HomeMy WebLinkAbout025648 RES - 02/10/2004RESOLUTION
APPROVING THE EXECUTION OF BUSINESS INCENTIVES
AGREEMENT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB
DEVELOPMENT CORPORATION ("CORPORATION") AND A. C.
DISTRIBUTION, INC. TO REIMBURSE A. C. DISTRIBUTION, INC. FOR
JOB TRAINING EXPENSES UP TO $3,700 PER NEW JOB CREATED,
TO CREATE AT LEAST 50 NEW JOBS PRIMARILY EMPLOYED TO
SERVE A CUSTOMER BASE OUTSIDE A 50-MILE RADIUS OF THE
CITY,
WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernon's
Texas Revised Civil Statutes ("Development Corporation Act of 1979")
empowered local communities with the ability to adopt an optional local sales and
use tax as a means of improving the economic health and prosperity of their
citizens;
WHEREAS, on November 5, 2002, residents of the City of Corpus Christi passed
Proposition 2, New and Expanded Business Enterprises, which authorized the
adoption of a sales and use tax for the promotion and development of new and
expanded business enterprises at the rate of one-eighth of one percent to be
imposed for 15 years;
WHEREAS, the 1/8 cent sales tax authorized by passage of Proposition 2 was
subsequently enacted by the City Council and filed with the State Comptroller of
Texas, effective April 1, 2003, to be administered by the Corporation's Board of
Directors ("Board");
WHEREAS, Section 21 of the Development Corporation Act of 1979 requires the
City Council to approve all programs and expenditures of the Corporation;
WHEREAS, the Corporation received proposal from A. C. Distribution, Inc. to request
business incentives of approximately $3,700 per new full-time permanent job created for
training related expenses on a reimbursement basis to enable A. C. Distribution to
create and maintain at least 50 new full-time permanent jobs in the City of Corpus
Christi, Texas, primarily employed to serve a customer base outside a 50-mile radius of
the City of Corpus Christi, Texas, with wages as required in Section 38 (b) of the
Development Corporation Act of 1979;
WHEREAS, the Board determined that it is in the best interests of the citizens of Corpus
Christi, Texas that business incentives be offered to A. C. Distribution for training
related expenses on a reimbursement basis in order for A.C. Distribution to create and
maintain at least 50 new full-time permanent jobs in the City of Corpus Christi, Texas,
that will be employed to primarily serve a customer base outside a 50-mile radius of the
City of Corpus Christi, Texas, with wages as required in Section 38(b) of the
Development Corporation Act of 1979, ("Job Training Project");
Page 2 of 2
WHEREAS, the Board authorized execution of an agreement with A. C. Distribution for
the requested job training funds at the Board's meeting of February 2, 2004; and
WHEREAS, the City Council has determined that it is in the best interests of the
Corporation and the citizens of Corpus Christi, Texas that the proposed Job Training
Project and its associated expenditure be approved.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI, TEXAS, THAT:
SECTION 1. The City Council approves the execution of a Business Incentives
Agreement between the Corporation and A. C. Distribution, Inc. to grant A. C.
Distribution, Inc., on a reimbursement basis, up to $3,700 per new job created. A
copy of the agreement is attached as Exhibit A.
ATTEST
CITY OF CORPUS CHRISTI
Armando Chapa
City Secretary
Mayor
Approved as to form: February 3, 2004
Lisa Aguil~
Assistant City Attorney
for City Attorney
H:\LEG-DIR\Lisa\RES\Feb 10 A. C. Distribution Res.doc
Corpus Christi, Texas
I~)J0"' Day of
The above resolution was passed by the following vote:
Samuel L. Neal, Jr.
Brent Chesney
Javier D. Colmenero
Melody Cooper
Henry Garrett
Bill Kelly
Rex A. Kinnison
Jesse Noyola ~,~J~
Mark Scott
AGREEMENT TO GRANT BUSINESS INCENTIVES TO
A. C. DISTRIBUTION, INC.
FOR THE CREATION OF JOBS
This Agreement to Grant Business Incentives for the Creation of Jobs ("Agreement") is
entered into between the Corpus Christi Business and Job Development Corporation
("Corporation") and A. C. Distribution, Inc., a Texas corporation ("A. C. Distribution").
WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernon's Texas
Revised Civil Statutes (Development Corporation Act of 1979) empowered local
communities with the ability to adopt an optional local sales and use tax as a means of
improving the economic health and prosperity of their citizens;
WHEREAS, on November 5, 2002, residents of the City of Corpus Christi ("City")
passed Proposition 2, New and Expanded Business Enterprises, which authorized the
adoption of a sales and use tax for the promotion and development of new and
expanded business enterprises at the rate of one-eighth of one percent to be imposed
for 15 years,
WHEREAS, the 1/8 cent sales tax authorized by passage of Proposition 2 was
subsequently enacted by the City Council and filed with the State Comptroller of Texas,
effective April 1, 2003, to be administered by the Corpus Christi Business and Job
Development Corporation Board;
WHEREAS, the Corpus Christi Business and Job Development Corporation exists for
the purposes of encouraging and assisting entities in the creation of jobs for the citizens
of Corpus Christi, Texas;
WHEREAS, the Board of Directors of the Corporation ("Board"), on May 5, 2003,
adopted the Corporation's Guidelines and Criteria for Granting Business Incentives;
WHEREAS, Section 21 of the Development Corporation Act of 1979, requires the City
Council to approve all programs and expenditures of the corporation;
WHEREAS, the City Council approved the Corporation's Guidelines and Criteria for
Granting Business Incentives on May 13, 2003;
WHEREAS, A. C. Distribution has submitted a proposal to the Corporation to request
business incentives of approximately $3,700 per new full-time permanent job created for
training related expenses on a reimbursement basis to enable A. C. Distribution to
create and maintain at least 50 new full-time permanent jobs in the City of Corpus
Christi, Texas, primarily employed to serve a customer base outside a 50-mile radius of
the City of Corpus Christi, Texas, with wages as required in Section 38 (b) of the
Development Corporation Act of 1979; and
WHEREAS, the Board has determined that it is in the best interests of the citizens of
Corpus Christi, Texas that business incentives be offered to A. C. Distribution for
training related expenses on a reimbursement basis in order for A.C. Distribution to
AC Distribution 12182003.doc
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create and maintain at least 50 new full-time permanent jobs in the City of Corpus
Christi, Texas, that will be employed to primarily serve a customer base outside a 50-
mile radius of the City of Corpus Christi, Texas, with wages as required in Section 38(b)
of the Development Corporation Act of 1979.
In consideration of the covenants, promises, and conditions stated in this Agreement,
Corporation and A. C. Distribution agree as follows:
1. Effective Date. The effective date of this Agreement ("Effective Date") is the latest
date that either party executes this Agreement.
2. Term. The term of this Agreement is five years from the Effective Date.
3. Facility. A. C. Distribution agrees to consolidate operations in a new facility in the
5500 block of Bear Lane, Corpus Christi, Texas for the term of this Agreement.
4. Wage Requirement. In order to count as a job under this Agreement, the job must
pay wages as required in Section 38 (b) of the Development Corporation Act of 1979,
5. Job Creation Qualification.
a. A. C. Distribution agrees to create and maintain a minimum number of 50 new
full-time (2,080 hours/year) permanent jobs at the Facility within three years of
the Effective Date. A full-time permanent job is one that provides at least 2,080
hours annually. The jobs shall be primarily engaged in serving a customer base
outside a 50-mile radius of the city of Corpus Christi.
b. A. C. Distribution agrees to maintain the new full-time permanent jobs created
under Section 5a of this Agreement throughout the remainder of the term of this
Agreement.
c. By January 15 of each year of this Agreement, A. C. Distribution agrees to
provide Corporation with a sworn certificate by its corporate officer in charge of
personnel records certifying the following:
(i) the number of full-time permanent employees at the Facility as of
December 31 of the previous calendar year; and
(ii) the number of full-time permanent jobs which were created during the
previous calendar year, with hourly wage.
d. A. C. Distribution shall allow Corporation reasonable access to A. C.
Distribution's personnel records to verify the job creation qualification.
6. Buy Local Provision.
a. A. C. Distribution agrees to use its best efforts to give preference and priority
to local manufacturers, suppliers, contractors, and labor, except where not
AC Distribution12182003 doc
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reasonably possible to do so without added expense, substantial inconvenience,
or sacrifice in operating efficiency.
b. For the purposes of this section, the term "local" as used to describe
manufacturers, suppliers, contractors, and labor includes firms, businesses, and
persons who reside in or maintain an office within a 50-mile radius of Nueces
County.
