We're going to get started.

E got a full agenda and
several speakers signed up.

,
september 26, 2012, and a
quorum is together.

I'll call to order the
meeting and first item on
the agenda is approval of
the minutes for the

[14:04:01]

august 27th regular
meeting.

And I'll entertain a motion
for approval.

Got a motion by
councilmember morrison and
I'll second that.

Any discussion?

All those in favor please
say aye.

That motion carries on a
vote of 3-0 with the mayor
temporarily absent.

We'll go to citizen
communication, everyone will
have three minutes and we do
have quite a few citizens
signed up.

Susan moffett.

Welcome, you will have three
minutes.

>> Good afternoon.

For the record, I'm susan
moffett speaking to you
today as the vice chair of
livable city.

You should have received an
electronic memo regarding --
and I want to be clear this
memo is not intended to be
exhaust sieve and livable
city is continuing to review
possible additional
recommendations including
the issue of local hiring
requirements.

In the four years since
livable city's original 2008
incentive study, austin has
experienced significant
growth and change.

Recent incentive deals allow
the opportunity to better
understand how current
policies play out and to
identify areas that may
benefit from adjust systems.

Livable city believes this
is a time to review the
incentive policies and
appreciates the work of the
subcommittee.

To that end we respectfully
recommend the following
improvements.

1, Employ a public process
to identify specific goals
the city intends to achieve
through the use of economic
incentives and revise the
city's written policy and
evaluation matrix to align
with these identified goals
and ensure accountability.

And I want to stress that
public involvement in
establishing these roles is
a key to countering a
growing perception that
these are all just closed
door deals that don't have
much benefit for actual
austin residents.

2, Require companies
receiving city subsidies or
incentives to provide living

[14:06:00]

wages and health care for
all workers.

We do not want to have to
pick up the tab twice for
basic services for underpaid
employees.

3, Adopt essential reforms
for the process of
evaluating and granting
incentives.

These include, a, require a
city council briefing in
executive session before the
city manager contacts the
applicant with a proposed
letter, and that is
permitted under the texas
open meetings act
specifically.

B, require confidential
disclosure of competing
localities by the applicant
so councilmembers who wish
may do their own due
diligence, and the ag has
found members of a
governmental body are not
prohibited about making
statements about the subject
matter of an executive
session so you would be
within your rights if you
wanted to make a
confidential phone call to
your counter part in another
city.

C, require supporting
information for each element
of the matrix attached to
the matrix and available for
all city council briefings,
public postings and public
hearings.

We need to be able to see
how the scores are arrived
at and compared with
previous deals.

And finally, 4, create a
unified economic development
budget and produce an annual
report tracking current
incentive agreements, and
again, the public needs to
be able to see easily where
our investments are and how
they are doing.

Now, there is the bigger
philosophical issue of
whether it's ever
appropriate for government
to pick winners and losers
in the marketplace, but I am
going to leave that debate
for another day.

In the meantime, we do
believe these nuts and bolts
recommendations will
strengthen transparency and
result in greater community
trust and by-in for any
future incentive deals.

Thank you for your time and
consideration.

>> Martinez: Next speaker
is scott johnson.

Welcome.

You will have three minutes.

Frank and anyone else, if
you want to sign up to
speak, you still have time
to do that for citizens
communication.

>> Thank you,
councilmembers.

Regarding this, I'm
interested in part as I was

[14:08:00]

at the recent talk by
christopher lineburger who
 david's church
and I asked him a question,
I said regarding economic
policies that incentivize
business relocation or
expansion, do those policies
work for or always work
against walkability in urban
areas or in this area
suburban areas.

And he answered that the
incentives that cities give
or counties give or
governmental entities give
only would rank somewhere
close to 8th or 9th in
terms of the reason why
these businesses would
expand here or would
relocate here, and that was
a bit eye opening.

And he went on and I hope
that presentation will be
shown in its entirety on
channel 6 because they were
filming at that particular
time.

There definitely is a public
process where the city makes
it easy, relatively easy for
citizens to engage but this
is not one.

It seems to be that when you
give grants or money to
nonprofits that don't get
their wish by being part of
the budget, there's not a
public process on that
either where the citizens
can chime in and say, well,
did that nonprofit earn that
funding for this coming
year.

One of the items that's
mentioned here in the
presentation to come by
 oden would look at
things such as air quality
or water quality and when
the toyota plant was looking
at cities within texas, they
looked at dallas' air
quality and whether or not
they were in compliance with
standards, and they weren't,
and that is one reason why
they decided to move to
san antonio to open this up.

So I wish that the council
would revamp the process and
I support changes that would
happen or plan to happen
this year or early next
year.

Thank you for your time.

[14:10:01]

>> Martinez: Thank you,
scott.

Councilmember tovo has a
question, I believe.

>> Tovo: johnson, i
just wanted you to clarify
the point you were making
about that gentleman's
speech.

He listed walkability as --
I'm sorry, incentives as
8th or 9th in terms of
what encourages a company to
come here, but I didn't
understand the connection to
his subject matter.

Were you asking him -- did
you ask him the question of
how highly incentive factor
ability -- would you
expand on that.

>> My question was do
economic incentive policies
in the context of trying to
promote business expansion
or relocation, do those work
for or against walkability
in a suburban environment or
an urban environment knowing
that manufacturing plants
when they choose to relocate
or to expand usually look
for land outside of the
urban core even though
downtown is the main place
where we hope walkability
happens.

So he was saying that in
terms of the list of what
businesses look for and
prioritize in order to
relocate here or to expand
here, that incentives would
rank down the list in the
8th or 9th slot based on
his experience in the
 area and
other urban areas.

>> Tovo: So I guess -- i
may still be missing
something, but it doesn't
sound like that's a direct
answer to the question you
had posed to him.

>> Well, he was trying to
answer the question of
whether or not that advanced
the issue of walkability and
how much economic incentive
policy did.

His answer didn't nail it on
the target, but it was
informative to me to know
that that was not what
businesses thrive or or
their foremost interests or

[14:12:00]

incentive when they choose
to locate.

>> Tovo: Thanks for
mentioning.

That I look forward to
seeing that presentation.

>> Martinez: Next speaker
is dave porter.

Welcome, dave.

>> Thank you,
councilmembers.

Dave porter with the austin
chamber.

Excuse me.

I've had a fun morning
yesterday and I did watch
your work session and
discussion about the current
project that will be
considered tomorrow and i
just wanted to comment on a
couple things regarding your
current process and the
current project that will be
discussed tomorrow.

You all have a current
policy for economic
development incentives.

It was adopted, it's been
reviewed and changed several
times in 2003, 2004 when it
was first adopted.

I think the time is right to
look at it to make
additional changes.

A company, though, what they
do is they look at the
policy, they look -- let's
use the current project
before you, the hid global.

They go through the process,
they look at the
application, they complete
the application, they work
with city staff, web loci
model and if it gets to that
point where it's still
moving forward, you know,
then you get this letter
from the city manager about
proceeding, and then the
company negotiates in good
faith a contract, a draft
contract which is presented
to you, which was presented
to you back on
SEPTEMBER 12th.

So up until that point, none
of these add-ons that were
discussed at the 12th are
even mentioned at any part
during this process until it
goes to you guys.

And I know that you
mentioned, councilmember,
the 11th hour situation

[14:14:01]

that you all feel like you
are crammed into or forced
into.

So my thought is let's get
this stuff up front so
companies can expect -- they
can look at your policy and
see what's expected.

Let's not hold the company
hostage.

I mean, I heard that wording
several times.

Let's not hold a company
hostage because it's not in
the current policy.

Let's get through this one
but get the input from
everybody, the community
partners, let's get a
[inaudible] in whatever is
necessary, but the company
is blindsided.

I know you feel blindsided,
but the company too is
blindsided by what is being
asked of them at the 11th
hour when they have felt
like they negotiated in good
faith with the city attorney
and city staff.

City staff does a great job.

But anyway --

>> Martinez: I appreciate
your comments that you are
willing to work on this and
we're going to need your
help.

We want the chamber to be a
part of -- I do, I want to
speak for myself, I want you
guys to be part of any
rewrite in terms of economic
development policy and we
need your input.

Where I will diverge with
you a little bit is the good
faith negotiations that goes
on with staff, while
absolutely true and
appropriate, the contract is
with this council, the
governing body.

And until that decision is
made by the council, there
is no contract and that's
with any case.

That's with any agenda item,
that's with any zoning case.

If a company looks at
austin, texas and they come
to you all and tell you they
are interested, I would hope
that you would let them know
what they are heading into
because every one of these
most recent economic
development agreements have
had every one of these same
conversations.

It's not like there's some
big surprise waiting around
the corner.

And so we need your
assistance in that part
because you guys are the
first to be contacted by
these companies.

Not us, necessarily.

[14:16:00]

So I don't believe it's a
blind side.

I believe it's part of a
negotiated process.

And quite honestly, they
don't have to request an
incentive if they don't want
it, if they feel that
blindsided.

What I'm trying to do and i
believe what this committee
is trying to do is create
the best policy, and just
like you said so that
everybody knows up front
what the rules of the game
are, but, again, ultimately
it ends with a council vote
and that means sometimes
that amendments are made or
requests are made in the
end.

>> I understand.

>> Martinez: Thanks, dave.

Next speaker is carol
hadnot.

>> [Inaudible].

>> Thank you for being here,
ms. hadnot.

We always appreciate you
being here.

Jeffrey santori.

Is jeff here?

Welcome, sir.

>> Good afternoon, mayor and
councilmembers.

My name is jeff santori.

I represent liluna career
center.

I just want to take this
opportunity to thank the
council for the work you
have done thus far to create
good jobs and opportunities
for construction workers
through your economic
incentives.

For example, the green water
master development agreement
and the amendments suggested
by mayor pro tem cole and
councilmember morrison.

On the hid global offer, we
encourage you to continue to
create opportunities for
disadvantaged workers.

To get the training they
need for a career in
austin's booming
construction industry.

And to ensure that they are
compensated fairly for their
efforts at living or
prevailing wages and thus to
contribute to austin's
economic growth.

