Loading...
HomeMy WebLinkAboutCity Council-Agenda Packets-7/22/2010~~~~ ~~~ City of Colleyville ~ `~~'., ~--~" ,`i~ Agenda ,,.,.,, City Council Worksession City Hall 100 Main Street Colleyville, Texas 76034 817. 503.1000 vvww.colleyville.com Thursday, July 22, 2010 6:00 PM Executive Conference Room, 3rd Floor 1. CALL TO ORDER 2. PRESENTATION AND DISCUSSION 2a Discussion of potential refunding of General Obligation, Certificates of Obligation and Tax Increment Financing debt issues 2b Discussion of potential refunding of callable Water and Sewer Revenue Bonds 2c Discussion of City of Colleyville's guidelines and criteria for economic development incentives 3. ADJOURNMENT: I hereby certify the above agenda was posted on the bulletin boards at City Hall on Monday, July 19, 2010, by 2:00 p.m %'~~ ~. Cynthia Singleton, TRMC, CMC City Secretary Any matter on this agenda may, at the discretion of the governing body, be opened for public comment and discussion. If you plan to attend this public meeting and have a disability that requires special accommodations, please advise the City Secretary at least 48 hours in advance at 817.503.1133, and reasonable accommodations will be made to assist you. City of Colleyville Page 1 Printed on 7/19/2010 `~ _~, ,f~ City of Colleyville 100 Mlain Street '~ 3 J Colleyville, Texas 76034 ~~~~~~= Agenda Briefing 817.503.1000 www.colleyville.com File Number: File Type: Presentation and Discussion Status: Presentation and Discussion Version: 1 Requester: Office of the City Manager Agenda Date: 07/22/2010 Agenda No.: 2a Controlling Body: City Council Final Action: File Name: Discussion of potential refunding of General Obligation, Certificates of Obligation and Tax Increment Financing debt issues Attachments: History of Legislative File Version: Date: Acting Body: Action Text: 1 07/22/2010 City Council Worksession Title Discussion of potential refunding of General Obligation, Certificates of Obligation and Tax Increment Financing debt issues Explanation Based upon an analysis performed by the City's Financial Advisor, First Southwest, there is the potential to refund callable General Obligation, Certificates of Obligation and Tax Increment Financing debt issues, all of which are repaid through ad valorem tax revenues. Jim Sabonis of First Southwest, will be providing a projected analysis of the transaction, with market conditions as of Thursday, July 22, 2010, which will include a projected present value dollar savings and percent net present value savings over the remaining life of the bonds. The projected date of the sale is August 16, 2010 and market conditions could improve or deteriorate in the interim, so actual transaction savings could vary from the projection. In the event that the market conditions deteriorate to the point the transaction is not economically viable, the City is not obligated to complete the transaction. Staff is seeking direction from the City Council and if the City Council wishes to proceed, the first reading of the ordinance approving the issuance of refunding bonds would be placed on the August 3, 2010 agenda, and the results of the refunding bond sale would be included in the second reading of the ordinance for City Council approval at the August 17, 2010 City Council meeting. City of Colleyville Page 1 Printed on 7/19/2010 Firstsouthwest ~' A PlainsCapikal Company Contact James S. Sabonis Senior Vice President 325 N. St. Paul Street, Suite 800 Dallas, Texas 75201 Direct 214.953.4195 Fax 214.953.4050 jim.sabonis@firstsw.com City of Texas Refunding Bonds Analysis July 22, 2010 City of Colleyville, Texas Table of Contents 1. Summary 2. Municipal Market Update 3. Phase 1 Refunding: Water & Sewer System Revenue Debt a. Water & Sewer Revenue Refunding Opportunity b. Water & Sewer Refunding Analysis Summary c. Water & Sewer Refunding Series 2010 Cash Flows d. Water & Sewer Refunding Proposed Schedule of Events 4. Phase 2 Refunding: Tax Supported Debt, TIRZ Supported Debt, and Drainage Utility System Revenue Debt a. Tax Supported Debt Refunding Opportunity b. Tax Supported Debt Refunding Analysis Summary c. TIRZ Supported Debt Refunding Opportunity d. TIRZ Supported Debt Refunding Analysis Summary e. Drainage Revenue Debt Refunding Opportunity f. Drainage Revenue Debt Refunding Analysis Summary g. Phase 2 Refunding Key Dates 0 T n 0 r r m r m m x a y Member FINRA 8 SIPC ©2010 Firstsouthwest ~ 1 First Southwest Company Refunding Bonds Analysis Summary City of Colleyville, Texas p Interest rates are currently near historical lows Bond markets have experienced "flight to quality" by investors ^ Based on current market conditions (7/21/2010) the City has the following refunding opportunities: Tax Supported Debt $2,995,000 $130,685 $118,919 2/1S/2011 TIRZ Supported Debt $5,340,000 $578,409 $512,967 2/1S/2011 Drainage Debt $1,510,000 $103,420 $86,424 2/1S/2011 0 T 0 r m r r m m x a rn Member FINRA & SIPC ©2010 Firstsouthwest~ 2 First Southwest Company Water & Sewer Debt $3,300,000 $459,699 $194,571 9/29/2010 Refunding Bonds Analysis City of Colleyville, Texas Municipal Market Update C1tY of Texas n 0 T n C) r r m r r m -~ rn x D to Member FINRA & SIPC ©2010 FirstSouthwest 3 First Southwest Company Municipal Market Update (Muni Market Benchmark Yield Curve) City of Colleyville, Texas Municipal Market Data Benchmark Yield Curve & Preliminary Pricing of Refunding Bonds a.so ____._ __ ___. a.oo ------ __ -__ --- --- 3.50 _ . --- -- -- n.=~.,=Qe- ~ nnnoi 3.00 0 2.50 --- - --- - - ----.. ~ - --- z TI RZ = 2.349% y I &S Tax = 1.926% 2.00 ----°----°---°--- _-__ ___- _-------~ a~ ~ ------ ----- c W &5 =1.892% 1.50 _ ___. ___ .__._ _ .__.__ ... . Source: Municipal Market Data n 1.00 --~-- -.-... --- -~f----- -- ---- ------- ----- --- --- - - - -- __ _ __ ___~ _ _-_----- ._..__._ 0.50 --- -___ 0.00 1 2 3 4 5 6 7 8 9 30 it 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Year 7/21/lOMMDYieldCurve -W&S -Tax -TIRZ -Drainage This graph depicts historical interest rates and their respective relationships. Future interest rates are dependent upon many factors such as, but not limited to, interest rate trends, tax rates, supply, changes in laws, rules and regulations, as well as changes in credit quality and rating agency considerations. The effect of such changes in such assumptions may be material and could effect the projected results. These results should be viewed with these potential changes in mind as well as the understanding that there may be interruptions in the short term market or no market may exist at all. a O m n O r r m r r m m x D Fi rstsouthwest ~ Member FINRA & SIPC ©2010 4 First Southwest Company Municipal Market Update (Bond Buyer GO Index) City of Colleyville, Texas Bond BuyerGO Index 25 Year History Weekly Actual as of 7/15/2010 10.00 _ _.~ _..__v_ ~ _ v _ -Bond BuyerGO Index ~v _ ____. 9.00 - ------- - - _ Current: 4.37% 8.00 - ~~_ ~ __~ _ _ ._ __w® 7.00 -__ ~ ~~. ._ _ 6 00 -- . 5.00 ~i '~ 4.00 -I --_~ _ -~ ___________~ _ __~._ _ ~_ _ ~~ _ 3.00 - ~_______-____~ ',~ I ',, 2.0 ~ 1.00 _.___~__________.~_---._.--_-.--______~ .___e __ ~ ~ _ _. _ _____ _ ___ __ 0.00 r-,- - -:-r---__ _. __-,_r_ , _ , -_-__._-___._.-,-__~,~_~ ~~ 0~ ~1 ~0 00 00 0^ pry 0~ ' ,~0 ,~°~ ^°~ r~0 ,~0 ,~~ ,~~ ,~~ ,~0 0~ ~5 0~O 0~ 0~ ~0 00 0~ Ory O`3 0~ ~h 06 ~1 ,~g ,`0 ,~0 ,~0 ,~0 ~~ ~O ~O ~O ~O ~O ~O ~O ~O ~0 O~ ,~O ~O ~O ~O This graph depicts historical interest rates and their respective relationships. Future interest rates are dependent upon many factors such as, but not limited to, interest rate trends, tax rates, the supply and demand of short term securities, changes in laws, rules and regulations, as well as changes in credit quality and rating agency considerations. The effect of changes in such factors individually or in any combination could materially affect the relationships and effective interest rates. These results should be viewed with these potential changes in mind as well as the understanding that th ere may be interruptions in the short term market or no market may exist at all. Source: The Bond Buyer n 0 T n r r rn r r m m X D Member FINRA & SIPC O 2010 FirstSouthwest 5 First Southwest Company Municipal Market Update (Bond Buyer Revenue Index) City of Colleyville, Texas 12.00 10.00 8.00 6.00 4.00 !,Source: IThe Bond Buyer n 0 T 2.00 0.00 ~b~ ~~ ~~ 0~ 4i°' 0~ 0^ ~rl' 03 0~` 0~ 0~O 0~ ~`b 0~ p~ p~ prl' p`~ p~` p~ p0 p1 p0 p°~ ^O ~°~ ~°' ~°' ~°' ^°' ^°' ^°j r~°~ r~°' r~°~ r~°' ~°' ^°' r~°' .~°' ti~ 0~ ti~ ti~ ti~ ~~ 00 rL0 rL0 rL0 rL0 This graph depicts historical interest rates and their respective relationships. Future interest rates are dependent upon many factors such as, but not limited to, interest rate trends, tax rates, the supply and demand of short term securities, changes in laws, rules and regulations, as well as changes in credit quality and rating agency considerations. The effect of changes in such factors individually or in any combination could materially affect the relationships and effective interest rates. These results should be viewed with these potential changes in mind as well as the understanding that there may be interruptions in the short term market or no market may exist at all. n 0 r r m r r m m x D rn Member FINRA & SIPC ©2010 FirstSouthwest 6 First Southwest Company Bond BuyerRevenue Index 25 Year H istory Weekly Actual as of 7/15/2010 Refunding Bonds Analysis City of Colleyville, Texas Phase 1 Refunding Water & Sewer System Revenue Debt 0 T n r r m r r m m x a v, Member FINRA 8 SIPC ©2010 FirstSouthwest '~ First Southwest Company Water & Sewer System Revenue Debt Refunding Opportunity City of Colleyville, Texas ^ The City has the opportunity to refund the Series 1996, 1998 and 2002 Water & Sewer Revenue Bonds for debt service savings. ^ The outstanding 1996 and 1998 Water & Sewer Revenue refundable maturities can be refunded on a current basis and redeemed on any date; and the Series 2002 on an advance basis, in full compliance with IRS advance refunding regulations for escrows over 90 days. ^ Below are the details of the Water & Sewer Revenue refundable maturities: 1996 W&S System Ref & $1,190,000 5.50 - 5.70% Any Date 