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Home My WebLink About08-City Administrator ll""'" CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Fred Wilson, City Administrator Subject: An Ordinance of the City of San Bernardino amending section 3.44.131 of Dept: City Administrator's Office the San Bernardino Municipal Code relating O ,.. , I'> , . . ~ L to Utility User's Tax Rebate Program as it Date: January 14, 2002 tl1 \of. I i ~ Ii applies to new and expanding businesses. MICC Meeting Date: 02/19/02 Synopsis of Previous Council Action: 03/0612000 - Ordinance MC-J065 adding a section 3.44.131 to the municipal code and establishing a UUT Rebate Program for new businesses was adopted. 08/0712000 - Ordinance number MC - 1078 adding a section 3.44.131 to the municipal code and establishing a UUT Rebate Program for existing businesses was adopted. 11108/2001- Legislative Review Committee recommended the amendment to full Council for approval. Recommended Motion: That said ordinance be laid over for final adoption. Contact person: TPM ~"l<pr Phone: Y~l?? Supporting data attached: St.ffR<:port & Ordin.nce Ward: All FUNDING REQUIREMENTS: Amount: $26,200 Source: (Acct. No.) 001- 092 - 5502 (Arrt n,::u::r:riptinn) Nnn nPJ'~rtrnpnt!ll - ProfessionallContractual Services I Finance: ~~tf~ Council Notes: Agenda Item Nc 110/ f pt~i~~ CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect: An Ordinance of the City of San Bernardino amending Section 3.44.131 of the San Bernardino Municipal Code relating to Utility User's Tax Rebate Program as it applies to new and expanding businesses. Backl!round: In March and August of 2000, the Mayor and Common Council adopted Ordinance No.'s MC- 1065 and MC 1078 adding section 3.44.131 to the Municipal Code establishing the Utility User's Tax Rebate Program for new and expanding businesses. The purpose of this amendment is to recommend changes to the section to provide an exemption to manufacturing and distribution employers who are high job generators but do not necessarily pay high wages. The ordinances read: New businesses that accomplish one ofthe following are eligible for a rebate: a) Create 5 or more new full-time jobs (50% of such new jobs must pay at least $25,000 per year in wages and/or commissions). Year 5-49 jobs 50+ iobs 1 75% 80% 2 50% 60% 3 25% 40% b) Increase property value by 25% or generate $40,000 in sales tax revenue. Year Rebate Amount 1 75% 2 50% 3 25% Expanding businesses must meet the criteria of two of the following categories in order to receive a rebate of 75% after the first year, 50% after the second year, and 25% after the third year: a) Creation of 5 or more new, permanent full time jobs (50% of such new jobs must pay at least $25,000 per year in wages and/or commissions). b) Expansion must increase building valuation by 25% or business relocates to new facility with 25% more square feet. c) Generate $10,000 more in sales or use tax revenues to the City of San Bernardino. Additional Incentive: As an added incentive for creating jobs for city residents, businesses (new or expanding) can earn an extra 1 % rebate for each San Bernardino resident that is hired. Both ordinances include similar language in order to determine eligibility; specifically, when "at least 5 or more jobs are created, 50% of such new jobs must pay at least $25,000 per year in wages and/or commissions," For example, Company A creates 6 new jobs, 3 of the new jobs pay wages of $25,000 or more - Company A qualifies. Company B creates 200 new jobs, 75 of the new jobs pay a minimum of $25,000 - Company B does not qualifv. Company B must create at least 100 new jobs that pay wages of $25,000 or more to meet the wage criterion. Economic Development Agency staff process the UUT Rebate Applications. Upon reviewing the first application received from a manufacturing business by the name of Juice Harvest, it was discovered that the $25,000 per year in wages and/or commissions might be problematic for some types of businesses. Understandably, the program was created to serve as a business recruitment and retention incentive to encourage the expansion and/or creation of significant numbers of higher-wage jobs. In practice, however, the wage criterion is not commensurate with manufacturing or distribution facility wages. Manufacturers and distribution facilities are typically high job generator and high utility users, but do not necessarily pay high wages to production staff. In