COUNCIL COMMITTEES

The Council Committees Meeting was held on May 28, 1996 at 6:30 p.m. with Council President Christiansen presiding. Members of Council present were Mr. Lambert, Mr. Pitts, Mr. Leary, Mr. Truitt, Mrs. Malone, Mr. Fenimore, Mr. Salters, Mr. Hare and Mayor Hutchison.

AGENDA ADDITIONS/DELETIONS

Mr. Fenimore moved for approval of the agenda, seconded by Mrs. Malone and unanimously carried.

LEGISLATIVE AND FINANCE COMMITTEE

The Legislative and Finance Committee met with Chairman Salters presiding. Members present were Councilmen Leary and Hare and Mr. James Washington. Mr. William Schaefer was absent. In Mr. Schaefer's absence, Mr. Salters deputized Mrs. Malone to serve as a committee member.

Expansion of City Development Incentive Program - Proposed Ordinance Amendment - Chapter 19.5, Article IV, Abatement of City Real Estate Taxes

Councilman Hare requested that the City Assessor review our current Development Incentive ordinance for new facilities and to provide suggestions on expanding the ordinance to include provisions for qualifying industries and businesses that wish to expand their current business. Mr. Hare noted that Kent County Levy Court has adopted such an ordinance and felt that the City should do likewise. After reviewing the City's current ordinance and the County's ordinance, the City Assessor suggested that the current ordinance be expanded to incorporate the provisions suggested by Mr. Hare.

Mr. Hare explained that although the proposal would result in some lost property tax revenues to the City, he felt that it would ultimately behoove the City and its citizens to encourage business expansion of our current employers. He also felt it only fair to offer the same type of incentives to current businesses as is being offered to new facilities.

The proposal before the committee basically provides for the ability of applying for abatement of real estate taxes for anyone investing a minimum of $1 million in a new or existing facility and creates 20 full time jobs of which 75% must be Kent County or Dover residents. The abatement is based on a ten year sliding scale with 90% in the first year and 0% in the tenth year.

Mr. Hare stated that the proposal applies only to those that meet the above requirements of investing $1 million or more in a new facility or investing $1 million or more in expansion of an existing facility. It would not apply to a company that buys an existing facility, unless the new owners invest $1 million or more in expansion of the current facility and the expansion creates the necessary number of new jobs. Eligibility for the tax abatement would be based on the expanded portion only and would not apply to the entire facility. Mr. Hare clarified that the requirements must be met on a per site basis, explaining that one company owning several small facilities cannot combine the resources from all sites in order to qualify.

Mr. Hare suggested that those who qualified during the 1995/96 fiscal year, make application for the abatement prior to July 1, 1996 for this next fiscal year. Council President Christiansen clarified that no one would be eligible for reductions from prior tax years, but that those that are qualified should make application for the reduction for the 1996/97 tax year.

There was general discussion on the requirement for the creation of 20 full time jobs (of which 75% must be Kent County or Dover residents). It was noted that the existing ordinance (for new facilities) requires the creation of 20 full time employees. Mr. Hare asked if Council wished to change the suggestion for 10 full time employees (for current facilities) to 20 which would then coincide with the requirements for new facilities. There was discussion about the current practice of businesses hiring several part time employees versus hiring a lesser number of full time employees as it saves dollars associated with employee benefits. Mrs. Malone felt that we should maintain the requirement of 20 full time employees, reminding Council that it is our desire to create new jobs for our citizens and keeping the number at 20 may encourage a business to reach that goal in order to qualify for the abatement. After further discussion, it was agreed that a compromise to 15 full time employees as a requirement would be agreeable to members of the committee.

Mr. Lambert and Mr. Fenimore commended Mr. Hare for taking the lead in this proposal to ensure that our existing facilities are treated in the same manner as new facilities in our area. In this respect, Mr. Fenimore suggested that we give consideration to ways of reducing the tax burden on our senior citizens. City Council went on record a few years ago as supporting additional tax reductions to our senior citizens and Mr. Fenimore suggested that this issue be addressed by the Legislative and Finance Committee in the very near future. Mr. Leary agreed that we should be in a constant state of modernizing our rules and regulations and suggested that the committee also review City business licenses to ensure equality among the various categories and to review licenses fees.

Mr. Leary moved to recommend approval of the proposed ordinance amendment (Attachment #1), stipulating that a minimum of 15 full time employees (of which 75% must be Kent County or Dover residents) be required for compliance in the expanded portion of the ordinance and that application for the tax abatement will be for the 1996/97 tax year with application to be made prior to July 1, 1996. The motion was seconded by Mr. Hare and unanimously carried.

Proposed Ordinance Amendment - Section 2-181 - Normal Retirement

It was recently brought to the attention of the Civilian Pension Board that the length of service requirement indicated in Section 2-181 of the Dover Code is not consistent with other sections of the General Employee Pension Plan. The Civilian Pension Board, after consultation with the Deputy City Solicitor, unanimously approved an ordinance amendment for submission to the Legislative and Finance Committee to correct this inconsistency.

Mr. Leary, Chairman of the Civilian Pension Board, explained that this is a housekeeping amendment that changes the length of service requirement from fifteen (15) years to ten (10) years of continuous service for those that have attained the age of 65. Asked by Mr. Washington if there is any financial impact by the change, Mr. Leary stated that there is no financial impact since the proposal simply brings the language into compliance with other sections of the Code.

Mrs. Malone moved to recommend approval of the proposed amendment to Section 2-181 (Attachment #2) of the City Code, as recommended by the Civilian Pension Board. The motion was seconded by Mr. Hare and unanimously carried.

Mr. Hare moved for adjournment, seconded by Mrs. Malone and unanimously carried.

Meeting Adjourned at 7:10 P.M.

                                                                                    Respectfully submitted,

                                                                                    Robin R. Christiansen

                                                                                    Council President

RRC/DJB