100% Imp Rev Bonds 1998 W&S System Rev $1,470,000 4.50 - 5.00% Any date 100% Bonds W&S Rev Ref ~'~ `~~~~ 2002 Bonds $640,000 4.35 - 4.70% ll-1f26~~" 100% 0 0 m r r m rn x a Member FINRA & SIPC ©2010 Firstsouthwest s First Southwest Company Water & Sewer System Revenue Debt Refunding Analysis Summary City of Colleyville, Texas ^ Bank Qualified borrowing rates and estimated costs of issuance are as of: July 21, 2010. (Preliminary, subject to change) ^ The refunding is structured to achieve uniform annual savings. No change in payment dates or extension of term. The $3,260,000 Series 2010 Bonds would have a true interest cost of 2.155% as of 7/21/2010, preliminary subject to change. Par Amount of Refunded Bonds Avg. Interest Rate of Refunded Bonds Gross Debt Service Savings Net Present Value Savings Net Present Value Savings as % of Refunded Bonds Estimated Interest Rate on Series 2010 Bonds ~3, 300, 000 4.919% $459,699 $194,571 5.896% 1.892% 0 T 0 r m r m *Preliminary, subject to change. m x n N Member FINRA & SIPC ©2010 FirstSouthwest 9 First Southwest Company Water & Sewer Refunding Series 2010 Cash Flow as of July 21, 2010 City of Colleyville, Texas Refunded Debt Service New Debt Service Transfers to Fiscal Year (2001 and 2002 Bonds) (2010 Bonds) Series 2010 Savings 2011 $443,468 $386,611 $- $56,856 2012 448,403 391,394 - 57,009 2013 702,413 646,678 - 55,735 2014 690,333 634,030 - 56,303 2015 559,279 500,447 - 58,832 2016 431,990 372,273 - 59,717 2017 431,13 8 3 73,913 - 57,224 2018 225,225 167,203 - 58,022 TOTAL $3,932,246 $3,472,548 $0 $459,699 0 T 0 r r m -~ r r m m x D y Member FINRA & SIPC ©2010 Fi rstSouthwest ~ Q First Southwest Company Phase 1 W&S Refunding Proposed Schedule of Events (Subject to change) City of Colleyville, Texas A July 22, 2010: Presentation to City Council for approval August 17, 2010: 1St reading of Ordinance Authorizing Issuance of Refunding Bonds ^ September 7, 2010: Pricing of Water & Sewer System Refunding Bonds, Series 2010 2nd Reading of Ordinance Authorizing Issuance of Refunding Bonds City Council Approves Bond Sale at Regular City Council Meeting ^ September 29, 2010: Closing of debt issue, redemption of outstanding bonds _, a 0 r r m r r m m x D to Member FINRA 8 SIPC ©2010 Fi rst5outhwest ~ ~ ~ First Southwest Company Refunding Bonds Analysis City of Colleyville, Texas Phase 2 Refunding Tax Supported Debt Tax Increment Reinvestment Zone Debt Drainage Utility System Revenue Debt C1tY O}' e C~ Texas 0 T n 0 m r rn m x a y Member FINRA 8. SIPC ©2010 FirstSouthwest~ 12 First Southwest Company Tax Supported Debt Refunding Opportunity City of Colleyville, Texas ^ The City of Colleyville has the opportunity to refund the outstanding Series 2001 General Obligation Bonds and a portion of the Series 2002 Certificates of Obligation for debt service savings. ^ The General Obligation Bonds are callable on 2/15/2011 and can be refunded on a current basis beginning November 17, 2010. ^ The Certificates of Obligation are callable on 2/15/2012 and can be advanced refunded at anytime in full compliance with IRS regulations for tax-exempt bonds. ^ Below are the details of the tax supported debt refundable maturities: 2001 GO Ref Bonds 2002 Certificates of Obligation $1,815,000 $1,140,000 4.40 - 4.60% 4.35 - 4.70% 2/15/2011 100% 2/15/2012 100% 0 T n 0 r r m r r m -~ m x D Member FINRA & SIPC ©2010 FirstSouthwest ~ ~ 3 First Southwest Company Tax Supported Debt Refunding Analysis Summary City of Colleyville, Texas ^ Bank Qualified borrowing rates and estimated costs of issuance are as of: July 21, 2010. (Preliminary, subject to change) ^ The refunding is structured to achieve uniform annual savings. Assumed Delivery Date is 2/15/2011. No change in payment dates or extension of term. ^ The $3,080,000 GO Ref Bonds, Series 2010 Bonds would have a true interest cost of 2.185% as of 7/21/2010 assuming closing on February 15, 2011, preliminary subject to change. Pay Amount of Refunded Bonds Avg. Interest Rate of Refunded Bonds Gross Debt Service Savings Net Present Value Savings Net Present Value Savings as % of Refunded Bonds Estimated Interest Rate on Series 2010 Bonds ~2, 995, 000 4.587% $130,685 $118,919 4.024% 1.926% 0 0 r r m r m m x D y *PrP~~minar~, G~ihTect to chanc,~P Member FINRA & SIPC ©2010 FirstSouthwest~ 14 FirstSoutbwestCompany Tax Increment Zone Supported Debt Refunding Opportunity City of Colleyville, Texas ^ The City of Colleyville has the opportunity to refund the outstanding Series 2001 TIRZ Certificates of Obligation and a portion of the Series 2002 TIRZ Certificates of Obligation for debt service savings. ^ The Series 2001 Certificates are callable on 2/15/2011 and can be refunded on a current basis beginning November 17, 2010. ^ The Series 2002 Certificates are callable on 2/15/2012 and can be advanced refunded at anytime in full compliance with IRS regulations for tax-exempt bonds. ® Below are the details of the TIRZ supported debt refundable maturities: 2002 TIRZ Certificates of $395,000 4.625 - 4.90% 2/15/2012 100% Obligation 0 0 r m r m m x D to Member FINRA & SIPC ©2010 FirstSouthwest 15 First Southwest Company 2001 TIRZ Certificates of $4,945,000 4.50 - 5.00% 2/15/2011 100% Obligation Tax Increment Zone Supported Debt Refunding Analysis Summary City of Colleyville, Texas ^ Bank Qualified borrowing rates and estimated costs of issuance are as of: July 21, 2010. (Preliminary, subject to change) ^ The refunding is structured to achieve uniform annual savings. Assumed Delivery Date is 2/15/2011. No change in payment dates or extension of term. ^ The $5,495,000 Comb Tax & TIRZ Revenue Refunding Bonds, Series 2010 Bonds would have a true interest cost of 2.513% as of 7/21/2010 assuming closing on February 15, 2011, preliminary subject to change. Par Amount of Refunded Bonds Avg. Interest Rate of Refunded Bonds Gross Debt Serviee Savings Net Present Value Savings Net Present Value Savings as % of Refunded Bonds Estimated Interest Rate on Series 2010 Bonds $S, 340, 000 4.899% $578,409 $512,967 9.606% 2.349% -~ 0 0 r r m r r m m x D t/1 *Preliminary, subject to change. Fi rstSouthwest Member FINRA & SIPC ©2010 16 First Southwest Company Drainage Utility System Supported Debt Refunding Opportunity City of Colleyville, Texas ^ The City of Colleyville will have an opportunity to refund the outstanding Series 2001 Drainage Utility System Revenue Bonds for debt service savings. ^ The Series 2001 Bonds are callable on 2/15/2011 and can be refunded on a current basis beginning November 17, 2010. ^ Below are the details of the Drainage Revenue debt refundable maturities: 0 T n Ct r r m { r r m m x a m Member FINRA & SIPC ©2010 FirstSouthwest~ 17 First Southwest Company 2001 Drainage Utility Rev $1,510,000 4.40 - 5.00% 2/15/2011 100% Ref & Imp Bonds Drainage Utility System Supported Debt Refunding Analysis Summary City of Colleyville, Texas ^ Bank Qualified borrowing rates and estimated costs of issuance are as of: July 21, 2010. (Preliminary, subject to change) ^ The refunding is structured to achieve uniform annual savings. Assumed Delivery Date is 2/15/2011. No change in payment dates or extension of term. ^ The $1,545,000 Drainage Utility System Revenue Refunding Bonds, Series 2010 Bonds would have a true interest cost of 3.00% as of 7/21/2010 assuming closing on February 15, 2011, preliminary subject to change. Par Amount of Refunded Bonds $1, SI D, 000 Avg. Interest Rate of Refunded Bonds 4.873% Gross Debt Service Savings $103,420 Net Present Value Savings $86,424 Net Present Value Savings as % of Refunded Bonds 5.723% Estimated Interest Rate on Series 2010 Bonds 3.000% *Preliminary, subject to change. 0 0 m r r m m x D Vl Member FINRA 8 SIPC ©2010 FirstSouthwest 18 First Southwest Company Phase 2 Refunding Key Dates City of Colleyville, Texas ^ 1St October Meeting: Update City Council on state of refunding opportunities. ^ 2"d October Meeting: First date when the City can sell the Phase 2 refunding bonds and take advantage of current refundings, closing will take place approx 30 days later. ^ November 17, 2010: The General Obligation Refunding Bonds, Series 2001, Comb Tax & W&S Revenue Certificates of Obligation, Series 2001, and the Drainage Utility System Revenue Bonds, Series 2001 become currently callable ^ February 15, 2011: All the bonds mentioned above can be called at anytime after this date. Assumed closing date for purposes of Phase 2 Refunding Analyses 0 0 r r m r r m m x D N Member FINRA & SIPC ©2010 Fi rstsouthwest _ ~ 9 First Southwest Company ;~~ ,., f=;- -~~ City of Colleyville City Hall 100 Main Street ~ Colleyville, Texas 76034 ~~~~~~" Agenda Briefing 817.503.1000 www.colleyville.com File Number: File Type: Presentation and Discussion Status: Presentation and Discussion Version: 1 Requester: Office of the City Manager Agenda Date: 07/22/2010 Agenda No.: 2b Controlling Body: City Council Final Action: File Name: Discussion of potential refunding of callable Water and Sewer Revenue Bonds Attachments: History of Legislative File Version: Date: Acting Body: Action Text: 07/22/2010 City Council Worksession Title Discussion of potential refunding of callable Water and Sewer Revenue Bonds Explanation Based upon an analysis performed by the City's Financial Advisor, First Southwest, there is the potential to refund callable Water and Sewer debt issues. Jim Sabonis of First Southwest, will be providing a projected analysis of the transaction, with market conditions as of Thursday, July 22, 2010, which will include a projected present value dollar savings and percent net present value savings over the remaining life of the bonds. The projected date of the sale is August 16, 2010, and market conditions could improve or deteriorate in the interim, so actual transaction savings could vary from the projection. In the event that the market conditions deteriorate to the point the transaction is not economically viable, the City is not obligated to complete the transaction. Staff is seeking direction from the City Council and if the City Council wishes to proceed, the first reading of the ordinance approving the issuance of refunding bonds would be placed on the August 3, 2010 agenda and the results of the refunding bond sale would be included in the second reading of the ordinance for City Council approval at the August 17, 2010 City Council meeting. City of Colleyville Page 1 Printed on 7/19/2010 n ~„ City of Colleyville 100 Main Street ~~ Colleyville, Texas 76034 T.