most cases, the administration staff and supervisors are the higher-wages jobs, which could be less than 50% of the total employees. For the above reasons, EDA requested that sections of 3.44.131 that require $25,000 per year in wages to qualify be amended to exclude manufacturing and distribution businesses from that criterion. In November of last year, the Legislative Review Committee recommended that the item amending the ordinance be referred to the full Council. Italics in the attached Ordinance denote the recommended changes. Financial Impact: It is estimated that EDA will receive 4 more applications during the remainder of this fiscal year. The average rebate amount is estimated at $6500 this fiscal year. $26,200 is available for these rebates in account #001-092-5502 Non Departmental- Professional/Contractual Services. Thus far, Juice Harvest is the only company to apply for and receive a rebate. The rebate amount was $6288. Recommendation: That said Ordinance amending Section 3.44.131 of the San Bernardino Municipal Code be laid over for final adoption. CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Fred Wilson, City Administrator Subject: An Ordinance of the City of San Bemardino amending section 3.44.131 of the San Bernardino Municipal Code relating to Utility User's Tax Rebate Program as it applies to new and expanding businesses. Dept: City Administrator's Office Date: January 14, 2002 MICC Meeting Date: 02/19/02 SynopsiS of Previous Council Action: 03/06/2000 - Ordinance MC-I065 adding a section 3.44.131 to the municipal code and establishing a UUT Rebate Program for new businesses was adopted. 08/07/2000 - Ordinance number MC - 1078 adding a section 3.44.131 to the municipal code and establishing a UUT Rebate Program for existing businesses was adopted. 11108/2001 - Legislative Review Committee recommended the amendment to full Council for approval. Recommended Motion: That said ordinance be laid over for final adoption. IJ/:.;:rn Contact person: Tp,; l'lolrpr Phone: Y<; 1" Supporting data attached: SlaffReport 8.: Orclinance Ward: All FUNDING REQUIREMENTS: Amount: $26,200 Source: (Acct. No.) 001- 092 - 5502 (Ar-rt nj::u::::~rirtinn) Nnn npr~rhnpnt~1 Professional/Contractual Services , /7 / F. . .;?;., / // / mance. ~/('t{7<_/0'/.//..-_ Council Notes: Agenda Item No. 33 ~/JqJb;r CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect: An Ordinance of the City of San Bernardino amending Section 3.44.131 of the San Bernardino Municipal Code relating to Utility User's Tax Rebate Program as it applies to new and expanding businesses. Backl!round: In March and August of 2000, the Mayor and Common Council adopted Ordinance No.'s MC- 1065 and MC 1078 adding section 3.44.131 to the Municipal Code establishing the Utility User's Tax Rebate Program for new and expanding businesses. The purpose of this amendment is to recommend changes to the section to provide an exemption to manufacturing and distribution employers who are high job generators but do not necessarily pay high wages. The ordinances read: New businesses that accomplish ~ of the following are eligible for a rebate: a) Create 5 or more new full-time jobs (50% of such new jobs must pay at least $25,000 per year in wages and/or commissions). Year 5-49 iobs 50+ jobs I 75% 80% 2 50% 60% 3 25% 40% b) Increase property value by 25% or generate $40,000 in sales tax revenue. Year Rebate Amount I 75% 2 50% 3 25% Expanding businesses must meet the criteria of two of the following categories in order to receive a rebate of 75% after the first year, 50% after the second year, and 25% after the third year: a) Creation of 5 or more new, permanent full time jobs (50% of such new jobs must pay at least $25,000 per year in wages and/or commissions). b) Expansion must increase building valuation by 25% or business relocates to new facility with 25% more square feet. c) Generate $ I 0,000 more in sales or use tax revenues to the City of San Bernardino. Additional Incentive: As an added incentive for creating jobs for city residents, businesses (new or expanding) can earn an extra I % rebate for each San Bernardino resident that is hired. Both ordinances include similar language in order to determine eligibility; specifically, when .hat least 5 or more jobs are created, 50% of such new jobs must pay at least $25,000 per year in wages andlor commissions." For example, Company A creates 6 new jobs, 3 of the new jobs pay wages of $25,000 or more - Company A