We look forward to working
with council on these issues
and thank you again for your
efforts thus far.

[14:18:00]

>> Martinez: Thanks, jeff.

Next speaker is emily tim.

Welcome, emily.

You have three minutes.

>> Good afternoon, mayor and
councilmembers.

I'm emily tim with the
workers defense project.

We appreciate the interest
of this committee and that
council has taken in
including construction
workers in the conversation
about incentive agreements
and what the city of austin
is requiring.

We know you've all heard
about the dangerous and
deadly conditions in the
construction industry and
low wages and the need to
address those issues.

We do appreciate bringing
that into the conversation.

These incentive agreements
are an opportunity to create
good construction jobs here
in austin and we think that
we can do that by including
in these agreements certain
things like a living wage, a
prevailing wage to raise the
standards, to make sure
workers are able to support
their families.

We want to make sure that
there is safety on these
work sites and that workers
are properly trained and
that there is oversight to
make sure that those work
sites are safe.

We think it is urgently
important that this is an
opportunity to create a
pipeline to -- for
disadvantaged workers to
obtain training and to
advance their careers in the
construction industry.

We look forward to
continuing this conversation
and to presenting to the
council alongside austin
interface, the building
trades and the other
organizations and groups
that are advocating to
include construction working
conditions as part of the
conversation around these
incentive agreements.

Thank you so much for your
work on this and we look
forward to continuing the
conversation.

>> Martinez: Thanks,
emily.

Next speaker is jim oquinn.

Welcome, you have three
minutes.

>> Thanks for having me.

Jim oquinn with our lady of
guadalupe church, leader
with austin interfaith and

[14:20:00]

specifically working on
economic incentives teams
and wage standards.

I just want to take a quick
moment to thank those of you
that appeared at the civic
academy for homeless on
saturday.

We believe there's a
correlation between low
paying jobs and homelessness
and those who live right on
the edge are probably one or
two paychecks away from
becoming homeless.

So, again, thank you for
your presence.

It was very important for
all of those that were
involved.

Over the last couple of
months, we've had many
conversations over the
process by which companies
receive economic incentives
and we learned a few things.

It appears as if the
community's desire for
better paying jobs is not
properly communicated to the
companies that are applying
for the incentives early
enough in the process.

I think hid global was
pretty surprised a the the
feedback, and surprise may
be putting it mildly at the
meeting last week.

And it's been brought up
just previously.

So I think moving the
education process up earlier
rather than at the 11th
hour would be pretty
productive.

We also realize that $8 an
hour job is better than no
job at all, but these groups
that are sort of mandated
with bringing jobs into the
city through the economic
incentive process and
spending taxpayer money
shouldn't even consider such
low paying jobs.

It should be part of their
mandate to only select
companies that are going to
pay -- we're not saying
living wage, but somewhere
between living wage and
minimum wage.

So we would like to see that
addressed by this economy
along with our five other
primary concerns.

Proper safety training,
career paths, hiring
locally, wage standard for
long-term jobs, wage
standard for short-term
jobs.

And we also believe that
there's a potential for a

[14:22:00]

loophole to happen when the
company who receives an
economic incentive goes off
and hires a third party and
then that third party pays 8
bucks an hour, 7 bucks an
hour.

So I think there should be
some dialogue about any
company that's involved with
the company that receives
economic incentive also
adheres to these same
standards so it's not
exploited as a loophole.

So in conclusion, we look
forward in helping solving
the current sort of
insufficient process that
requires leniency and often
stressful debate down at
city hall between the
businesses, between the
community and between the
councilmembers.

If the expectations can be
set early on in the
discussions with these
companies requesting the
incentives we think it can
result in a much less
contention process.

Thank you.

>> Martinez: Next speaker
the paul saldana.

Welcome, paul will.

>> Good afternoon,
councilmembers.

I'm paul saldana speaking on
behalf of the minority trade
alliance and we're part of a
bigger coalition today of
construction industry reps
that include the agc, the
aca, the abc, the greater
austin chamber of commerce,
reca and our minority trade
association eye lines.

And my focus today was to
talk about the ongoing
discuss regarding the wage
for construction workers.

And we are aware of the
proposal that mayor pro tem
cole has put forward about
disadvantaged workers and
demonstrating good faith
efforts to set aside 15% of
the job.

The conversation that has
been missing so far is
conversation with the
construction industry reps
which is why we decided to
form a coalition.

Some of the followup
speakers are going to speak

[14:24:00]

directly to the policy
decisions that you all are
making and who it's actually
having an impact on.

It actually has an impact on
the smaller guys.

I wanted to point out and
give you an example that's
actually working very well
in the city of houston, and
I hate to ever compare the
city to houston examples to
what we have here in austin
but they are ahead of the
curve because they actually
have a group called the c-3,
crux, career collaborative,
where their focus is
partnering today to ensure
tomorrow's workforce.

They have three primary
goals in their alliance.

The first is specifically
looking at the issue of
hourly and overtime
payments, strong emphasis on
safety and craft training.

At the end of the day, that
ensures that you have all
the construction industry
experts, the actual
construction companies
involved in these
discussions to make sure we
have a sustainable strong
workforce in the future.

Moving forward it's our hope
that we can make sure that
we have a seat at the table
as you all are talking about
the wage increases and
potential initiatives for
disadvantaged workers
because that does have a
direct impact on the
construction industry and
like I said, a followup
speaker will speak and give
you specifics.

I appreciate your time this
afternoon.

Thank you.

>> Martinez: Thanks, paul.

Phil tobin.

Welcome.

>> Good afternoon.

I appreciate the opportunity
to take three minutes today
to talk a little about the
construction industry's
feedback on the economic
incentive plan.

First of all, I thank you
for having a special
economic incentive committee
because construction
companies become very
frustrated when they are not
at the table between the
owner and the city during
these negotiations and often
there's not a construction
industry expert in there
giving some feedback to you
as to how some of the things
that may be tacked on at
city council meeting on

[14:26:00]

thursday will actually
impact the construction
industry.

So as paul said, there's a
number of folks here from
the industry.

[Inaudible] represent
general contractors, members
doing work here in austin,
texas.

A lot of the economic
incentive packages that come
through have addressed
construction issues and in
particular safety and wage
issues.

I just want to let you know,
as I always try to, that we
have a very competent and
very good workforce in
austin, texas and we have
companies that take safety
very seriously.

I would like to extend an
invitation to take all of
you as a group or
individually to one of our
construction sites.

There are a number of around
here.

Every time I go I marvel at
the level of professionalism
and the integrity and the
skill of our workforce and
our companies here in
austin.

I think it's good that there
is community discussion from
people representing workers
at the low end, construction
companies and companies
wanting to come here to
austin and it's tough to
squeeze everything we need
to talk about in three
minutes.

What I wanted to share with
you was following up on what
paul was talking about with
the c-3 group, the issues
that we talk about here are
wages and safety 6789 and i
have some alternative
language I included in a
letter to each of your
offices.

I have a handout here,
basically three points that
I think would be great to
include in economic
incentive plan.

Pay by the hour with
applicable overtime for the
workforce in lieu of piece
work payments to craft
workers.

Provide worker security by
paying unemployment taxes.

Making sure all workers are
fairly classified and
everybody is paying into the
unemployment tax coffers.

And with regard to safety,
make sure that craft workers
on the site have a 10-hour
construction card and that

[14:28:00]

supervisors has a 30 hour.

All those provisions are
incorporated in general
provisions of the city
public works document and i
think that's a great place
to start is what you require
of contractors doing work
for the city.

So I can hand that out to
you if you like and i
appreciate your time.

>> Martinez: Thanks, phil.

I think we have one question
for you.

>> Morrison: I wondered if
you had any specific
comments -- I got the
feeling you were going to
perhaps mention some
observations about, i
believe it was mayor pro tem
who made a suggestion for
hid global to consider about
disadvantaged workers and
setting a goal of hiring a
certain percentage of those.

Did you have any specific
comments on that and do you
see that as having a
negative impact on the
construction industry?

>> Well, it's a challenging
issue for a lot of different
reasons.

The construction industry is
very complex.

You might have a company
that is just petting a
temporary fence in so you
have somebody doing that
work as a subcontractor and
they are hiring people for
one or two days and a couple
things have to happen in
order to meet that 15%.

They already have a -- they
go out and get a new
workforce, they are telling
their loyal workers who have
been there for a long time,
hey, you don't get to work
on this, we're taking people
who haven't been trained and
they are getting a higher
wage essentially.

That creates challenges.

Anecdotally, talk to people
who are looking to hire
people into our workforce,
they have ads in the paper
or doing outreach and it's
difficult to get people into
the construction industry.

Part of that, I'll put the
blame partly on the
construction industry
because I know 19 and
20-year-olds can go down to
the oil and gas industry in
the houston area and they
are making $75,000 a year
with a high school diploma.

And our industry has to
realize that and has to
realize there are only so

[14:30:01]

many workers out.

There paul was talking about
c-3 and what they are doing
in houston.

Part of the reason they've
come together is because
they are losing workers to
other industries, oil and
gas.

Trying to get a trucker,
there have been reports of
concrete shortages on job
sites because there aren't
truckers trained to deliver
it.

So to your point, you know,
if it's reaching out, we're
happy to help in that
regard, but the frustration,
kind of as dave alluded to,
not knowing what the
economic incentive game plan
is for each of these private
jobs, so trying to
streamline that.

Whether this included that
or not, that's really the
frustration.

>> Morrison: Okay.

So I'm gather, the points i
heard you say are to some
degree you might be
concerned it displaces
existing workers
potentially.

>> Correct.

>> Morrison: And then just
the challenge of the
outreach and -- that you
offer to participate in
[inaudible] thank you.

>> Martinez: Phil, i
wanted to ask a followup
because I've heard from the
contractors on this issue
before and it sounds similar
to what you mention, but i
wanted a little more context
because I still don't fully
understand it when a
contractor says -- and the
example you used was
temporary fencing.