~., Agenda Briefing 817.503.1000 www.colleyville.com File Number: File Type: Presentation and Discussion Status: Presentation and Discussion Version: 1 Requester: Economic Development Department Agenda Date: 07/22/2010 Agenda No.: 2c Controlling Body: City Council Final Action: File Name: Discussion of City of Colleyville's guidelines and criteria for economic development incentives Attachments: Incentives and Economic Development in Colleyville presentation Colleyville Economic Development Plan.pdf Economic Development Incentive Policy.pdf History of Legislative File Version: Date: Acting Body: Action Text: 1 07/22/2010 City Council Worksession Title Discussion of City of Colleyville's guidelines and criteria for economic development incentives Explanation This item allows the City Council and staff to review the City's Economic Development Incentives Plan, which was approved by City Council on October 19, 2004. As stated within the City's Economic Development Strategic Plan, it is an appropriate time to revisit this policy for consideration by the City Council. Staff desires to review the City's existing set of Guidelines and Criteria and receive City Council input on what should be included, limited, and excluded or removed from the document so they may return to City Council with a revised version for consideration. Staff also wishes to formalize the associated application into an actual form, rather than an itemized list. City of Colleyville Page 1 Printed on 7/19/2010 Incentives and Economic Development in Colleyville: Developing a new set of Guidelines and Criteria City Council Worksession July 22, 2010 What is an Incentive? Any action taken by a city that provides /a cost break, reduction or sharing, /a tax reimbursement or /an operational advantage to a new or expanding business. Why Cities Use Incentives • Make it easier for businesses to open or expand (or at least to deal with external development and redevelopment obstacles such as site issues) • Can help "level the playing field" between cities • Assist in "sealing the deal" (used to enhance, but not meant to be a breaker or maker) • Convey apro-.business message to businesses • Economic Development in its truest sense is the use of public resources to leverage private investment for a larger economic return Arguments For Using Incentives • Proven beneficial in many cases • Some projects will not happen without them • Remain competitive with other cities • Make development happen sooner • Can be structured to pay for themselves • Can yield benefits to cities - increased and/or diversified tax base - new or increased property values - tax revenues - jobs - reinvestment in local economy Arguments Against Using Incentives • Displaces or competes with existing businesses • Takes away or redirects city tax dollars • Viewed by some as shifting tax burden to residents • Can be considered subjective in practice Cost vs. Benefits Checklist: • Level of investment in the community • Impact on the city's tax base • Number and type of jobs created • One of the city's targets? • Located in a targeted area or an area designated for redevelopment? • Impact to neighboring businesses Evolution of Incentives • Becoming more complex • Under increased public scrutiny • Monitoring is more stringent Commonly Used Incentives • Tax Abatements • Reduced/Waived Development Fees • Infrastructure Assistance • Non-Cash Incentives • Tax Increment Financing Districts (TIFs) • Type A and Type B Sales Tax Grants • Sales Tax Rebate Grants • Public Improvement Districts (PIDs) • Targeted Area Incentives Tax Abatements • On real or personal property improvements • Must apply prior to start of construction • Maximum 10 years - 100% • City designates a reinvestment zone • Not applicable within existing Tax Increment Reinvestment Zones (TIRZs) Reduced Development Fees • Cities may agree to discount, waive or rebate zoning, building permits and other development fees • Rebates are usually payable after a certificate of occupancy is obtained Infrastructure Assistance • Usually in the form of grants from cities • Infrastructure improvements often are a cost-share between the city and developers Tax Increment Financing Districts • Based on the pledge of future real property taxes generated by new development within a defined area • Used to fund public improvements • Increases property and commercial values Type A and Type B Sales Tax • Requires voter approval • Requires oversight from development corporations • Can be used to attract business • Type A: Generally used for industrial development - Purchasing land, buildings, equipment, and infrastructure • Type B: Generally used for quality of life initiatives - Sports, entertainment, parks, affordable housing, transportation facilities, infrastructure, maintenance, and operational costs • Voters can elect to allow Type A funds for Type B uses Tax Rebates and Grants • Chapter 380 Local Government Code • Allows loans and grants of city funds, use of city staff and city facilities at minimal or no charge • Use must be construed as serving a public purpose • Requires a contract between the city and developer/business Public Improvement Districts • Created at the request or with the consent of the property owners • Funds used for capital improvement projects and maintenance • Allows for the levy of voluntary assessments and the issuance of tax exempt bonds Targeted Area Incentives • Public/private cost-sharing programs - New signage, storefront improvements • Low interest loan pools - Low interest loans from local lenders • Investment tax credit - Credit against taxes owed Non-Cash Incentives • Public infrastructure - Signage and intersection improvements • Fast track permitting • Real estate relocation assistance • Employee recruitment and training • Recreational opportunities • Business promotion and assistance • Overlay districts Effective Use of Incentives • Diverse and available with clear parameters • Customer focused • Adequately "packaged" • Tailored to match business needs-of the types of businesses Colleyville prefers • Influential • Timely • Structured to be performance-based • Negotiated and executed to include claw back provisions Sample Incentive Packages • Large Retail - Tax abatement, sales tax rebate grant, infrastructure improvements • Mixed-Use Development - Tax increment financing, infrastructure improvements, public "anchor" facilities and amenities, such as city hall, public plaza • Office - Tax abatement, employee recruitment and relocation, job training Rules of Incentives • The proprietary nature of business should be respected. • Not every business is worthy of incentives. • Incentives need to be endorsed by the local governing body. • Cities should pass public policy adopting incentives with parameters (Guidelines and Criteria) • Predictability makes deals; similar incentives should be considered for businesses offering similar benefits to the community. • Mechanisms should be in place to monitor and enforce business accountability. • Incentives between parties should be written in legally enforceable contracts containing claw back provisions. What Else Businesses Consider • National/ Re Tonal Location City Demographics: g Income Levels, • Trade Area usin Costs . Ho g , • Transportation Network Average Age of • Available Sites Residents, etc. • Traffic Counts • Local Economy • Labor Market • Combined Tax Rates • Cost of Uti I ities • Top Employers/Tax Payers • Quality of Life: Public Safety, Schools, Recreational Opportunities, Public Services and Infrastructure, etc. Citizen Survey-Resident Unprompted Responses What is the most critical issue facing Collevville today? • Attracting/keeping quality businesses (28%) • Hwy 26 issues/development (11 %) • Traffic (9%) Citizen Survey- Economic Development Opinions • I can generally find what I want to buy in Colleyville. • 2% strongly agree + 28% agree = 30% agree • 17% strongly disagree + 53% disagree = 70% disagree • The last time I was unable to buy an item in Colleyville: • Clothes (30%), electronics/camera/computer (10%), specific store mentioned (9%), groceries(7%) • I can generally find ample entertainment opportunities. • 2% strongly agree + 35% agree = 37% agree • 10% strongly disagree +53% disagree = 63% disagree Citizen Survey Results- Economic Development • 70% cannot find products they want to buy in Colleyville • 63% cannot find ample entertainment opportunities • 98% support increasing sit-down restaurants • 92% support medium sized retail store shopping • 87% support professional services development • 86% support major supermarket shopping Support For Types Of Economic Development In Colleyville Sit-down restaurants (98.0:1) ~ ~ii~ ~ ; ~ , ~ ~ T, ~~ .