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>> WELCOME TO THE FINANCE, UTILITIES AND RULES COMMITTEE MEETING ON JUNE 16TH, 2025.
[a. Property Abatements/Compliance with Statement of Benefits ]
WE'LL CALL THE MEETING TO ORDER AND ITEM ON OUR AGENDA IS PROPERTY ABATEMENTS, COMPLIANCE OF STATEMENTS OF BENEFITS. NICK, DID YOU WANT TO COME UP AND PRESENT?>> GOOD AFTERNOON. NICK WEBER, CITY OF CARMEL.
WE CAN TAKE THEM IN A BLOCK OR DO THEM ONE BY ONE.
DOES THE COMMITTEE HAVE A PREFERENCE FOR HOW WE GO THROUGH THESE?
>> LET'S JUST GO THROUGH ONE BY ONE.
>> ALLIANCE FOR COOPERATIVE ENERGY SERVICES IS THE FIRST ONE ON THE AGENDA.
THIS IS THE MOST RECENT TAX ABATEMENT THAT THE COUNCIL HAS UNDERTAKEN. JUST TO SET THE STAGE A LITTLE BIT, AS YOU ALL KNOW, STATE LAW PROVIDES FOR DESIGNATED BODY, WHICH IN THIS CASE IS THE FISCAL BODY, TO AWARD REAL AND PERSONAL PROPERTY TAX ABATEMENTS TO ENTITIES WITHIN THEIR JURISDICTIONS. ONCE AWARDED, RECIPIENTS ARE REQUIRED TO FILE REPORTS ON OR BEFORE MAY 15 OF EACH YEAR WITH THE DESIGNATING BODY INDICATING PROGRESS TOWARD THEIR ANTICIPATED INVESTMENTS AND HIRING TARGETS. THE DESIGNATING BODY IN TURN REVIEWS THOSE SUBMISSIONS AND DETERMINES IF THEY ARE IN COMPLIANCE WITH THE PROJECT ESTIMATES.
WHAT'S IMPORTANT TOO IS TO UNDERSTAND THERE IS A TIMING ELEMENT TO ALL OF THIS. THE COUNTY USES THIS DATA, THIS COMPLIANCE DATA TO UPDATE BILLS THAT THEY SEND OUT AND THEY TRY TO DO THAT AT THE END OF JUNE, BEGINNING OF JULY. THE TIMING OF WHAT YOU'RE DOING IS TIMED SORT OF JUST IN TIME, IF YOU WILL.
THAT'S WHY HOPEFULLY WE CAN ANSWER ALL THE QUESTIONS YOU MAY HAVE. SO THE FIRST PROJECT ALLIANCE FOR COOPERATIVE ENERGY SYSTEMS OR ACES, YOU UNDERTOOK THIS A LITTLE LESS THAN A YEAR AGO, A FIVE- YEAR PERSONAL PROPERTY TAX ABATEMENT. THERE IS A PROJECT COLLEAGUE DATE OF 2028. ACES IS THE ONLY COMPANY WHICH THE CITY HAS AN MOA GOVERNING CERTAIN ELEMENTS OF THEIR PERFORMANCE INCLUDING HIRING AND WAGES.
THE COMPANY HAS RETAINED ALL ITS COMMITTED EMPLOYEES AND HAS PAID THEM SLIGHTLY MORE THAN WHAT THEY ANTICIPATED A YEAR AGO THAT THEY WOULD BE PAYING THEM.
AND THE COMPANY HAS MET ITS NEW JOB COMMITMENTS OF 14 AND WAGES OF $50. 48 AN HOUR FOR 2024.
THAT WAS PART OF THEIR MOA. THEY HAVE MET THAT.
