HomeMy WebLinkAboutResolution - 2343 - Grant Application - EDA - Foreign Trade Zone Economic Feasibility Study - 06/12/1986DGV:js
RESOLUTION
Resolution #2343
June 12, 1986
Agenda Item #28A
WHEREAS, the City Council of the City of Lubbock believes that it
would be in the best interest of the citizens of the City of Lubbock to
determine the feasibility of establishing a foreign trade zone within the
City; and
WHEREAS, the initial step in pursuing a foreign trade zone for the
City of Lubbock is to determine the potential benefits to the community of
such a zone; and
WHEREAS, the City of Lubbock may seek a grant from the Economic
Development Administration to fund a portion of the costs of an economic
feasibility study to determine potential benefits to the City of Lubbock;
and
WHEREAS, the City of Lubbock will comply with all regulations, poli-
cies, guidelines and requirements of the Technical Assistance Application
of the EDA, which are contained on page five of such application; NOW
THEREFORE:
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the City Council of the City of Lubbock hereby authorizes and
directs the Mayor of the City of Lubbock to sign and submit on behalf of
the City of Lubbock a grant application for technical assistance from the
Economic Development Administration for assistance in funding the costs of
a foreign trade zone economic feasibility study.
Passed by the City Council this ,L day of . ; _, �- , 1986.
C
t .-
B. C. McM NN, MAYOR
anette Boyd, City Secret
APPROVED AS TO CONTENT:
Ted B , Assist--a—nf to the City
Manager
AS TO FORM:
rQ
uon-ala u. vanaiver, rirst Assistan
City Attorney
AUG 0 8 1988
Honorable B. C.
Mayor, City of
P. 0. BOX 2000
Lubbock, Texas
U.S. DEPARTMENT OF COMMERCE
ECONOMIC DEVELOPMENT ADMINISTRATION
AUSTIN REGIONAL OFFICE
SUITE 201 - GRANT BUILDING
611 EAST 6TH STREET
AUSTIN, TEXAS 78701
McMinn
Lubbock
79457
Subject: Foreign Trade Zone Feasibility Study
Project No. 08-06-02507
Dear Mayor McMinn:
We are pleased to advise you that the Economic Development Administration
has approved a technical assistance grant in response to your application
for funding under Title III of the Public Works and Economic Development
Act of 1965, as amended.
Enclosed are three copies of the Grant Offer and the Special Terms and
Conditions and one copy of the General Terms and Conditions, all of which
will govern the performance of the approved grant program. Any modification
or other deviation thereto, including work scope and budget adjustments,
must have the prior written approval of the Economic Development
Administration.
If the provisions of this grant are acceptable, please sign and seal the
three copies of the Grant Offer and attach a copy of the Special Terms and
Conditions to each. Then, at your earliest convenience, return two sets of
the documents properly executed to Marvin W. Hagemeier, Chief, Planning and
Technical Assistance Division, Economic Development Administration, U. S
Department of Commerce, 611 East Sixth Street, Grant Building, Suite 201,
Austin, Texas 78701. The third set of documents and the copy of the
General Terms and Conditions are for your files.
Sincerely,
N—\N
Hugh M. Farmer
Regional Director
Enclosures
cc: Mr. William Dohr
Ms. Felice Pelosi
Ms. Christy L. Bakaly
Ms. Peggy Wireman
South Plains Association of Governments
Economic Development Representative
U. S. DEPARTMENT OF COMMERCE
ECONOMIC DEVELOPMENT ADMINISTRATION
GRANT OFFER FOR TECHNICAL ASSISTANCE GRANT NO. 08-06-02507
The Regional Director, acting pursuant to Title III, Section 301(a), of the
Public Works and Economic Development Act of 1965, as amended, hereinafter,
the "Act") hereby offers to the City of Lubbock, Texas, (hereinafter, the
"Grantee") grant assistance subject to the terms, conditions, and limitations
as set forth herein and in the attached General Terms and Conditions and
Special Terms and Conditions. The assistance is offered to enable the Grantee
to carry out the objectives of the Act by undertaking a program to alleviate
or prevent excessive unemployment and underemployment in the area(s) of
Bailey, Cochran, Crosby, Dickens, Floyd, Garza, Hale, Hockley, King, Lamb,
Lubbock, Lynn, Motley, Terry, and Yoakum Counties of Texas.
The maximum amount of grant assistance hereby offered is $25,000.
The term of the grant will be four months from the effective date of the grant,
September 1, 1986, and will include a three-month work program. Funds will be
made available for the Grantee's eligible expenses during this period in
accord with the attached General and Special Terms and Conditions.
This Grant Offer does not commit the Economic Development Administration (here-
inafter, the "Grantor") to approve requests for additional funds during or
beyond this grant period.
Dated this day of ha ot V 1986.
Regional Director
The foregoing Grant Offer is hereby accepted, and it is agreed that the funds
made available will be used only as set forth herein and in the attached
General and Special Terms and Conditions.
Dated this
27th
day of August , 1986.
