of Pueblo by Ordinances Nos. 5668, 5978, 6683, 7464
and 8197 have repeatedly extended the one-half percent sales and use tax rate for
primary job-creating capital improvement projects within the City and the Pueblo
Memorial Airport/Airport Industrial Park and established the special fund now known as
the 1992-2016 Sales and Use Tax Capital Improvement Projects Fund (the “Fund”) for
the deposit of such revenue; and
WHEREAS, the people of Pueblo by Ordinances Nos. 5668, 5978 and 8197
have authorized and directed the City Council to establish by ordinance the criteria,
standards, rules and regulations for the appropriation and expenditure of such revenues
and monies in the Fund for primary job-creating capital improvement projects and
incidental primary job training programs within the City and the Pueblo Memorial Airport
boundaries, and directed that none of such revenues shall be appropriated or expended
except in conformity with such criteria, standards, rules and regulations; and
WHEREAS, said criteria, standards, rules and regulations have heretofore been
adopted by City Council by Ordinances Nos. 6381, 7583 and 7836; and
WHEREAS, Council believes that it is fitting and appropriate that such criteria,
standards, rules and regulations be updated to account for the realities of economic
development in the Twenty-First Century and that the same be codified for easy
reference by the public and those engaged in economic development efforts; NOW,
THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (Brackets
indicate matter being deleted; underscoring indicates new matter being added.)
SECTION 1.
Chapter 4 of Title XIV of the Pueblo Municipal Code, as amended, is hereby
amended by the addition of new sections 14-4-85.1, 14-4-85.3, 14-4-85.5, 14-4-85.7
and 14-4-85.9 thereto to read as follows:
Sec. 14-4-85.1 Sales and Use Tax Capital Improvement Projects Fund;
Definitions.
For purposes of Sections 14-4-85 through 14-4-85.9 of this Code, the
following terms shall have the following meanings:
(a) "Applicant" means the person, firm, partnership, corporation
or other entity that intends to develop a Project and files a written
application for Funds upon forms to be approved by the City Manager.
(b) "Capital Improvement Project" or "Project" means a project or
improvement of a permanent or fixed nature and includes the acquisition of
property (both real property and tangible personal property, except
inventory or property held for sale to customers in the ordinary course of
business), the construction, extension, remodeling or rehabilitation of
buildings or structures within which individuals are customarily employed
or which are customarily used to house machinery or equipment, and the
installation or extension of streets, sanitary sewer, water, or other utilities
required to serve a Project.
(c) "Construction Contract" means any and all contracts or other
arrangements, including, without limitation, "design-build" arrangements,
for construction work, labor, services and/or materials in excess of $50,000
for a Project.
(d) "Funds" means the sales and use tax revenues collected and
on deposit in the 1992–2016 Sales and Use Tax Capital Improvement
Projects Fund and the fair market value of real property owned by the City
to be transferred as part of the Project.
(e) "Job Creating" means the creation of employment for new
employees.
(f) "New employee" means a person employed in a primary job at
the Project after its substantial completion if such person performs duties
on a regular full-time basis at least thirty-five (35) hours each week. The
number of new employees at any stated time shall be determined on a
quarterly basis by dividing the sum of the aggregate number of new
employees on each business day of a quarter by the total number of
business days in a quarter.
(g) "Primary job" means a full-time position in private sector
employment by manufacturing, business, commercial or service industries
producing, assembling or distributing products or providing services
primarily or ultimately for sale, consumption, or use outside of the City and
County of Pueblo, Colorado.
(h) "Project Value" means the fair market value of the real
property and tangible personal property (except inventory or property held
for sale to customers in the ordinary course of business) comprising the
Project. The value of such property owned by the Applicant shall be its
original cost or the fair market value of the property as represented by the
Applicant, whichever is less. The value of buildings and structures
constructed on real property as part of the Project, whether new
construction or rehabilitation of existing buildings or structures, shall be
the construction contract price therefore and shall not include
expenditures commonly referred to as soft costs which include but are not
limited to costs associated with legal, accounting and realtor fees; loan
fees; sales and marketing; project signs; and rent lost during construction.
(i) "Professional Services" means architectural, engineering,
geotechnical, surveying, environmental, consulting, legal and other
professional services which are necessary or desirable in connection with
either a Project, prospective Project, shell building or acquisition and
development of an industrial park or development site.
