City of Springfield
Massachusetts

Ordinance
ORD-2018-11
Passed/Veto
Sep 10, 2018 7:00 PM

Tax Increment Financing Agreements

Information

Department:City ClerkSponsors:Vice President - Ward 8 Councilor Orlando Ramos
Category:Local Law

Attachments

  1. Printout
  2. mayor's veto

Body

AMENDING CHAPTER 355 OF THE REVISED ORDINANCES OF THE CITY OF SPRINGFIELD, 1986, AS AMENDED, BY AMENDING CHAPTER 355 THEREOF

ORD.  NO. ___

BE IT ORDAINED BY THE COUNCIL OF THE CITY OF SPRINGFIELD, AS FOLLOWS:

Chapter 355, Taxation  is hereby amended by adding Article IV, Tax Increment Financing, to read as follows:

 

Section 355-15. Requirements

In addition to any other conditions that may be required in connection with tax increment financing relief granted by the City, each tax increment financing agreement entered into between the City and the recipient of such relief shall be subject to the following:

A.              It shall be a special and material requirement of the Tax Increment Financing Agreement that any construction manager, general contractor or other lead or prime contractor, or any entity functioning in any such capacity, and any other contractor or subcontractor of any tier or other person that is engaged to perform the construction work during the term of this Agreement on the property that is the subject of the Tax Increment Financing Plan (hereinafter, collectively and individually, the “contractor”) shall comply with the following qualifications and conditions at all times during their performance of work on the property:

 

(1)              The contractor has not been debarred or suspended from performing construction work by any federal, state or local government agency or authority in the past five years;

 

(2)              The contractor has not been found within the past five years by a court or governmental agency in violation of any law relating to providing workers compensation insurance coverage, misclassification of employees as independent contractors, payment of employer payroll taxes, employee income tax withholding, wage and hour laws, prompt payment laws, or prevailing wage laws;

 

(3)              The contractor must maintain appropriate industrial accident insurance sufficient to provide coverage for all the employees on the project in accordance with G.L. c.152 and provide documentary proof of such coverage to the Office of Economic Development to be maintained as a public record;

 

(4)              The contractor must properly classify employees as employees rather than independent contractors using applicable federal and state law. Individuals properly classified as employees according to applicable law must be treated as employees for the purposes of minimum wages and overtime, workers’ compensation insurance coverage, unemployment taxes, social security taxes and state and federal income tax withholding. (G.L. c.149, §148B on employee classification);

 

(5)              The contractor must comply with G.L. c. 151, §1A and G.L. c. 149, § 148 with respect to the payment of wages to properly classified employees;

 

(6)              The contractor  must be in compliance with the health and hospitalization requirements of the Massachusetts Health Care Reform law established by Chapter 58 of the Acts of 2006, as amended, and regulations promulgated under that statute by the Commonwealth Health Insurance Connector Authority;

 

(7)              The contractor must comply with the residency and diversity requirements that would be applicable if the project were subject to the City’s Responsible Employer Ordinance.

 

Section 355-16. Non-Compliance

A.              If any person or entity subject to the foregoing qualifications and conditions fails to comply with any of the foregoing qualifications and conditions with respect to work on the property, the parties agree that such an event materially frustrates the public purpose for which this Agreement and any certification of the tax increment financing plan by the EACC was intended to advance.  Upon such an event, the City shall petition the EACC for revocation of any certification of the TIF plan. Upon notice of revocation from the EACC, the tax relief provided by this Agreement shall be terminated upon written notice by the City to the owner, the owner shall pay to the City an amount equal to the value of the tax relief already received under this Agreement.

 

B.              Complaints concerning compliance with the qualifications and conditions set forth above shall be directed to the Compliance Officer, who shall investigate the complaint and make a determination as soon as administratively feasible and notify the complaining party and the property owner or its designee.  Such complaints must be submitted in writing no later than 270 days following the completion of the construction project.  Any party may appeal the Compliance Officer’s determination to the REO Committee, which shall take such steps as it deems necessary to investigate and, after giving the parties an opportunity to be heard, shall make its determination concerning the question of compliance.