qualifies. Company B creates 200 new jobs, 75 of the new jobs pay a minimum of $25,000 - Company B does not aualifv. Company B must create at least 100 new jobs that pay wages of $25,000 or more to meet the wage criterion. Economic Development Agency staff process the UUT Rebate Applications. Upon reviewing the first application received from a manufacturing business by the name of Juice Harvest, it was discovered that the $25,000 per year in wages and/or commissions might be problematic for some types of businesses. Understandably, the program was created to serve as a business recruitment and retention incentive to encourage the expansion andior creation of significant numbers of higher-wage jobs. In practice, however, the wage criterion is not commensurate with manufacturing or distribution facility wages. Manufacturers and distribution facilities are typically high job generator and high utility users, but do not necessarily pay high wages to production staff. In most cases, the administration staff and supervisors are the higher-wages jobs, which could be less than 50% of the total employees. For the above reasons, EDA requested that sections of 3.44.131 that require $25,000 per year in wages to qualify be amended to exclude manufacturing and distribution businesses from that criterion. In November of last year, the Legislative Review Committee recommended that the item amending the ordinance be referred to the full Council. Italics in the attached Ordinance denote the recommended changes. Financial Impact: It is estimated that EDA will receive 4 more applications during the remainder of this fiscal year. The average rebate amount is estimated at $6500 this fiscal year. $26,200 is available for these rebates in account #001-092-5502 Non Departmental- ProfessionaliContractual Services. Thus far, Juice Harvest is the only company to apply for and receive a rebate. The rebate amount was $6288. . Recommendation: That said Ordinance amending Section 3.44.131 of the San Bernardino Municipal Code be laid over for final adoption. ~ ORDINAN@~ , AN ORDI:'iANCE OF THE CITY OF SAN BERNARI>INO AMENI>ING SECTION 3.44.131 OF THE SA:'; BERNARDINO MUNICIP AL CODE RELATING TO llTlLlTY liSER'S TAX REBATE PROGRAM AS IT APPLIES TO NEW AND EXPAND1:\'G BUS1:'iESSES. THE :\'I.A YORAND COMMON COUNCIL OF THE CITY OF SAN BERNARI>INO DO ORDAI:'i AS FOLLOWS: .' -I 5 Section l. Section 3.44.131 A I of the San Bernardino Municipal Code is hereby 6 amended in its entirety to now read as follows: 7 A. Notwithstanding any other provision of this Chapter. in order to attract new businesses that provide signiticant numbers of higher-wage jobs. the following Utility User's Tax Rebate Program is hereby established: 8 9 1. Any new business that creates, after January I. 2000. between 5 to 49 ne\v, pellllanent full-time jobs within the City (50% of such new jobs shall pay at least $25.000 per year in \\'ages and/or commissions. except that the dollar requirement for said jobs shall not apply to nllllllifaclllring amI distribution businesses) shall be eligible for a rebate on the amount of Utility User's Tax. paid by such business on electrical. gas, video. and telephone communication services. imposed by this Chapter according to the following schedule: 10 11 12 13 a. First vear.- 75% rebate 1-1 b. Seco;ld veal' -. 50% rebate c. Third year -- 25% rebate 15 d. FOUlth and subsequent years -- No rebate. 16 Section 2. Section 3.4.:\.131 A 2 of the San Bernardino lvlunicipal Code IS hereby amended in its entirety to now read as follows: 17 2. Any new business that creates. alier January 1, 2000. 50 or more ne\\. permanent full-time jobs within the City (50% of such new jobs shall pay at least $25.000 per year in wages and/or commissions. except that the dol/ar requirement for said jobs sltal/ not app~1' to fmll1/ifacturing and distribution businesses) shall be eligible for a rebate un the amount of Utility User's Tax, paid by such business on electrical. gas, video, and telephone communication services. imposed by this Chapter according to the following schedule: IS 19 20 21 22 a. First year .- 80% rebate b. Second year -. 60% rebate c. Third Veal' .. 40% rebate d. Fourtll and subsequent years -- No rebate. 7' _J 24 Section 3. Section 3.4.:\.131 B 1 (b) of the San Bernardino Municipal Code is hereby 25 atnended in its entirety to now read as follo\vs: 26 B. Not withstanding any other provision of this Chapter, in order to encourage the physical expansion and/or creation of signiticant numbers of higher-wage jobs by existing San Bernardino businesses. the following Utility User's Tax Rebate Program is hereby established to complement the program recently adopted 1',)1' nc\\ businesses. 