We may have someone that
works for you that we
subcontract with that we pay
$9 an hour to do temporary
fencing, but because they
are going to do it on a hid
global job or an ex-job that
the council voted on to set
a floor of $12 an hour, now
we're kind of caught in this
limbo stage of either
bumping them to $12 an hour
for this temporary position
and then bumping them back
when they go to another job
or hiring someone off the

[14:32:01]

street and just paying them
$12 an hour for that
one-time job.

How is that different from
agc and any other contractor
applying for a city project
that absolutely has a floor
of $11 an hour?

>> Well, prevailing wages
for travis county and city
57 on
up to 38 bucks an hour.

So there's actually, as i
understand it, levels of
craft workers who are below
that.

>> Martinez: But not on
city of austin projects.

All public works projects
and all projects of the city
of austin have a floor of
$11 an hour, even if the
prevailing wage scale is
below $11 an hour.

I'm struggling with how does
that scenario differ from
the one you are referring
the and why is it causing
problems for contractors
that bid on city jobs?

>> They know what it is.

It's stated on the
documents.

When they go to pre-bid,
they are given notice, okay,
everything is going to be
this on this particular
project.

>> Martinez: Okay.

Paul, did you have something
you wanted to add to that?

>> That's the point --
[inaudible]

>> Martinez: Good.

He's our next speaker.

Frank fuentes, you will have
three minutes.

>> Councilmember.

>> Martinez:,
Councilmember tovo,
councilmember morrison,
thank you for allowing us to
come here before you and
express our concerns.

If, certainly on the
 morrison
asked, with respect to how
our industry works, and it's
not as easy and as simple as
it works.

It's very complicated.

It's a big jumble puzzle, if
you will, and the prime
contractor puts the puzzles
together.

The contract between the
city or in this case a third

[14:34:00]

party owner has all these
requirements.

And so the prime contractor
now has to insure that all
the pieces that are below
him have to do this
outreach.

A simple construction
contract has 16 divisions.

Let's just start with the
mechanical, electrical and
plumbing.

A mechanical contractor has
your ac subcontractor, and
the ac contractor has a
testing and balancing
subcontractor.

It also has a sheet metal
subcontractor.

And down below then you have
your installers and a lot of
this work sometimes is done
outside from the job site.

Let's say somebody says this
job is going to take a year
and typically for that
particular subcontractor
he's not there for a year.

He can be there for a week,
he can be there 30 days.

And so when you implement or
institute this policy, it's
not consistent because it's
specifically for that
particular job.

Now, with respect to your
question, prevailing wage
scale, we've gone dealing
with that for many, many
years, not only at the
federal level but at the
city level.

Contractors are already used
to that and for the most
part on commercial projects
those classifications, if
you will, that phil was
referring to already exist.

And so companies already
have those particular
classifications lined out on
their payroll.

When you institute, like a
$16 an hour raise for
unlicensed or unskilled
workers, for example, it
becomes disruptive to the
small contractor.

Phil described the temporary
fencing, your erosion
control.

Those guys come in at the
very beginning and they are
there for a week, yet they
are going to have to adhere
to the policy that council
institutes.

And it's very disruptive
because that worker, that
laborer walks away with that
pay raise.

You can't take it away from
them.

It's very disruptive to

[14:36:00]

small business.

Now, your intent is very
good.

No one can deny that your
intent is good.

There's got to be a way to
make it work, though, so
that this complicated
puzzle, if you will, at the
end of the day, it all works
and your intent actually is
realized without hurting the
small business who is
actually going to have to
hire these new workers
because if mayor pro tem's
policy comes true --
[buzzer sounding]
-- they are going to have to
hire from this 15% pool that
we have to now outreach --
I'm sorry my time ran out.

>> Martinez: That's okay.

Go ahead and finish.

>> If I understand the
policy the mayor pro tem
cole is trying to institute
is a 15% goal to reach out
to disadvantaged laborers.

And here is also the
distinction.

We're talking about laborers
versus companies.

Companies contract with the
prime contractor and with
the subprimes.

You have a lot of tiers.

But ultimately the laborers
work on the small tiers, the
small businesses.

Those are the ones most
affected by the policy that
we're now discussing, if
that makes any sense.

At any rate, if that policy
is instituted, now the lower
companies, just to get
through the bidding process,
have to now retain more
resources to do this good
faith effort, if you will --
because good faith really is
just a measurement of your
heart.

How well do you really want
to reach out to these folks,
and you have a measurement,
if you will.

So it takes resources to
really measure your heart,
if you will, your good will,
if you will.

So it's just another added
cost to the bidding process
to something that you might
not even get, to something
you might be working for a
week, a month, two months.

So it's not as simple as
mandating the company that
owns a factory, if you will,
and letting them know you

[14:38:01]

will only hire -- and these
are the rules to hire and
the employee is there
forever.

You can manage your
profitability because you
have a long-range, if you
will, of time to do it.

I hope that makes sense.

>> Martinez: Actually i
think a light bulb just went
off in my head.

I want to ask staff a
specific example.

So we have $11 an hour floor
on city of austin projects.

Is that correct?

>> That's my understanding,
if we have a project where
the city is actually funding
that contract.

>> Martinez: Let me give
you a somewhat hypothetical
example, and this is
hypothetical so don't read
into this this.

So I build a new house and i
tell my builder what kind of
cabinets and vanitys and
bookshelves that I want and
it's x amount, 60,
70 thousand dollars worth of
cabinets.

They spend the next four
months at their shop
building these things, but
they only come to my house
for four days to install
them.

How do we implement a $11 an
hour minimum wage on the job
site in that scenario?

>> That's some nice cabinets
you are getting.

You know --

>> have you seen his house?

>> Hey, hey.

>> I have not.

>> Martinez: You don't
want to go there.

I've seen yours.

>> I guess assuming that
it's a city project then so
you are asking the $11, i
guess it comes in the
installment, those that are
actually at the house doing
the installment of those
cabinets as opposed to those
back in the factory making
them because you don't know
specifically where are those
cabinets going to be
manufactured.

>> Martinez: And in my
hypothetical, the installers
are the same folks that
manufactured them in the
wood shop back at the
cabinet company abc.

>> Okay.

>> Martinez: That's a real
scenario in my mind, you
know, at a city of austin
project if we're building

[14:40:01]

the energy control center
for austin energy, we're
bringing in tons of modules
of equipment whether it's
electronics, computers,
desks, cabinets, that are
being manufactured and built
off site and then installed,
if you will, and backed into
a space.

How do we -- how do we
enforce a in $11 an hour
minimum wage on that?

>> I guess, you know she
it's a difficult question.

If you are looking at being
up front and saying every
position associated with
this entire process needs to
make a minimum of $11 an
hour.

When that company bids on
that particular project,
they are going to
incorporate that, and if
that's an increase in terms
he have what they would be
paying, you would pay a
higher rate for the work
they are doing because you
directly are paying for that
higher wage.

>> Martinez: I just see
that as problematic and it
was very difficult to
enforce scenario.

And that's just one
scenario.

>> Your point is incredibly
correct.

You take the steal erection,
for example, the steal is
fabricated outside
specifically for a job and
in this factory, if you
will, you've got all kinds
of -- type of skilled
workers with different pay.

And if you are going to
institute unskilled labor at
a certain rate, how in the
world do you police that,
number one.

Number two, if you only do
erection, you are
mandating that particular
company to raise the level
of pay for only the certain
time amount that it takes
for them to erect that
structure, if you will.

Not to mention supplies.

>> Martinez: Councilmember
tovo.

>> Tovo: Well, I think the
question you raised,
councilmember martinez, is a
good one, and I wonder how
the city monitors that.

Is there a bright line
between installation that
happens on site or does
the -- not get it backward,

[14:42:01]

the wage floor extend to
anybody associated with the
job and if so how do they
regulate it, and I think
that would point some
directions as to how an
incentive wage floor might
work if we're trying to
capture all of those who
work on a job whether they
are working on site or
contributing to the
production of things.

>> I think what wee need to
separate here, there's a
couple things.

One, we're talking about
wages for construction
associated with a project,
if you will, and that's
generally going to be
something public works is
doing.

We're not in terms of
economic development out
monitoring the wages
associated with that.

What we do monitor are all
the wages associated with
the company that we're
working with that has an
agreement with the city
that's creating those jobs.

We monitor that.

We make sure they hit those
wage goals as are outlined
in any contract.

I'm not qualified to say how
we as a city monitor that
$11 an hour threshold or
floor for that project.

That being said, I would
assume there is a way to do
that.

>> Tovo: And [inaudible].

 fuentes, I have a few
questions.

I want to make sure i
understand your point -- or
the many points you made,
but are there any
circumstances in which you
have -- a contractor has an
ongoing relationship with
different contractors,
different subcontractors and
they may have a certain rate
on one job and a different
on another.

I hear what you are saying
about -- about an
incentive -- if the
councilman dates a
particular wage level for a
job, that that gives certain
workers, as you said, a
salary increase, but then i
assume the point you were
making is that a contractor
then needs to pay at those
same rates on the next job
and the next job and so --
am I understanding your
point correctly?

>> If I understand your
question correctly, let me
answer it this way.

My point was if you have an

[14:44:01]

employee and you give him a
raise, you can't just take
the raise away away from him
once you give it to him.

Does that make sense?

>> Tovo: Yeah, I mean that
makes sense.

It's not exactly the same
relationship when you are
talking about a general
contractor and
subcontractor.

>> Right, about out the
policy, if I understand
correctly the policy that is
being discussed is for
employees, is for labor, not
for contractors, not for
businesses.

Although the businesses have
to fulfill the requirements
with their employees.

When you are paying somebody
by the hour, he is your
employee.

There's no doubt about that.

So I guess I'm not
understanding your question.

I'm trying to.

>> Tovo: Yeah, I'm just
trying to understand the
point you are making and i
think we're moving in that
direction.

>> Real simple.

>> Tovo: But I think -- so
if I'm a contractor and i
have -- and I'm doing --

>> councilmember martinez is
your --

>> Tovo: We're working on
his house.

>> Oh, okay.

>> Tovo: I ordinarily pay
them, say, $8 an hour.

And now we're going to work
on a job that received
incentives and there's going
to be a wage floor of $11 an
hour.