CITY OF LUBBOCK
(Grantee)
(By Authorized Official)
FORM ED -331
(REv. }77)
U.S. DEPARTMENT OF COMMERCE
Economic Development Administration
Office of Technical Assistance
SPECIAL TERMS AND CONDITIONS
For Technical Assistance Grant under Title III, Section 301(a) of the
Public Works and Economic Development Act of 1965, as Amended
EFFECTIVE DATE: September 1, 1986 ,GRANT NO: 08-06-02507
TITLE: Foreign Trade Zone Feasibility Study
GRANTEE/ADDRESS: City of Lubbock
P. 0. Box 2000
Lubbock, Texas 79457
GRANT ADMINISTRATOR/ADDRESS:
1. TOTAL AUTHORIZED BUDGET:
Federal Cash Contribution
Grantee Cash Contribution
Grantee In -Kind Contribution
Total Authorized Budget
Regional Director
Economic Development Administration
U. S. Department of Commerce
611 East Sixth Street
Grant Building, Suite 201
Austin, Texas 78701
— $
25,000
— $ 8,334
— $ -0-
— $ 33, 334
I USCOMM-OC 63815-P77
Grant No. 08-06-02507
11. AUTHORIZED STAFF POSITIONS AND MAXIMUM SALARY LEVELS:
Annual Grantee Share:
Position Salary Federal Cash (C) or Total
Title Rate Cash In -Kind (1) Salary
None $ —0— $ —0— $ —0— $ —0—
TOTAL PERSONNEL
$ —0— $ —0— $ —0—
USCCMM•DC 63815-P77
Grant No. 08-06-02507
III. DETAILED BUDGET CATEGORIES:
3. Equipment & Furniture
4. Supplies
5. Contractual -Total
(a)
(b)
(c)
(d)
6. Other -Total
(a)
(b)
(c)
(d)
(e)
(f)
TOTAL DIRECT COSTS
7. Indirect Costs
mom
-0- -0- -0-
-0-
-0-
Authorized Budget
-0-
Federal
Grantee Share
Budget Categories
Cash
Cash In -Kind
Total
1. Personnel:
(a) Salaries (from II)
$ -0-
$ -0- $ -0-
$ -0-
(b) Fringe Benefits
-0-
-0- -0-
-0-
2. Travel & Per Diem
-0-
-0- -0-
-0-
3. Equipment & Furniture
4. Supplies
5. Contractual -Total
(a)
(b)
(c)
(d)
6. Other -Total
(a)
(b)
(c)
(d)
(e)
(f)
TOTAL DIRECT COSTS
7. Indirect Costs
mom
-0- -0- -0-
-0-
-0-
-0-
-0-
25,000
8,334
-0-
33,334 -
-0- -0- -0- -0- 1
25,000
8,334
-0-
33,334
-0-
-0-
-0-
-0-
TOTAL AUTHORIZED BUDGET $25,000 $ 8,334 $ -0- $33,334
3
0
IV. REPORTING SCHEDULE:
Grant No. 08-06-02507
A. Reports shall be submitted to the GRA
at the address
shown
on page one
of
these Special Terms.
Type of Report
Due
Date
Two Copies each of the Work Schedule
Plan and the Certification of
One month
after
Adequacy of Grantee's Accounting
the effective
date
of the
grant
System
Two Copies of the Progress and
Three months
after
Financial Report
the effective
date
of the
grant
Two Copies of the Progress and
NA
after
Financial Report
the effective
date
of the
grant
Two Copies of the Progress and
NA
after
Financial Report
the effective
date
of the
grant
Two Copies of the Draft Final
Three months
Report
within 30 days before the
expiration
Three Copies of the Final Financial
Report
20 Copies of the Final Report
4
date of the grant
Five months
within 90 days of the expiration
date of the grant
Five months
within 90 days of the expiration
date of the grant
Grant No. 08-06-02507
V. SCOPE OF WORK:
The Scope of Work of the Grantee under this grant—the term of which is four
months, including three months for the work program, plus additional time needed
to meet reporting and other procedural requirements—shall be the following:
A. Secure the services of a professional consultant to assist the City of
Lubbock in preparing a formal application for.Foreign Trade Zone (FTZ)
designation.
1. Specific items to include conducting a study of the economic
conditions of Lubbock and the South Plains Association of
Governments (SPAG) region to determine the benefit the area
would derive from the presence of an FTZ.
a. Design a survey form for use by others to determine
the potential use of an FTZ by area businesses.
b. Identify business which might become involved in
international trade if an FTZ were available.
2. Tabulation of survey results and complete analysis of survey
results and economic conditions. Presentation of results and
analyses to the FTZ Committee, and any others the Committee
may select, in printed form, including recommendations for
specific areas which should be designated as the Foreign Trade
Zone and subzones. This presentation will become a part of
the City of Lubbock's formal application for an FTZ
designation.
VI. SPECIAL CONDITIONS:
A. Continuation Grants: No obligations shall be created by Recipient for any
purpose pertaining to the operation of the program or activities for which
the funds were awarded where the obligation would require performance beyond
the expiration date stipulated in the award document. Funds may only be
expended beyond the expiration date for activities such as the preparation
of final reports and documents directly associated with the close out of
the awards in accordance with OMB Circulars A-110 or A-102, and for obliga-
tions properly created prior to the expiration date that require expenditures
beyond the expiration date.
Verbal or written assurances of refunding shall not constitute authority to
obligate funds for programmatic activities beyond the expiration date.
Funds shall not be obligated unless or until an award document is received
by the Recipient from the Grants Officer.
B. The Grantee hereby agrees that no funds made available from this grant shall
be used, directly or indirectly, for paying attorneys' or consultants' fees
in connection with securing this grant or cooperative agreement (as appropri-
ate) or other grants or cooperative agreements from EDA during FY 1986. For
example, funds could not be used for preparing the application for this or
other EDA FY 1986 assistance. However, attorneys' and consultants' fees
5
USCOM+-&-DC 63815-P77
Grant No. 08-06-02507
incurred for meeting grant requirements such as, for example, conducting a
title search or preparing plans and specifications, may be eligible project
costs and may be paid out of funds made available from this grant or
cooperative agreement (as appropriate), provided such costs are otherwise
eligible.