Section 14-4-85.3 Sales and Use Tax Capital Improvement Projects Fund;
approval, criteria and standards.
(a) Application for Funds shall be filed in the office of the City
Manager for preliminary review. If the City Manager determines that the
application generally conforms with the provisions and intent of Sections
14-4-85 through 14-4-85.9, he shall forward the application and comments
of the City's administrative staff, if any, to City Council for consideration. If
the City Manager determines that the application does not generally
conform with the provisions and intent of this Ordinance, he will return the
application to the Applicant with the reasons for his determination. The
City Manager shall act in a timely and expeditious manner. All applications
for Funds shall include information required by the City to perform an
economic impact evaluation of the Project prior to approval of an
application.
(b) Each of the following criteria and standards must be met
before the City Council may by Resolution approve an application for
Funds:
(1) The Project may not be speculative in nature and the
Applicant must document to the City's satisfaction the Applicant's
financial ability and experience to complete the Project and fulfill the
Applicant's representations and commitments made with respect to
the Project, including, without limitation, the number of new
employees, the Project Value, and the Project's gross salary.
(2) The amount of Funds made available for the Project
shall not be greater than either:
(i) fifty percent (50%) of the Applicant's committed
annual gross salary (excluding employee benefits) for new
employees to be employed at the Project within two (2) years
after its substantial completion; or,
(ii) fifty percent (50%) of the Project value, as
determined by the City Council in its sole discretion.
(3) Employees employed by the Applicant within the City, at
the Pueblo Memorial Airport or at Pueblo Memorial Airport Industrial
Park (except employees transferred from outside the City and the
County for purposes of developing the Project) on the date of the
approval of the Applicant's application shall not be less than the
average number of employees employed by the Applicant within the
City and the Pueblo Memorial Airport during the twelve month period
immediately prior to such date as computed pursuant to Section 14-
4-85.1(f). For purposes of this subsection (b), the number of new
employees employed at a Project shall not include the number of
employees employed on the date of the application or the average
number of employees employed during the preceeding twelve (12)
months, whichever is greater.
(4) The Project must be consistent with the City's long-
range planning objectives for the City as a whole as well as the
location of the Project. Greater consideration shall be given for
Projects which enhance the City's tax base.
5) The Project may not be for an activity or business which
(
materially and substantially competes, as determined by the City
Council in the exercise of its sole discretion, with an existing activity
or business within the City.
(6) If a Project is to be located at the Pueblo Memorial
Airport or Pueblo Memorial Airport Industrial Park, except upon land
which has been annexed into the City of Pueblo or will be so
annexed in connection with the Project, (i) the Project may not result
in the relocation, in whole or in part, of an existing business or
industry from the City to the Pueblo Memorial Airport or Pueblo
Memorial Airport Industrial Park, and (ii) the fair market value of any
land or building transferred by the City to the Applicant shall be
included as part of the Funds made available to the Applicant for
purposes of subsection (b)(2) of this Section.
(7) If the application is for a loan of Funds, (i) the loan may
be at such interest rate as the City Council shall determine and must
be secured by a first deed of trust and/or security interest in all or a
portion of the Project or other collateral acceptable to the City,
having a reasonable fair market value in relation to the principal
amount of the loan, (ii) the term of the loan shall not exceed ten (10)
years, and (iii) the difference in the interest to be paid on the loan
and interest calculated by using the so-called "prime rate" of Wells
Fargo Bank, N.A. plus three percent (3%) (as determined by the
Director of Finance) shall be included as part of the Funds made
available to the Applicant for purposes of subsection (b)(2) of this
Section.
(8) All Construction Contracts shall be awarded by
competitive bidding. Based upon the nature of the construction
contract, Applicant shall invite general contractors holding Building
Contractors-A (General Unlimited) and/or Building Contractors-B
(General Limited) licenses having their principal place of business in
the City or County of Pueblo who are qualified and experienced to
perform construction work for the Project ("Local Contractors") to
submit bids. Applicant may invite other qualified general contractors
with their principal place of business outside of Pueblo County,
Colorado to submit bids. Applicant shall assure that the same scope
of work to be bid is timely furnished to each general contractor
invited to bid. For "design-build" or other contractual arrangements,
this requirement may be accomplished by a pre-bid conference or
other acceptable competitive bidding procedure which allows Local
Contractors a reasonable opportunity to participate in the
competitive bidding procedures. All bids will be received and
opened publicly. Applicant will use its best efforts in good faith to
award the construction to the lowest qualified bidder. A similar
provision with respect to local subcontractors and suppliers shall be
included as part of the construction contract between the Applicant
and the general contractor who shall use its best efforts in good faith
to engage local subcontractors and suppliers for such construction.