~... Support Oppose 100 Colleyville Incentives: Recent History Three partnership grant agreements (Chapter 380 of the Texas Local Government Code) approved in association with Town Center: Sales Tax Rebate to Borders (2005): - 1% rebate of City's General Fund for two years (estimate of $101,890; $64,298 actual) - Extension approved in February 2009 - Entitled to two more payments Sales and Personal Property Tax Rebates to Colleyville Cinema Grille (2005): - $625,000 over 10 years - Renegotiated and reauthorized in 2008; limits term to 2016 - Provision for IMAX marketing grants of $100,000 over five years - $128,364 rebated to date Sales Tax and Personal Property Tax Rebates to Town Center Colleyville developer Melvin and Martindale (2005): - $500,000 over 10 years - $100,000 rebated to date Colleyville Incentives: The Future Staff proposes that the new Guidelines and Criteria be revised to: • Serve as a catalyst for what Colleyville really desires in the way of new businesses, development and redevelopment • Clarify Colleyville's commitment to perFormance- based returns and claw back provisions • Include an actual application form (rather than general directions in place now) Colleyville Incentives: The Future • Incorporate a new matching grant program for 1. Existing building facade improvements 2. Pole sign removal and monument, landscaping replacements 3. Tenant improvements for destination, sit-down restaurants (i.e. that aren't presently here or in neighboring cities) Colleyville Incentives: The Future Other additions to consider • A section on inspection and financial verification • Information on existing job training services and corporate relocation assistance • Mention the City's new CDARS program • Text on procedural incentives such as fast- track planning, fast-track plans review, fast- track permitting and dedicated inspections • A request for applicants to quantify a project's municipal services impact Colleyville Incentives: The Future Other additions to consider • A statement which notes how incentives that encourage business growth and development are often unique to the needs of each individual business-and that the City is therefore open to discuss any particular incentives that may be necessary for a company to ensure its success in Colleyville. COLLEYVILLE ECONOMIC DEVELOPMENT STRATEGIC PLAN MARCH 2010 Executive Summary When City Council and the staff Leadership Team conducted a Strength, Weaknesses, Opportunities, Threats (SWOT) Analysis in Fall 2009, economic development was noted as the top opportunity as well as the City's biggest weakness. The adoption of five strategic points for the City identified the need for Colleyville to make along-term commitment to economic development. Development and implementation of an economic development strategic plan was established as a high priority within that strategy. In preparing this Economic Development Strategic Plan, the Economic Development Department has: / Reviewed previous plans, including the detailed effort by citizen volunteers participating on an Economic Development Task Force in 2003; / Met individually with City Council members regarding their individual goals and ideas; / Interviewed numerous members of the local development community about the environment in Colleyville; / Considered the effects of global, national and regional economic conditions; and / Analyzed and incorporated the results of the 2010 Colleyville Citizen Survey. In the 2010 Colleyville Citizen Survey, residents have restated the need for Colleyville's Economic Development efforts to focus on business retention and attraction, consistent with what City Council members identified in the SWOT Analysis and Strategic Plan in Fall 2009. Moreover, citizens and Council members have both recognized the link between SH26/Colleyville Boulevard and the City's economic health. Background Economic Development strategic planning in Colleyville began in 2003 with the appointment of an Economic Development Task Force. This group delivered recommendations to City Council for the Economic Development Department and its activities, some of which are referenced within this document. The City Council also held afollow-up visioning session in May 2008. Additionally, discussions on economic development policies and priorities have taken place for a number of years as a part of annual City Council goal setting sessions. For the last 24 months, the United States has been in an economic recession, and while Texas has been less impacted than most states, unemployment figures continue creeping upward, even in the Fort Worth-Arlington MSA. A local newspaper reported the delinquency rate for securitized loans in North Texas is 50 percent higher than the national average, and several economists have predicted commercial real estate will not rebound until 2011 at the earliest, partly due to caution in commercial lending. At a January 2010 retail forecast, speakers representing one of the region's strongest shopping center development groups predicted "little to no new projects" in 2010, due to an anticipated 74 percent decline in single-family starts and little in the way of new residential construction until 2012. Also, speakers cited extreme real estate speculation and leverage, pointed out that real job creation remains questionable, and noted that people have changed buying habits and are buying more conservatively. In the case of the local Colleyville economy, the City experienced eight consecutive months of declining sales tax revenues prior to March 2010. Building permit activity has declined dramatically. Permit revenues have dropped almost $534,000 since the end of FY 2008-and are projected to be down almost $150,000 below the FY 2010 budget. Therefore, Colleyville's Economic Development Department staff drafted the following Economic Development Strategic Plan based on results of the City's Strategic Plan, 2010 Citizens Survey, Councilmember input, as well as recommendations made by Colleyville's 2003 Economic Development Task Force and review of current and future economic conditions. THE ECONOMIC DEVELOPMENT STRATEGIC PLAN 1. RETAIN A. Breakout and share Merchandising Plan primary retail market data details with existing retailers and leasing representatives of Colleyville's retail centers for them to communicate with tenants. 1) Schedule representatives of Catalyst + Commercial (the contractor that prepared the City's new Merchandisinq Plan) to present results to Collewille Executive Organization (CEO) and Collewille Area Chamber of Commerce Networking GrOUgS. Catalyst + Commercial presented the results of the market data to the CEO in March 2010 and will begin to share the results with Chamber membership over the next several months. 2) Invite leasing representatives to a joint meeting to receive the Merchandisinq Plan results. Staff will schedule this meeting in the format of an "Allies Day" event in the weeks following the International Council of Shopping Centers (ICSC) RECON real estate convention in May. 3) Schedule individual meetings with larger retailers that were studied within the Merchandising Plan. Staff will coordinate with Catalyst Commercial to arrange these individual meetings during third and fourth quarter 2010. Implementation Timeline: 3~d Quarter and 4th Quarter, FY 2010 and Ongoing B. Promote the recently established business counseling program offered by the U.S. Small Business Administration's Service Corps of Retired Executives (SCORE) Program at City Hall as an option for businesses struggling to survive and prosper. 1) Include SCORE representatives in the Allies Day event planned for leasing representatives. 2) Profile SCORE's City Hall office at an inaugural Business Appreciation Reception as outlined in 1.D. 3) Ensure SCORE is featured at a future CEO meeting program. 4) Recommend SCORE involvement in evaluating applications for incentive matching Grants as outlined in 2.B. The U.S. Small Business Administration's SCORE Program is becoming one of Colleyville's biggest assets. Since the City designated office space for SCORE in early January 2010, the program has averaged three meetings each Wednesday and is considering a second weekly day of counseling. Staff will include SCORE in future efforts to create a business incubator and establish venture capital funding as outlined in 2.E. The City will team with the Colleyille Area Chamber of Commerce to help SCORE recruit additional new counselors to meet demand for counseling services. Implementation Timeline: Ongoing 2 C. Introduce and marshal a campaign to promote greater awareness of existing Colleyville businesses and encourage buying and living local. 1) Seek groaram stakeholders co-sponsors and in-kind contributions. 2) Kickoff new campaign at inaugural Business Appreciation Reception. 3) Introduce associated new initiatives to inform and facilitate local spending throughout the months to come. Colleyville must begin to help citizens, business owners and neighbors to recognize the importance of their buying habits and encourage them to frequent Colleyville enterprises. Business owners and operators have noted that the previous "Shop Colleyville" effort was beginning to be beneficial at its conclusion; this new campaign must continue and expand that effort. The Economic Development Department is planning a continuous campaign to include a brand and tag line and regular new buying initiatives, so the City may introduce Colleyville residents and business owners and operators to one another. This localization program can be mutually beneficial to the Colleyville Area Chamber. Moreover, the City will seek to build relationships and promote other initiatives that showcase Colleyville's unique retail businesses and restaurants, with the understanding that additional opportunities for business/customer interaction will also build loyalty and encourage frequency. As people support what they help create, Colleyville will seek early involvement of business owners and operators; their investment and sponsorship participation will help fund this campaign. As part of the campaign, the City will recommend that businesses offer dining specials and shopping coupons so residents will live local and visitors will become aware of Colleyville's worth as a destination. Visitors are equally important since they introduce outside dollars into the City's local economy. On average, each dollar spent circulates three to four times. Over the coming months, the Economic Development Department will conduct this campaign on a continual basis. Implementation Timeline: 3rd Quarter, FY 2010 D. Introduce an annual Business Appreciation Reception to help boost the local economy, recognize accomplishments of Colleyville enterprises and express appreciation for their presence in Colleyville. 1) Schedule and hold an inaugural event April 29, 2010. 2) Give incentives for participants to dine at Collevville restaurants before the event. 3) Celebrate awards and recognitions of Collevville employers over the previous ~• 4) Promote SCORE's City Hall services. 