>> good afternoon.
I'm austin mayor lee
leffingwell.
A quorum is present so I'll
call this special meeting of
the austin city council to
order on november 28th,
2012.
We're meeting in the council
chambers, austin city hall,
301 west second street,
austin, texas.
We have two items on the
agenda for today.
And for purposes of citizen
input, we have combined both
of those items.
So if you signed up on
either one, you will be
speaking on both.
So without objection,
council, we'll go ahead and
take public input before we
address items 1 and 2 in
order.
First speaker is gus pena.
Gus pena?
Jim o'quinn.
Dave porter.
Welcome, you have three
minutes.
>> Councilmembers, dave
porter with the austin
greater chamber.
First of all I want to say
thank you for supporting
your previous incentive
deals.
This is the third one that
we have brought to you this
year and we appreciate your
previous support on all the
economic development deals.
Like all previous deals,
this one is again a net
positive financial impact on
the city, bottom line of
8 million net after the
incentive over the 10-year
period.
Visa, should they select
austin, and I want to stress
that this is still a very
competitive situation, but
should they select austin
they'll bring 800 good
paying jobs, average wage
over 90,000.
The lowest 10% wage is over
60,000 so this is a great
project and will be a great
win for austin and we would
greatly appreciate your
support next week when you
take action on this.
Thank you.
>> Mayor Leffingwell:
Thank you.
Before we go to the next
speaker I think it would be
best if we had a brief staff
presentation on this.
>> Thank you, mayor, city
counl.
Kevin johns, director of
economic growth and
redevelopment services.
With us today representing
vees are brad buyers, head
of real estate and
facilities, nancy clay balk,
the global hr director and
anne hart, principal in
hickey and associates.
For this special called
meeting today the purpose is
to present background on the
economic development
proposal and the schedule
for the future city council
meetings, provide an
overview of visa, provide a
background on the matrix
criterion score, also the
loci impact analysis and
lastly an overview of the
agreement itself.
So what is being considered
is an economic development
agreement with vees
corporation to establish
a -- visa corporation to
establish a global it center
and the economic proposals
being presented here today
at this special called
meeting and then a regular
meeting on december 6th to
have a public hearing and to
make a recommendation.
>> So a little background on
visa.
I think that everybody knows
that it's an american
multinational finance
service corporation.
They're the inventor of the
debit card.
The company is a 36-year-old
company headquartered in
california.
There are a global payments
technology company that
connects consumers,
businesses, banks and
governments in 200
countries.
The company has 18 u.s.
Locations and 70 global
locations.
Vees has been the worldwide
sponsor of the olympics
thins 1986 and is in
sponsorship with the
nat paraathletics.
A development proposal,
there are these five
components that you see.
The overall and fiscal
impact, linkages to the
economy, the character of
job and labor forces,
quality of life and cultural
vitality issues, and then
the analysis by the loci
cost benefit tool.
In summary, the company
scored 90 out of 100, which
represents visa increasing
its austin presence by
renovating 175,000 existing
square foot facility for its
global i.t. center.
This investment will result
in 794 new jobs over the
next five years.
They offer a comprehensive
benefits package including
domestic partner benefits.
The loci analysis concluded
that there would be a
8-million-dollar net new
positive result.
This is after the incentive
is included, 6.8 million.
The economic development
proposal benefits are
illustrated in this slide.
Basically it is 794 new
full-time jobs, a combined
7
and 8.7, about $27 million.
8-Million-dollar cash
positive investment.
The company offers a
comprehensive health care
benefits and it would locate
in the desired development
zone.
So the contractual
obligations to visa, their
performance obligations are
they would
establish a global it center
in austin, they would invest
7 million in real
property improvements.
7 Million in business
property.
794 New jobs would be
created with an average
salary of $113,000.
They would work with local
minority chambers of
commerce to expand the pool
of diverse candidates and
employment recruitment
efforts.
It would abide by the
supplier diversity policy
and they would of course
comply with the standards
and principles of the city's
ordinance for mwbe.
Contractual obligations for
the city of austin would be
to provide a 10-year
performance-based economic
development grant equal to
$250 per job.
The estimated value of the
5 million over
the duration of this
performance agreement.
The city is not obligated to
make a grant payment for any
year in which the company
would fail to meet the
performance measures.