THE COMPANY HAS NOT YET MET ITS PERSONAL PROPERTY SPENDING, BUT, AGAIN, IT HAS UNTIL 2028 TO DO THAT. ANY QUESTIONS ON THAT ONE? MOVING ON TO MIDCONTINENT. MIDCONTINENT INDEPENDENT SYSTEMS OPERATOR, THEY HAVE A TEN- YEAR PERSONAL PROPERTY TAX ABATEMENT, FIRST REPORTED IN 2018, WITH A PROJECT COMPLETION DATE OF 2020. THE COMPANY HAS RETAINED ALL THE EMPLOYEES THEY COMMITTED TO RETAINING AND PAID THEM NEARLY TWO TIMES WHAT THEY EXPECTED TO PAY THEM FOR THEIR SALARIES ARE STRONGE THAN ANTICIPATED. THE COMPANY ADDED SLIGHTLY MORE EMPLOYEES THAN EXPECTED, 90 VERSUS 84 AND PAYING THEM MORE THAN THEY EXPECTED AT THE TIME OF THEIR PROJECT SUBMISSION. THE COMPANY DID NOT REPORT PERSONAL PROPERTY SPENDING FOR 2024 AND COMPLIANCE PERIOD, HOWEVER IT HAD PREVIOUSLY REPORTED A FIGURE WELL IN EXCESS OF ITS COMMITMENT OF 2. 5 MILLION.
SO WE DO SEE THAT SOMETIMES WHERE -- ONCE WHEN A COMPANY REACHES ITS GOAL, IT WON'T KEEP TELLING YOU IT REACHED ITS GOAL ONCE IT REACHED THE GOAL, THE GOAL HAS BEEN REACHED. ANY QUESTIONS ON THE CONTINENT?
>> I WAS JUST GOING TO MAKE A COMMENT.
WHEN WE REVIEWED THIS LAST YEAR, THE REALLY GREAT THING TO SEE NOW IS THIS ALMOST DOUBLIN OF THE ADDITIONAL JOBS AND, YOU KNOW, THEY WERE IN THE RED FOR THE PREVIOUS FOUR YEARS.
SO IS IT SOMETHING SOMETHING GOING ON OVER THERE, ARE THEY EXPANDING? WHAT MIGHT BE DRIVING THAT? BECAUSE THIS IS SOMETHING THAT I'M NOT USED TO SEEING, BUT IT IS VERY
PLEASANT. >> I THINK -- IT IS PLEASANT, I WOULD AGREE WITH YOU. TO THAT THEIR PLAN JUST TOOK A LITTLE LONGER TO UNFOLD THAN THEY THOUGHT.
WE'LL SEE ANOTHER EXAMPLE OF THAT AS WELL.
SOMETIMES BUSINESSES, PARTICULARLY PROJECT THAT STARTED IN 2018, SO THEY HAD THEIR CRYSTAL BALL IN 2018 AND WE'RE LOOKING AHEAD. A LOT HAPPENED SINCE 2018 AND THINGS SLOWED DOWN. I THINK WHAT WE'RE SEEING IS A CATCH- UP TO THAT.
>> YEAH. I THINK THE POINT I WANTED
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TO MAKE IS THAT, YOU KNOW, AS WE REVIEW THESE AND SEE FOUR YEARS IN A ROW, NOT MEETING THOSE GOALS, DO WE GO ONE MORE AND THANK GOD WE DID. AND THERE WERE A COUPLE THAT WE TERMINATED LAST YEAR. MAYBE IT WAS THE YEAR BEFORE, I CAN'T REMEMBER. ANYWAY, ALL GOOD NEWS THERE.>> I'LL ALSO -- YOU'RE EXACTLY RIGHT TO HIGHLIGHT THE WAGES ARE VERY STRONG WITH THAT ONE TOO. NOT ONLY HAVE WE SEEN A FEW MORE JOBS THAN EXPECTED, BUT THE WAGES SORT OF FAR OUTSHIFT.
THAT GOES TO 2018, THE CRYSTAL BALL WAS ONLY SO GOOD AND THE MARKET HAS MOVED QUITE A BIT AND THEY HAVE TO PAY MORE THAN THEY EXPECTED TO AT THAT TIME. THE NEXT ONE, SCHLAGE LOCK.
THEY HAVE A TEN- YEAR PERSONAL PROPERTY TAX ABATEMENT. THEY FIRST REPORTED IN 2018 WITH A PROJECT COMPLETION DATE OF 2021. THE COMPANY HAS RETAINED ALL THE EMPLOYEES THEY COMMITTED AND HAS PAID THEM MORE THAN TWO TIMES WHAT WAS EXPECTED OF THEIR RETAINED JOBS. THE COMPANIES ADDED ALMOST THREE TIMES THE NUMBER OF NEW JOBS EXPECTED, 350 JOBS VERSUS 125.
