17-ECONOMIC DEVELOPMENT - AD VALOREM TAX ABATEMENT POLICY

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CITY COUNCIL AGENDA ITEM BRIEFING SHEET Submittal Date: Originating Department: Presented By: Agenda Item No.: 07/16/12 Council Date: City Manager John Godwin 17. 7/23/12 RECOMMENDED MOTION: POLICY ISSUE(S): Economic Development BACKGROUND: For many years the city has maintained a very detailed and very specific ad valorem tax abatement policy. Both the county and PJC adopted and maintained the very same policy, which was developed over a long period of time and with much input from a number of sources. This single policy approach promotes consistency and predictability in economic development negotiations, which are typically the responsibility of the PEDC, which, within certain restrictions, acts on behalf of all three jurisdictions. Recently, based on state law, the city was required to re-adopt its abatement policy to maintain its authority. At that time, the city attorney researched policies from other cities and noted the trend in many municipalities and counties to adopt much shorter policies with more freedom to negotiate on a case by case basis. He prepared a new policy, reducing the old one in complexity, and also eliminating specific tables that directly related job creation to abatement eligibility and scope. Both Lamar County and Paris Junior College expressed some initial concern over making these major changes, and we spoke briefly about the proposed new policy last month at a PEDC meeting. In response I recommended that the city council go ahead and at least temporarily readopt the old policy as is so we would have a valid one in place should a significant ED opportunity present itself. In the meantime, a committee consisting of the county judge, city manager, chief appraiser, tax collector, and college president scheduled a meeting to try to come to a consensus. We met on July 12 and both the county and the college reiterated their preference for all three jurisdictions to have the same policy rather than two or three different ones, and also expressed their plan to leave the existing policy in place as is, with no changes. The PEDC director also indicated he preferred keeping the old policy, as it made the process of requesting and granting abatements more predictable and consistent. At this point, the city needs to adopt the new draft policy, make additional modifications to the new draft, or take no action and leave the existing policy in place. BOARD/COMMISSION RECOMMENDATION: EXHIBITS: Resolution, Guidelines & Criteria for Granting Tax Abatements ACTION: BUDGET INFO: ❑ Financial Report ❑ Minute Order Expense $ ❑ Department Report Z Resolution Budgeted Amt. $ ❑ Presentation ❑ Ordinance yTD Actual $ ❑ Public Hearing ❑ Other Acct. Name Acct. Number FISCAL NOTES: City of Paris 5n Revised 6/20/12 .7