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Item 4G Approve Resolution No. 16-019, adopting a tax abatement policy; establishing guidelines and criteria for tax abatement agreements; and, electing to continue eligibility to participate in tax abatement. Item 4G Hello Mayor and members of the City Council. This is Alison Ortowski and I will be presenting Item 4G, resolution No. 16-019 1 Requested Action Approve Resolution No. 16-019, adopting a tax abatement policy; establishing guidelines and criteria for tax abatement agreements; and, electing to continue eligibility to participate in tax abatement. The action you are being requested to take is to… 2 Background Information On September 1, 2015, the City Council directed City Manager Shana Yelverton to enter into a Memorandum of Understanding (MOU) with TD Ameritrade whose purpose was to establish the mutually-agreed upon terms of a future incentive agreement between the two entities. In addition to establishing infrastructure cost participation on roadway, water and sewer line construction, the terms of that MOU also included the following:   “The parties desire to enter into an ad valorem tax abatement agreement pursuant to Chapter 312 of the Texas Tax Code to exempt from taxation: (i) up to 90% of the increase in the value of the Property for a period not to exceed 10 years; and (ii) up to 90% of the value of tangible personal property that is brought onto the Property after the execution of the tax abatement agreement, for a period not to exceed 10 years.” In order to grant TD Ameritrade this tax abatement, Chapter 312 of the Texas Tax Code specifies that the City must adopt a tax abatement policy that identifies conditions that any tax abatement applicant must meet in order to be eligible for abatement. The terms of the policy are at the discretion of the City and can be specific or general but must provide for “the availability of tax abatement for both new facilities and structures and for the expansion or modernization of existing facilities and structures.”  Once adopted, the policy is effective for 2 years.  It may be amended or repealed during that 2 year period only by a vote of 3/4 of the members of the city council.   3 Tax Abatement Policy Terms The policy attached as Exhibit A to Resolution No. 16-019 identifies terms related to both new and existing facilities. For new facilities, the policy specifies that the project is expected to produce a minimum added value of Thirty Million Dollars ($30,000,000) in real and personal property improvements within the City and create a minimum of 1,000 full-time jobs, with an average annual total compensation of $60,000.   For existing facilities, the policy specifies that the project is expected to produce a minimum added value of Ten Million Dollars ($10,000,000) in real and personal property improvements within the City of Southlake, and create a minimum of 500 new full-time jobs with an average annual total compensation of $50,000. It is also important to note that the policy does include in Section IV an exceptions clause that allows the City Council to vary from these terms if needed. 4 City of Southlake Strategy Map The City of Southlake provides municipal services that support the highest quality of life for our residents, businesses, and visitors. We do this by being an exemplary model of balancing efficiency, fiscal responsibility, transparency, and sustainability. C1 Achieve the highest standards of safety & security C2 Provide travel convenience within City & region C3 Provide attractive & unique spaces for enjoyment of personal interests C4 Attract & keep top-tier businesses to drive a dynamic & sustainable economic environment C5 Promote opportunities for partnerships & volunteer involvement Serve our Customers Manage the Business B1 Achieve best-in-class status in all City disciplines B2 Collaborate with select partners to implement service solutions B3 Enhance resident quality of life & business vitality through tourism B4 Provide high quality services through sustainable business practices B5 Enhance service delivery through continual process improvement B6 Optimize use of technology Provide Financial Stewardship Promote Learning and Growth F1 Adhere to financial management principles & budget F2 Invest to provide & maintain high quality public assets F3 Achieve fiscal wellness standards F4 Establish & maintain effective internal controls L1 Ensure our people understand the strategy & how they contribute to it L2 Enhance leadership capabilities to deliver results L3 Attract, develop & retain a skilled workforce L4 Recognize & reward high performers L5 Empower informed decision-making at all levels in the organization C6 Enhance the sense of community by providing excellent customer service and citizen engagement opportunities L6 Foster positive employee engagement Deliver on Our Focus Areas This item supports the City’s strategy through strategic corporate objective C4 (read from slide) 5 Other Considerations The minimum added value amounts identified in the policy have been determined by the City’s Chief Financial Officer Sharen Jackson who has indicated that these amounts should generate a return sufficient to warrant public investment.   In addition, it is important to note that the policy does not commit the City to granting an abatement simply because one has been requested. The granting of an abatement remains solely at the discretion of the City Council. And finally, the proposed policy was reviewed and approved by the City Attorney. 6 Questions? Alison Ortowski, 817-748-8261 7