5) Introduce new buy local campaign and development process initiative In preparing for the inaugural Colleyville Business Appreciation Reception to be held on April 29, 2010, Economic Development Department staff recognizes the City must not miss an opportunity to express appreciation and boost the local economy. Staff will encourage all participants to dine at a Colleyville restaurant beforehand. Implementation Timeline: 3rd Quarter, FY 2010 E. Formalize a partnership with SCORE and the Colleyville Area Chamber of Commerce to encourage services targeted particularly for Colleyville retailers and restaurants. Utilize cooperative effort to generate new ideas for assisting Colleyville's sales tax generators. 1) Follow-ug on initial discussions with the Colleyville Area Chamber staff and SCORE representatives. 2) Recommend the adoption of resolutions on the part of all three entities to formalize the partnership. 3) Brand and introduce a name for this new business retention relationship. 4) Begin to meet reautarly~ identify and recommend additional retention initiatives. The Colleyville Area Chamber of Commerce recently invited Colleyville's Economic Development Director to served on its Advisory Committee which, along with other City representatives on the Chamber of Commerce Board of Directors, will further the City's existing platform to forge this relationship. Staff believes a consistent message among the three groups will build relations and continue to increase communication. Implementation Timeline: 3~d Quarter, FY 2010 2. ATTRACT A. Attract and create new business enterprises resulting in the backfill of existing spaces and likewise the development of new commercial buildings. 1) Work in tandem with consultant Catalyst + Commercial to communicate results of Merchandising Plan to prospective new retailers and restaurants. As staff reported to City Council in early March 2010, this is already in effect and will continue for several months. 2) Schedule meetings with representatives of individual prospects at the ICSC RECON and Texas Conference and Deal Making sessions. Catalyst + Commercial and City staff will continue to contact prospects identified as prime targets in the Merchandising Plan study. In doing so, they will request face-to-face meetings with interested prospects to discuss potential sites and market development in Colleyville. 3) Organize a Retailers Roundup in conjunction with Catalyst + Commercial to introduce interested retail and restaurant prospects to brokers. Event is tentatively planned for September 2010. City Council members will have the opportunity to welcome participants and communicate with them directly about Colleyville's economic development commitment. 4) Set up individual meetings with prospective developers and leasing representatives of Colleyville's existing centers to share results and work to backfill vacant spaces with prospective new retailers and restaurants; work in tandem with the Colleyville Road Show effort (See Item 3.A. below). Staff will spend the months following ICSC RECON following-up with prospects. The Marketing Plan prepared by Catalyst + Commercial will benefit staff in preparing a "Road Show" PowerPoint. Catalyst + Commercial's information will also be used to update Colleyville's exposition display prior to the fall North Texas Commercial Realtors Expo (NTCAR) and ICSC Texas. 5) Approach owners and representatives of remaining large undeveloped tracts of land and propose master planning of this acreage consider connecting future incentives to master plans that have community input and deliberation. This strategy has already begun. Staff continues ongoing communications with several property owners and representatives for this purpose. The work done by Gateway 4 Planning Group and Kimley-Horn to study the SH26 reconstruction project should also aid these efforts, particularly since the analysis is intended to consider the project's development benefits outlined in 2.C. Implementation Timeline: Ongoing B. Reevaluate and renew the City's incentive Guidelines and Criteria; consider implementation of a matching grant program to stimulate exterior facade and interior tenant improvements. 1) Convene the Colleyville Economic Development Corporation to review previous Guidelines and Criteria• study other potential sources for incentives. 2) Consider what other communities are doing especially to attract restaurants. 3) Propose consideration of new matching grant program to help fund building improvements for existing businesses and property owners, as well as prospective new employers. 4) Review the financial strength of Colleyville's Tax Increment Reinvestment Zone (TIRZ) and consider its restructuring and continued use to facilitate quality new development and redevelopment. 5) Explore partnering with property owners to create Public Improvement Districts PIDs "We recommend that Council pass enabling ordinances that will establish an economic development incentive program run by the City Manager and the Economic Development Director." --Colleyville Economic Development Task Force 2003 Report As the State of Texas requires municipalities to update and adopt Guidelines and Criteria, this is an opportune time to incorporate citizen comments from the 2010 Citizen Survey (ex. new restaurants, retail and entertainment). Officials have individually communicated interest in exploring grants or micro loans, especially to stimulate redevelopment (for example, to help bear the costs of building facade improvements or pylon sign replacements) as well as the absorption of vacant in-line retail spaces along the Colleyville Boulevard corridor. Implementation Timeline: 3~d & 4th Quarters, FY 2010 C. Oversee work done by Gateway Planning Group and Kimley-Horn and Associates to confirm the best, most expedient plan for reconstruction of Colleyville Boulevard/SH26 and the development and redevelopment of adjacent properties. In addition to arranging meetings with senior representatives of the Texas Department of Transportation (TxDOT) and the North Central Texas Council of Governments (NCTCOG), consultants will develop two schematics as alternatives to the SH26 design, estimate traffic impacts, estimate tax base impacts and develop a proposed structure for a new design/funding partnership. 1) Convene representatives of both firms and ensure an optimum groiect start. 2) Monitor progress and participate in applicable meetings with TxDOT and NCTCOG. 3) Invite Gateway representative to speak to CEO and other groups upon completion of study. 5 4) Link results to continuation of Overlay District initiative and any site master planning_efforts as recommended in 2.A.5. 5) Upon completion of the study explore a comprehensive redevelopment study of SH26/Colleyville Boulevard. 6) Communicate results of Gateway Planning Group/Kimley-Horn work to community, businesses and other stakeholders. Economic Development Department staff recognizes the importance of the SH26/Colleyville Boulevard project and will guide it to completion. Staff will be involved with consultants and transportation representatives throughout the process. Moreover, as the project nears completion it will be important to communicate results to the community and to possibly used this study as a segue to other planning efforts related to SH26 development (i.e. the Overlay District Draft Ordinance and Design Guidelines) and redevelopment. Implementation Timeline: 3~d & 4th Quarters, FY 2010 D. Explore ways to bring people from other cities to Colleyville and begin to establish a visitors' economy. 1) Research and produce aDining/Shopping/Attraction Guide• celebrate and promote Colleyville's unique entertainment magnets (i.e. Lifetime Fitness, Colleyville Cinema Grille & IMAX Theatre Market Street Piazza in the Village, the Colleyville Center . Staff has already prepared a draft version and will prioritize the finalization of this brochure for roll out with the buy local program. 2) Ensure its distribution and placement in hotels airports and TxDOT Travel Centers throughout Texas. Staff will research and propose printing and distribution costs in the FY 2011 budget. 3) Affiliate with the DFW Area Tourism Council as a vehicle for promoting Colleyville's entertainment and meeting attractions. The Department will propose this membership for inclusion in the FY 2011 budget. 4) Encourage support and promote Colleyville's cultural arts events and festivals. Staff is already working with the Regal Opera, Northeast Orchestra, the Blue Shoe Blues Festival and a new Marketing Committee of The Village Property Owners Association to help foster new arts events and activities. 5) Work to attract and facilitate a hotel and begin collecting occupancy tax revenues to help fund future marketing efforts. Staff has likewise already begun these communications; work continues to help quantify the growing visitors' economy and daytime population. Implementation Timeline: Ongoing E. Pursue opportunities to advance small business development; create a business incubator in order to nurture the commercial tax base. 1) Suggest the CEO include program speakers on venture capital and business incubators. Staff will propose program feature in the Fall 2010, following or in conjunction with one on SCORE. CEO and Council members will have the opportunity to help explore and establish a venture capital fund and business incubator program. 2) Examine whether the Vineyard Antique Mall may be a good site to create a Colleyville craft/arts business incubator. 6 3) Approach Collewille's community banks and explore establishment of a 501(c) 3 not-for-profit organization or development corporation for promotion of Collewille microloans and venture capital. Implementation Timeline: 4t Quarter, FY 2010 and FY 2011 3. MARKET/PROMOTE A. Utilizing data culled from the Merchandising Plan exercise, create a "Colleyville Road Shove'. 1) Couple this data with a Real Estate Inventory of all Colleyville commercial buildings and available commercial properties. 2) Schedule presentations to staff meetings of DFW commercial real estate brokerage houses. 3) Utilize data for Colleyville's booth at the annual North Texas Commercial Association of Realtors (NTCAR) Expo. 4) Communicate same information in targeted advertising in association with ICSC Texas NTCAR and in Texas Real Estate Business magazine. 