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RESOLUTION NO. ~ ~%q
A RESOLUTION DETERMINING THE AMOUNT OF REVENUE TO BE
GENERATED BY A LOCAL SALES AND USE TAX AND ADOPTING
THE WRITTEN PLAN FOR THE IMPLEMENTATION OF A LOCAL
SALES AND USE TAX PURSUANT TO ORDINANCE 2283 OF THE CITY
OF WEST MEMPHIS, AND FOR OTHER PURPOSES.
WHEREAS, pursuant to A.C.A. §§26-82-101, et seq., the City of West Memphis
adopted Ordinance 2283 establishing aone-fourth of one percent (0.25%) sales and use tax
within the City to pay project costs for an economic development project located within or near
the City if still located within the State of Arkansas; and
WHEREAS, the sales and use tax levied by Ordinance 2283 was approved by an election
held on November 8, 2011; and
WHEREAS, A.C.A. §26-82-103(c)(1) requires the local entity to determine the amount
of revenue to be generated by each local sales and use tax levied; and
WHEREAS, A.C.A. §26-82-105(2) provides that the local sales and use tax shall not go
into effect until the governing body of the levying entity has adopted a written plan meeting
specified requirements;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF WEST MEMPHIS, ARKANSAS, THAT:
SECTION 1. The City Council finds that the written plan regarding the specific
proposed economic development project satisfies the requirements of A.C.A. §§26-82-101, et
seq., and the written plan, attached hereto and incorporated herein by reference, is hereby
adopted.
SECTION 2. The amount of revenue to be generated by this local sales and use tax for
the specific proposed economic development project is determined to be $250,000.00.
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ADOPTED this ~..5 day of ~e« M ~r' , 20 ~ ~ .
WILLIAM H. JO ON, MAYOR
ATTEST:
PHI ARA, CITY CLERK
SPONSORED BY:
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The Sales and Use Tax Plan for a Prospective Industry as identified in Resolution
dated December 15, 2011.
(a) The proposed project is seeking a site with at least 15 rail served acres and access
to a port. The site selection process is a competitive effort that is evaluating other sites
in the region. The prospective industry a manufacturer that will have a minimum payroll
of $2 million within 2 years and will make a capital investment of over $75 million
dollars. The workforce requirement can be met from the local area and it is envisioned
that the Mid South Community College would be actively involved in the recruiting and
training effort. West Memphis is the only site in Arkansas that is being considered.
(b) The economic impact will be two fold -the construction of a $75 million facility will
require a large number of contracts that will employee several hundred workers on a
temporary basis. While many of those workers will come from the area, a number of
workers will be workers from outside the area who will stay in local hotels or engage in
short term residential rentals. Regardless, all of the construction workers will spend
money in the area on food, clothing, housing and other expenses. The company will
employ over 30 workers with an hourly wage of over $30. In addition to these direct
hires, due to the nature of the operation, a number of in-direct jobs will be created in the
area. The cost benefit of the proposed incentive exceeds 2 to 1.
(c) The incentive will include a forgivable loan for up to $250,000 that can be used for
acquiring property, site preparation, rail extension, parking lot construction, drainage
improvements and other similar infrastructure needs. The loan can be paid back over a
5 year period through annual job creation credits based on maintaining a minimum
workforce and payroll in West Memphis. Included in the agreement will be a loan
reimbursement provision (a claw-back provision) in the event the terms of the
agreement are not met. The City's agreement will be modeled on the one used by the
State of Arkansas.
(d) The proposed project will satisfy 5 of the 7 criteria of A.C.A. 26-82-102(4) (must
satisfy at least 3 criteria):
1. A prospective recipient must invest at least $10 million -this project investment
will exceed $75 million.
2. The prospective industry must pay wages that are at least 110% of the County
average hourly rate. The County average rate is $15.11 and 110% of that is $16.62.
The prospective industry average hourly rate will be $30.05, 199% of the County
average hourly rate.
3. The proposed industry must be a targeted industry. The State's targeted
industries include those with a NAICS code of 31, 32 and 33. This prospective
industry's NAICS code is 32.
4. The prospective industry has a cost to benefit ratio of over 2 as determined by
AEDC.
5. AEDC has made a financial incentive offer to the prospective industry.