Are you suggesting that
there are no -- that there's
no way that I can work with
my employees and say on this
job you are going to receive
$11, but after this project
is over you are going to go
back to your regular wages?

I think the hope I've heard
expressed is this will lead
to livable wages for
construction workers on all
the projects so by no means
am I suggesting it's a good
situation for a contribution
worker's wages to go down
after they've completed a
project that received
incentives.

>> I think I understand your

[14:46:00]

question.

No doubt the intent is a
beautiful intent.

And if I could support it
right now, if I knew there
was a clear plan for it, we
would probably support it.

But there is no clear plan
because the construction
industry is very
complicated.

Councilmember martinez just
pointed out one scenario
where it would be hard to
monitor.

In terms of employees, it's
like -- city employee, for
example, if you send them
out to work at a different
park that's federally
owned -- federal owned and
he's only going to be there
30 days, you can't give that
city employee a raise and
take it away from him.

At least I don't think you
can.

If he walks away with that
raise.

If he walks away with that
raise, you just cannot do
that.

>> Tovo: Yeah, in my -- i
mean, it does -- maybe this
is a misperception of some
of the contractors and
subcontractors, but it seems
sometimes there is nor
flexibility.

A contractor might work with
a particular work of
contractor -- it's not as
consistent.

I'm not sure the analogy is
apt.

A clear consistency between
the employees who work with
a particular supervisor.

>> But the policy we're
hearing is for laborers, not
for contractors.

It's not for businesses.

Contractors are businesses
that hire employees.

More specifically on
public -- a public works
projects they are employees.

They are just not labor that
you pay by contract.

If you are looking at the
private sector, that's more
apt to happen.

But if you have to submit
certified labor report,
that's difficult to do.

>> Tovo: So -- and i
understand -- I mean so we
have a contractor who is
working with a good up of
laborers.

On the next project those
laborers may be working with
a different contractor on a
different project.

>> Then they are not

[14:48:00]

employees, they are
contractors.

They are contract labor.

They are not employees.

And therefore they would not
be held to the policy that
you are discussing.

The policy that you are
discussing is people that
work by the hour.

They are labor, hourly paid
employees.

The discussion then turns to
how are we going to pay the
contractors.

Are we now asking the
contractors to work by hour?

Then that's a different
definition.

>> Tovo: Well, I think we
have more --

>> I don't know if I'm
making sense and I'm trying
desperately to do that.

It's a very complicated
policy because it's a very
complicated industry.

I know it looks simple, but
you take the electrical, for
example, you have within the
electrical you have high
voltage, you have your
regular electrical that you
see in a building, then you
have your security systems,
which is low voltage.

These are different types of
subcontractors, different
businesses, if you will, and
you are mandating that
policy to them.

It's just a complicated
industry.

>> Tovo: I understand.

I'm married to a, an
architect.

I understand.

But I do want to earth about
understand your point, but
we can take it up on --

>> I would be happy to sit
down with more time.

>> Tovo: That would be
useful.

>> I'm hoping by the end of
this week we can even draw a
flow chart that will better
paint a picture of our
industry.

>> Tovo: Great.

Thank you.

>> Martinez: Councilmember
morrison.

>> Morrison: I just wanted
to ask staff, I think by
tomorrow we're going to have
some answers to that issue.

I think the specific
language that we had at the
last meeting, I might be a
little bit off, but I have
some papers here that i
worked from, we can check,
but the applicant will
ensure the contractors and
subcontractors pay workers a
minimum of and then it went
on from there.

So we're going to need to

[14:50:02]

have the answer to the
question, especially that
councilmember martinez
brought up, and that is how
do they do it on our public
works projects now where
they are required to pay a
prevailing wage and that
contractor might not always
pay a prevailing wage.

So how do we handle it in
any case.

I'll look forward to that
and yes, we're on a very
short time line and we
haven't gotten any answers
yet back from the questions
that we did propose a couple
weeks ago.

So we'll have a long
discussion, I'm sure.

>> Martinez: And I just
want to state that my
question today is for a
prospective policy.

I understand your concern
about applying it to
tomorrow's decision, with
what worry doing here in my
mind is not about tomorrow's
decision, it's about the
contemplated change in the
policy somewhere down the
lane.

But I appreciate your
concern.

>> Morrison: Yeah, i
suspect the issue is going
to come up tomorrow and i
also appreciate that it
needs to be a part of this
discussion.

I also will look forward and
I think we can maybe just
leave this till tomorrow,
but I think we need to
explore the issue about good
faith effort for hiring a
certain percentage of -- of
disadvantaged workers for
the long term, but also it's
going to come up tomorrow
and so I don't know if you
all will be able to do some
discussion with those
[inaudible] and I suspect
there will be some people in
the community that will be
able to help us have that
dialogue.

>> Martinez: We have three
preparations and
unfortunately, folks, we
have some conflicts about
00 for some of the
committee members.

So I'm going to ask the
presenters, I think you were
given a heads up to try to
keep them within 20 minutes.

So we will go on to agenda
number 3, which is
presentation from michael

[14:52:02]

oden from the university of
texas regarding economic
incentive agreements.

Welcome.

You can sit if you would
like.

I don't want you to stand
for 20 minutes.

>> Hopefully I won't take 20
minutes.

>> Martinez: We'll crank
the ac down and make you
stand so we can get through
this.

>> Yeah, well, I want to
express my gratitude for
being invited to comment by
the councilmembers to the
committee on economic
incentive.

I've been involved in
economic development policy
and have written on economic
development in austin
specifically less so in the
past few years because I now
have administrative jobs at
the university.

But I study and teach
economic development
 and I wrote
a study back in may of 2008
and I participated in the
city working group to revise
incentive process back in
2009 which led to some
changes in the policy.

Which I think generally have
worked pretty well.

I'd like to start by trying
to sort of put economic
development incentives into
a broader context.

And I'm probably not going
to be telling anybody
anything they don't know,
but I think we oftentimes
get fixated on tax
incentives to firms thinking
that if we don't do that, it
will stifle growth or if we
do do that, it just
corporate welfare pure and
simple, et cetera.

And we don't understand, i
think -- we forget sometimes
that economic development is
really our -- is one tool in
a big toolbox and that it's
probably not as substantial
in terms of shaping our
growth and job development
as we sometimes might think

[14:54:00]

it is.

You know, almost all private
investment that occurs day
in, day out, year in, year
out in the city of austin
has nothing to do with
getting or not getting
economic development
incentives.

Private market is out there,
it's working.

In good years, it's
generating jobs and
opportunities for people.

And we have a $90 billion
economy in austin.

So whether we grant a
million dollars in
incentives a year every year
really has no major effect
on that.

In fact, I think you
completely shut the window
on economic development
incentives you really
wouldn't notice a negligible
impact on anything in terms
of the broader economy of
the city.

City governments can most
effectively support job
growth by the provision of
quality public services, by
retaining and burnishing
local amenities, by helping
to build and sustain and
attract high-skilled workers
to the community.

So -- okay.

Sorry.

So the stuff in the picture
is probably more important
than whether or not we give
a $500,000 economic
development incentive to one
or two firms every year.

So in terms of sustaining
austin's fairly impressive
record of economic growth.

Furthermore, direct
incentives to firms to
encourage relocation or
expansion in austin are
really a small part of a
much broader economic
development strategy that
involves numerous city

[14:56:01]

departments and
subdepartments.

So incentives really are
significant, it's very
important that we have a
good incentive policy, but
incentives really hardly
make the world go round in
terms of economic
development.

I think we sometimes get a
little too fixated on them.

Why do firms decide to
locate in one region versus
another.

There's a long list of
reasons and firms that are
relocating or expanding in a
region look at all sorts of
factors that are important
for their business success.

They look at transport
costs, labor costs, land
costs, the skill of local
labor force related to what
they do specifically, labor
and business regulations,
whether they are local
research and development
assets they might draw on if
they are a certain kind of
firm, education and
training, local supplier
industries, et cetera.

And they also look at things
like site and building
availability, neighborhood,
urban and environmental
amenities.

They look at a very long
 johnson
suggested earlier, local tax
burdens and incentives
are -- the research is
pretty decisive, they are
way down the list.

So, again, these other
things that the city is
involved with, be it
employment and training,
participation in training
programs, be it maintaining
high quality urban amenities
of various kinds are more
important to the economic
development process than
direct tax incentives to
companies.

So why then do we brother
with them?

Why are incentives justified
and why might they make
sense in particular
instances.

I do not oppose
incentives on principle but
I think they have to be used
only in certain

[14:58:00]

extraordinary circumstances
where the benefits of
attracting a certain kind of
firm and industry are
exceptional.

And these are some of the
factors that might justify
offering a firm a direct tax
incentive.

A firm should export its
product to national and
global markets because it
will grow a lot, generate a
lot of jobs.

It should offer wage
premiums.

It should offer average
wages above what market is
offering.

This should be something
special in that regard.

The location or expansion
should consider -- would not
occur without the senate
itself.

Are the incentives really
critical to this firm's
location?

Given all those other
important factors that firms
really consider when they
are deciding about a
location.

And are there significant
positive effects on other
firms in the region from
enticing one firm to locate
or expand in a region.

Are there higher customer
links, research and
development knowledge spill
over, a specialized labor
pool.

So all of these benefits are
important to understand and
verify and they do justify
in certain circumstances, i
would argue, offering a
direct incentive to firms.

You know, I think i
sometimes have been seen to
be a critic of austin's
incentive -- I also think
austin on balance does a
pretty good job of managing
incentives.

We're very disciplined
relative to other cities in
offering incentives.

Very a very strong
performance based system,
maybe -- a strong
performance based system.

If a company doesn't do what
it says it's going to do,
they do not get the tax
incentive and we have a
strong and very good process
for that.

I think we have improved the
process for evaluation of
deals.

And many of the deals that
we do meet the criteria i
just laid out for being an
exceptional or extraordinary
deal.

So we're doing a lot that's
right, but we -- and I think
it's absolutely crucial and
I think one reason why our
incentive policy is pretty
good is that we do revisit
it, we try to tweak it, we
try to improve it every so
often.