C. Pursuant to Section 504 of the Rehabilitation Act of 1973, the Grantee
must provide fair and equitable treatment for the handicapped. The
Recipient will comply with the Department of Commerce regulation,
15 CFR Part 8.b, implementing Section 504. This regulation protects
the rights of handicapped persons and establishes a mandate to end
discrimination.
5a
FORM ED -357A
(REV. 6.65)
Approval Expires 2129188
TECHNICAL ASSISTANCE APPLICATION
Resolution #2343
U.S DEPARTMENT OF COMMERCE
ECONOMIC DEVELOPMENT ADMINISTRATION
gal cite: See Sec. IV OMB Approval No. 0610-0018
a. NUMBER
b. DATE
ASSIGNED Year month day
19
FEDERAL ASSISTANCE
2 CAPPLI-ANTS
a. NUMBER
3. APPLE
a. Applicant Name City Of Lubbock
To the best of my knowledge and belief,
APPLI-
CATION
1- TYPECATION
OF ❑ NOTICE OF INTENT (OPTIONAL)
SUBMISSION ❑ PREAPPLICATION
(Mark ap
propriate ® APPLICATION
box)
A -Increase Dollars
IDENTI-
FIER
52
IDENTI-
FIER
NOTE: TO BE
ASSIGNED
BY STATE
b. DATE
Year month day
19
Leave
PRO-
a. NUMBER I ( I I
e. OTHER
been duly authorized by the governing
Blank
Resolution #2343
U.S DEPARTMENT OF COMMERCE
ECONOMIC DEVELOPMENT ADMINISTRATION
gal cite: See Sec. IV OMB Approval No. 0610-0018
a. NUMBER
b. DATE
ASSIGNED Year month day
19
9. AREA OF PROJECT IMPACT (Names of cities, counties, states, etc.) 10. ESTIMATED NUMBER 11. TYPE OF ASSISTANCE
z Bailey, Cochran, Crosby, Dickens, Floyd, Garza, OF PERSONS BENEFITING A -Basic Grant
B -Supplemental Grant
Hale, Hockle , King, Lamb, Lynn, Motley, Terry, D -Loan
w Y akum
m 12. PROPOSED FUNDING 13. CONGRESSIONAL DISTRICTS OF:
a. FEDERAL $ 25,000 .00 a. APPLICANT b. PROJECT
b. APPLICANT 8,333 .00 19 19, 13, 17
14. TYPE OF APPLICATION
A -New C-Revislon
B -Renewal D -Continuation
4. LEGAL APPLICANT/RECIPIENT
.00
5. EMPLOYER IDENTIFICATION NUMBER (EIN)
16. PROJECT
a. Applicant Name City Of Lubbock
To the best of my knowledge and belief,
d. LOCALDATE
Year month day
b. Organization Unit
A -Increase Dollars
6,
52
.00
a Street/P.O. Box P.C. BOX 2000
Months
PRO-
a. NUMBER I ( I I
e. OTHER
been duly authorized by the governing
8
GRAM
C -Increase Duration
THAT►
d. City Lubbock
e. County Lubbock
18. DATE DUE TO
Year month day
a
f. State Texas
g. ZIP Code. 79408
(From CFDA)
MULTIPLE ❑
h. Contact Person (Name
OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW ❑
b. TITLE
Z
& Telephone No.) Mayor B.C. "Peck"
McMinn (806) 762-6411
b. SIGNATURE
a
7. TITLE OF APPLICANTS PROJECT (Use section IV of this form to provide a summary description
8. TYPE OF APPLICANTIRECIPIENT
Cj
of the project.)
A -State
G -Special Purpose District
W
tL
C
B_ Interstate
H -Community Action Agency
F
"Peck" McMinn, Ma
Or
C-Substate
1 -Higher Educational Institution
Foreign Trade Zone feasibility
study
Organization
D -County
J -Indian Tribe
K-Other(Specify)
rJ
Z
24. APPLI- Year month day
E -City
26. FEDERAL GRANT IDENTIFICATION
J
TION
F -School District
CL
RECEIVED 19
Enter appropriate letter a
I
27. ACTION TAKEN 28. FUNDING
Year month day 30. Year month date
Z
❑ a. AWARDED
9. AREA OF PROJECT IMPACT (Names of cities, counties, states, etc.) 10. ESTIMATED NUMBER 11. TYPE OF ASSISTANCE
z Bailey, Cochran, Crosby, Dickens, Floyd, Garza, OF PERSONS BENEFITING A -Basic Grant
B -Supplemental Grant
Hale, Hockle , King, Lamb, Lynn, Motley, Terry, D -Loan
w Y akum
m 12. PROPOSED FUNDING 13. CONGRESSIONAL DISTRICTS OF:
a. FEDERAL $ 25,000 .00 a. APPLICANT b. PROJECT
b. APPLICANT 8,333 .00 19 19, 13, 17
14. TYPE OF APPLICATION
A -New C-Revislon
B -Renewal D -Continuation
f. Total $ 3-5 333 FEDERAL AGENCY ► 1986 6 13
19. FEDERAL AGENCY TO RECEIVE REQUEST
Economic Development Administration
a. ORGANIZATIONAL UNIT (IF APPROPRIATE) b. ADMINISTRATIVE CONTACT (IF KNOWN)
Economic
c -ADDRESS Economic Development Administration
Austin Regional Office
D -Insurance
E -other ❑
Enter appropriate letter(s)
E-Augementation i�7
Enter appropriate letter I A I
F- Other (Specify)
Enter appropriate letter(s) ❑ ❑ ❑
20. EXISTING FEDERAL GRANT
IDENTIFICATION NUMBER
21. REMARKS ADDED
c. STATE
.00
15. PROJECT START
16. PROJECT
17. TYPE OF CHANGE
To the best of my knowledge and belief,
d. LOCALDATE
Year month day
DURATION
A -Increase Dollars
52
.00
19
Months
B- Dec rease Dollars
LL
e. OTHER
been duly authorized by the governing
8
C -Increase Duration
THAT►
body of the applicant and the applicant
18. DATE DUE TO
Year month day
Decrease Duration
E -Cancellation
f. Total $ 3-5 333 FEDERAL AGENCY ► 1986 6 13
19. FEDERAL AGENCY TO RECEIVE REQUEST
Economic Development Administration
a. ORGANIZATIONAL UNIT (IF APPROPRIATE) b. ADMINISTRATIVE CONTACT (IF KNOWN)
Economic
c -ADDRESS Economic Development Administration
Austin Regional Office
D -Insurance
E -other ❑
Enter appropriate letter(s)
E-Augementation i�7
Enter appropriate letter I A I
F- Other (Specify)
Enter appropriate letter(s) ❑ ❑ ❑
20. EXISTING FEDERAL GRANT
IDENTIFICATION NUMBER
21. REMARKS ADDED
Suite 201 Grant
St. Austin.