7. Business Incentives Authorized. In consideration for creation and maintenance of
at least 50 new full-time permanent jobs at the Facility, the Corporation agrees to
reimburse A. C. Distribution $3,700 per new full-time permanent job created under this
Agreement, up to a maximum of 75 new full-time permanent jobs, for certain training
expenses identified on the attached Exhibit A, if the following conditions are met:
a. A. C. Distribution shall submit invoices to the Corporation for reimbursement
of costs expended by A. C. Distribution for training expenses identified on the
attached Exhibit A.
b. Each invoice must be submitted to Corporation within 30 days from date
services were performed.
c. Corporation shall pay the reimbursement amounts solely out of its sales tax
revenue collected during the term of this Agreement. Should the actual sales tax
revenue collected for any one year be less than the total amount of grants to be
paid to all parties contracting with the Corporation for that year, then, all
contracting parties shall receive only their pre rata share of the available sales
tax revenue for that year and Corporation shall not be liable to A. C. Distribution
for any shortage.
8. Warranties. A. C. Distribution warrants and represents to Corporation the following:
a. A. C. Distribution is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Texas, has all corporate power and
authority to carry on its business as presently conducted in Corpus Christi,
Texas.
b. A. C. Distribution has the authority to enter into and perform, and will perform,
the terms of this Agreement.
C. A. C. Distribution has timely filed and will timely file all local, State, and
Federal tax reports and returns required by laws to be filed and all taxes,
assessments, fees, and other governmental charges, including applicable ad
valorem and employment taxes, have been timely paid, and will be timely paid,
during the term of this Agreement.
d. A. C. Distribution has received a copy of the Texas Development Corporation
Act of 1979, Art. 5190.6, Vernon's Texas Revised Civil Statutes, and
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acknowledges that the funds granted in this Agreement must be utilized solely for
purposes authorized under State law and by the terms of this Agreement.
e. If an audit determines that the funds were not used for authorized purposes,
A. C. Distribution agrees to reimburse Corporation for the sums of money spent
for purposes not authorized by law within 30 days written notice requesting
reimbursement.
f. There are no bankruptcy proceedings currently pending concerning A. C.
Distribution, nor are any such proceedings contemplated by A. C. Distribution, as
of the date of execution of this Agreement by A. C. Distribution.
g. The parties executing this Agreement on behalf of A. C. Distribution are duly
authorized by its Board of Directors to execute this Agreement on behalf of A. C.
Distribution.
9. Compliance with Laws. A. C. Distribution shall observe and obey all applicable
laws, ordinances, regulations, and rules of the Federal, State, County and City
governments, as may be amended or enacted.
10. Non-Discrimination. A. C. Distribution covenants and agrees that A. C.
Distribution will not discriminate nor permit discrimination against any person or group of
persons, with regard to employment and the provision of services at, on, or in the
Facility, on the grounds of race, religion, national origin, marital status, sex, age,
disability, or in any manner prohibited by the laws of the United States or the State of
Texas.
11. Force Majeure. If the Corporation or A. C. Distribution are prevented, wholly or in
part, from fulfilling its obligations under this Agreement by reason of any act of God,
unavoidable accident, acts of enemies, fires, floods, governmental restraint or
regulation, other causes of force majeure, or by reason of circumstances beyond its
control, then the obligations of the Corporation or A. C. Distribution are temporarily
suspended during continuation of the force majeure. If either party's obligation is
affected by any of the causes of force majeure, the party affected shall promptly notify
the other party in writing, giving full particulars of the force majeure as soon as possible
after the occurrence of the cause or causes relied upon.
12. Assignment. A. C. Distribution may not assign all or any part of its rights,
privileges, or duties under this Agreement without the prior written approval of the
Corporation and City. Any attempted assignment without approval is void, and
constitutes a breach of this Agreement.
13. Indemnity. A. C. Distribution covenants to fully indemnify, save,
and hold harmless the Corporation, the City, their respective officers,
employees, and agents ("lndemnitees") against all liability, damage,
loss, claims, demands, and actions of any kind on account of
personal injuries (including, without limiting the foregoing, workers'
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compensation and death claims), or property loss or damage of any
kind, which arise out of or are in any manner connected with, or are
claimed to arise out of or be in any manner connected with A. C.
Distribution's activities conducted under or incidental to this
Agreement, including any injury, loss or damage caused by the sole
or contributory negligence of any or all of the Indemnitees. A. C.
Distribution must, at its own expense, investigate all those claims and
demands, attend to their settlement or other disposition, defend all
actions based on those claims and demands with counsel
satisfactory to Indemnitees, and pay all charges of attorneys and all
other cost and expenses of any kind arising from the liability,
damage, loss, claims, demands, or actions.