AND THOSE SALARIES ARE ALMOST FIVE TIMES MORE THAN EXPECTED.
SO, THAT ONE, AGAIN, HAS PROVEN TO BE A REAL WINNER AS IT RELATES TO COMPLIANCE AND EFFICACY FOR THE CITY.
THERE ARE COMPANIES UNDERREPORTED, HOWEVER, IN TERMS OF PERSONAL PROPERTY SPEND.
SO THEY EXPECTED TO SPEND 2 MILLION, THEY REPORTED SPENDING $700,000. SO WHILE THEY HAVE OVERREPORTED IN PEOPLE, THEY HAVE UNDERSPENT SO FAR IN PERSONAL PROPERTY. ONE OF THE BENEFITS TO THAT IS OBVIOUSLY TAX ABATEMENTS ARE WEIGHTED TO HOW MUCH YOU SPEND.
IF YOU SPEND LESS, YOU GET LESS IN BENEFITS.
SO, THEY HAVE RECEIVED LESS THAN THEY THOUGHT THEY WERE GOING TO RECEIVE IN TERMS OF TAX ABATEMENT BECAUSE THEY SPENT LESS.
WE, HOWEVER, HAVE RECEIVED THE BENEFIT OF A LOT MORE EMPLOYEES THERE. AND THE LAST ONE IS ZP INVESTMENTS AND ZOTEC PARTNERS.
FIRST REPORTED IN 2021, WITH A PROJECT COMPLETION DATE OF JUST LAST YEAR, 2024. SO 2025 IS THE FIRST YEAR OF THAT MEASURED COMPLIANCE. THE COMPANY HAS RETAINED ALL THE EMPLOYEES THEY COMMITTED TO RETAINING AND PAID THEM MORE THAN EXPECTED. THE COMPANY HAS OVERESTIMATED THE REAL PROPERTY SPEND, THEY SPENT $60 MILLION VERSUS 47 AND THEY DRAMATICALLY OVERINVESTED IN PERSONAL PROPERTY, 11 MILLION VERSUS 1. THE COMPANY HAS UNDERREPORTED IN TERMS OF NEW JOBS, 89 NEW JOBS VERSUS THE 300 THEY THOUGHT THEY WOULD -- THEY THOUGHT THEY WOULD EMPLOY.
THE SALARY AMOUNT YOU'LL SEE IS RED, AND IS UNDERREPORTED, 7 MILLION VERSUS 22. IF YOU EXTRAPOLATE IT OUT, ON A PER EMPLOYEE BASIS, THEY EXPECTED AT 300 EMPLOYEES AVERAGE WAGES OF $75,000. THEY'RE AT 89 EMPLOYEES, BUT THE AVERAGE WAGE IS ABOUT $80,000.
SO OF THE NEW EMPLOYEES THEY HIRED, THEY'RE PAYING THEM MORE THAN THEY THOUGHT THEY WOULD PAY NEW EMPLOYEES, THEY HAVE JUST HIRED FEWER EMPLOYEES THAN THEY EXPECTED.
I THINK IN THAT ONE THE PARTICULAR ELEMENT MIGHT BE THAT $11 MILLION OF PERSONAL PROPERTY, AND IN TALKING TO THE COMPANY REPRESENTATIVE, THEY ARE INVESTING IN TECHNOLOGY IN WAYS THAT HAS DISPLACED SOME OF THE HEAD COUNT THAT THEY THOUGHT THEY WOULD ULTIMATELY NEED. AGAIN, THIS PROJECT STARTED, FIRST REPORTED IN 2021, BUT CONCEIVED OF BEFORE THAT, THE CONSTRUCTION ON THEIR NEW HEADQUARTERS STARTED JUST BEFORE COVID, THAT CRYSTAL BALL DIDN'T QUITE PLAY OUT AND THEY STARTED SUPPLEMENTING WITH TECHNOLOGY AND THAT PERSONAL PROPERTY SPEND AGAINST SOME HEAD COUNT.
