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use of investment funds | procedure for investment consideration | conclusion
Sampson County Economic Development Investment Policy
The Sampson County Board of Commissioners and the Sampson County Economic Development Commission has determined that the general welfare of the residents of Sampson County is directly benefited by fiduciarily sound economic development polices that promote the growth and diversity of the local economy and result in the creation of more high quality, well paying jobs.
On May 1, 2000, the Sampson County Board of Commissioners adopted the Sampson County Economic Development Investment Policy (EDIP).
The Sampson County Economic Development Investment Policy is available to prospective industries that are interested in calling Sampson County home as well as to the industries that are currently located in Sampson County. For more information, contact the Sampson County Economic Development Commission at: 910-592-8921.
ARTICLE I
PREAMBLE
The Sampson County (the "County") Board of County Commissioners (the "Board"), has determined that the general welfare of the residents of the County is directly benefitted by fiduciarily sound economic development policies which promote the growth and diversity of the tax base and result in the creation of more high quality, well paying jobs. Pursuant to its ruling in Maready v. The City of Winston Salem, et. al, the North Carolina Supreme Court has made clear that the expenditure of public funds to promote economic development is deemed to be for these legitimate public purposes.
The current competitive environment among states which regularly compete with North Carolina and counties which regularly compete with the County in economic development projects, dictates that the County must adopt an Economic Development Investment Policy ("EDIP"), which is conservative and fiduciarily sound, in order to remain competitive in recruiting new business and industry and retaining expansions of existing businesses and industries currently located in the County.
The County has a degree of economic distress which calls for economic development policies to address these persistent short comings. Based upon data most recently assembled, the County has experienced a steady decline in population as reported by the last census, and it is anticipated that the upcoming census will show no growth or growth which lags behind the rest of the State. Due to the lack of quality jobs in the County there is at present a severe out migration of workers. Additionally, for workers in jobs in the County; wage levels overall lag behind the State averages.
For these reasons, the Board hereby establishes EDIP guidelines to encourage new businesses/industries to locate and existing businesses/industries to expand within the County. These guidelines are guidelines only. Each new or expansion economic development project will be considered on a case by case basis. The Board takes this action in adopting these guidelines pursuant to authority granted by N.C. Gen. Stat. §158-7.1, as interpreted by the North Carolina Supreme Court in Maready.
ARTICLE II
POLICY PRINCIPLES
These EDIP guidelines are based upon, and any EDIP arrangement with a new or existing company must be in compliance with fiduciarily sound public policy principles, which at a minimum include:
A. Any EDIP investment must provide the County a high return on investment, taking into account tax revenues of the economic development project over a ten year period from the date of the start-up of the project. NC Gen. Stat. §158-7.1(d2).
B. Any EDIP investment must be preceded by an agreement with the company involved, binding it to minimum levels of capital investment and quality job creation, and providing for penalties and/or reductions in amounts of forward funded investments in the event that it fails to meet these minimum required levels. NC Gen. Stat. §158-7.1(d2)(2).
C. Investments of County funds by way of EDIP investments shall be in items which leave value in the County in the event of a curtailment or closure of the operations within the facility, such as site acquisition, site preparation, internal infrastructure, job training, etc.
D. The bedrock of the County’s economy are agribusiness, businesses and industries already located in the County. Consequently, the terms and application of the EDIP policy are to result in existing businesses/industries receiving consideration for investments that are on terms equal to or better than those available to a company considering locating its first facility in the County. Specifically, EDIP investments may be provided when in the opinion of the Board it is necessary to retain jobs currently existing in the County.
E. Provision of any EDIP investment for a new industry must be a competitive necessity, in order to successfully locate a new business/ industrial facility. This provision will not apply when such investments are necessary to retain an expansion of an existing facility in the County.
ARTICLE III
EDIP PROGRAM PARAMETERS
Each project will be considered on a project-by-project basis, using these guidelines established by the Board. These guidelines shall be subject to periodic review and may be modified, amended or terminated, due to changed economic conditions or competitive considerations. In the event of any modification, amendment or termination, EDIP investments to which the County previously committed will not be affected.
In determining whether to make an EDIP investment to a project, and if so, the amount of such investment the Board will consider, among other relevant factors, the following matters:
A. The total capital investment in the project including site acquisition, site improvement, building cost and equipment.
B. The number, type and quality of jobs created or retained.
C. Wage levels for jobs created or retained by the project.
D. Other site specific issues through which the recruitment of a particular industry would have some particular ancillary benefit for the County, such as opening up areas for further development.