Yes ❑ No
Z
22.
To the best of my knowledge and belief,
a. YES THIS NOTICE OF INTENT/PREAPPLICATION/APPLICATION WAS MADE AVAILABLE TO THE STATE
THE
data in this icattdocupment plication
D R 123 FOR REVIEW ON:
52
APPLICANT
are true and orrrectlthe has
�28P}iOCESS
1 bb
DATEUT�VIEI
LL
CERTIFIES
been duly authorized by the governing
THAT►
body of the applicant and the applicant
U
will comply with the attached assurances
b. NO, PROGRAM IS NOT COVERED BY E.O. 12372 ❑
j
if the assistance is approved.
OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW ❑
23.rB
D NAME AND TITLE
b. SIGNATURE
CERTIFYING
C
SENTATIVE
"Peck" McMinn, Ma
Or
Z
24. APPLI- Year month day
25. FEDERAL APPLICATION IDENTIFICATION NUMBER
26. FEDERAL GRANT IDENTIFICATION
F
TION
O
RECEIVED 19
y
27. ACTION TAKEN 28. FUNDING
Year month day 30. Year month date
Z
❑ a. AWARDED
START
29. ACTION DATE► 19 DATE ING 19
0
❑ b. REJECTED a FEDERAL $
.00 31. CONTACT FOR ADDITIONAL IN FORMA- 32. Year month date
❑ c. RETURNED FOR b. APPLICANT
TION (Name and telephone number) ENDING
AMENDMENT
•00 DATE
19
Q¢
Lu
O
❑ d. RETURNED FOR c. STATE
.00 33. REMARKS ADDED
w
E.O. 12372 SUBMISSION
d. LOCAL
LL
BY APPLICANT TO
,00
STATE e.OTHER
❑ e. DEFERRED
.00
❑ ❑
Z
f. TOTAL
Yes No
0
❑ f. WITHDRAWN
I$
--00
w
N
Section IV—REMARKS (Please reference the proper item number from Sections 1, 1l or /ll, if applicable)
This grant if awarded will assist in the funding of a feasibility study which will indicate
the economic impact of a foreign trade zone on the communities of the area as well as
determine the ability of Lubbock and the South Plains region to support such an endeavor.
In addition, the study will be used as an integral part of the overall FTZ application.
The study can also be used to locate potential FTZ users and a tool to implement other
economic development programs.
Part II Agency Information
14) "`The City of Lubbock will assume responsibility for administration of the grant
and
assure that proper documentation is maintained and all requirements
are met.
15) Since the grant funds will be used to conduct a feasibility study to be used in
an application for a foreign trade zone, the end result being increased markets
and thus increased productive capacity for some area businesses.
16) Because of the increased emphasis being placed on FTZ's as criteria
for determining
relocation sites, the possible establishment of one in Lubbock will
better their
chances of attracting new industry.
LEGAL CITE:
No assistance may be offered unless this report is completed and filed. 42 U.S.C. 3151; 13 C.F.R. Parts 307 Subpart A;
18 C.F.R. Part 309
PART II AGENCY INFORMATION (See Instructions)
YES
NO
❑
12
1. Does this assistance request require State, local, regional, or other priority rating? ...............................
2.
Does this assistance require State or local advisory, education, or health clearance? .............................
❑
12
3.
Does this assistance request require acknowledgement under E.O. 12372? ......................................
4.
Does this assistance request require State, local, regional, or other planning approval? ...........................
❑
5.
Is the proposed project covered by an approved comprehensive plan? ...........................................
❑
6.
Will the assistance requested serve a Federal installation?.................................::.................
❑
7.
Will the assistance requested be on Federal land or installation? ..............................................
❑
Q
8.
Will the assistance requested have an effect on the environment? .............................................
❑
Q
9.
Will the assistance requested cause the displacement of individuals, families, businesses, or farms? ...............
❑
Q
10.
Is there other related assistance for this project previous, pending or anticipated? ...............................
❑
Q
11.