14. Events of Default. The following events constitute a default of this Agreement:
a. Failure orA. C. Distribution to timely, fully, and completely comply with any
one or more of the requirements, obligations, duties, terms, conditions, or
warranties of this Agreement;
b. The Corporation or City determines that any representation or warranty on
behalf of A. C. Distribution contained in this Agreement or in any financial
statement, certificate, report, or opinion submitted to the Corporation in
connection with this Agreement was incorrect or misleading in any material
respect when made;
c. Any judgment is assessed against A. C. Distribution or any attachment or
other levy against the property of A. C. Distribution with respect to a claim
remains unpaid, undischarged, or not dismissed for a period of 30 days.
d. A. C. Distribution makes an assignment for the benefit of creditors.
e. A. C. Distribution files a petition in bankruptcy, or is adjudicated insolvent or
bankrupt.
f. If taxes on the Facility become delinquent, and A. C. Distribution fails to timely
and properly follow the legal procedures for protest or contest.
g. A. C. Distribution changes the general character of business as conducted of
the date this Agreement is approved by the Corporation.
15. Notice of Default. Should the Corporation or City determine that A. C. Distribution
is in default according to the terms of this Agreement, the Corporation or City shall notify
A. C. Distribution in writing of the event of default and provide 60 days from the date of
the notice ("Cure Period") for A. C. Distribution to cure the event of default.
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16 Results of Uncured Default. After exhausting good faith attempts to address any
default during the Cure Period, and taking into account any extenuating circumstances
that might have occurred through no fault of A. C. Distribution, as determined by the
Board of Directors of the Corporation, the following actions must be taken for any
default that remains uncured after the Cure Period:
a. A. C. Distribution shall immediately repay all amounts of reimbursements paid
by Corporation under this Agreement, with interest at the interest rate paid by the
City on its most recently issued general obligation bonds from date of expiration
of Cure Period until fully paid.
b. A. C. Distribution shall pay Corporation reasonable attorney fees and costs of
court to collect amounts due to Corporation.
c. The Corporation shall have no further obligations to A. C. Distribution under
this Agreement.
d. Neither the City nor the Corporation may be held liable for any consequential
damages.
e. The Corporation may pursue all remedies available under law.
17. No Waiver.
a. No waiver of any covenant or condition, or the breach of any covenant or
condition of this Agreement, constitutes a waiver of any subsequent breach of
the covenant or condition of the Agreement.
b. No waiver of any covenant or condition, or the breach of any covenant or
condition of this Agreement, justifies or authorizes the nonobservance on any
other occasion of the covenant or condition or any other covenant or condition of
this Agreement.
c. Any waiver or indulgence of A. C. Distribution's default may not be considered
an estoppel against the Corporation.
d. It is expressly understood that if at any time A. C. Distribution is in default in
any of its conditions or covenants of this Agreement, the failure on the part of the
Corporation to promptly avail itself of the rights and remedies that the
Corporation may have, will not be considered a waiver on the part of the
Corporation, but Corporation may at any time avail itself of the rights or remedies
or elect to terminate this Agreement on account of the default.
18. Notices.
a. Any required written notices shall be sent mailed, certified mail, postage
prepaid, addressed as follows:
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A. C. Distribution:
A. C. Distribution
c/o Mr. K's Heating and Air Conditioning
Attn: Kathy Baily
708 Cantwell Lane
Corpus Christi, Texas 78408
Corporation:
City of Corpus Christi
Business and Job Development Corporation
Attn: Executive Director
1201 Leopard Street
Corpus Christi, Texas 78401
b. A copy of all notices and correspondence must be sent the City at the
following address:
City of Corpus Christi
Attn.: City Manager
P.O. Box 9277
Corpus Christi, Texas 78469-9277
c. Notice is effective upon deposit in the United States mail in the manner
provided above.
19. Incorporation of other documents.
a. The Corpus Christi Business & Job Development Corporation Guidelines &
Criteria for Granting Business Incentives ("Corporation Guidelines"), adopted
May 5, 2003, are incorporated into this Agreement.
b. A. C. Distribution's application submitted to the Corporation for business
incentives ("Application") is incorporated into this Agreement.
c. If there is any conflict in the terms of these documents, the following order
controls: (i) This Agreement, (ii) Corporation Guidelines, (iii) Application.
20. Amendments or Modifications. No amendments or modifications to this
Agreement may be made, nor any provision waived, unless in writing signed by a
person duly authorized to sign agreements on behalf of each party.
21. Relationship of Parties. In performing this Agreement, both the Corporation and
A. C. Distribution will act in an individual capacity, and not as agents, representatives,
employees, employers, partners, joint-venturers, or associates of one another. The
employees or agents of either party may not be, nor be construed to be, the employees
or agents of the other party for any purpose.
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22. Captions. The captions in this Agreement are for convenience only and are not a
part of this Agreement. The captions do not in any way limit or amplify the terms and
provisions of this Agreement.
