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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 Page 1 of 9 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 Page 2 of 9 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 AC Distribution12182003.doc Page 3 of 9 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' AC Distribution 12182003.doc Page 4 of 9 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. AC Distribution12182003,doc Page 5 of 9 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: AC Distribution 12182003.doc Page 6 of 9 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. AC Distribution12182003.doc Page 7 of 9 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: AC Distribution12182003.doc Page 8 of 9 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 Page 9 of 9 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/