Is the project in a designated flood hazard area?...........................................................
❑
12.
Are funds being requested to be used to cover the cost of work already performed or of services already
provided prior to the effective date of the grant?...........................................................
❑
13.
Are anticipated results from the proposed grant to be of substantial proprietary benefit to a private for-profit
individualor group?....................................................................................
❑
14.
Will the grant be properly and efficiently administered, operated, and maintained? ...................... I ........
®
❑
15.
Is the proposed project directed toward an increase in the productive capacity for goods or services
by a specific, identifiable enterprise, either existing or proposed? ..............................................
®
❑
16.
Will the proposed grant assist an enterprise(s) to relocate from one area to another? .............................
®
❑
17.
Has the applicant been the subject of any unresolved issues, or negative determinations issued within the
past two years, arising from civil rights compliance reviews, complaints, lawsuits or other allegations of
discrimination on the basis of race, color, national origin, sex, handicap or age? .................................
❑
If yes, explain in detail in Section 1V, Remarks.
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PART IV
Program Narrative
1. OBJECTIVES AND NEED FOR THIS ASSISTANCE
The economy of the South Plains Texas area Is In trouble. The recent
dramatic drop in oil prices and a continued decrease in agricultural
income have combined to negatively impact many aspects of the region's
economy. The number of bankruptcies filed in the first six months of
1986 almost equals the total number filed for all of 1985. The majority
of loans through the Farmers Home Administration (FmHA) are delinquent,
and unemployment has hit double digit figures in several counties.
In an attempt to reverse these trends, the City of Lubbock, Texas has
been Investigating several means to enhance economic development
activities in the South Plains region. One possible method would be the
establishment of a foreign trade zone (FTZ) In the Lubbock area.
Since the area was first settled in the late 1800ts, agriculture has
been the basic industry of the South Plains of Texas. Even though the
economy of Lubbock and the surrounding counties Is now much more
diversified than It was in the past, the economic health of the area is
still largely dependent on agriculture. The six-year decline In
agriculture income, coupled with the recent drastic fall of oil prices,
are manifested in the economic indicators for Lubbock and the South
Plains.
PART IV
PROGRAM NARRATIVE
PAGE 2
Since agriculture is one of the major industries for the South Plains
region, a very good indicator of the economic health of the area Is the
total cash receipts for South Plains agricultural products (see Exhibit
1). These cash receipts, which hit a high of almost $1.9 billion in
1979, had dropped to approximately $1.44 billion by.1984. This drop is
even more dramatic when compared In constant 1967 dollars, thereby
alleviating the distortions caused by the inflationary spirals of the
late 1970ts. Using 1967 dollars, agricultural income for the area has
dropped from a high of approximately $1.2 billion In 1973 to less than
$0.5 billion by 1984. This is almost a 60 percent decrease In
agricultural income during that eleven -year period.
Cotton historically has been the primary crop of the South Plains.
Approximately 80% of the cotton grown In the Lubbock area has in the
past been exported. Exhibit 2 shows total United States cotton exports
since 1980. Cotton exports, which totaled 6.8 million bales in 1983,
are projected to be only 2 million bales in 1986. The strong U. S.
dollar and increased foreign production, particularly in China, are
cited as the primary reasons for the decline in cotton exports.
A second indicator of the region's economic health is the growth in
employment. (Manufacturing employment for Lubbock is shown In Exhibit
3.) The number of persons employed in manufacturing has declined in the
market from a high of 13,600 in 1980 to the current level of only 7,300.
This dramatic decrease Is attributed to the decline of home computer and
other electronic devices and to decreased demand for agricultural
equipment and products related to oil production. Of the 6,300 decrease
in manufacturing employment, approximately 2,500 to 3,000 is attributed
PART IV
PROGRAM NARRATIVE
PAGE 3
to curtailed production at the Texas instruments plant and the balance
of 3,500 to 3,800 from various companies producing products for
agriculture and oil production. The unemployment rate for Lubbock
County Is indicated by Exhibit 4. This graph shows the unemployment
rate to have been approximately 3.4% from 1976 through 1979, increasing
to a 5.9% average in 1985. The unemployment rate for Lubbock County in
March, 1986 was 7%. However, several counties in the South Plains area
are suffering from unemployment rates even higher than that experienced
by Lubbock County. In March, 1986 three counties in the area suffered
from double digit unemployment. These include Crosby (11.6%), Terry
(11.50 and Hockley County (10.0%). Other counties experiencing high
unemployment rates include Garza (9.6%), Bailey (8.0%), and Lamb County
(7.6%). it is generally agreed that the increase in unemployment is
related directly to problems in the agricultural and manufacturing
segments of the Lubbock and area economies.
The economic problems of the area are also reflected in the Increase in
bankruptcies being filed. The number of bankruptcies filed in Lubbock
and the 18 surrounding counties has risen dramatically the past few
years. As shown In Exhibit 5, the number of bankruptcies filed remained
relatively constant at approximately 100 per year from 1976 through
1980. The number grew to 372 in 1985. As of June 9 of this year, 350
bankruptcy cases have already been filed. As In the case of the
unemployment rate, the Increase in bankruptcy cases are considered to be
mostly related to the agricultural and manufacturing segments of the
economy.
PART IV
PROGRAM NARRATIVE
PAGE 4
Finally, the high delinquency rate among farm loans with the FmHA gives
cause for concern. As of May 23, 1986, approximately 53 percent of the
active land loans, or $4,935,000 in loans, were considered delinquent.