5) Encourage commercial development along Precinct Line Road. 6) Work with and capitalize on Collewille citizens who are commercial real estate brokers developers engineers and architects create a Development Insiders focus group to meet and receive updates on a regular basis. Discuss with them opportunities to foster and expand commercial development in conjunction with the future Collewille Boulevard reconstruction. "In order to change this perception and attract more development, he [representative of CB Richard Ellis] suggested Colleyville put together a `road show' for brokerage houses, showing sites available, road development and any incentives that are available."; --Colleyville Economic Development Task Force 2003 Report Staff will complete the updated inventory, fine tune data and prepare for these visits this summer with the "Road ShovW' to begin in the Fall 2010. In preparation for the visits, staff will convene Colleyville residents employed in development to "test drive" the data and presentation. Implementation Timeline: 4t" Quarter, FY 2010; Ongoing B. Market Colleyville as a medical specialist, procedure and lab center and build-up the community's daytime population with well-educated, well-paid medical professionals. 1) Join and participate in BioDFW and the DFW Health Industry Council. Staff is already participating in BioDFW as a visitor; plans are to propose affiliation with both organizations in the FY 2011 budget. 2) Convene local members and representatives of BioDFW and discuss how that effort may be localized in Colleyville. The Department will contact Northeast Tarrant participants and host a working lunch for this purpose in July 2010. 3) Work with adjoining cities to create a regional partnership or alliance for medical facility support, promotion and attraction. Staff will invite a Baylor Medical representative to speak to Northeast Leadership Forum's Economic Development Directors Roundtable regarding regionalism-and propose idea of this new partnership. Implementation Timeline: Ongoing; 4t" Quarter, FY 2010 and FY 2011 C. Work to create and support positive attitudes toward development-both inside and outside of Colleyville. 1) Articulate the economic impact of potential new developments. Staff will work with Council to help quantify and illustrate economic potential of prospective new projects; Colleyville's objective is to model and accurately quantify both revenue potential and municipal services costs. 2) Create a curriculum and introduce economic development as a key piece of the Citizen/Neighborhood Academy slated for development Fall 2010. The Department recognizes that this may be the initiative with the longest lead- time. It will require communication with Colleyville's homeowner associations and therefore is a prime opportunity for leaders to participate in its creation. Staff suggests creating a task force of interested Council members to work with us in structuring the curriculum for Colleyville's proposed new citizens' economic development corps and to advise staff on how to best deliver such a new initiative. Implementation Timeline: 2"d Quarter, FY 2011 3) Seek continuous improvement within new development process initiative and further the ease of doing business in Colleyville (to be introduced at Business Appreciation Reception); include preparation of a "how to do business" manual. A branding article recently noted how "Great products create great brands"; Colleyville's proposed new Flight Plan effort is a sincere step toward creating such aproduct-and ultimately, an associated, positive brand. Colleyville will best be able to satisfy the needs of the end users (developers) when they are engaged in processes, rather than just at the beginning or end. End users should be tasked to identify problems, research solutions and recommend plans of action that will increase efficiency and effectiveness. End users know best what City processes work for them and what does not. By working side by side, Colleyville and end users can develop new cutting-edge, consumer-driven processes. Colleyville will take the lead. The City will open up the process and involve its development audience in crafting solutions, as well as, the information about Colleyville's plan to other customers. References and word-of-mouth advertising such as this can pay off; and as Colleyville recognizes, involving our customers in this way is much better than just trying to do it internally. Potentially, they can also provide us with the best words to use in communicating new programs and processes in an engaging, useful way. By doing this, Colleyville can illustrate an unswerving commitment to innovation and customer satisfaction. Therefore we begin by inviting our customers to be inventors, to join us in the plans review room and brainstorm the best ways for us to deliver them and others memorable service. As part of this initiative, staff proposes the following elements in order for "Liftoff": I. Explore User-Driven Innovation. In order to kick-off this initiative, the City will engage in a comprehensive development process review that will include the following: • A process map or flowchart that represents every step in the development review and inspection process. This will be broken down by department/division at first but, will be aggregated to represent the entire review process. Also included will be a timeline for each process. Two comprehensive surveys: one sent to the development community and one sent to internal development review staff (to be confidential) listed above. Questions may address customer satisfaction and recommendations for improvement. Two Meetings or focus groups: one meeting will be with the development/business community to include all general contractors registered with the City and all recent land developers and surveyors as well as the business community; the second meeting will be with all internal development review staff. The process map, or variations thereof, will be presented at these meetings in order to review the process flow. A final report will be published summarizing the results of the surveys, discussion held at the meetings and final recommendations for process, procedural, and, if identified, structural improvements. Implementation Timeline: March, 2010 Present purpose/scope/schedule of project to Pre-Council March/April, 2010 Complete all Process Maps no later than April 30th. Send out surveys no later than the end of April April/May, 2010 Schedule meeting with builders/developers/businesses for mid to late May. Schedule meeting with internal development review staff for mid to late June July, 2010 Prepare a draft report of meeting and survey comments and present to the development Flight Crew. The Flight Crew will then formulate the final recommendations. Aug/Sept, 2010 Final report containing final recommendations is completed. The report may then be presented to the City Council at a pre council meeting to be held in July or August. II. Let our customers see their product and our service In Real Time. Why can't those awaiting a building permit have access to an on-line schedule, which illustrates their application as it progresses through to approval? They can! As part of a larger effort to continually improve customer service and efficiency as well as make the development process as smooth and seamless as possible, the Community Development Department will soon provide aweb-based platform for issuing building and development permits. Real time online access to the status of permits and applications will be made available to Community Development's customers. Contractors will be able to request inspections as well as pay fees through the new system. Information will also be made available online for certain zoning, plat and variance cases as well. The system will also have a citizen request module (CRM) component, which will allow citizens to request code enforcement follow-up. The online permitting system is the final step in the implementation of the department's new CRW permitting software, which went live December 2008. Implementation Timeline: 4th Quarter, 2010 III. The future is now and we are all connected. People already have an ability to share their impressions, stories and advice moment-by-moment, on-line and over wireless. In an increasingly packed market of information, the natural tendency is for those who take the lead in this, to become important influencers. Colleyville development staff professionals realize that those who generate new ideas and new content will be the market movers. We know now is the time for the City to become involved in this emerging customer service structure and go to work building a reputation that's based on "Earned Media". It is described as "favorable publicity gained through promotional efforts other than advertising, as opposed to paid media, which refers to publicity gained through advertising". Marketing is no longer about buying an advertisement and casting a lot of lines to see who bites. The most effective marketing programs focus on targeted, niche audiences that utilize earned media. To be truly successful, Colleyville must concentrate on those initiatives, which, build personal relationships with the City's customers (business owners, developers, brokers and ultimately prospective new businesses and investors) and trust in them for word-of- mouth advertising, as well. To accomplish this, Colleyville must engage in daily contact with its customers. This can range from participating in public speaking engagements and presentations, to having a Facebook and Twitter presence, and posting photos on Flickr and videos on You Tube. The more Colleyville interacts with its customers, the better the City will be able to serve its customers and likewise encourage word-of-mouth sales. As another article recently pointed out, "The best way to generate more leads is to create a customer experience that makes people talk." Establishing programs and events that are unique from neighboring