If an Applicant, its employees or agents negotiate with a general
contractor, subcontractor or supplier with respect to a Project prior
to competitive bidding, the Applicant shall not enter into any
Construction Contract with such general contractor, subcontractor
or supplier for the Project. "Negotiate" means to discuss, confer
upon, or arrange the terms and conditions of a Construction
Contract including, without limitation, obtaining estimated of
construction costs.
(c) The City Council may grant a variance to the requirements set
forth in subsection (b) of this Section, if the City Council determines in its
sole discretion that the Project will create employment for new employees
justifying the expenditure of Funds; provided, however, that such variance
and the grounds therefor shall be set forth in the Resolution approving the
application.
Section 14-4-85.5 Sales and Use Tax Capital Improvement Projects Fund;
Special Categories.
(a) Subject to the requirements of this Section, City Council may
authorize expenditure of monies in the Fund for the following items:
(1) Acquisition of land and construction of so-called shell
buildings or the acquisition, remodeling and renovation of existing
buildings for the purpose of making such buildings available for
Applicants or potential Applicants who meet the standards and
criteria of this Ordinance.
(2) Public infrastructure required to serve new major
governmental facilities consolidated or relocated from outside of
Pueblo County to an area within the City of Pueblo, as determined by
the City Council.
(3) Land acquisition, infrastructure development and
Professional Services associated therewith to establish and facilitate
the creation of primary jobs within the City of Pueblo and enhance
the City’s tax base, including but not limited to establishment and
development of one or more industrial parks or development sites.
(4) For payment and reimbursement of reasonable
expenses for contracted Professional Services associated with
solicitation of Applicants and development of proposals for Projects.
(5) For maintenance of shell buildings and rail spurs owned
by City, including maintenance of landscaping located upon the
property upon which shell buildings are located.
(b) The provisions of Section 14-4-85.3(b)(1) through (b)(3), and
(b)(7) shall not apply to the expenditure of funds authorized by this
Section.
Section 14-4-85.7 Sales and Use Tax Capital Improvement Projects Fund;
Training.
In order to provide a trained local workforce to match new or
expanding company's job skills for specific permanent full-time primary
jobs there is hereby created the Pueblo primary job training program
("Pueblo Program").
(a) The Pueblo Program may include any of the following, or any
combination thereof:
(1) pre-employment training of primary job workers;
(2) training of primary job workers upon first being hired.
(b) The Pueblo Program shall be instituted only when the
sponsoring new or expanded company has identified specific permanent
full-time primary job openings and has agreed to give graduates of the
Pueblo Program hiring priority and to pay a minimum wage for each
primary job of at least $10 per hour or the minimum hourly wage under
Colorado First/Existing Industry Customized Training Programs, whichever
is greater, plus fringe benefits.
(c) Training shall not be provided when a trained or experienced
work force, seeking employment, already exists in the City of Pueblo.
(d) A company must agree to act as sponsor in the development
and implementation of the training program. Training programs shall be
designed with the direct cooperation and agreement of the sponsoring
company.
(e) Forty percent of training costs must be financed by the
sponsoring company in cash or in-kind expenditures. The company shall
be encouraged to participate with in-kind contributions of training space,
training equipment, training supplies and technical assistance.
(f) Training programs shall last no longer than the time required
to provide workers with the primary job skills required by the sponsoring
company.
(g) Funds allocated for the Pueblo Program shall not be used to
pay wages or stipends to trainees during a training session but may be
used for the payment of all direct costs of the training program. Direct
costs shall include:
(1) Instructor wages, travel and per diem allowances;
(2) Lease of training equipment;
(3) Lease of training space;
(4) Purchase of training supplies;
(5) Development of instructional materials; and
(6) Administrative costs directly associated with each
training session.
(h) Existing vocational or technical education facilities and
resources located in the City of Pueblo shall be used in the Pueblo
Program whenever such resources are available. The Pueblo Program
shall be coordinated through existing vocational or technical education
institutions located in the City of Pueblo.