So the next steps would be
for the city council to set
the public hearing date,
which is currently
anticipated for
december 6th.
The information is online,
but we would accept online
public comments to city
COUNCIL BY DECEMBER 3rd.
And lastly the public
hearing would be held on
december ofth.
-- December 6th.
If you have questions i
would be delighted to do
that.
>> Questions for staff or we
have representatives of visa
here if you would like to
ask them a question.
Otherwise we can go to our
speakers.
And the next speaker is paul
robbins.
>> Council, I'm really hag a
hard time parsing this math.
I keep hearing the incentive
of $250,000 per new job.
When I look at it it's
$2,000 total.
If only the jobs in austin
are looked at, it's $2,900
per job.
If you add in the state
money it will be $15,000 in
investment spent per local
job created.
Another thing about this --
that's what I understand.
The explanation is not very
defined.
Another thing I'm having a
hard time with about this
proposal is it will not help
the austin independent
school district.
This site is in the round
rock school district.
What is really worrysome to
me is the unanalyzed cost.
The austin independent
school district recently
calculated that overthe next
five years there will be a
1,500-dollar increase in
taxes, rates and fees for
the average austin home.
With the passage of the new
hope, that's another $100.
So some of this increase is
due to inflation, but some
of it is linked to growth.
In 2011 austin had the
highest average housing cost
of all 47 regions in texas.
Austin also has the highest
fair market rent in texas.
It also has the highest
water cost of the top 10
texas cities.
How much more affordable is
austin going to become with
this kind of unsustainable
growth?
This kind of affordability
analysis is something not
done by the chamber of
commerce, who seems tone
deaf to affordability
issues.
One last point.
In one case I actually
supported development
incentives of a solar
company.
I did it to support a
struggling industry and to
encourage a positive image
of austin.
I want austin to be renowned
as a city that tries to make
the world a better place.
Credit transactions and race
cars are not at the top of
this pyramid.
Good afternoon.
[Applause]
>> Mayor Leffingwell: And
with reference to the austin
independent school district
comment, I'd remind everyone
that a large part of the
round rock independent
school district is inside
the city of austin.
Clay dafoe.
>> Thank you, sir.
My name is clay dafoe,
former candidate for mayor
of austin, investigative
journalist on 10.5 f.m.
We've now expanded to
austin.
This right here is corporate
crime at its best.
I'm sick of it, sir.
What about small business?
What about the people that
actually live and work in
austin and the people that
are long-time austinites?
Just like your giveaways to
apple, nine million dollars
to apple.
Round rock isd tax money,
they're getting our tax
money.
Formula one, another bailout
you guys did a real bang up
job of.
(Indiscernible) renewables,
the spanish utility company,
the fourth largest company
in the world that you just
gave what was it,
450 million over five years?
Do you have the right to
determine the future of this
city and the future of
business development in
austin?
I don't think that's your
duty.
Your duty is our
representatives, elected,
honorables,
please look at me if you
dare.
It's to protect our rights
and I think you guys have
forgotten that.
I hear 794 jobs by this
kevin john whose I see often
down here.
I'm sure he has a great
salary here.
$27 Million he says will be
generated.
These jobs are median
$115,000 a year.
Let me remind you, ladies
and gentlemen, the median
salary today in the united
states of america is about
$30,000.
These are not your average
paying jobs here.
Brad meyers and anne harts,
stop your criminal theft
from me and everyone that
lives here in austin, texas.
We're sick of it and we're
not going to take it light
lie.
And you will be publicly
shamed for what you're doing
currently.
Austin is losing.
We are losing the business
battle.
Yes, we're losing to
san antonio, believe it or
not.
More laid back city than
austin.
San marcos, we're losing to.
We're losing to dennison
texas, tyler texas, and yes,
we're even losing to dallas
of all places.
So this shirt I bought from
planet k which is a long
time small business here in
austin.
Where is their two million
mayor
leffingwell?
Can you answer that
question?
Well, real weird austin
business does not want your
filthy blood spoiled money.
These tax-pair funded
federal reserve notes which
are based on debt, your
house of cards will
collapse.
Stop your criminal theft.
Ask hard questions.
I want to see you vetting
these claims of 794 jobs.
That's your duty to protect
our rights.