cities will make people take notice of Colleyville. Colleyville wants this type of discourse; if this occurs, others will do the talking (and selling) for us. The improvements to the development review process and the innovation center described below are initial, proactive measures. The plan to communicate those initiatives includes: 10 • Scheduling meetings with developers, brokers and prospective businesses to discuss development opportunities in Colleyville. • Participating in speaking engagements that promote Colleyville to real estate brokers, developers and prospective businesses. Regularly sharing and disseminating important information which effects Colleyville development through the Colleyville Executive Organization and the Chamber's Networking groups. This initiative provides another good opportunity for elected and other appointed officials-as well as interested citizens and volunteers-to get involved and help communicate Colleyville's cutting edge actions. Implementation Timeline: Ongoing; work to establish an economic development "Care Force" of spokesperson advocates for deployment in the 2"d Quarter, FY 2011. IV. Create a Customer Innovation Center which provides a forum for meeting with corporate customers and engages them in the innovation process. Developers, brokers, builders, architects, new and existing business owners and anyone that has a stake in the future of Colleyville, will be invited to participate. This partnership between Colleyville and the City's corporate customers will generate a wealth of ideas to promote new projects and business growth in the City. We see our corporate customers as partners in Colleyville's innovation and want the City's four development-related Departments to access, absorb and utilize their insights, especially so we may be aware of additional resources we can provide to better serve them. Likewise, we want our customers to have knowledge of Colleyville's programs, policies and the latest in development news. As they come to know the City of Colleyville focuses on its corporate customers, this proposed Flight Plan Innovation Center will be a productive way to transition our efforts into tangible products. The Customer Innovation Center will serve as a testing ground for new Community and Economic Development programs and policies, new Business models and concepts before any funds are spent. The Customer Innovation Center is the setting most conducive backdrop for developing a new Business Incubator. It is also the ideal setting to involve CEO's that live in Colleyville in initiatives that promote new projects and business growth. It may even entice Colleyville's CEO's to locate their business in the City. The possibilities for the Flight Plan Innovation Center are endless; the Center is simply aWin-Win proposition. 11 The following initiatives will assist the City in getting the Innovation Center off the ground: • Approach area universities and SCORE and propose a partnership to develop a strategy for development of the Customer Innovation Center program. Explore: Y What services can we offer new and emerging businesses? Y What should our work plan be? Where do we focus our innovation efforts? Y How do we make innovation a managed process? How much innovation do we need? - How do we connect our Innovation Strategy with the City's Strategic Plan? • Begin holding Customer Innovation Center meetings. The primary focus of the meetings will be on developing ideas (inventions) and following through on initiatives (innovations) that promote new business growth and the growth of a knowledge based economy (which will also help provide a daytime population for our retailers and restaurants). Consider tacking the following initiatives within the Customer Innovation Center program. Y Business Entrepreneurship Programs Y Business Mentorship Programs Y Business Incubator y Other Initiatives Aimed at Improving Community and Economic Development Programs and Processes Implementation Timeline: Approach Universities and SCORE in 15t Quarter, FY 2011; target introduction in 2"d Quarter, FY 2011 12 ECONOMIC DEVELOPMENT INCENTIVE POLICY Section 1. General Purpose and Objectives The City of Colleyville Economic Development Department is charged with expanding the City's taxable base. In keeping with this overall mission, the City has implemented a three point strategy in order to accomplish this important revenue generating task: • To identify and assist retail developers to commit, invest and build new high quality sales tax generating projects in Colleyville; • To assist landowners in the sale and development of potential retail, office and hotel sites to their highest and best use; and • To recruit new, and retain existing, Colleyville retailers, restaurants and other sales tax generating businesses compatible with Colleyville's available land, land use plan and demographics. To achieve this goal, the City wishes to enhance its economic development efforts by developing an incentive policy to promote retention and expansion of existing retailers and to attract new retail businesses. Within the context of these goals, the City of Colleyville will give consideration to providing reasonable incentives as a stimulus for new development and redevelopment on a case-by-case basis. Nothing herein implies or suggests that the City of Colleyville is under any obligation to provide any incentive to any applicant. Section 2. Criteria Any request for incentive shall be reviewed by the City Council. Their decision shall be based upon an evaluation of the following criteria, which each applicant will address in narrative format in the application: Employment Impact • Totat number of full time equivalent jobs brought to Colleyville; • Types of jobs created; • Total annual payroll. Fiscal Impact • Total real and personal property value to be added to the tax rolls; • Anticipated direct sales tax generated at one percent (1 %) of taxable sales; • Other revenues generated for the city: franchise payments, occupancy taxes, utility revenues, etc; • City infrastructure construction required; • Projected total annual operating budget of the facility. Community Impact • The expected effect the project have on the local housing market; • The expected environmental impact, if any, created by the project; • The compatibility of the project with the City's comprehensive plan. Competitive Impact • The effect the project would have on existing businesses in Colleyville; • A list of the types of products or services to be sold by the applicant which are currently sold by existing Colleyville merchants; • A list of specific businesses seen as direct competitors to the applicant. Section 3. Types of Incentives It is the policy of the City of Colleyville to customize the provisions of economic development incentives on a case-by-case basis. This individualized design of a total incentive package is intended to allow maximum flexibility in addressing the unique concerns of each applicant while enabling the City of Colleyville to better respond to the changing needs of the community. Consideration wilt be given to providing any type of economic development incentives not prohibited by state or federal law including, but not limited to: tax abatements, in-lieu-of frneport exemptions, sales tax grants and other grants in general, as we{I as participation in infrastructure and waiver of fees. These economic development incentives are in addition to an ongoing tax increment financing program offered by the various taxing entities, which is not a part of this incentive program. The provision of incentives will be subject to the procedural and other requirements outlined in this document as well as those mandated by state or federal law, and by other actions of the City of Colleyville. Nothing within these guidelines shall imply or suggest that the City of Colleyville is under any obligation to provide any incentive to any applicant. Section 4. Value of Incentives Following an assessment of the response provided to the criteria contained in Section II, the City Council shall determine whether it is in the best interests of the City of Colleyville that economic development incentives be offered to the applicant. Additional consideration, beyond the criteria, will include such items as the degree to which the project/applicant furthers the goals and objectives of the community or meets or compliments a special need identified by the City Council. Tax Abatements: A Tax Abatement may be offered in two categories: 1. Real Property (not located in the TIF District); and/or 2. Business and Personal Property 2 Real property abatements may be offered to applicants, which will pursue the construction of new or expanded facilities in which to house the applicable project. The abatement may apply only to the value of improvements made. Business Personal property abatements may be offered to applicants, which will pursue the purchase or long-term lease of existing facilities. The abatement will apply to the value of new personal property brought into the taxing jurisdiction. Once a determination has been made that a tax abatement may be offered, the value and term of the abatement will be determined according to the following schedule: Grants in general The City of Colleyville may agree to extend a grant based on the amount of revenues to be generated by the economic development project to the City of Colleyville for such categories as sales tax, occupancy taxes, utility fees, or similarly related revenues. Retail Sales Tax Grants The City may by contract provide an incentive consisting of an annual grant based on a percentage of the sales and use tax received by the city from the sale of taxable items by the applicant. The City is authorized by Section 380.001, Texas Local Government Code, to make such grants. Sales and use tax means the city's one percent (1%) sales and use tax on the sale of taxable items by the applicant at the applicant's business location in the city. Sales tax receipts consist of the City's receipts from the State of Texas from the collection of sales and use tax by the applicant