E. Other factors deemed relevant by the Board in its discretion.
ARTICLE IV
MINIMUM PROJECT QUALIFICATIONS
In order to qualify for consideration for an EDIP investment from the County, the project must meet certain minimum threshold requirements. Meeting these threshold requirements does not indicate that the project will necessarily receive an EDIP investment and if so, the amount of such investment inasmuch as the Board reserves sole discretion in this regard on a project-by-project basis.
The minimum project qualifications are as follows:
A. The minimum levels of capital investment are $2,000,000 for a project on behalf of a company which is a new project in the County, and $1,000,000 for a project which is an expansion of an existing facility in the County.
B. At least 25 new jobs for a new corporate facility or 15 new jobs for the expansion of an existing corporate facility must be created in the County over a period of 3 years, or a like amount retained.
C. The wage levels of the jobs created must represent a competitive improvement for citizens of the County, as determined by the Board, and must be at or above the average manufacturing wage in the County.
D. The project must involve a facility to be used for manufacturing, customer service center, data processing center, central administrative offices, value added agricultural processing facilities, agricultural processing facilities, distribution, corporate or divisional headquarters, research and development, wholesale distribution warehousing.
For a project to be considered by the Board for an EDIP investment, it must meet the above minimum project qualifications. Additional qualifications may be required by the Board in its discretion on a project-by-project basis.
ARTICLE V
EXCLUSIONARY FACTORS
Even though a project might meet all of the above minimum project qualifications, it will not be considered by the Board for an EDIP investment if any of the following factors apply:
A. The expansion project would, for any reason, result in a net reduction of the ad valorem tax valuation of all facilities in the County owned by the company, or its parent, subsidiary or affiliated companies.
B. An EDIP investment will not be made or installments continued if that company, or a parent, subsidiary or affiliated company, is not current in all ad valorem tax payments to the County.
C. No prior commitment to an EDIP investment shall be binding if the company originally receiving the investment assigns it to another company, unless the Board has consented to such assignment in writing.
D. The financial condition of the company receiving the investment must not be such that the ability of the company to meet its obligations is in doubt.
ARTICLE VI
USE OF INVESTMENT FUNDS
EDIP investments under these guidelines may be made at the time of the announcement that the project is locating in the County, or in installments to be paid in the future, with the timing of such payments in the sole discretion of the Board. Such investments may be used for one or more of the following purposes, depending upon the terms approved by the Board:
A. Site acquisition.
B. Site preparation.
C. Internal site infrastructure.
D. Other improvements to the site.
E. Job training costs not otherwise reimbursed by investments from the Community College system or tax
credits pursuant to the state statute.
F. Other purposes which leave value in the community as determined by the Board on a project-by-project basis.
ARTICLE VII
PROCEDURE FOR INVESTMENT CONSIDERATION
The following procedure will be utilized in considering a project for an EDIP investment:
A. The company will negotiate the terms of such investments with the Executive Director of the Sampson County Economic Development Commission, and/or the Assistant Director of the Sampson County Economic Development Commission, the County Manager, and any other official designated by the Sampson County Manager. Such discussions are negotiations only, inasmuch as the Board has the sole discretion and authority to finally agree to such investments.
B. The company will submit financial records, under procedures to protect confidentiality, to a designee of the County for a review of the financial ability of the Company to meet the performance requirements specified.
C. At a time agreeable to the company, given its confidentiality concerns, a public notice and public hearing regarding the proposed investment will be given/held in accordance with the requirements of N.C.Gen.Stat. §158-7.1.
D. The Board will make a decision as to whether to approve the terms of the investment agreement.
E. An EDIP investment agreement will be executed which contractually binds the County to make the investments and the company to meet the capital investment, job creation and wage level requirements, to which they mutually agreed.
F. The company will provide annual verification of its compliance with the requirements to which it has agreed, such verification process to be as mutually agreed to between the County and the Company.
ARTICLE VIII
CONCLUSION
All EDIP investments will be considered on a project-by-project basis, and by adopting these guidelines, the Board is not obligated to make any investments. In considering whether to provide EDIP investments for a project and if so how much, the Board will take into account grants made by other local, regional or economic development entities. These guidelines are not retroactive to any project which has been announced prior to the adoption of these guidelines, except for projects that have been announced and have reached an agreement in principal with the Board or the Executive Director of the Sampson County Economic Development Commission and the County Manager as to EDIP investments for that particular project. These guidelines are effective as of April ____, 2000.
Adopted, this 1st day of May, 2000.
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Norman Wayne Naylor, Chairman
Sampson County Board of Commissioners
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Jerry D. Hobbs, Clerk to the Board