I don't see that happening.
Keep austin corporate.
Keep austin corporate.
Keep austin corporate, keep
austin corporate, keep
austin corporate.
As your /the
city/constituent I instruct
each and every one of you to
vote no on item 1 and 2
today.
Thank you.
>> Mayor Leffingwell: Next
SPEAKER IS will McCloudy.
>> To answer paul robbins'
question about the chamber
of commerce, the chamber of
commerce doesn't care about
the little guy, they care
about realtors and special
interest groups.
Now, visa, let me tell you a
little bit about visa.
A lot of people have debit
cards.
Some people have credit
cards.
Here's my card collection.
Let's see, I've got my id,
I've got my target credit
card, I've got my haveler
row card.
I have a mastercard out of a
credit union from
san antonio.
An at and t universal
rewards card, allied bank,
mastercard and a couple of
bus passes, acevedo's card
and a medicare card.
I don't see a visa in here.
Not many banks issue visa
cards.
In fact, speaking of target,
you can't get a target visa
card anymore.
Why?
Because their processing
fees are so high.
Now, if we're going for move
them into austin they're
coming from california.
Isn't california trying to
tax people who are leaving
the state of california and
take over by eminent domain?
I don't want to become part
of that because if visa does
that we will be paying for
california's debt.
We are rolling off the
fiscal cliff.
Y'all need to wake up
because we roll off the
fiscal cliff, where's the
money going to come from?
And these jobs, you think
they're going to go to high
school graduates from
memorial -- east side
memorial high school?
No!
They're going to go to
wealthy, well off, maybe
students that will go
out there and work.
Etcetera not helping the
poor.
It's not helping the
homeless.
Y'all wanted to tax the
homeless.
Y'all can't do that in the
state of texas because the
sales tax is capped at
8.25%.
Get that out of your head.
What you need to do to
improve the housing and make
austin a liveable city is
vote no on this visa u.s.a.
And other forms of corporate
welfare.
Where's the money going to
come from?
Because guess what, you'll
want to put it all on the
austin energy electric bill.
Remember 10-1, remember what
happened with 10-1?
We can do that with austin
energy.
We can actually abolish
austin energy and let it be
sent back to the voters and
let the voters choose and
decide what electric
provider they have.
And then you will really be
off a fiscal cliff.
I mean, that's food for
thought right there.
, I'm sorry, but
we should not be giving you
handouts.
You make a lot of money, you
don't need our money.
I'd rather see the two
million dollars go to small
businesses and more
importantly the poor.
We want to help with
homeless and housing.
We're not doing that by
giving corporate welfare out
in round rock.
Round rock school district
limits.
I don't think so.
Vote no, please.
[Applause]
>> Mayor Leffingwell:
Aaron chappell.
>> I'm aaron chapel from the
labor's union.
I have others here with me.
Hopefully we can cut down on
the number of speakers that
way as well.
We're very happy today after
yesterday's actions at the
county commission and of the
special incentives committee
to consider low wage,
especially construction
workers that are involved in
these deals and set minimums
for wages and for safety and
training opportunities for
those workers.
We just encourage you, this
looks like a good deal in
many ways, but to consider
those recommendations or to
just get those passed before
this deal is approved so
that -- we're looking at
7 million of
construction or
improvements, real property
improvements assessed,
smaller than in some deals,
but certainly the workers
involved in that piece won't
be making the six figure
salaries and would greatly
appreciate the minimums and
the opportunities that were
recommended yesterday.
So we encourage you to move
on those as soon as
possible.
Thanks a lot again to
councilmember martinez and
the members of that
committee as well as the
folks in the working group,
the chamber, the contractors
associations.
We really appreciate
everybody's work on that.
>> And as a final note, part
of those recommendations --
>> are you signed up to
speak?
>> I'm sorry.
>> Thank you.
>> Next speaker is phillip
la honor.
>> My name is phillip la
honor and I represent the
electricians union here in
austin.
And I want to thank mike
councilmember martinez and
tovo, morrison for their
efforts to raise the poverty
levels here in austin up to
somewhat of a giving wage
and just hope -- a living
wage and hoping that you
guys continue to progress
and vote for the incentive
package here coming up soon.
Thank y'all very much.
>> Mayor Leffingwell:
Thank you.