Even more alarming are the delinquency rates for operating and emergency
loans, 75 percent and 84 percent respectively, for a total of
$128,861,000 In delinquent loans.
In summary, the agricultural and oii/gas industries are depressed.
This, along with the decline in computer and electronics manufacturing
at Texas instruments, has resulted in a drop in manufacturing employment
of nearly 50%. The unemployment rate and number of bankruptcy cases
have increased significantly. Many reports indicate that oil prices may
rise and stabilize in the not -too -distant future. However, the future
of agriculture, especially in view of foreign competition, seems much
more uncertain at this time. it is very important that consolidated
efforts be made to assist the agriculture Industry and to attract new
industries to Lubbock and the surrounding area.
3. APPROACH
In order to attract new industries and assist existing Industries In the
Lubbock area, the idea of establishing an FTZ in Lubbock has been
advanced. The South Plains Association of Governments (SPAG) has done
some preliminary research on this matter and has concluded that the
establishment of an FTZ in Lubbock could be an Important factor in
helping the area economy. Reference to the FTZ is made in SPAGts
Overall Economic Development Plan which is filed with the Economic
Development Administration. in Addition, a feasibility study for an FTZ
in the Lubbock area is listed as one of the goals for their current
PART IV
PROGRAM NARRATIVE
PAGE 5
Economic Development planning period. The establishment of an FTZ would
also be consistent with the economic development strategies proposed for
the Lubbock area in studies done by two consulting firms, Fantus
Corporation and City Venture Corporation.
At the present time, there Is not a foreign trade zone within a 300 -mile
radius of Lubbock. Lubbock has long been a transportation and
distribution center for west Texas. The Lubbock airport has already
been designated as a port of entry. Considering its geographical
location and agricultural -based economy, the establishment of an FTZ in
Lubbock appears logical.
Advantages of foreign trade zones to business and Industrial users are
as follows:
1. Imports may be landed and stored quickly without full
customs formalities. U.S. Quota restrictions, duty and
bonding are applicable in the zone.
2. Cash flow can be Improved because duty is not paid until
goods leave the zone. if goods are exported, U. S. Customs
duty payments are not required. Merchandise may be
withdrawn in less than case lots or in other partial
amounts.
3. Insurance on goods in zone storage can be limited to value
alone plus ocean freight, rather than value plus freight
plus duty plus taxes paid.
PART IV
PROGRAM NARRATIVE
PAGE 6
4. Buyers may inspect and sample goods displayed In a zone
showroom before purchase and payment of duty.
5. Orders for goods may be accepted In the zone before payment
of duty or excise tax If such tax is applicable.
6. Goods may be processed or manipulated to qualify for lowest
duties or freight charges and other duties may be avoided on
damaged or substandards Items.
7. Goods may be altered, re -labeled or re -marked to meet
federal or local requirements or to avoid fines for
Improperly marked merchandise and samples may be withdrawn
to submit to Customs for proper classification.
8. For products manufactured in a zone a choice is offered:
the rate of duty or quota limitation on the finished product
entering U. S. trade channels may be applied to the finished
product that is the percentage of which Is of foreign origin
or to the foreign materials in the finished product.
9. Goods In excess of U. S. import quotas may be imported and
held in the zone until the next quota period since such
quotas do not apply in the zone.
10. Good subject to a U. S. quota can be imported into a zone
and fabricated into a product not subject to quota
limitations.
11. Salvage or repair of damaged goods may be carried out to
maximum market advantage duty and quota free.
PART IV
PROGRAM NARRATIVE
PAGE 7
12. Certain bonded merchandise may be transferred to the zone
for export canceling the bond or time limit applicable to
bonded warehouses and making possible immediate recovery of
taxes already paid.
13. On goods destined for export, recovery'of U. S. Customs duty
or of certain state taxes can be made upon entry into the
zone.
14. Merchandise stored in a zone has an added protection against
theft since it is in a facility under Customs security
supervision.
15. Posting of bond for missing documents can be avoided since
merchandise can be held in a zone until the documents are
located.
16. indefinite zone storage permits traders to await the best
U.S. market conditions or if U. S. buyers are found
unreceptive offers the option of shipment elsewhere.
17. For small shipments out of zone --under $250 --duty may be
paid to the U. S. Customs Service with minimum formalities.
The designation of Lubbock as a Foreign Trade Zone would assist the City of
Lubbock In implementing its local economic development strategy. That
strategy, as outlined for the Texas Cities for Economic Development Leadership
Program (TERCEL), targets those businesses and Industries with growth
potential whose requirements match local resources. Those industry types
include:
PART IV
PROGRAM NARRATIVE
PAGE 8
1. Technology - Oriented industry
a. Research and production
b. Electronic machinery, equipment and components.
C. Medical - related manufacturing research and development
2. Light/Intermediate Manufacturing
3. Regional, Divisional and National Corporate and Administrative
Headquarters.
4. Wholesale and Distribution Facilities.
Designation as a Foreign Trade Zone would be particularly advantageous for the
technology - oriented, tight/intermediate manufacturing, and distribution
classifications.
The designation of a foreign trade zone in Lubbock would serve to aid in the
recruitment of new Industries, as well as providing a mechanism for helping
agriculture and other existing businesses in the area. A number of area
businesses.have already shown interest and support for an FTZ in Lubbock. In
addition, many public and private organizations have offered support of, and
assisted in activities which would promote the overall economic development of
the South Plains region. These organizations include the City of Lubbock, the
Lubbock Board of City Development, South Plains Association of Governments,
the Lubbock Chamber of Commerce, Texas Tech University, Lubbock independent
School District, Lubbock Christian College, South Plains College,
Comierciantes Organizados para Mejlco Americanos (Mexican American Chamber of
PART IV
PROGRAM NARRATIVE
PAGE 9
Commerce), and the Small Business Administration. It is anticipated that with
publicity and education, broad support of the FTZ would be forthcoming.