27 28 IITOj,II'liT,\XIUJI,ORIlI ~o.3.3. / :f-II f/(J ,-:- AN ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING SECTION 3.44.131 OF THE SAN BERNARDINO MUNICIPAL CODE RELATING TO UTILITY USER'S TAX 2 REBATE PROGRAM AS IT APPLIES TO NEW AND EXPANDING BUSINESSES. , .) 4 5 I. Any business currently operating in San Bernardino shall be eligible for a Utility User's Tax rebate if, after January I, 2000, it meets the criteria of a least two of the categories below: b. Category B: Job Criteria 6 The business creates and maintains at least 5 new, permanent full- time jobs (50% of such new jobs shall pay at least $25,000 per year 7 in wages and/or commissions, except t/rat the dollar requirementfor said jobs shall not apply to manufacturing and distribution 8 businesses) in addition to the jobs already existing at the current location(s) within the city, and sustains that job increase over the 9 previous 12 month period prior to the application for the rebate. 10 Section 4. Section 3.44.131 B 2 of the San Municipal Code is hereby amended in its entirety to now read as follows: II 12 13 14 15 16 17 18 19 1// 20 //1 21 //1 22 1// 23 1// 24 //1 25 1// 26 //1 27 III 28 //1 HTC/js [UUT AXREB.ORD] ') Any business currently operating in San Bernardino, and not qualified under Subsection (I) above or Subsection (3) below, shall be eligible for a Utility User's Tax rebate ifit creates, after January 1,2000 and maintains at least 50 new, permanent full-time jobs (50% of such new jobs shall pay at least $25,000 per year in wages and/or commissions, except t/rat the dollar requirementfor saidjobs shall not apply to manufacturing and distribution businesses) in addition to the jobs already existing at the current location(s) within the city, and sustains that job increase over the previous 12 month period prior to application for the rebate. If qualified, the business shall be eligible for a rebate of Utility User's Tax paid on the following scale: (i) I st year -- 75% rebate (ii) 2nd year -- 50% rebate (iii) 3rd year - 25% rebate (iv) 4th and subsequent years - no rebate. 2 I AN ORDINANCE OF THE CITY OF SAN BERNARDINO AMENDING SECTION 3.44.131 OF THE SAN BERNARDINO MUNICIPAL CODE RELATING TO UTILITY USER'S TAX 2 REBATE PROGRAM AS IT APPLIES TO NEW AND EXPANDING BUSINESSES. 3 I HEREBY CERTIFY that the foregoing Ordinance was duly adopted by the Mayor and 4 Common Council of the City of San Bernardino at a , 2002, by the following vote, to wit: meeting thereof, held on the 5 _ day of 6 COUNCIL MEMBERS: 7 ESTRADA 8 LIEN 9 MCGINNIS 10 SCHNETZ II SUAREZ 12 ANDERSON 13 MC CAMMACK 14 15 16 AYES NAYS ABSTAIN ABSENT City Clerk 17 18 19 20 21 22 The foregoing Ordinance is hereby approved this _ day of ,2002. JUDITH V ALLES, Mayor City of San Bernardino 23 Approved as to form and legal content: 24 JAMES F. PENMAN 25 City Attorney 26 Li.f~ 28 0 27 HTe/js [VVT AXREB.ORD] 3 "iJ:;' -, *~:FC)R OFFI.!=E.USE ONLY - NOT.',A PUBLlCDOCU...nrr*~~t: A ::{4-:..~~,,~. :~. .:~(f;.::;/:<< '<13~\' -, r.~7t~'\~~r:.<. ~.. ',: ~~_.~~_}(.:,,~,;~1:,:~:- -:':.~~.~~';~.g~:;.t~:.;JJ)-,~~:{-:f~-. ,,- "CITY OF SAN BERNARDINO :'CITY CLERK'S OFFICEv,~,-~:,,"'-" ,- '.,' RECORDS & INFORMATION MANAGEMENT PROGRAM .:.,...;. AGENDA ITEM TRACKING FORM Meeting Date/Date Adopted: ~/ 'f,/ 0 2--- Item No. Resolutio~din;~. /J1 C- - 111'7 Ordinance Urgency: Yes Effective Date: (-1/- CJ 'l-- TerminationlSunset Date: Vote: Ayes: I L '7 'I :I" c;, 7 Nays: ..e-- /1/7'// Abstain: ("l Absent: e- Date Sent to Mayor: ?/~I () 2- Date Returned from Mayor: 3/0/'02-- Date of Mayor's Signature: :J /5/02--- Date of Clerk's Signature: 5/G/o 2- Date Summary Sent to Attorney: ' .J / si 11 L- Date Summary Return~ fr~m Attorney: 3 / , Date Published: - ?- 0 2.- Meeting Type: ~ . oe5~ L --,' Continued FromfTo & Item No. ~ rNQ'>) /1~ _ '5-5-0 '-- Date Seal Impressed: 3/(;~2.- " t' Date Sent for Signature: Expiration Date: Copies Distributed To Whom: Date Returned: / V 5:,11. ./ v ./ Exhibits Complete & Attached to Resolution/Ordinance: Rem i nder Letter Sent: Reminder Letter Sent: Reminder Letter Sent Request for Council Action & Staff Report Attach Yes ~_ 3~D~ ~' No Ready to File: Date: DOCtIMENT lOCATION! ~A.IMda "'TtKtcin&Fonn.CCFomtNo.l11.1.M~ 1210411996