23. Severability.
a. If for any reason, any section, paragraph, subdivision, clause, provision,
phrase or word of this Agreement or the application of this Agreement to any
person or circumstance is, to any extent, held illegal, invalid, or unenforceable
under present or future law or by a final judgment of a court of competent
jurisdiction, then the remainder of this Agreement, or the application of the term
or provision to persons or circumstances other than those as to which it is held
illegal, invalid, or unenforceable, will not be affected by the law or judgment, for it
is the definite intent of the parties to this Agreement that every section,
paragraph, subdivision, clause, prevision, phrase, or word of this Agreement be
given full force and effect for its purpose.
b. To the extent that any clause or provision is held illegal, invalid, or
unenforceable under present or future law effective during the term of this
Agreement, then the remainder of this Agreement is not affected by the law, and
in lieu of any illegal, invalid, or unenforceable clause or provision, a clause or
provision, as similar in terms to the illegal, invalid, or unenforceable clause or
provision as may be possible and be legal, valid, and enforceable, will be added
to this Agreement automatically.
24. Venue. Venue for any legal action related to this Agreement is in Nueces County,
Texas.
25. Sole Agreement. This Agreement constitutes the sole agreement between the
Corporation and A. C. Distribution. Any prior agreements, promises, negotiations, or
representations, verbal or otherwise, not expressly stated in this Agreement, are of no
force and effect.
Corpus Christi Business & Job Development Corporation
By:
Name:
Title:
Date:
Attest
By:
Name:
Title:
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A. C. Distribution, Inc.
By:
Name:
Title:
Date:
Attest:
By:
Title:
Federal Tax ID No.:
Corporate Seal:
The State of Texas
County ofNueces
Before me, (Notary's name), on this
day personally appeared President ofA. C.
Distribution Inc., known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he execute(J the same in the
capacity sated as the act of A. C. Distribution, Inc., a Texas corporation, for the
purposes and consideration expressed in the instrument.
Given under my hand and seal of office this the day of
,2004.
Notary Public in and for the State of Texas
AC Distribution 12182003.doc
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Exhibit "A"
Authorized Training Expense List
Education
Instructor fees (in house employee or out sourced
Tuition
Training Videos
Training Video Rental
Literature, books, and training materials
Skills Testing
Testing, Registration Fees
Literature, books, materials
On the Job Training
New employees gross wage while under the supervision of a trainer or supervisor.
Trainee(s) Lab time and Safety Meetings (if paid out to trainee(s))
Training Lab Instruments and Equipment
Volt Meters
Amp Meters
Temperature Probes
Air Flow Hoods
Blowers Doors
Data Logging Recorders
Velometers
Magnahelic Gages
Duct Testing Equipment
Air Sampling Instruments
Moisture Meters
Test Panels and Equipment
Refrigerant Recovery Machines
Ox/Act Torches
Vacuum Pumps
Dial Indicators
Video Projector
Control Software
Laptop Computers
Desk Top Computers
Travel Related to Training
Airline Tickets
Hotel
Car Rental
Phone
Fuel
Daily Perdium
Other
Any other training related item or expense mutually agreeable to the Corporation's Executive Director and
A.C. Distribution's authorized representative in writing.
CITY OF CORPUS CHRISTI
CERTIFICATION OF FUNDS
(City Charter Article IV, Sections 7 & 8)
I, the Director of Financial Services of the City of Corpus Christi, Texas (or his/her duly
authorized representative), hereby certify to the City Council and other appropriate officers that
the money required for the current fiscal year's portion of the contract, agreement, obligation or
expenditure described below is in the Treasury to the credit of the Fund specified below, from
which it is to be drawn, and has not been appropriated for any other purpose. Future payments
are subject to annual appropriation by the City Council.
City Council Action Date: 02/10/04
Agenda Item:
A. Resolution approving the execution of business incentives agreement between the
Corpus Christi Business and Job Development Corporation ("Corporation") and
A.C. Distribution, Inc. to reimburse A. C. Distribution, Inc. for job training
expenses up to $3,700 per new job created at least 50 new jobs primarily
employed to serve a customer base outside a 50-mile radius of the City.
Amount Required:
$185,000.00
Fund Name Fund No. Org. No. Account No. Project Amount
No.
Corpus Christi Business and 1140 15010 530000 $ 185,000,00
Job Development Corporation
Total $ 185,000.00
Fund 1140 is a 4-A corporation and thus does not require certification of funds.
is contingent upon receipt of sales tax revenues.
[~ Certification Not Required
Funding
Director of Finaficial Services
Date: L// C//)7/