 

C.              In the event the owner of the property that is the subject of the Tax Increment Financing Plan challenges the termination of the tax relief provided by this agreement and/or the revocation by the EEAC of any certification of the TIF plan, the owner shall set aside in an escrow account an amount equal to the full amount of the tax savings that previously had and that would have accrued under this Agreement while any such challenge remains pending.  The owner shall have a continuing obligation to contribute to the escrow account amounts equal to the additional tax savings that accrue under this Agreement while its challenge remains pending.  The owner shall promptly provide to the City with documentation of its compliance with this obligation.  The conditions of the escrow account shall provide that, in the event the owner is unsuccessful in its challenge, the funds in the account shall be paid to the City.  The owner’s obligations under this subsection shall be judicially enforceable.  It is the intent of the parties that the residents of Springfield are third party beneficiaries of this Agreement, and that it may be enforced in a civil proceeding brought by not less than 10 taxable inhabitants of the City. 

 

Meeting History

May 7, 2018 7:00 PM  City Council Regular Meeting
draft Draft

Councilor Ramos moved to send the matter to Economic Development subcommittee. Seconded by Councilor Twiggs. The motion passed unanimously.

RESULT:COMMITTEE
May 14, 2018 7:00 PM  City Council Regular Meeting
draft Draft

no action

May 29, 2018 4:00 PM  City Council Economic Development
draft Draft
Jun 18, 2018 7:00 PM  City Council Regular Meeting

Councilor Gomez spoke in favor of the order.

Councilor Gomez made a motion to delete paragraph 7 from section A from the proposed ordinance. Seconded by Councilor Ryan. The motion passed unanimously.

Councilor Shea expressed concerns about the application of the ordinance to certain developers.

Councilor Ryan stated that he shared Councilor Shea's concerns.

Councilor Shea made a motion to send the matter to committee. Seconded by Councilor Walsh.

Councilor Ramos stepped down from the president's podium.

Councilor Walsh took over as president.

Councilor Ramos spoke in favor of the proposed ordinance.

The motion to committee failed.

Councilor Lederman spoke in favor of the proposed ordinance.

Councilor Ryan stated he supported taking first step.

RESULT:FIRST STEP
Jul 16, 2018 7:00 PM  City Council Regular Meeting
draft Draft

Councilor Edwards moved to amend the proposed ordinance by inserting after first sentence of section B the following language: "Such complaints must be submitted in writing no later than 270 days following the completion of the construction project". Seconded by Shea. The amendment was unanimously approved.

The Council invoked rule 22C to ordain the amendment in one vote.

RESULT:SECOND & THIRD STEPS [8 TO 0]
MOVER:Orlando Ramos, President- Ward 8 Councilor
AYES:E. Henry Twiggs, Kenneth E. Shea, Adam Gomez, Kateri B. Walsh, Jesse Lederman, Melvin A. Edwards, Timothy C. Allen, Orlando Ramos
ABSENT:Marcus J Williams, Michael A. Fenton, Thomas M. Ashe, Justin Hurst, Timothy Ryan
Sep 10, 2018 7:00 PM  City Council Regular Meeting
draft Draft

Councilor Gomez moved to take this item first.

Councilor Ryan spoke in opposition too the override. He expressed concerns about the lack of exemptions for small contractors and subcontractors.

Councilor Shea spoke in opposition to the ordinance.

In response to a question from Councilor Shea, Atty. Davis stated there were issues with enforcement and issues regarding holding people liable for the activities of others that they may not know about.

Councilor Walsh spoke in support of the override, she expressed concern about the new concerns from the administration.

Councilor Williams spoke in favor of the override. He expressed concern about the fact that other councilors did not express their concerns earlier.

Councilor Lederman stated that he would support the override.

Councilor Ryan spoke against the override, He stated that the ordinance would not cover HDIPs.

Councilor Gomez spoke in support of the veto override.

Councilor Edwards spoke in favor of the override.

RESULT:PASSED/VETO [11 TO 1]
MOVER:Orlando Ramos, President- Ward 8 Councilor
AYES:Marcus J Williams, E. Henry Twiggs, Kenneth E. Shea, Adam Gomez, Kateri B. Walsh, Michael A. Fenton, Jesse Lederman, Melvin A. Edwards, Justin Hurst, Timothy C. Allen, Orlando Ramos
NAYS:Timothy Ryan
ABSENT:Thomas M. Ashe

Discussion