(i) The maximum training grant award for each employee under
the Pueblo Program shall not exceed $800.00, and shall be made in a
manner to supplement grants made available to the sponsoring company
under the Colorado First/Existing Industry Customized Training Programs,
or, if such grants are not so made available to the sponsoring company, the
Pueblo Program grants may be paid directly to the existing vocational or
technical education institutions providing and furnishing the training
program.
Sec. 14-4-85.9 Sales and Use Tax Capital Improvement Projects Fund; Anti-
fraud and Performance Requirements.
(a) When an application for Funds is approved by Resolution
adopted by the City Council, the Applicant as a condition precedent to the
receipt of any of the approved Funds, shall within sixty (60) days after the
date of such approval, or such later date as the City and Applicant may
mutually approve, enter into a written agreement with the City which
contractually commits and binds Applicant to, and secures the
performance of, all criteria and standards of this Ordinance or any other
variance thereto approved by the City Council, and all representations
contained in the Applicant's application or otherwise made to the City by
Applicant. The agreement shall contain a provision whereby the Applicant
represents and warrants that no person, entity or organization has been
employed or retained or will receive or be paid, directly or indirectly, any
commission, percentage, contingent fee or any other remuneration
payment or receipt of which is contingent upon approval of its application;
provided, however, that this representation and warranty is not intended to
apply where (I) a customary and usual fee or commission is paid to a real
estate broker with respect to sale or lease of a shell building or other
facility constructed using Funds which is located within the secure area of
Pueblo Memorial Airport and (II) the real estate broker to whom the fee or
commission is paid has been selected by the City based upon
qualifications following a duly advertised request for proposals. For
breach or violation of such warranty, the City shall have the right to
terminate the agreement, or recover the full amount of such commission,
percentage, contingent fee or other remuneration, or to seek other such
remedies legally available to City, which remedies shall be cumulative.
(b) City staff designated by the City Manager shall monitor the
compliance of all Applicants receiving Funds with the requirements of their
employment commitment agreement and report the results of such
monitoring activities in writing to the City Council at least quarterly. Such
monitoring shall include: the number of full-time employees compared with
employment commitments; the salaries and benefits of employees
compared to salary and benefits set forth in the employment commitment
agreements; the repayment of funds and the amount thereof if required
because of the failure to meet employment commitments; and, such other
matters as the City Council may designate by Resolution.
(c) Any action taken by the City Council relating to an application
for Funds is, and shall constitute, a legislative measure. No person or
entity shall have a right to or be eligible to receive any Funds except as
specifically authorized by Resolution of the City Council. Notwithstanding
that an application for Funds may meet and comply with the criteria and
standards of this Ordinance, the City Council reserves the right in its sole
and absolute discretion to approve, reject, disapprove, or approve with
modification any such application. No recourse shall be had against the
City, the City Council or any officer, employee or agent of the City, by, or be
available to, any Applicant or other person or entity resulting from or
arising out of the filing of an application for Funds or the rejection,
modification, approval or nonapproval of an application by the City
Council. The filing of an application by an Applicant shall constitute and be
construed to constitute an expresses waiver and release of the City, City
Council, and officers, employees and agents of the City from any such
recourse and all other claims or liabilities with respect to the application or
any action taken or not taken thereon by the City or the City Council.
(d) The provisions of this section requiring a written agreement
with the Applicant shall not apply to the City when the City is undertaking:
acquisition and construction of shell buildings, acquisition and renovation
of shell buildings, provision of Professional Services authorized by Section
14-4-85.5(a)(5), maintenance of City-owned shell buildings or infrastructure
authorized by Section 14-4-85.5(a)(6), or acquisition and development by
City of sites or facilities authorized by Section 14-4-85.5(a)(3).
SECTION 2.
The City finds and determines that (a) the acquisition and construction or
remediation of shell buildings is necessary to provide adequate and available facilities
for attracting and creating Primary Jobs in a timely manner; (b) the redevelopment of
underutilized urban areas within the City and provision of necessary infrastructure to
facilitate the creation of Primary Jobs will have a greater job-creating effect as new
employees will utilize other businesses surrounding the redevelopment zone and will
enhance the City's tax base; and (c) location of a new government facility within the City
will create employment opportunities for the residents of Pueblo and constitutes a
primary job-creating capital improvement project within the meaning of Section 14-4-
85(f) of the Pueblo Municipal Code.
