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The November 21, 2001 joint meeting of the Community and Economic Development Committee
was called to order by its Chairperson Council Member Roland Kelly at 1:35 p.m. in the Council
Informal Meeting Room.
Persons in attendance included Council Members Varner, King, Coleman and Kelly; Michael
Beitzinger, Don Inks, Jon Hunt, Jim Scheetz, F. Jay Dunney, Pat McMahon of Project Future,
Pete Mullen, Mike Kruk, Terry Bland of the gbouth Virti4 ZrthU1U and Kathy Cekanski
Farrand, Council Attorney.
Council Member Kelly thanked everyone for coming to the Committee meeting which will focus
on revising local tax abatement procedures.
Council Member King then provided a brief overview to the draft tax abatement ordinance which
was provided at the November 7th meeting focusing on the abatement tiers, base abatements and
add-on abatement years. Council Member King noted that the"super-sized projects"are addressed
in 9(1) f, which has been added since the last meeting.
Council Member Coleman noted that Tire Rack was a 500,000 square foot project, and therefore
attention should be given to size.
Council Member King noted that projects like Tire Rack and the proposed regulations would
provide the opportunity to hire locally since they could build from different categories.
Pat McMahon noted that materials are a function of what you buy and where it is located. He
questioned what was local and what was not, and further noted that with construction managers
there would be separate contracts.
Council Member Kelly stated that the Committee is attempting to come up with a process which
would ultimately benefit those who are living in South Bend. He noted that we must be practical
as well as provide benefits to those living in the city.
Don Inks suggested that incentives be provided only if it is available locally for perhaps 75 % or
based on a dollar cost. Discussion then took place on employees versus independent contractors
noting that independent contractors should receive 1099's are not usually licensed through the
Building Department.
Dr. Varner suggested that tax ID numbers be used.
Jon Hunt noted that one of the primary goals is to have benefits accrue to South Bend.
The Committee inquired of the building trade representatives present how many live in South
Bend. It was suggested that perhaps that information could be provided to the committee utilizing
zip code classifications.
Mr. Dunney noted that there are 5,500 construction workers in St. Joseph County.
Mr. Kruk suggested that Davis-Bacon wages be the goal as opposed to BLS rates.
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Community and Economic Development Committee
November 21, 2001
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Mr. Hunt noted that much discussion has taken place on this topic and that many believe that the
Davis-Bacon wage rates are too high and relate to national averages which do not take into
consideration the particulars of the locality like South Bend.
Mr. McMahon suggested that research be done on this topic and that that information then be
shared with the Committee.
Council Member King noted that he has been told that the skilled rates are on the high end. He
suggested that some one like Craig Hartzer for the Indiana Department of Workforce Development
in Indianapolis be contacted for a recommendation.
Council Member Kelly agreed with Council Member King's suggestions and urged him to contact
Mr. Hartzer.
Dr. Varner suggested that the cost of doing business needs to be discussed further, as well as the
concept of paying targeted wage levels.
Mr. Hunt stressed that most abatement go to existing businesses not to companies re-locating here.
Council Member King noted that the Council has been criticized for providing tax abatement to
"bottom feeders" and that if the regulations would target wage levels it would help change that
image.
With the assistance of Council Member King's computer program, the Committee then began the
process of the assignment of points for each category. Preliminary placement and assignment then
took place based on the Committee's informal recommendations.
Council Member Kelly thanked Council Member King for his assistance in providing the necessary
software to assist the Committee.
Mr. Hunt noted that the "safe harbor" for those who have been in discussion with the City should
be at least six(6) months before any new regulations would take effect.
Council Member Kelly suggested that the next meeting take place on Wednesday, November 28th
at 3 p.m.
There being no further business to come before the Committee, Council Member Kelly adjourned
the meeting at 4:00 p.m.
Respectfully submitted,
Council Member Roland Kelly, Chairperson
Community and Economic Development Committee
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