attributed to the sale of taxable items applicant's business location in the City for the previous twelve calendar month period. The applicant by contract will be required to provide a sales tax certificate setting forth the applicant's collection of sales and use tax for the sale of taxable i#ems consummated at the applicant's business location in the City for the previous ending twelve calendar month period, together with such supporting documentation as may be required by the City. The grant would be conditioned on the applicant's continued ownership/occupancy of the project site. The sates tax grants would be paid in annual installments within ninety (90) days after the end of each twelve calendar month period following the issuance of the certificate of occupancy for the facility, or other commencement date if no certificate of occupancy is required. The grant would not include any of the City sales and use tax receipt from the imposition and collection of sales and use tax for taxable items consummated at any location, business, establishment or by any other entity in the City, other than from the applicant's sate of taxable items at the applicant's business location in the City_ 3 Any sales tax grant payable would be limited to the extent that the City has received sales tax from taxable sales by the applicant. The City would not be required to provide any grant for any twelve calendar month period during the term of the agreement for which the City has not received sales tax revenue from taxable sales by the applicant for such twelve calendar month period. The City's obligation to pay the sales tax grants in the agreement would be conditioned upon the applicant providing the following: 1. A schedule detailing the amount of sales and use tax collected and paid by the applicant to the State of Texas for the previous twelve calendar month period for the sale of taxable items consummated at the applicant's business location in the City; 2. A copy of all sales and use tax returns and reports, sales and use tax prepayment returns, direct payment permits and reports, including amended sales and use tax returns or reports, filed by the applicant with the State of Texas for the previous twelve calendar month period showing sales and use tax collected and paid by the applicant for the sale of taxable items consummated at the applicant's business location in the City; 3. A copy of all direct payment and self-assessment returns, including amended returns, filed by the applicant for the previous twelve calendar month period showing sales and use tax collected and paid by the applicant for the sale of taxable items consummated at the applicant's business location in the City; 4. Information concerning any refund or credit received by the applicant of sales and use tax paid or collected by the applicant which has been reported by applicant in a sales tax certificate for a previous twelve month period and for which a sales tax grant has been paid by the City; and 5. A schedule detailing the total sales of taxable items by the applicant consummated at the applicant's business location in the City for the previous twelve month period. The City will agree to the extent allowed by law, to maintain the confidentiality of the sales tax certificates. The City may condition the incentive upon the creation of employment, construction of improvements, certain development, continued operations for a stated period, or other public consideration. The contract shall require the applicant to construct certain improvements or expansions and contain at a minimum the following terms: 1. generation of certain level of sales tax; 2. annual written certification that applicant is in compliance with the agreement; 3. authority to terminate or modify the agreement if applicant fails to comply with agreement; 4. Minimum term of occupancy or continued operations within a city. In the event the applicant files an amended sales and use tax return, or report with the State of Texas, or if additional sales and use tax is due and owing, as determined or approved by the State of Texas, affecting sates tax receipts for a previous twelve calendar month period, the sales tax grant payment for the next twelve calendar period immediately following such State of Texas approved amendment could be adjusted accordingly provided the city has received sales tax a receipts attributed to such adjustment. As a condition precedent to payment of such adjustment, the applicant should provide the city with a copy of any such amended sales and use tax report or return, and the approved thereof by the State of Texas. !n the event the State of Texas determines that the city erroneously received sales tax receipts, or that the amount of sales and use tax paid to the city exceeds the correct amount of sales and use tax for a previous twelve calendar month period, for which the applicant has received a sales tax grant, the applicant will be required within thirty {30) days after receipt of notification thereof from the City specifying the amount by which such sales tax grant exceeds the amount to which the applicant was entitled pursuant to such State of Texas determination, repay such amount to the City. Infrastructure Participation and Waiver of Fees The City of Colleyville may agree to a partial or complete cost participation for the extension, construction, or reconstruction of infrastructure necessary for the development of an economic development applicant's project. In addition, the City Council may approve the waiver of fees for, but not limited to, permit applicants, utility taps and similar fees. Section 5. Recapture In the event a business receiving incentives from the City of Colleyville fails to perform under the agreement executed between the City and the business, the incentive obligation on the part of the City will be void. Any incentive paid to the business up to the point of failure shall be returned to the City of Colleyville in full. Section 6. Procedural Guidelines Any person, organization or corporation desiring that the City of Colleyville consider providing economic development incentives to encourage location or expansion of operations within the city limits of Cotleyville shall be required to comply with the following procedural guidelines. Nothing within these guidelines shall imply or suggest that Colleyville is under any obligation to provide incentives in any amount or value to any applicant. Preliminary Application Steps 1. Applicant shall complete an "Application for Economic Development Incentive" as provided by the City. 2. Applicant shall address all criteria questions outlined in Section 2 above in a letter format. 3. Applicant shall prepare a plat showing the precise location of the property, all roadways within 200 feet of the site, and all existing land uses and zoning within 200 feet of the site. If the property is described by metes and bounds, a complete legal description shall be provided. 5 Applicant shall complete alt forms and information detailed in items 1 through 3 above and submit them to the Economic Development Manager, City of Colleyville, 100 Main Street, Coffeyville, Texas 76034. Application Review Steps 1. All information in the application package detailed above will be reviewed for completeness and accuracy. Additional information may be requested as needed. 2. The application will be distributed to the appropriate City departments for internal review and comments. Additional information may be requested as needed. 3. Copies of the complete application package and staff comments will be provided to the City Council. Consideration of the Application The City Council will consider the application at a regular or called meeting(s). Additional information may be requested as needed. The City Council of Colleyville may consider a resolution calling a public hearing to consider establishment of a tax reinvestment or redevelopment zone or other zone designation as deemed appropriate. The City Council of Colleyville shall hold the public hearing and determine whether ~, the project is feasible and practical and would be of benefit to the land to be included in the zone and to the municipality." The City Council of Colleyville may consider adoption of an ordinance or resolution, as deemed appropriate, designating the area described in the legal description of the proposed project. The City Council may consider adoption of a resolution approving the terms and conditions of a contract between the City and the applicant governing the provision of the economic development incentives. Section 7. Purpose of Policy The policy herein adopted is intended as a guide for use in developing economic development incentive programs under the provisions of state law. Notwithstanding the policy herein established, the City Council of the City of Colleyville retains the right to act within the provisions of such act without the necessity of amending the general policy and/or purpose herein adopted. 6 RESOLUTION R-04-2462 A RESOLUTION OF THE CITY OF COLLEYVILLE ADOPTING A POLICY FOR ECONOMIC DEVELOPMENT INCENTIVES WHEREAS, Texas State law provides for ahome-rule municipality to offer various economic development incentives; and WHEREAS, the economic viability of the City of Colleyville depends upon the City's ability to attract new investment through the location of new businesses as welt as the expansion-retention of existing businesses; and WHEREAS, the City of Colleyville must enhance its competitiveness with other localities in both the retention, expansion and attraction of businesses; and WHEREAS, the Property Redevelopment and Tax Act requires that any City wishing to grant economic development incentives must first establish guidelines that govern consideration of such incentives. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLLEYVILLE, TEXAS: Sec 1. That the Economic Development Incentives Policy contained in Exhibit "A" is hereby adopted. AND fT IS SO RESOLVED. PASSED BY A VOTE OF AYES, O N YS AND ~ ABSTENTIONS ON THIS THE ~ DAY OF 2004. ATTEST: Cynthia Singleton, TRMC City Secretary CI OLLE oe cutt Mayor