I was involved in the
2008-2009 period and I'm not
sure what it was exactly, i
think it was a working
group, involved mostly staff
and councilmembers and the
mayor sat in on occasion, i
don't think it was a formal
committee, but we went
through processes and dealt
with certain sorts of
complaints.

Part of that we eliminated
incentives for retail, which
makes certain -- which makes
complete sense.

We created a much better
opportunity for public
deliberations and
discussion.

We created a regular,
consistent process for that,
and we ensured that each
deal was evaluated through a
relatively sophisticated
kind of cost benefit model,
whereas before they were
kind of cost benefit models
were just kind of brought in
for each individual deal.

Now they are evaluated by
the same criteria.

So I think these are real
improvements.

It is my feeling, and i
don't, you know, have privy
to local pollers or polling
information, but I do think
that there still is a high
degree of questioning and
opposition to the granting
of direct incentives to
firms, and from what I've
heard and from what I kind
of understand, these are
some of the major complaints
that are common.

The perception is that
incentives are used
selectively and
opportunisticly not tied to
an economic development
strategy the public really
understands.

The public doesn't really
understand and tried to
communicate but I don't
think it's effective to
communicating to citizens
why are we doing this, what
are specific goals in
granting these [inaudible].

And I don't think the public
really understands why and
they view it as deals and
corporate welfare and so on
and so forth.

I think the perception is
that despite the policy
changes that we did work on
in 2009, that the deals are
basically fully baked or
predetermined when they are
murder presented for public
discussion.

So people go to the hearings
and so on and so forth and i
think a lot of people
perceive it a donedeal, i
can say I oppose it but it a
done deal and that can be
sort of demoralizing.

I think there's a perception
by some after three decade,
and this has been a long
precedent in the city, we
have been offering
incentives to firms that are
not creating living wage
jobs.

This is a change in
direction that's troubling.

And then there's the
perception by many that some
companies would come and we
didn't really have to offer
the incentives.

I think these are the main
things that you hear and
council people probably have
a better sense of this
because they deal with the
public every day, but i
think these are the kind of
problems and perceptions
that people have and I think
as we change this policy, we
really ought to try to
address at least in part
some of these perceptions.

If I look at the deals that
have been done after the
2009 reforms, there were
seven deals.

And I've done a -- you know,
my own personal quick
assessment of these deals
and I don't pretend it's
definitive, but I look at
the reasons why you would
offer incentive in these
cases.

Why this deal was
extraordinary.

And then whether the
incentive was critical to
the firm really coming here
or not.

And whether the senate i
have is critical or not is
complete guesswork.

And I think that's part of
the problem with official
basis is it's very hard and
the way the institutional
setup is it's kind of
designed you can't really
answer but for the incentive
question.

But when I look at the deals
that we've done since 2009,
I noticed one that the
incentives are very small.

So it's really unclear to me
whether these -- in some
cases really tiny incentives
were really the decisive
factor that determined
whether a company came here
or not.

I would be very surprised if
it was.

Because, again, all these
other factors shape whether
a firm thinks that austin is
the right place for it to
locate.

And I this I a couple of the
deals, my assessment of the
legal zoom deal and the fair
thane deal.

The other cases I think you
could make strong arguments.

And I think that when we
look at this, we have a
pretty good record but a
record and questioning that
comes up in these cases why
are we incent a back office
operation.

Is it really going to yield
these extraordinary benefits
that I think you need to
communicate and justify
offering incentives?

I would offer no.

Why are we offering a tiny
incentive, granted, but
incentive nonetheless, for a
company that really is not
paying a living wage job.

So I think there are
questions associated with a
particular -- I don't think
we've done a bad job, but i
think in a couple of cases
there's kind of head scratch
ago this kind of feed into
some of the public
perceptions I was talking
about.

So these are my sort of
takes.

These are what I would argue
would really help address
some of those public
perceptions that I outlined.

I really do think the city
should work with broader
constituency to better
articulate and communicate
the specific goals that will
be achieved through the
offering of incentives.

And based on that revise
this firm based scoring
matrix and explain the
scoring to the public.

Because for each of these
deals, the scoring matrix is
presented.

25 Points in the case of
legal zoom of being linked,
having critical linkagees to
local economy.

Maybe there was evidence
that I couldn't understand,
but I didn't see any sort of
thins.

This is -- these are the
important links that we
reveal when we examined it.

So again, I just don't think
that we're communicating to
the citizens and voter why
we do this stuff.

And I think we've got to
communicate this is our
goal, this is why we're
doing it and we're doing it
by this and we're grading
these potential deals by
these criteria.

I think, and this is I think
a fairly easy and modest
tweak to the process.

I think that the council
should be briefed in
executive session, this kind
of came up earlier in
 porter's comments,
allowing the councilmembers
and the mayor to kind of
offer questions and
deliberate before that
letter is sent to the
applicant outlining the
agreement.

I think if I were on the
council and I sort of
entered the process once
that conditional kind of
agreement had been sent to
the firm, I would feel like
to oppose it I would be
opposing at that point not
just the firm or not just
the idea we should give
incentives, but opposing the
judgment of the city
manager.

I think before that judgment
is made, that the
councilmembers and the mayor
should kind of get a sense
of what this deal is, what
some of the issues are, is
it worth doing, et cetera,
et cetera, before the
agreement is baked.

I think that the city and
staff should produce a kind
of across the departmental
budget that really outlines
all the economic development
activities occurring this
the various city
departments.

And I think the staff could
do this probably in a day or
afternoon.

But there are lots of
economic development
activities as are more
important than are
incentives that are
occurring in small business
support, in business
incubation, in support for
certain kinds of employment
and training and so forth
and it would be good to have
a map of all of the economic
development functions that
the city carried out by
department.

And I think that would allow
you to say, okay, this
company wants to come here,
these are the kinds of
services, not just
incentives we could offer
them some other things.

I think that would be a
simple, straightforward
thing to do that I think
would actually give us much
better information.

>> Martinez: I want to
make sure you get through
your presentation.

20 Minutes.

I just want to make sure
everyone else get their
presentation as well.

>> I'm done.

The final thing is I think
we should have a
confidential disclosure of
compeing localities.

Estimating argument, well,
wedon't offer incentives they
are going to community x.

And I think everybody has a
right council and staff to
say, so on.

So I think this helps deal
with the problem of -- of
the if but before the
incentives question.

Thanks.

Appreciate it.

>> Martinez: Thank you.

Any questions?

Councilmember tovo.

>> Just a couple quick ones.

I want to thank you for
being here and for the time
you've put into the
presentation.

I think you've offered us
some interesting
perspectives to think about
and to consider as we move
forward.

And thanks, of course, on
your past work on our
incentives program.

I wondered, it's come up
multiple times and I think
you are right in saying that
there is a public perception
that some of the firms might
have located here without
incentives.

Do you have any suggestions
on how we might collect
better information or how do
we get at answering that
question of whether or not a
firm would have located here
without the incentives?

You've offered a few ideas,
collecting information,
asking the staff doing those
negotiations to collect
information about that and
then perhaps doing some
verifying of that
information.

>> I think that's an
important step.

The other way you can get a
better idea, you can never
answer that question
completely because this
whole process has asymmetric
information.

That means one party to the
transaction has a lot of
information and the other
part to the transaction
doesn't have much
information.

That gives the party with
information more power.

So it's always kind of
mystified me why we kind of
allow that process to be the
kind of business as usual in
this domain.

But I think if you -- that
little list of location
factors that I laid out at
the good evening of my talk,
I think if you look at that
and say, okay, here's why
this firm really wants to
come here.

We have this, we have that,
we have that, we have that.

Is the competing -- does the
competing jurisdiction
really have all of that?

And if they do, well, maybe
the incentive will be the
kind of tipping factor.

But if the other community
or competing community is
clearly inferior in a number
of these locational factors,
that suggests you probably
don't need to offer
incentive, or if the other
community is clearly
superior in a lot of those
location factors, it would
probably suggest if you have
to pay them you would have
to pay too much because you
would have to be
compensating them for having
infear your assets here
versus the community they
might move to.

So I think you can never
answer the question
completing, but I think it's
really worth trying to get
at it as rigorously as
possible because if you
offer -- it could be the
best deal in the world and
it could do wonderful
things, but in a city offers
an incentive and it doesn't
have to, that's a direct
transfer of revenues from
the taxpayers to the company
stockholders.

It could be the best deal in
the world, but if you didn't
have to use that incentive
to get them, it's still in
that lot.

>> Martinez: Any other
questions?

>> Morrison: I just want
to highlight one point
you've made and that is back
on one of the earliest slide
about why direct incentives
and the last bullet is
significant positive effects
on other firms in the region
and supplier customer
linkagees and all.

I hear you say that and i
think making sure folks
understand what we're
working with, that tied to
the livable city in terms of
let's really define our
goals.

I also know that opportunity
austin and the chamber have
set things that fit into the
goals and I think we're
hearing the same thing in
many different languages and
it's important that we
address them and have some
public dialogue so that they
are understood and do they
need to be refined and we
get them in terms of some
higher level goals and
things like that.

I hope that's one thing
we'll be able to work on.

>> Thank you.

>> Martinez: Thank i, sir.

The next item is a
presentation from a dear
friend of ours who left us
and retired, used to work
for the county, it's good to
have you back, leslie.

>> [Inaudible] I kind of had
a peripheral role in that.

>> Martinez: Just to tee
this up, the county is
obviously a part of these
deals that we make and you
all are contemplating
potential changes to how you
structure your economic
development agreement and
that's why we've asked you
to come present to us the
things that you all are
looking at and things that
you find kind of heading in
the right direction, if you
will, toward where the
commissioners want to land.

>> And I've got a power
point for you that I think
you can make up some time
with me.

You all remember I talk
pretty fast.

But anyway, we are in the
middle of process.

It had actually been ongoing
before I went to work at the
county and the way it got
initiated, we did have a
policy in effect that
expired in 2011 that had an
end date.

[One moment, please, for
change in captioners]

>> but do that in the july or
august time frame.

The development consumed us.

We didn't get there.

