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HomeMy WebLinkAboutResolution - 2019-R0350 - LEDA Incentive For Simflo Pumps, Inc. - 09/24/2019 Resolution No. 2019-80350 Item No. 6.34 September 24, 2019 RESOLUTION WHEREAS, pursuant to Section 501.073 of the Texas Local Government Code the City of Lubbock, as the corporation's authorizing unit, has the authority to approve all programs and expenditures of the Lubbock Economic Development Alliance (LEDA); and WHEREAS, the City Council finds that it is in the best interest of the public to approve the program or expenditure, as proposed to the City Council by LEDA, as set forth in Exhibit "A" attached hereto and incorporated herein by reference; NOW THEREFORE: BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the program or expenditure of the Lubbock Economic Development Alliance, in the amount set forth in Exhibit "A" attached hereto and incorporated herein by reference, to be provided to Similo Pumps, Inc. (Simmons Pump & Supply, LLC.) is hereby approved pursuant to Section 501.073 of the Texas Local Government Code. Passed by the City Council on SentQmhe_24 2019. �Z—y DANIEL M. POPE, MAYOR ATTEST: Reb cca Garza, City Se eta AsOt,VAS TO CON' T: Brianna Gerardi, BusineDev opment Director APPROVED AS TO FORM: ' F Amyim , Deputy y Attorney RES.LEDn Expenditure-Similo Pumps, Inc. (Simmons Pump&Supply, LLC.) 09/09/2019 Resolution No. 2019-RO350 RE 19-28 RESOLUTION APPROVING SIMFLO PUMPS, INC. (SIMMONS PUMP & SUPPLY, LLC) PROJECT THE STATE OF TEXAS COUNTY OF LUBBOCK At a regular meeting of the Board of Directors of LUBBOCK ECONOMIC DEVELOPMENT ALLIANCE, INC., a Texas nonprofit corporation (LEDA), on Wednesday, August 28, 2019, held in conformity with the bylaws, after due notice as therein provided, a quorum being present and acting, the following resolution was unanimously adopted: WHEREAS, LEDA presented to members of the Board the proposal of a possible Economic Development Grant and Contract to Simflo Pumps, Inc. (Simmons Pump & Supply, LLC.) The terms and conditions of such Economic Development Grant and Contract, other than the non-nal terns and conditions applicable to all such Economic Development Grant and Contracts by the Corporation, are described generally as follows, to wit: Grant Simflo Pumps, Inc. (Simmons Pump & Supply, LLC). $9,311 for moving and relocating the utility poles on their property where they are expanding and investing$2.875 million in a new facility and hiring 17 new employees with average salaries of$57,266. WHEREAS,The Board of Directors of LEDA finds that an Economic Development Grant and Contract offering the $9,311 for moving and relocating utility poles meet and comply with the qualifications and purposes of the Corporation for the granting of such Economic Development Grants and Contracts. Upon Motion by Director, Mr. Brett Cate, and Seconded by director, Mr. Calvin Davis, it was approved, IT WAS RESOLVED that LEDA offer and, if accepted by Recipient, enter into an Economic Grant and Contract with Simflo Pumps, Inc. (Simmons Pump & Supply, LLC) This Economic Development Grant and Contract will be on the normal terns and conditions of such Economic Development Grant and Contract offered by LEDA to existing businesses and business prospects and authorize the CEO to enter into and negotiate Perfonnance Agreement. 442� 00, JOHN SBORNE, PRESIDENT & CEO LIN A DAVIS. SECRETARY LEDA Project Presented to City Council September 24, 2019 Project River Project River, Simmons Pump LLC and Simflo Pumps, Inc., two of the nation's top providers of industrial, agriculture, and municipal-use pumps merged in 2018 and the two companies combined business operations and operate under both brands. Simflo/Simmons needs to build a 17,000 square-foot facility that will be used to sell submersible pumps, motors, and related accessories and will also provide repair and delivery services to customers primarily within a 250-mile radius. The facility will consist of multiple offices for personnel,2 test pits for testing pumps and a large warehouse for storing inventory and building assembled pumps. The facility will allow for continued growth and expansion, which will result in an increase in the number of employees employed by the company. Simflo/Simmons plans to hire 17 new employees within the next five years with average salary of$57,266 with a capital investment of$2.875 million. The Lubbock Economic Development Alliance Board of Directors has voted to incent National Pump $9,311 for moving and relocating utility poles for their new facility once they have received the certificate of occupancy for their new facility. In the expansion, Simflo Pumps is investing $2,875,000 in capital investment and will add 17 jobs with an annual payroll of$973,522 with average annual salaries of approximately $57,000. The Lubbock Economic Development Alliance Board of Directors has voted to incent Simflo Pumps, Inc. $9,311 for moving and relocating the utility poles on their property where they are expanding. Annual economic impacts of the business once fully operational on Lubbock County include a total earnings impact* of $1,053,772 and a total value-added impact (change in Lubbock County's Gross Regional Product) of$5,574,827. • This employment creates an additional 24 indirect (suppliers/support operations) and induced jobs (retail/entertainment/hospitality) for a total of 41 jobs. • The present value of net benefits** to the City of Lubbock over 10 years (fiscal) is $339,455. • The present value of net benefits to all taxing districts over 10 years (fiscal) is $601,467. *Earnings impact includes all salaries/wages, benefits, and other compensation to employees.Value added impact (change in Lubbock County's Gross Regional Product) includes earnings, taxes, and profits that the company has added to its inputs and is equivalent to revenue less outside purchases (of materials and services). This represents the wealth created and is also called value-added output, or productivity. "The Present Value of Net Benefits is a way of expressing in today's dollars, dollars to be paid or received in the future.Today's dollar and a dollar to be received or paid at differing times in the future are not comparable because of the time value of money.The time value of money is the interest rate or each taxing entity's discount rate. This analysis was conducted using Total Impact'", a model by Impact Data Source. The analysis was performed using company data, rates and information provided to Lubbock Economic Development Alliance. In addition, the model uses certain estimates and assumptions common for this type of analysis and based on data collected for Lubbock County. Using this data, the impact from the facility and the costs and benefits for relevant taxing districts were calculated using multipliers provided by Economic Modeling Specialists Inc.