Laura presley?
>> Thank you, council and
mayor, for having this
hearing.
I am vehemently against this
incentive.
And I want to be clear.
If you could please answer a
couple of questions.
The total cost that was
presented just a few minutes
ago was over a two year
period for $15 million.
I think that is really
unclear to everybody what
those costs are.
$15 Million.
Is that coming out of the
taxpayers' pocket?
Where is that money coming
from?
Because the grant is
1.5 million.
5 million over 10
years with a total of
50 million?
Where is that 15 million
coming from?
If you could please clear
that up for the press and
for the public.
You know, the banking
industry that visa is a part
of, visa is not part of the
struggling industry, as
mr. robbins had said.
And I want to put a little
mats to this -- a little bit
different math.
We're going to be creating
800 jobs with an average of
$113,000 per year.
That's a nice salary.
In that salary -- and that
salary can afford a
430,000-dollar home because
the rule of thumb is
typically three times what
your salary is.
You can afford a
300,000-dollar home with
that salary.
And I want you guys to
recall that the average home
in austin is 210,000.
So why are our citizens
subsidizing a bunch of
people to have homes more
valuable than our average?
It doesn't make any sense.
That doesn't make any sense
at all.
Our average home value is
210,000 and we're going
to -- you're asking us to
subsidize people who can
make -- who can buy a
340,000-dollar home?
That's insanity.
It doesn't work.
I want you to think about
that kind of math.
We don't need our taxpayers
subsidizing rich global
corporations.
This is a sad day in austin
that we're even thinking
about this.
Austin is number one in so
many categories and we've
spent millions and millions
of tax dollars to get there.
Why is it not good enough?
Why do we have to continue
to spend more?
And I want to reiterate
please explain this
15-million-dollar cost and
where is that coming from?
Thank you.
>> Tovo: I think the
answer to your question is
that was the net cost on the
web loci analysis.
johns, that may be a
point of confusion.
Others have as well.
I wonder if you might come
up and talk a little bit
about the categories of
costs that are included in
that analysis.
And this is available on the
economic growth and
redevelopment service
website, is that right?
>> Yes.
Good afternoon, bryan
gillby.
For this and all projects we
look at the benefits, but
also the cost.
The costs associated with a
project like this include
the incentive.
They include cost to
recreation, libraries, court
system, general government,
health services, social
welfare, public safety,
water costs, electric costs
and wastewater costs.
So obviously there's a
revenue generator, but
there's also a cost so we
don't want to look just at
the positives.
We want to look at what the
costs associated with this
and every project are so
that we get to an accurate
bottom line.
>> So in other words you
assume that the workers who
would be employed at visa
will have -- will be using
the library, will be using
the recreation centers,
etcetera, so there's a cost
that you average -- that you
estimate based on that
service use.
>> That's correct.
>> Tovo: Thanks.
>> Cole: Mayor, while
you're there will you also
explain what's included in
net benefits?
>> When you look at the net
benefits as I mentioned it
is the costs that I outlined
and also the benefits that
are part of this and any
project.
That includes sales tax,
increased property taxes,
franchise fees, alcohol and
beverage tax revenues,
revenues from fines, fees,
wastewater revenues, water
revenues and electric
revenues.
>> Cole: And this is not
any of the additional taxes
from the other jurisdictions
like the county?
>> That's correct.
It's justin based financial
figures.
>> But those would also be
generated, but they're not
included in our analysis.
>> Correct.
>> Cole: Okay.
Thank you.
>> Morrison: There was one
other question that came up
robbins mentioned
that he was calculating that
it was more like $2,000 a
job versus 2 fist.
And I think the distinction
is the 250 is per year.
>> Correct.
>> Morrison: Could you
talk a little bit about
that?
>> So the jobs are going to
be phased in over a number
of years.
The potential maximum per
job would be if the job was
created in year one and
retained throughout that 10
year period that would be
2500 for that job.
We cap it so that we can
budget accordingly, but the
figure that we put at 250 is
an annual basis so it also
looks at retention.
>> Mayor Leffingwell:
Those are all the speakers
that I have signed up
wishing to speak.
So with that, council, I'll
entertain a motion on item 1
to set the public hearing
and consider the ordinance
on the economic development
program with visa, suggested
time and date december 6,
four p.m., austin city hall.
