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HomeMy WebLinkAboutCity Council Committees - Economic Development Corporation - 09/30/1983 p 1 ECONOMIC DEVELOPMENT CORPORATION Minutes The first meeting of the Economic Development Corporation was held at 8:15 a.m. on September 30, 1983. The following members of the Board of Directors were introduced by City Administrator Richard Cushing: Leo Powers, Michael Miller, Council Members Tim Leahy and Tom Bailey. Board Member Berne Biteman of the City Council was not present. Also introduced were William Tonkin of Roberts, Shefelman, Bond Counsel ; P. Stephen DiJulio, City Attorney; Tony McCarthy, City Finance Director; and Marie Jensen, City Clerk. It was determined that all present had received books containing copies of the Bylaws, Ordinance 2419, creating the City of Kent Economic Development Corporation, the Industrial Development Revenue Bond Act (Chapter 39.84 RCW) and the Industrial Development Bond Policy and Eligibility Standards. Bylaws ,1 H Questions about the bylaws were answered by DiJulio and Tonkin. It was determined that State statutes prohibit the use of any of the City's funds or staff time for Corporation business. The City cannot be held responsible for debt for bonds issued by the Corporation. The Corporation is the machine for issuing the Industrial Development bonds. It was pointed opt that when bonds are issued, the applicant then reimburses the Corporation for any expenses incurred. The City may not lend money to the Corporation even if interest was to be charged. Regarding personal liability, it was stated that the City would check to see if the Corporation could be covered in the existing insurance pool , and if not, liability insurance would be purchased. Assurance was given that serving on the board of this Corporation would- not make Public Disclosure statements necessary. By mututal consent, the bylaws were adopted as presented. -1- Election of Officers The following officers were elected: Chairman of the Board -Tim Leahy Vice Chairman -Mike Miller Treasurer- Tony McCarthy Secretary- Marie Jensen. Resolutions The following resolutions were introduced and adopted: 1983 - 1 , Directing the Finance Director to prepare policy regarding Article IV: contracts, loans, checks, and deposits; and Article V: fiscal year. (A report is to be made to the Board at the next meeting. ) 1983 - 2, Appointment of Roberts, Shefelman as Bond Counsel. 1983 - 3, Appointment of Kent City Attorney as General Counsel . 1984 - 4, Adoption of Industrial Development Bond Policy and Eligibility Standards and application form. It was determined that the application form should be changed to read General Counsel instead of City Attorney. It was noted that the application fee was $1 ,500, and if this was insufficient to cover the costs incurred by the Coporation, an agreement would be made with the applicant to reimburse the City for staff expenses. RCW 39.84 was distributed with the books prior to this meeting. DiJulio distributed copies of Chapter 51 covering the recent amendments to RCW 39.84.020 regarding the TEFRA regulations and the requirement for registering bonds. There was some discussion as to the differences between corporations formed under Washington State Regulations and National Industrial Development Bond financing. Tonkin noted that the types of projects which could be financed in -2- this state were limited to those listed in the State statutes and that the Federal tax law was broader than State law and allowed other projects to be financed, both exempt projects as well as non-exempt. He pointed out that "Industrial Park" was narrowly defined in the State law and that office buildings would not qualify. He noted that the Corporation had to issue Industrial Revenue Bonds or plan to do so by Resolution before the applicant incurs project costs and that interim financing was ordinarily the responsibility of the applicant. He also noted that the Corporation was not responsible for marketing the bonds, that the applicant would have this lined up beforehand. It was noted that industry might be attracted to Kent by the fact that our public corporation could issue tax-exempt bonds for certain facilities but that neighboring cities could offer the same thing if they form an Economic Development Corporation. Cushing noted that strategies for marketing could be developed such as an expedited permit process. DiJulio determined that costs of sewer or waterlines could not be changed for potential applicants, but it was noted that some of the application requirements might be changed later. Tonkin noted that the City's Planning Department approval is required and that our Industrial Development Plan would be a means of expediting applications. It was noted that by forming this corporation, Kent has expressed its interest in economic development and that many cities had not done so. DiJulio stated that the charter for this Corporation had been filed with the State and that copies of Kent's standards and application form would also be sent. Cushing stated that the application fee has been based upon the Port of Seattle's fee and that in California the corporation makes a profit since the corporation handles the interim financing, manages the cash flow and the investments. The profit is then used for civic cultural improvements. It was noted that bond rates would fluctuate with the market, and at present the rate was approximately eleven percent. -3- Cushing noted that the City's Economic Development Plan had been prepared by the Economic Development Council of Puget Sound and had cost $7,000. The plan addresses the following questions: 1 . What kinds of projects would be in our best interests? 2. What would prompt a firm to decide to locate in Kent? 3. What kind of incentives could the City offer to attract the firm? He pointed out the "City's best financial interest" was not clear and that additional work would be done on this. It was determined that Standard Industrial Classifications categories could not determine what kinds of projects were best for Kent, that this must be based on the characteristics of the project. In this analysis, it was found that high-tech type firms would not generate enough sales tax and that warehousing is of questionable benefit to the community. Bailey noted that housing and retail services were important for real estate tax and for sales tax revenue. Cushing noted that the Planning Department would work further on completing the study project using Revenue Sharing funds to develop a "request for proposals" approach. The next meeting was scheduled for Friday, November 18, at 8:00 a.m. This meeting was adjourned at 9:30 a.m. Marie Jensen, City Clerk Secretary of the Board � Jr3 9462-52A -4- ��. c,k, CITY OF KENT ECONOMIC DEVELOPMENT CORPORATION Progress Report October 4, 1985 The City of Kent Economic Development Corporation held its first meeting on September 30, 1983 and has been in existence for two full years. Some monthly meetings were cancelled due to a lack of business but special meetings made up for this. In the 24-month period, 24 meetings were held, ten of which were special meetings. Fifteen applications have been filed through September 30, 1985 totalling $47. 3 million. Bonds have been sold in the • amount of $17. 7 million for the five applications which have closed. The Corporation has adopted 32 resolutions during this two year period. The City Council conducts public hearings for each applica- tion in accordance with TEFRA regulations. Issuance of bonds are approved by Council resolutions. Six public hearings have been conducted by the Council and eleven City resolutions have been enacted. Four special meetings of the City Council have been required to accomplish this. Marie Jen n, CMC City Clerk, Secretary of the Board Mayor, Council, Staff