Now we're having a session in
mid october to address
everything that was left because
there were I want to say about
ten issues that the court wanted
to discuss before they finalized
something.

And hopefully after that, we can
get to the point where we
adopted a revisedeconomic
development policy.

In the current draft, I thought
this slide would be helpful for
you, a little history of what we
did previously in the county.

In the last policy, the focus
was on the large dealings, the
large expansions.

The minimum was $100 million in
terms of the capital investment.

The minimum jobs requirement was
minimized and we reduced it and
we could look at hiv global, for
example.

They've only done one agreement
since I was there, the apple
agreement.

And there has been a lot of
living wage inclusions in there.

It's for the employees that work
at apple.

It doesn't relate to the
construction.

In the new policy, we have
minimum requirements.

Again, this is a draft that
hasn't been adopted yet.

So there are rebate percentages
associated with the minimum
requirements depending on the
magnitude.

They grow on a sliding scale.

I've included all of that in the
back here.

And there's add-ones in the
event that you achieve
additional things.

That's the next to the last
bullet.

We've got incentives in there,
add-on incentives for green
building.

The lead certification.

The development, if it's located
in a desired development
location.

And we're actually citing the
city's desired development zone
in there as well.

As the travis county planning
staff are working on a future, i
guess master plan, kind of
similar to a comprehensive plan.

So we'll get feedback from them.

But basically it would focus on
the activity center that we
would like to see it occurring
in.

Or we've been leaning towards
transit friendly areas.

And I think hiv global is
planning their location is near
a capital metro park and ride.

And we've been told that capital
metro is looking at possibly the
rapid transit bus service going
up there and they've indicated
to us that they're excited about
that.

The one thing we included in the
apple agreement that may be
unique to travis county.

And we heard about this a lot in
the public feedback if we had
recapture provisions in there.

Sometimes they're not always
needed.

But I think apple is kind of --
they were planning to bring
their jobs and their capital
investments over a period of
time.

And so we had a provision if
they didn't meet that in any
given year, the rebate would not
be paid.

Over time they weren't meeting
the overall goals.

They would recapture.

That's not always necessarily
relevant.

That will be a feature in the
policy that we have the option
of renegotiating that.

The preferred industry, I think
the county put this list
together in kind of cooperation
with the chamber or the city in
the january work session that i
referenced.

And so they're all laid out
here.

And I think they're very
consistent with the opportunity
austin program.

Okay.

Oops.

They put some surprise going to
have to get after it -- oops,
okay, there we go.

These are the base requirements.

I think I kind of mentioned
those already.

So I went too in depth.

Capital investment of $25
million.

Increase employment by 50
employees.

Then we got add-ones for you
achieve greater new job creation
you get a larger percentage.

The competitive requirement
which I believe the city has
having a good employee benefits
policy.

And we've kind of been
struggling a little bit with the
language there.

But we basically want the
company to provide meaningful
access and coverage.

I think the meaningful term
comes from ann kitchens.

She suggested that.

We want the employee benefits
policies of the firms to imply
two things.

Then item number six is the idea
that came into our discussion.

I would say this past spring
when we were looking at the
policy.

That was trying to feel at least
50 positions with travis county
residents.

Apple ended up, we ended up
doing an add-on for apple which
is what we originally had in the
policy rather than including
that as a base requirement.

So I'm not sure where the
commissioner's court will land
on that.

The only time that seems to
bring up concerns is if you're
locating near the border,
williamson county.

And so you can understand how
those discussions go.

But this is a feature that's
received a lot of discussion and
I think the commissioner's court
is in it.

These are the lists of the
component incentives.

We do have in our draft policy
that we will not exceed an 80%
of taxes on new or eligible
property value.

And really, our rationale there
is trying to limit it to close
to or no more than the
operations and maintenance rate
associated with the tax rate.

So that we just are rebating
general funds related revenue,
not debt service just a
definition of capital investment
for you.

One of the things that we may do
that's a little different in the
city is we actually require the
firm to provide us with
documentation as what they
presented to the travis central
appraisal district when they
actually get to determine what
is actually taxable in terms of
their facility.

We actually have a further
requirement that it has to
qualify for new construction.

With tcad.

This is the base incentive i
mentioned earlier.

$25 Million is the minimum for
consideration in terms of the
capital investment.

And you can get the rebate.

It kind of increases in the
sliding -- on a sliding scale
here.

Job minimum was in the base.

Lead certification.

You can go up there.

The austin's city desired
development zone in there and
any important activity center
that might be identified in the
equivalent of a travis county
comprehensive plan.

That's another 5%.

Economically disadvantaged, we
need help in this area.

We're going to involve our
health and human services group
there.

This is something that companies
have said they're interested in.

They could use some help from
us.

We could pull in the experts and
that would be the health and
human services people to flesh
this out a little bit so that
when companies come and express
interest in doing this, we could
kind of offer some different
programs for them that might fit
their needs.

You can get under the current
draft policy an additional 10%
under this category.

Oops, they did it to me again.

The next up is in october when
they bring it back for a special
format for further
consideration, these are some of
the areas that we kind of
targeted the last time we had
the discussion with them that we
need sort of some closure and
some additional feedback to
finalize the policy.

Do we have the right targeted
industries there?

Do we need to define those a
little more broadly to account
for evolving trends and the
desire to diversify our economy
here.

We have a requirement to look at
the loophole commitments.

We're having a discussion in
that as well.

You can get having a long-term
opportunity for people making
leasehold improvements that
result in taxable value.

There's been discussion about
whether or not to include a --
or to require a super majority
of the court if we want to waive
I go in -- waive anything in
the policy.

That might be a little more
cumbersome.

That could receive further
discussion.

Health benefits, that will be an
issue.

Access versus requiring employer
subsidies.

One of the pieces we had on the
last slide was setting it up
that gives you a little more
flexibility to award bonus
points when companies are
locating or want to locate in an
area where there's a lot of
economically disadvantaged
residents.

And, of course, residents on the
last.

That's all I've got.

Good to see all of you.

I hope I talked fast.

>> I have a question, leslie, on
one of the slides.

Slide five.

Under requirements for
incentives, number two says it
doesn't transfer employment from
one part of the county to
another.

Can you explain to me what
exactly that means?

I think I get it from the retail
perspective and that's why we
stopped doing retail incentives
but not sure how it applies to
manufacturing?

You know, this may just be --
this may sort of be related to
number four.

It's basically that you are
actually discussing an incentive
with someone who's bringing new
business to the area.

So I do see what you mean with
retail.

But, for example, if a company
is expanding.

If they're located here and
they're expanding.

Is that what you're getting at?

They're going to bring more jobs
and value to the tax base.

So that may be a little
confusing.

>> Then on your so you cap new
maximum property value at 80 kt
be.

The abatement can only be up to
80%.

So, does your policy -- are you
contemplating or do you
currently contemplate an actual
annual revisit of those
performance measures so that
that abatement can continue at
that level or be adjusted to be
commiserate with --

>> with whatever they've
achieved, yes.

So we would look at that on an
annual basis to make sure that
compliance is occurred.

Any time we partner with the
city, they help us with that.

We appreciate it.

>> Councilman morris?

>> I know we need to move on.

Thank you for rubbing through
this so quickly.

A couple of questions, have you
guys started talking about the
issue of construction safety and
wages?

You know, I don't recall that
it's come up before.

We had a couple of hearings on
hiv global.

So I've got some of the points
that they're interested in.

They left those with us.

>> And does the county do a cost
analysis?

>> We do --

>> oh, okay.

>> We're looking at right now
when something comes up jointly
that the city is working on and
the county has been approached
as well.

Egrso is helpful.

We're running those numbers for
us.

We're looking at contracting to
go forward and relieve them of
that request that makes me make
it from time to time.

>> Tovo: It makes me think
there are two different
jurisdictions and demographics
and we serve different people
than the court.

But it makes a whole lot of
sense to align things where it
makes sense to align things.

For me, I would love to be able
to see our policy next to the
county's policy and have a
conversation about whether it
makes sense to incorporate
something and where the
differences really are.

And potentially we have a
different approach to them bchlt
uh to see them lined up next to
each other would be helpful.

I wonder if the staff might be
able to help create such a
chart, as you will, or
however -- however best it could
be presented.

>> Martinez: Can I assume
you're referring to our existing
policy?

And then they're going through a
draft so -- the draft?

Is it a future draft that we
have versus their draft?

Is that just a question I have.

>> That's a very good question.

I would suggest -- I don't know
what you think -- what my
colleagues might think is most
helpful, but I would suggest our
existing policy and the county's
proposed draft policy.

We know that it's the draft and
we know that we're probably
going to change some things.

Like some inl put from my
colleagues on that.

>> How different is your current
existing policy with the draft
that you just presented.

>> Our existing policy was
focussed on tax abatements.

It actually expired.

And I think -- I didn't bring it
with me, but I think it was
mainly focused on large capital
investments and large numbers of
jobs.

That was the main focus.

So it was $100 million in terms
of a minimum investment and 500
new jobs in terms of minimum job
creation.

>> So, I would agree
councilmember morrison if we
could get a side-by-side
comparison of the existing
policy of what she presented
today on the existing county
policy?

>> Sure.

>> Thank you.

>> Martinez: Thanks, leslie,
appreciate it.

One more presentation.

This is from john hocnyos.

>> Sit or stand?

>> Martinez: Up to you, buddy.

Appreciate you being here.

>> My pleasure.

Thanks, guys.

Thank you for having me this
afternoon.

It's not a misprint in the first
page of the slide.

What I'm going to show you today
is I thought it would be helpful
to see some of the deliberations
and the findings that happened
getting on to ten years ago with
the policy that exists today
came out of what was then the
mayor's task force on the
economy and chartered by mayor
garcia.

It's been long enough ago that i
forget who was involved doing
what?

I was involved in that
obviously.

This is kind of to give you a
flavor of the original thinking
that was behind a lot of the
conversation about the policy.

If you go through this, you will
see that a lot of the questions
you were wrestling with were
questions that we were thinking
about back then as well.

By way of context by you all,
you know what I do for the city
of austin.

