6.0. EDSR 09-09-2002 - Laserfiche WebLink

Home Browse Search

Review 1st Draft Business Subsidy Policy September 5,2002 Page 2 of 2 • 41111° Summary The proposed Business Subsidies Policy includes provisions required by the MN Business Subsidy Law,including: • Specific minimum requirements that recipients must meet in order to be eligible to receive business subsidies. Beyond the minimum criteria required by law,recipients will also be required to meet the City's specific guidelines for the particular form of subsidy being requested. • Specific wage floor for the wages to be paid for the jobs created or retained. The wage floor may be stated as a specific dollar amount or may be stated as a formula that will generate a specific dollar amount. Staff recommends that a minimum wage floor be established for all types of business subsidy provided by the city. The attached Business Subsidy Law Fact Sheet defines the types of business subsidies in which the law applies. The following job and wage criteria currently exists within the respective city policies: • Tax Increment Finance Economic Development Districts o Creation of 1 full-time job per$25,000 of TIF, no wage criteria • Tax Rebate Finance o No specific job and wage criteria • Economic Development Micro-Loans o Supplemental Financing Program (loans up to $50,000) 1 full-time job per$20,000 loaned with a minimum average wage of $8.00 per hour plus benefits. o Industrial Incentive Program (loans up to $100,000) - 1 full-time job per$20,000 loaned with a minimum average wage of $10 per hour plus benefits. o Redevelopment Financing Program (loans up to $50,000) - No specific job and wage criteria The proposed City of Elk River Business Subsidies Policy includes a minimum wage floor of $15.00 per hour exclusive of benefits. The particular wage floor is proposed based upon the average wage of industrial companies in Elk River (2002 Business Retention Report$14.94). Or, the City may consider a formula such as the St. Cloud Housing&Redevelopment Authority. The St. Cloud HRA established the attached "Threshold Minimum Average Wage" to be applied to economic development projects that receive public assistance. The policy was developed to encourage employers to pay employees a wage that would allow them to be able to afford housing in the area based on their wages. The threshold is annually based upon the standard definition for local incomes and rents (3-bedroom apartment) established by the US Department of Housing and Urban Development (HUD).