AGENDA MEMORANDUM

 

 

Meeting Date:           July 23, 2007

 

From:                          Kenneth L. Thomas, Director of Housing & Economic Development          

                       

Subject:                      Request for approval to Award an Economic Development Grant to Waste Management, Incorporated for creation of 65 new jobs in the City of Leesburg.     

 

 

Staff Recommendation:

Staff recommends the City Commission approve an Economic Development Grant for Waste Management, Incorporated in the amount of $24,000 (3 year term), $5,000 the first year and $9,500 per year for the remaining two years for creation of 65 new jobs in Leesburg. 

 

Analysis:

Waste Management, Incorporated (WMI) is the leading provider of comprehensive waste and environmental services in North America, a Fortune 500 company.  The company, headquartered in Houston, Texas, includes 413 collection operations, 370 transfer stations, 283 active landfill disposal sites, 17 waste-to-energy plants, 131 recycling plants, 95 beneficial-use landfill gas projects and 6 independent power production plants. 

 

To better serve the Central Florida region, WMI decided to move its customer service operation to Leesburg.  WMI will initially occupy 10,500 square feet of space at the Talley Business Center on Talley Road.  During the first year of operation WMI will create 65 new jobs and plans to expand its workforce to 100 jobs.  After the first year, WMI has the option to expand its square footage to an additional 3,500 square feet.  The facility will be occupied by Customer Service Agents responsible for new services, customer complaints, administration of municipal contracts and accounts receivables.  The facility will be used as a training center for employees, providing training in computer systems and contract administration. 

 

The average pay rate will be $13.00 per hour; in addition, WMI will provide health insurance, 401K, paid sick and vacation time along with miscellaneous company perks.  The annual company purchases, excluding new equipment, are estimated to be $250,000 per year.  WMI capital investment for new construction will cost $600,000, and the overall development cost for Talley Business Center will exceed $4.2 million dollars.  

 

WMI will lease 10,500 square feet at $14.50 per square foot per year. The lease will pay $152,250 lease payments to the owners and $10,657.50 in sales tax.  The sales tax collected is divided among Lake County Government, State of Florida and the City.

 

Sales Tax Calculation:

 

Lease Payments                       $14.50 (cost per square foot) x 10,500’ = $152,250 per year

 

Sales Tax                                 $152,250 x 7% (sales tax) = $10,657.50 Sales Tax collected per year

 

Property Tax Calculation

 

Ad Valorem tax                       $4,500,000 (property value) x 4.01 mills / 1,000 = $18,045 Leesburg property taxes per year.

 

If the Commission approves this proposal, the City Attorney will prepare an Economic Development Grant Agreement to be considered for Commission approval. The Agreement will describe such things as: how and when payment will be made, beginning and ending dates for the grant, what happens if the number of jobs provided is not met, etc.  No payments will be made until the Agreement has been approved by the Commission.

 

Options:

1.  Appropriate $5,000 for fiscal year 2007/2008 and $9,500 per year for each of the subsequent two years; or,

2.  Such alternative action as the Commission may deem appropriate

 

 

Fiscal Impact

The fiscal impact of the project will be for a three year term at $24,000, pursuant to budget approval.  The 65 new jobs created equals to $369.23 per job; i.e. $24,000 / 65 = $369.23.   

 

 

 

Submission Date and Time:    7/19/2007 10:50 AM____

 

Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. __________________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________