The grant funds would be used by the City of Lubbock to contract with a
consultant to prepare a foreign trade zone feasibility report. If this report
concluded that a foreign trade zone in Lubbock should be*pursued, the
application process for an FTZ would be Initiated.
4. GEOGRAPHIC LOCATION
The area which would be served by the proposed project is roughly that
same area encompassed by the South Plains Association of Governments
(SPAG). (See Exhibit 6)
The SPAG region includes 15 Texas counties covering 13,737 square miles
and is inhabited by more than 365,000 residents. Lubbock, the center of
the region, is the largest city (approximately 180,000 pop.). The next
largest city is Plainview which has a population of 23,000.
Exhibit l
TOTAL CASH RECEIPT AGRICULTURE FOR THE SOUTH PLAINS
YEAR
VALUE ACTUAL DOLLARS*
1967 DOLLARS*
1984
1.46
0.47
1983
1.32
0.44
1982
1.65
0.57
1981
1.73
0.63
1980
1.74
0.70
1979
1.91
0.87
1978
1.53
0.78
1977
1.56
0.86
1976
1.42
0.83
1975
1.17
0.73
1974
1.32
0.89
1973
1.57
1.18
1972
0.85
0.68
1971
0.76
0.63
What should -be noted is the decrease in constant 1967 dollar
from the early 1970's. Three primary factors are:
1) Strong value of U. S. dollar.
2) Foreign competition.
3) Governmental programs which discourage production; e.g.
payment in kind programs.
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Exhibit 2
U.S. COTTON CROP EXPORTS
YEAR EXPORTS (million of bales)
1980
5.9
1981
6.6
1982
5.2
1983
6.8
1984
6.2
1985
4.0
1986
2.0 (projected)
Source: United States Department of Agriculture
Two primary reasons for the decline of cotton exports are:
1) Strong value of the U. S. dollar making cotton
relatively more expensive.
2) Increase foreign production, particularly in China.
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MANUFACTURING EMPLOYMENT
LUBBOCK, TEXAS
YEAR*
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
* As of January 1st.
Exhibit 3
PEOPLE EMPLOYED BY MANUFACTURING
7,300
8,900
9,000
11,250
11,850
12,440
13,600
12,520
12,580
10,990
Source: Texas Employment Commission, Labor Market Review
1977 - 1986.
Lubbock is similar to many communities in Texas in that it
has seen a dramatic decrease of manufacturing employment.
The primary factors for this decrease are:
1) Strong value of the U. S. dollar.
2) Volatile nature of electronics and home computer
manufacturing.
3) Decreased demand for agricultural implements and
products for the production of oil.
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Exhibit 4
PERCENT UNEMPLOYMENT
YEAR PERCENT UNEMPLOYED
1985
5.9%
1984
5.4%
1983
6.2%
1982
5.1%
1981
4.9%
1980
4.4%
1979
3.4%
1978
3.4%
1977
3.2%
1976
3.4%
Source: Lubbock Economic Indicators, 1976 - 1985.
As with bankruptcies, unemployment has essentially doubled
since the late 1970's. This too is a result of the problems
in the agricultural and manufacturing segments of our
economy.
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Exhibit 5
BANKRUPTCIES
LUBBOCK, TEXAS
YEAR NUMBER OF BANKRUPTCIES
1985
372
1984
328
1983
265
1982
211
1981
135
1980
108
1979
106
1978
99
1977
81
1976
109
Source: Lubbock Economic Indicators, 1976 - 1985.
As depicted in the graph, bankruptcies have basically
doubled since the late 1970's. This is a result of the
problems in -the agricultural and manufacturing segments of
our economy.
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Exhibit 6
STATE PLANNING REGIONS
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LUBBOCK POWER & LIGHT
P.O. BOX 2000 • LUBBOCK, TEXAS 79457 • (806) 763-9381
June 11,1986
Hugh M. Farmer
Regional Director
Economic Development Administration
Planning and Technical Assistance Division
U.S. Department of Commerce
611 - East 6th Street
Grant Building, Suite 201
Austin, Texas 78701
Dear Mr. Farmer:
Lubbock Power and Light is very interested in and supportive
of a foreign trade zone for the Lubbock area. The presence
of such a zone would definitely increase the economic
development activities in this region.
Please call on us for any assistance we can give in
attaining this goal for Lubbock.
Sincerely,
Leona Maxwell
Asst. Director
of Electric Utilities
LM/ pm
Lubbock Chamber of Commerce
P.O. Box 561
Lubbock, Texas 79408
806-763-4666
June 11, 1986
Mr. Hugh Farmer
Regional Director
EDA
Planning and Technical Assistance Div.
U.S. Dept. of Commerce
611 E. 6th St.
Grant Building, Suite 201
Austin, TX 78701
Dear Mr. Farmer:
The Lubbock Chamber of Commerce is in support of the
application of the City of Lubbock as it relates to
the creation of a Foreign Trade Zone here.
It is my opinion that a Foreign Trade Zone for the
City of Lubbock is needed and will enhance the city's
capability of becoming a viable competitor in international
trade for this region.
Lubbock's geographic location in the central part of
West Texas enhances its opportunities as an international
trade center. This, coupled with the agricultural
production of this region and other business influences
of Lubbock makes this a very worthwhile project and
increases the need for a Foreign Trade Zone here.