SECTION 3.
This Ordinance may be rescinded, modified or amended, in whole or in part, at
any time by ordinance duly adopted by the City Council.
SECTION 4.
If any section, paragraph, clause or provision of this Ordinance shall for any
reason be held to be invalid or unenforceable, the invalidity or enforceability of such
section, paragraph, clause or provision shall not affect any of the remaining provisions
of this Ordinance.
SECTION 5.
Ordinances Nos. 6381, 7583 and 7836 are hereby repealed provided that such
repeal shall not affect any contract, obligation, right, remedy or privilege granted or
existing prior to the effective date of this Ordinance.
SECTION 6.
This Ordinance shall become effective immediately upon final passage and
approval.
INTRODUCED: August 27, 2012
BY: Steve Nawrocki
COUNCIL PERSON
PASSED AND APPROVED: September 10, 2012
Background Paper for Proposed
ORDINANCE
DATE: AGENDA ITEM # R-3
August 27, 2012
DEPARTMENT:
Law Department
Thomas J. Florczak, City Attorney
TITLE
AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF THE PUEBLO
MUNICIPAL CODE RELATING TO AND ESTABLISHING CRITERIA, STANDARDS,
RULES AND REGULATIONS FOR THE APPROPRIATION AND EXPENDITURE OF
FUNDS IN THE 1992-2016 SALES AND USE TAX CAPITAL IMPROVEMENT
PROJECTS FUND AND REPEALING ORDINANCES NOS. 6381, 7583 AND 7836
ISSUE
Should City Council adopt an ordinance codifying and updating the criteria, standards,
rules and regulations for expenditure of the so-called "1/2 Cent Sales Tax" funds?
RECOMMENDATION
Approve the Ordinance.
BACKGROUND
The 1992-2016 Sales and Use Tax Capital Improvement Project Fund (the "Fund"),
commonly referred to as the "1/2 cent tax fund," was established by the voters of the
City years ago, and extended several times, for the purpose of funding primary job-
creating capital improvement projects within the City and at Pueblo Memorial Airport.
By those voter-approved ordinances, the people also delegated to City Council the
authority and direction to establish by ordinance criteria, standards, rules and
regulations for the appropriation and expenditure of monies in the Fund, consistent with
its purpose.
City Council adopted such criteria, standards and regulations by Ordinance No. 6381,
later amended by Ordinance Nos. 7583 and 7836. None of these ordinances were
codified as part of the Pueblo Municipal Code, and they are difficult to work with and
appear to need updating to remain effective based upon the current realities of
economic development.
The Ordinance under consideration does two things: first, it codifies the existing criteria
and policies adopted by Council over time; secondly, it adds new provisions which grant
Council additional flexibility or clarifies the criteria. These changes are summarized as
follows:
Redefines a new employee as one working at least 35 hours a week, rather than
32.
Authorizes Building Contractors – B licensees to competitively bid on projects for
which they are qualified. The Criteria Ordinance previously restricted invitations
to only "A" Contractors.
Authorizes expenditures for land acquisition, infrastructure development and
professional services associated therewith for development of industrial parks or
development sites to establish and facilitate the creation of primary jobs.
Defines "Professional Services" as architectural, engineering, geotechnical,
surveying, environmental, consulting, legal and other professional services which
are necessary or desirable in connection with either a project, prospective project
or the industrial park or site development and clarifies that expenditures of funds
for these project costs are permitted.
Authorizes expenditure for maintenance of shell buildings and rail spurs owned
by the City and maintenance of landscaping located on shell building properties.
Permits, on a very limited basis, the payment of usual and customary fees or
commissions to competitively selected real estate brokers in connection with the
sale or lease of a building or facility located in the secure area of Pueblo
Memorial Airport and which is or has been constructed with ½ cent funds.
FINANCIAL IMPACT
There are approximately $30 million dollars of unobligated funds in the Fund. The City
general fund has been indirectly subsidizing economic development by providing,
through City personnel, engineering, technical and other professional services for
economic development prospects. This ordinance will permit the hiring of such
professional services payable instead from the ½ cent sales tax. Additionally, there is
no provision in the current criteria ordinances for maintenance of shell buildings and rail
spurs at the Airport Industrial Park. By authorizing these expenditures to be made from
the 1/2 cent sales tax, the general fund will not provide subsidies for economic
development.