THOSE ARE YOUR FOUR ACTIVE TAX ABATEMENTS.
>> THESE ARE TWO OVERARCHING AND DON'T NEED THEM TODAY, BUT I KNOW WHEN WE WERE DOING THE ACES EARLIER, IN OUR TERM HERE, WE TALKED ABOUT THE ROUTINE JOBS IN CARMEL VERSUS NOT IN CARMEL. AND HOW THAT PROCESS OF GIVING TAX INCENTIVES TO THE BUSINESSES THAT ARE CREATING OR RETAINING EMPLOYMENT IN THE CITY OR OUTSIDE THE CITY JUST MAY BE MOVING FORWARD, HAVING THOSE NUMBERS WHICH EXTRAPOLATES MY SECOND QUESTION, IS THERE A WAY FROM AN ECONOMIC DEVELOPMENT PERSPECTIVE TO PUT THE VALUE OF THE INCENTIVE THAT WE'RE GIVING. SO, LIKE, FOR ZOTEC, THEY DIDN'T HAVE THEIR JOBS NUMBERS, THEY DID INVEST MORE INTO THE COMMUNITY BASED ON THE BUILDING AND THE INFRASTRUCTURE
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AND THE INVESTMENT THEY MADE, WONDERING IF THERE IS A WAY FOR US TO SHOW THAT VALUE OF THE TAX DOLLAR WE'RE GIVING UP FOR THE BENEFIT COMING BACK IN A WAY THAT CAN BE KIND OF PUT IN PLACE FOR THESE DIFFERENT PARTS OF THE>> I THINK IT IS -- WE HAVE A TOOL THAT WAS PROBABLY -- CERTAINLY USED FOR ACES AND I ASSUME THE OTHER THREE THAT PREDATE ME, WHERE WE DO SOME MODELING.
IT IS A FORWARD- LOOKING TOOL. WE MIGHT HAVE TO -- WE MIGHT HAVE TO MODULATE IT A BIT SO WE CAN SAY, HEY, IN THE LAST THREE YEARS, IT CAN STACK UP AND SHOW YOU WHAT A CUMULATIVE HAS BEEN & BEEN AND A BACKWARDS LOOKING BUT WE CAN PROBABLY DO THAT WITH THE TOOL AND WE CAN ADD THAT TO THE PIECE. I'M NOT SURE I'M FOLLOWING ON YOUR FIRST QUESTION AS IT RELATES TO
LOCATION. >> YES, SO, 214 JOBS RETAINED, WHEN WE TALKED ABOUT IT AT 35 OR 40% OF THOSE INDIVIDUALS LIVED IN CARMEL, SO, WE TALKED ABOUT REGIONALLY AND HOW THAT APPLIES AND BATTLING OTHER STATES AND INCENTIVES THEY HAVE FOR COOLER OFFICES THAT CAN'T BE COOLER BECAUSE OURS HERE, BUT HOW ARE WE INCENTIVIZING BEHAVIOR AND HOW IS THAT THEN COMING BACK TO THE CITY FROM A TAX BASE PERSPECTIVE. ARE WE INCREASING THE ACTUAL TAX REVENUE OR COLLECTING THROUGH NEW JOBS AND RETENTION OF JOBS BY GIVING UP THE SWITCHES THE INTENT --
>> RIGHT. SO, CLEARLY, RIGHT, WE'RE COUNTING THE JOBS BOTH RETAINED AND CREATED IN CARMEL.
THAT'S WHAT ALL OF THIS IS. THE STATISTIC YOU'RE REFERRING TO FOR ACES HAD TO DO WITH THE NUMBER OF THOSE EMPLOYEES WHO LIVE IN CARMEL. SO WE CAN DO A CENSUS.