In terms of incentives, I want
to say that my firm has written
probably close to a dozen
incentive policies at this point
fundamentally relying on the
outline that we use there.

We're engaged by the city of
grapevine, every time they do
negotiation, they have us cut
the deal.

We wait for the guy to come in,
ask for the stars and the moon.

And we say you ear not going to
have the stars and the moon.

Let's go back to the policy and
have a realistic conversation.

This is the charge given to the
traditional industries
recruitment and retention sub
committee.

You can see here, the question
is how to think about an
incentive policy and how do we
go about developing anned
evaluation process and scoring
matrix that will fit community
values.

Again, what you will see as we
go through this, obviously we're
concerned with the impacts on
the economy.

But we're also concerned at the
same time in reflecting what the
city of austin and by extension,
the austin community cares
about.

Sod that was behind this whole
thing.

By way of background, I found it
interesting that alexander
hamilton came in and asked for a
tax abatement, 1791.

It's just a little flavor on
this.

Any economist we talked to would
tell you in the abstract, we
wouldn't want to do taxes.

We're not functioning in the
abstract.

So what you end up with is a
situation where communities are
pitted against each other.

Part of the goal is to think
about the scale.

You have a policy that's
relatively clear in terms of
what it's going to be asked for
by the companies.

You don't want to find yourself
boxed in.

It was a philosophy and a
thought process that was shot
through most of what we're
trying to do here.

More background, blah, blah,
blah.

We can skip past this.

It included 40 stake holders
from a broad range of
consistencies across the city of
austin and the broader austin
community is we should do what
was called a shared investment.

We couldn't say tax incentive
because it was an ugly term.

Using the sort of broad criteria
here, and it's somewhat in
descending order, economic and
fiscal impact, local interests
to the austin economy.

You heard something about this.

Cultural and quality of life
considerations and I'll get in a
little more detail on what that
was.

And additional environmental
considerations that we were
thinking about nine or ten years
ago.

So these were the questions that
we suggested should be informing
the evaluation criteria.

This is specifically on the
economic and fiscal impact.

First of all, how big is it.

Does it fit with the targets
are.

Operations are desirable.

Does it represent the
headquarters of a new product, a
service, a new division of the
company.

Is it a growing firm.

Is it a firm in the growing
industry.

How stable is the firm?

This is the place where I want
to say about target industries.

I've done a ton of target
industry studies.

I came in too tightly for the
attendance policy.

You have a terrible firm in the
growing industry and you have a
great firm in an industry that
you're not targeting.

Sometimes you have a firm in an
industry that's cool but doesn't
fit with what you think it would
be.

I had a long consideration with
the firm that's looking at doing
vertical farming.

You know what vertical farming
is?

It's basically hydrouponics on
steroids.

You go old warehouses and go 16,
17 stories in the air in any
urban environment and grow
incredible food.

Is it manufacturing?

Agriculture?

Technology?

It's cool.

They think you want to be in
austin.

Long ways away from being able
to talk about this.

In a target industry study, that
wouldn't be on the list unless
you were sufficiently broad that
you said it was leveraging new
technologies or something.

Keep that in mind.

The one about significantly
enhancing the tax base, the mall
example.

I'll give you context.

I wrote a long piece about why
you never want to incentivize
retail.

I could go on that for hours.

At the time in the day we were
concerned about sunset valley,
where sunset valley was on the
order of -- I can't remember the
exact number.

The insane amount of sales tax
revenue for 325 residents in
sunset valley.

We were also back in the day
thinking of incentivizing mixed
use development because we knew
it was a pattern of development
that we wanted to push in the
city of austin.

So that was back in the day.

That's convention market wisdom.

Any developer you talk to says
you have to do it.

You don't have to incentivize
it.

The point of that is this needs
to be flexible and responsive to
the trends out there in the
world.

The demand on the environment
and the community's
infrastructure.

Job evaluation criteria.

Will the bulk of new hires be
right up on top.

What is the average wage paid?

How does it compare to the local
or the national industry
average.

Let me encourage you to think
about that in those terms.

I agree with the notion of the
living wage.

When I think about it, there are
some industries that we may want
to incentivize someone noft
paying a living wage.

For example, an industry that
said we're going to have a
program for people who have been
recently incarcerated.

It will be relatively low skill.

We're going to try to provide
job training and we're going to
pay $2 more than the industry
standard which is $8.50.

If you have an absolute minimum,
you may be hamstrung with that.

Conversely, you could have a
company paying below the
industry standard but well above
the living wage standards.

So you could leave money on the
table.

So what this is designed to do
is really look at this.

You can see in some of the
criteria in getting a more
complete picture of the hiring
practices and patterns of the
company you're dealing with.

So not only what is the average,
but what is the media.

Do you have a handful of highly
paid people and then a whole
bunch of really low paid.

You should look at the median in
addition to just the average.

What training is provided?

What opportunities are there for
advancements.

Are there funds available for
education.

Tuition match, etc.

The last one -- I hope it's not
quite the concern it used to be.

We have to be mindful of it.

Does the firm actively promote
diversity in hiring and
promotion?

These are all things that helped
you paint a more complete
picture.

Local linkages.

This was a big issue at the time
because at the time, the
unemployment rate is relatively
high.

Does it make use of an
especially underute litzed
asset.

Certain segments of the labor
force, or at the time, office
space.

What creates opportunities for
local firms.

Disadvantaged businesses, does
it fill a hole?

Doesth is it the potential to
see a new cluster?

Bring firms to austin?

That's an important one.

Will it compete for resources
directly with existing local
firms?

That's an important
consideration.

One of the things you want to
avoid doing in this process is
incentiveizing people to the
disadvantage of your existing
companies.

Simple terms, that's not fair
and inappropriate in my view.

So these are the cultural and
environmental criteria we talked
about it at the time.

It took a lot of energy and
thought to come up with a
blanket statement about are we a
good citizen on the global
front.

The active participants in the
arts and cultural life in
communities where it operates.

We hope that's a broad enough
statement to fill in a lot of
things.

Instead of being specific.

Will it be proactive, a cultural
outreach program, does it
encourage the employees to
volunteer.

Does it have a track record to
conduct the business in a
responsible way?

Does it have a track record of
being supportive of
environmental initiatives and
concerns?

So those were the questions we
laid out.

Most of them were on the table
as we sit here.

What is the process?

This is guidance.

This is not the exact policy,
cost benefit analysis is the
proper approach.

We think the best way to
benefit -- measure the benefits
with time is the present value
of direct tax revenues
attributable for a project.

We suggested at the time that
became a city policy, you look
at the ten-year window on
present value.

There's a specific reason for
that.

That is, ultimately, the process
that you should get more than
you give, so accepting
extraordinary circumstances, you
shouldn't give away more than
50% of the present value.

But if you looked at a ten-year
window, it gave you flexibility.

You could front load for a
couple of years.

If that's what the company
required, taper it on the back
end and keep it under the 50%
present value ceiling that we
suggested was important.

Two components for the costs.

One is direct costs for the city
of austin.

If the firm for the project is
the primary beneficiary.

Do you have to expand any
infrastructure, etc.

And the second is indirect costs
to the extend that new folks are
in town.

You're going to have ongoing
city expenses associated with
the overall growth of the
community.

Operations, police, fire, parks,
etc.

We suggest you should measure
all of that out.

And the package that became 50%
is the ceiling should be some
percentage of the net gain.

Benefits minus the cost.

Give back some percentage of the
net game.

That is one of the more rigorous
incentive analysis processes out
here in the country.

There's a reason why it works in
austin.

We have an extraordinary range
of advantages here.

I would argue over time these
all begin to fit together.

I want to underscore something
the doctor said.

He's right.

Nobody picks this community
initially because of the tax
incentives.

They pick it because of all of
the other things they have going
on here.

However, sometimes the community
and two or three others are all
leaders for the company's we're
talking about.

That's when the tax incentives
can potentially become a more
important part of the equation.

Also I want to say this too.

You guys heard me speak of this
a lot.

Much of what the city does has a
huge effect on economic
development.

And this is just a small piece
of it.

I said that for years,
everything that the city does
helps create an environment that
influences the future of our
economy.

What should be some of the
principles?

Make people perform based on the
contract.

Give it back.

I think that's been the case.

Guidelines any earlier should be
used to determine the level of
net gain.

We talked about that.

At the time, we talked about all
applicable city revenue sources
could be included.

That's a policy decision.

Chapter 380, I think, continues
to be the right way to do it.

Because it's simple and flexible
and allows you to craft an
agreement with the company that
makes the most sense.

Again, emphasize ten years ago.

It should be factored into the
equation.

A couple of things again, these
are things that are also part of
the process.

Some of these are less germane,
some are still germane.

Expedited permitting, etc., etc.

That last one is particularly
interesting because a couple of
times this happened in recent
years, the city, I think, is in
part willing to offer an
incentive because it was a
requirement from the texas
enterprise fund.

That's an important piece of the
equation.

If you have a tie breaker, a
company that otherwise isn't
quite as attractive but if the
governor's office is able to put
a bunch of money on the table,
maybe you want to step in and
participate today as well.

Where are we today?

You heard about this.

We are going through a detailed
benefit cost analysis.

The city staff is asked me to
come in and help them go through
a little bit of that to have the
best possible data.

That's the best methodology.

Again, per the recommendations
for ten years ago, the direct,
economic, and fiscal effects are
the main components of the
analysis.

Ripple effects are measured and
considered but not included in
the calculation.

I want to say if you think about
this, the ripple effects are not
important.

Because the ripple effects will
extend the benefits of the right
kind of project on beyond the
people who actually work for
that particular company.

If you bring new money to town,
the goal of the economic
development, the net exporter of
a good or service, that money
moves through town with
suppliers in the form of wages
paid, obviously, the people who
work there.

That creates benefits for people
even if you are not actually
directly employed by the company
that's receiving the incentive,
something that we're keeping in
mind.

We talked about some of the
balance there.

This is kind of interesting.

I asked city staff to send me
over a list of some of the
projects.

Look at the benefits.

And, again, these are ten-year
projections.

Benefits measured by revenue of
the city.

The incentive is included as a
cost.