Your favorable consideration of the application will
be appreciated.
Sincerely yours,.
4V &
$4
qohn A. Logan
President & General Manager
T4T Timno 0imov
JOHN T. MONTFORD
STATE SENATOR
DISTRICT 28
P. O. BOX 12068
AUSTIN, TEXAS 78711
512/463-0128
June 11, 1986
Mr. Hugh Farmer, Regional Director
Economic Development Administration
Planning and Technical Assistance Division
U. S. Department of Commerce
611 East 6th Street
Grant Building, Suite 201
Austin, Texas 78701
Dear Mr. Farmer:
I wish to voice my support for a foreign trade zone in Lubbock.
The presence of a foreign trade zone would assist in the
economic development activities for Lubbock and the surrounding
area.
Thank you for your consideration in this matter.
Yo s very truly,
J hn T. tford
ITIWVC
2022 Broadway
Lubbock,Texas 79401
806/747-0467
COMMITTEES:
ECONOMIC DEVELOPMENT
JURISPRUDENCE
NATURAL RESOURCES
VICE CHAIRMAN
SUBCOMMITTEE ON WATER
CHAIRMAN
SUNSET COMMISSION
SECTION III
WORK PROGRAM OF SPECIFIC ECONOMIC DEVELOPMENT
PLANNING ACTIVITIES
1. The Postex facility is currently being 100.°0 leased to Postex Cotton
Warehouses and T.A. Case It is expected that the resulting lease
revenue will permit the Post Economic Development Corporation (PEDC)
to develop an intensive industrial recruitment program. Therefore
the Economic Development Department will provide assistance in
acquiring EDA public works grants, technical assistance and loan
guarantees in order to complement the PEDC efforts.
2. Pursue the possibility of obtaining a techincal assisitance grant
for the purpose of conducting a market study on the feasibility
of the region sponsoring a foreign trade zone.
3. If a grant for a feasibility study is obtained and the study .locates
a site, SPAG will spearhead the operation to locate a designated
Foreign Trade Zone (FTZ) within the region. This project would create
an additional incentive in recruiting industry to the region.
Regardless of location, a Foreign Trade Zone, would greatly enhance the
economy and population of the immediate area, and thus have a positive
spillover effect onto the rest of the region.
4. Encourage stable growth of the local economy through increased market
diversification through the continued existence of the SPAG Export
Assistance Program. Begun in October, 1983, the program provides
export development services to businesses interested in diversifying
their markets by going overseas. The program is the first and only
of its kind on a regional level in the state of Texas. Since inter-
national trade requires considerable price competition unaffordable by
the majority of distributors, as well as product adaptation capabil-
ities, manufacturers are the main clientele of the program. Services
include assistance in the mechanics of exporting, trade lead referral,
country and market information, customer indentification, inter-
national financing information and telex services.
5. Publish a regional trade directory. This directory will contain
statistical information on every county and city within this region.
In addition there will be a listing of those businesses and
manufacturers wishing to participate. The directory will be used
as an informational resource of the area. It will be sent to U.S.
businesses interested in relocating, and it will be sent overseas
to U.S. Embassies, foreign businesses and buyers promoting the South
Plains Region and what it has to offer. The Directory will be used
as a major promotional tool for the South Plains Region both
domestically and internationally.
6. Sponsor an Economic Development workshop which will focus on the "How
To's" of setting up an Economic Development program. The workshop
will include information on specific economic development programs
available through the South Plains Association of Governments and
from state and federal sources.
7. Encourage the development and expansion of small businesses by
assisting them in obtaining the necessary loans for growth, and also -
by providing counseling and assistance to the small businesses in their
day to day operations, i.e. business plans.
8. Successfully obtain Community Development funds from the Texas
Department of Community Affairs in order to establish long-term
sources of funding for future economic development projects.
These projects will in turn create revolving loan funds which can then
be made available for other economic development projects.
9. With the establishment of the SPAG Agriculture Development Corporation
efforts to create or expand the use of agriculture products will be
increased through processing facilities financed by the issuance of
low interest long term tax exempt bonds. A canning facility proposed
in Crosby county is currently being considered for this program.
Economic Development services may include EDA technical assistance and
EDA public works funds.
10. Improve city streets in the cities of Whiteface and Lookney (Cochran
and Lynn counties) by providing technical assistance for their
applications to the Texas Department of Community Affairs or to
EDA for Public Works project funds.
11. Improve municipal water systems for Roaring Springs and Ralls by
providing technical assistance for applications to the Texas
Department of Community Affairs or EDA for Public Works funds to
replace and update current fire protection and public water
facilities.
12. Provide adequate housing throughout the region by continuing to
provide low cost financing for both single and multi -family
housing. To be accomplished primarily through the South Plains
Housing Finance Corporation, SPAG will follow up on any expressed
interest and will continue to administer the program and offer any
needed technical assistance in regard to housing.
13. Assist Mexican -American Research, Inc. in assessing local regional
needs, identify training needs and explain other economic
approaches which promote job expansion to miniority businesses.
14. In the fall of 1986 an update of the SPAG Overall Ecomonic
Development Plan (OEDP) will be initiated.
15. Provide any necessary assistance in future municipal projects as
described in detail in the SPAG study entitled: Municipal Facilities
Improvement Needs of the South Plains Planning Region 1982-1990.
Economic Development services may include technical assistance,
provision of EDA Technical Assistance Grants and EDA Public Works
funds.