So moved by the mayor pro
tem, seconded by
councilmember martinez.
Any discussion?
Councilmember morrison.
>> Morrison: I wanted to
just bring up one issue that
I thought was -- we had a
little bit after chance to
talk about it yesterday, but
it's relevant here.
And I had a chance to talk
with visa folks in the
chamber yesterday about
this.
I would like to hear a
little bit about it right
now because I think it's an
interesting conversation
that we need to have here.
And that is inch visa is
estimating that about 70% of
the jobs that will be
created would go to local
hires.
Which is interest because we
want jobs for austin people.
The other side of the coin
that comes up in the
high-tech realm is a little
bit interesting and that is
that we don't really have an
over abundance of high-tech
people that aren't currently
employed in the city of
austin.
So -- which is great for
them.
But on the other hand there
is a demand for high-tech
people.
So in a situation like this
we want to be careful that
we're not necessarily
promoting competition for
the high-tech people in the
city of austin where there's
a bunch of new jobs opening
that we're supporting, that
we might be supporting, and
it's actually creating a
hardship for the existing
companies because they're
losing their employees to
them.
And I had a good
conversation about some of
the ways that we're actually
trying to deal with that in
the city and what's going on
there.
I see mr. martin back there.
I wonder if you might come
down and talk a little bit
about our discussion
yesterday and how we're --
it's a problem everywhere.
There's not an over supply
of high-tech workers pretty
much anywhere in the united
states.
But in particular there are
some efforts to deal with
that that the chamber and
others are involved in.
And I wonder if you could
share that with us.
>> Certainly.
Good afternoon.
Jeremy martin on behalf of
the austin chamber of
commerce.
And when we are working on
our economic development
strategy, the top two things
that we hear from our
companies and investors,
issues that they're facing,
talent development and
transportation.
And with respect to talent
development, we're looking
at strategies across the
spectrum to provide the
skilled workforce that our
companies need.
And that's partnering with
, our school
districts.
Today we had our state of
education event where we
recognize excellence in
education.
Those that are making great
strides in college readiness
and making sure people
finish high school and have
the ability to go to some
kind of post-secondary
certification or direct to
college.
So I'd be happy to provide
additional information in
collaboration with my
colleague who cannot be here
today because of that event.
But with specific respect to
tech issues, we've
identified that we do have a
very skilled labor force,
meaning that they can be
trained up for the specific
types of jobs that are
necessary for high-tech.
A great liberal arts student
base from the university of
texas and they just need to
have the computer training
such as ruby on rails or
other computer languages
that would make them perfect
candidates for companies
such as visa or the other
tech employees we have in
town.
>> Morrison: So the bottom
line is to do some rapid
training for folks that are
really going to be able to
step up into those jobs if
they only have some very
specific kills skills.
looking at
our local population base
and providing that targeted
training so that they are
able to fill the jobs not
only for this company, but
all of our other tech
employers and our general
employment base.
>> Morrison: Right.
So we're really trying to
make the most of folks that
we do have people here and
that would mitigate the
phenomenon that I just
mention where had we're
actually creating more
competition for our existing
businesses to hold on to
their high-tech workers.
So you think you can dance
that's really an important
effort to get those in
place.
And I was thinking after our
conversation that there was
a visit -- we made a visit
to san jose in september and
heard from some of the folks
in the city there.
And one was that in their
economic development
department, and they were
talking about specifically
partnering with businesses,
when the businesses come in
and say I need this skill.
And I thought that might be
an interesting model for us
to sort of evolve to,
especially, for example, if
visa can actually identify
some very specific skills in
the interim before they even
get here to see if we
couldn't put together
quickly a class to be able
to create more of a supply
for them and some
opportunities from some
people that might not
otherwise have that
opportunity.
So I'd love to talk with
staff a little bit more
about that.
Thank you, mr. martin.
>> Thank you.
>> Mayor Leffingwell: And
I would just say I think
it's really nice to have
employers competing for
employee services instead of
the other way around.
All in favor of the motion
say aye?
Opposed say no?
It passes on a vote of six
to zero with councilmember
spelman off the dais.
So council, we've already
completed the staff
presentation, unless there
are further questions or
discussions.
Those are all the items on
our agenda.
So without objection, we