I broke it out.

You can see actually directly
what it was.

The other costs for the
calculation, it's about 2 1/2 to
1.

Which suggests that so far,
we're getting more than we're
giving.

That's obviously a very, very
positive thing.

Hiv is included, it wasn't done
yet, that was proposed at the
time.

So, in conclusion, you know, i
think the overall process is
pretty good.

I agree.

I think overall that I believe
this isn't broken.

The detailed evaluation criteria
and the scoring system never
meant to be carved in stone.

I would never suggest as an
economy evolves, as priorities
evolve and change, you should
revisit that.

I think the overall structure is
sound.

I have a dog in the hunt.

Full disclose euro, obviously.

Incentives, again, one piece,
overall economic effort, by the
city, by extension and the
community as a whole.

And it's something that also it
is easy to lose sight of, we
have tremendous economic success
here.

I would argue because
fundamentally we're doing this
right in the big picture sense.

I would make the argument that
yes, for the pride of living
here, we're the economic leader
in the country.

There are certainly communities
of any size.

So, with that -- I'll stop.

>> Thank you so much.

I really appreciate the
presentation.

And these are great points.

I guess I'm not going to suggest
that they didn't make it to a
codified policy.

But these -- these points that
you brought forward in 2003 seem
a bit stronger than what we have
in the policy today.

So I appreciate you revisiting
this as a reminder to us that
you actually have been here
before, and you made some darn
good suggestions.

So I really appreciate you
coming back with it.

>> Sure.

>> Councilmember tovo?

>> Tovo: A couple of quick
questions.

Thanks very much.

As with the other presentations,
I think there's a lot to
consider.

I appreciate you bringing it
forward.

I want to be clear about what's
in front of us is not the same
document provided in 1993.

This is your 2012 take on what
those findings were?

>> No, the last --

>> Tovo: I'm sorry, I have the
2003.

>> The last three slides -- see
if I can reverse course here.

Go back with it.

Yeah.

Starting where it says city
incentives today, that's 2012.

The other stuff are actually the
slides.

I showed it on april 9, 2003.

>> You probably told us that
initially.

But I didn't capture that bit of
information.

A quick question.

And I'm not sure kind of tell
you what page it's on.

Under the shared investment
policy.

The nine financial inducements
and bullet points.

Can you explain land where
possible in the energy.

>> We were talking at the time
that the city at the time had
land that was actually in its
control that could be offered
up, either free or at a nominal
rent value.

In 2003-there was more available
city land, I believe, than there
is today.

Austin energy had some as well.

>> Tovo: So the austin energy
references, austin energy-owned
land.

My last comment the ten-year
projections.

Are these based on the
calculations done at the time
those deals are being
considered?

Or did the staff go back and
revisit those numbers?

>> This is done at the time the
deals were being considered,
right?

>> These calculations were done
at the time that these deals
were considered projecting out
the future ten years.

Our agreement carried that term.

>> Tovo: That was the question.

Did you go back and recalculate
any or look at any actual
financial information after the
point of execution of that
agreement.

>> Actual taxes collected, the
property taxes.

The jobs.

We can't measure the sales tax
collected as a result of the
jobs being created.

>> Tovo: Okay, thanks.

>> Martinez: Councilmember
morrison?

>> Morrison: Yes, I want to
echo councilmember martinez's
comment that there are a lot of
great things in here that were
not actually put in.

But good points all around.

I wanted to ask someone specific
question, sort of a fascinating
question.

Local linkages, evaluation
criteria.

The very bottom bullet question
is will the firm compete for
resources directly with the
existing local firms?

How do we deal with something
like that?

How do I appreciate something
like that?

And when it comes to, for
instance, thinking of our lack
of enough technically competent
and capable employees or workers
in our community right now?

Some folks say all they're doing
is stealing from each other.

Apple will come in and steal
from all of the little guys.

>> It brings up the point.

That's the purpose of that.

It depends on where you are in
any given time.

It's in 2003, that wasn't a
problem.

At the time, it was the wake of
the dot-.com, you know, bust.

It was the wake of 9/11.

There was a tremendous amount of
under and unemployment in the
austin technology community at
that stage.

So to cite that specific
example, that's an issue.

Another issue that arises as you
think about that is squaring
that with thinking about wanting
to hire local folks first and
foremost.

So as you say to yourself, hey,
wait a minute, we're down to a
tight labor market in specific
areas, if we want to bring in
companies that we think are
going to be growing, companies
that are going to be good
citizens here go forward, do we
want to impose on them a
requirement to hire an existing
local folks at a time when the
labor market is tight?

Maybe not.

Maybe you do when the labor
market is very loose.

When there's tremendous excess
capacity in the labor market.

So the point of all of this, i
guess, is really a lot of it is
contextual.

The specific industry we're
talking about or where we are as
a city?

>> Martinez: So, john, on some
of the criteria that you guys
contemplated in 2003, were there
certain things such as
participating in the cultural
life, being environmentally
sensitive.

I think those are broad
statements and they're certainly
good values.

But what if any conversations
took place regarding specific
performance measures as to
investment in the local
community and cultural arts?

>> There was a lot of
conversation and the answers
were unsatisfactory.

Several times in different
instances, it was going to be --
it was going to vary
company-to-company,
industry-to-industry.

What was contemplated.

I think that does happen is as
the scoring is done, there's
justification of why a score was
awarded.

You can be done in that form, we
talked to the following people.

We reviewed the following
materials.

We did this, this, and this.

The article in business week,
town and company had the
incredible recycling program.

Those kinds of things that you
could do going to look at
evaluating this.

The staff and by extension to
you the policy makers.

But these issues are complex
enough that you want to give
some room within that so someone
could build a case about why
this particular company has a
terrific environmental program
without having to say here's a
quantitative metric that we're
going to make you rely upon.

So the default position was,
leave some flexibility.

Tell people this is what they're
going to be judged on, and say,
okay, make your case about why
they meet the criteria.

>> I appreciate those comments
because I think that's partly
where my position lies on this.

There are some hard and fast
values that this council wants.

There are a few absolutes and
you get in the door with them or
you don't.

But there are others that are of
value that I would certainly
contemplate being flexible on if
they showed a stronger value.

So as the example that you just
brought, an environmentally
superior company that is zero
waste.

That is carbon neutral.

And that is energy consumption
neutral.

I may not be as hard and fast on
a living wage, necessarily,
because of the costs it takes to
be carbon neutral, to be so
environmentally sensitive.

Again, I don't know where I'd
end up on that.

I would have to see the full
proposal.

But I want to maintain a flex
nblt the new policy that
determines the baseline hard and
fast rules.

Everything else is somewhat of a
menu.

You can achieve up to a certain
percentage of incentive via
disagreement by applying the
values to the companies as it
expands here in austin.

>> That's exactly what I'm
talking about.

That's beneficial, I think, to
the community and the company.

The company for whatever reason
may say -- let's stipulate that
there's hard and fast.

And I assume that it's not going
to get a deal.

Okay, fine.

That's a stipulation.

We're there.

But a lot of these other things,
individual companies may have a
greater capacity to perform at a
relatively higher level in
different -- different criteria.

And by giving that flexibility,
you give the company the best
opportunity to perform at the
highest level.

While at the same time, being
able to say to the community, we
have a lot of these values here.

Okay.

HE DIDN'T GET STRAIGHT A's BUT
He did a plus over here and b
over here, that's find.

Again, that's part of the goal
here is guidance and
flexibility.

Those are the two principles we
tried to reconcile in putting
this together.

I'd argue with you so far pretty
good.

There's always room for
improvement.

I applaud use guys for thinking
about this and trying to
continue to make this better,
make it better aligned with the
reality of the modern economy.

Make it better align with what
are certainly evolving community
values.

But, compared to lots of other
places I work in, we're doing
this right, we really are.

>> I really appreciate you being
here.

I hope that you will help us
craft whatever becomes the final
policy.

0
version?

This will be the third, right?

I do appreciate it, john.

>> Thank you.

>> I want to make one more
comment.

It sounds like our grade is
"it's not as bad as it could
"

but I do want to mention, you
know, you're talk about the
guidance and -- I want to add
process to all of that.

Because I think one of the
things that's come up in some of
the conversation is that we need
not just transparency, but so
that folks know what we're
talking about and why we're
talking about it.

And the interesting thing is i
think about it is some of the
forms and some of the backup we
get right now for instance has a
number score over here.

If you go to a different -- if
you go to a different section or
a different file, it's sort of
explains why.

So I think we just need to keep
an eye on also presentation to
really help the public dialogue
quite a bit.

That's another -- for the public
to understand what we're talking
about.

It's critical.

>> Martinez: Those are all of
the items that are posted today.

I'm going to make an assumption
that we want to have another
meeting fairly shortly.

Would it be appropriate, brian,
to maybe just verbally without
taking any formal action direct
you all to help us start
bringing forward some language
to start working from to share
with the public?

And get feedback on?

>> Sure.

>> Martinez: Maybe ask john to
help us based on the comments he
heard today and some of the
things that historical context
that he has with the process?

>> I guess the question I have
is are you asking me to craft
language based on what we've
discussed and bring it forward
or is it let's craft the
language and use the next
meeting as a forum to throw out
and measure some of the ideas.

>> Martinez: The second.

>> Morrison: It would be great
for the committee to roll up our
sleeves and say here's the
overall construct, here are all
of the things we need to deal
with.

So I guess my sense is it would
be a little premature to ask
staff to draft anything at this
point, unless they wanted to
draft a set of points that we
ought to address.

>> Martinez: That's a better
starting point.

Let's -- we'll see if we can
come up with a synopsis of kind
of the conversation and the
points that we brought up that
you all have heard.

And we haven't clearly
articulated that openly, then
we'll add to that -- add more
content to it.

>> Be helpful to put together
bullet points, specific to the
points we discuss, share that,
if additional ones we have
missed.

Circulate those.

And as this progresses, start
working with the committee in
terms of vetting those?

>> Morrison: Right?

Seeing how we want to address
those, that's great.

>> Martinez: Any other
questions or comments?

No other agenda items, we stand
adjourned.