IT IS NOT PART OF THE STANDARD, WHAT IS CALLED CF- 1 FORMS, THOSE REQUIRED MAY FORMS. WE COULD GO BACK INTO, YOU KNOW, ASK EACH COMPANY, HEY, WHEN YOU GIVE US THESE, LET US KNOW HOW MANY OF YOUR EMPLOYEES, NEW AND RETAINED, ARE CARMEL RESIDENTS. WHAT WE DID FOR ACES IS CARMEL RESIDENTS AND HAMILTON COUNTY RESIDENTS, TWO DIFFERENT BUCKETS. THAT COULD BE A PIECE THAT WOULD BE PART OF A TECHNICALLY CALLED A SURVEY YOU WOULD DO AS PART OF YOUR COMPLIANCE.
I WOULD HAVE TO THINK ABOUT IT. CERTAINLY ACES HAS SIGNED THE MOU MO MOU WHICH REQUIRES THEM TO PARTICIPATE. THE OTHER THREE DIDN'T PARTICIPATE. I THINK WE COULD GET IT, IT JUST WOULD LOOK A LITTLE DIFFERENT.
>> I THINK IT IS GOOD DATA TO TELL US WHAT THE IMPACT OF OUR ABATEMENTS ARE AND GIVES US A BARGAINING CHIP AS WE START TO BUILD UP THAT AREA WITH ZIONSVILLE AND MOON COUNTY TO SAY THEY SHOULD HELP US OUT. GOOD DATA TO HAVE.
>> ADDITIONAL QUESTIONS FOR NICK? SO, NICK, CAN YOU GO OVER THE ACTUAL -- I'M LOOKING AT ZOTEC PARTNERS. YOU GIVE A BRIEF OVERVIEW OF THE PERCENTAGE OF ABATEMENT AND STRUCTURE? I'M STRUGGLING TO -- I WASN'T HERE WHEN IT HAPPENED. I SEE THE CF- 1, AND I HAVE YOUR -- IN THE FOLDER HERE, I HAVE THE SPREADSHEET.
CAN YOU GO OVER THAT DEAL STRUCTURE FOR ME?
>> I BELIEVE -- LIKE YOU, IT PREDATES ME AS WELL, I BELIEVE IT IS WHAT AS REFERRED TO AS THE TRADITIONAL TAX ABATEMENT, A SLIDING 10% REDUCTION SCALE, TAX ABATEMENT. I CAN CONFIRM THAT AND COMMUNICATE TO THE COUNCIL AFTER THE MEETING, BUT GENERALLY WHAT THAT DOES IS IT DECREASES AS A PERCENTAGE THE AMOUNT OF ASSESSED VALUE THAT IS ABATED, IE NOT TAXED, OVER A PERIOD OF TIME. EACH YEAR GETTING LESS AND LESS WHICH MEANS THE AMOUNT OF ASSESSED VALUE THAT DOES HAVE THE TAX RATE APPLIES TO IT GROWS EACH YEAR DURING THE COURSE OF THE ABATEMENT UNTIL IT ULTIMATELY SEER ZEROS OUT AT THE END.
>> THAT'S HELPFUL. THAT GETS ME TO THE POINT OF -- MY UNDERSTANDING IS THAT THAT THOUGH THEY'RE LACKING IN THE ADDITIONAL JOBS, THE LARGE PERCENTAGE OF REAL PROPERTY INVESTMENT MEANS THAT WE'RE COLLECTING MORE THAN WE ORIGINALLY --
>> AND EVERY YEAR WE COLLECT MORE ON THE DECREASING SCHEDULE, SO ANYTIME THAT WE GOT A SCHEDULE THAT DECREASES OVER TIME, YOU COLLECT MORE.
>> THIS IS THE ONLY ITEM ON OUR AGENDA TODAY, AND SO AFTER FURTHER REVIEW, IS THERE ANY OTHER QUESTIONS AND THEN WE LIKE TO HAVE A MOTION TO TAKE THIS BACK TO COUNCIL THIS EVENING.
>> I WOULD MAKE A MOTION THAT WE RETURN THIS TO COUNCIL WITHOUT ANY MODIFICATIONS OR CHANGES.
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>> MOTION BY COUNCILOR WORRELL, SECOND BY COUNCILOR LOCKE. PLEASE VOTE.
THANK YOU, MOTION CARRIES. AND THAT'S THE LAST ITEM ON OUR AGENDA. WE WILL THEN CALL THE
* This transcript was compiled from uncorrected Closed Captioning.