Two thirds of the Coos County Commission, Whitty and Stufflebean, are set to vote Monday on whether to socialize ORC’s risk and offer an extension that will provide up to eight full years of property tax abatement. Follow this thread below (read from bottom to top). Given the recent studies proving the detrimental effect of tax cuts on jobs and wages, my personal opinion is e-zones should be done away with entirely.

From: Mary Geddry

I agree, Sharon. Local officials, in favor of abatement, are looking to socialize ORC’s risk and simultaneously maintain privatized revenue. Worse, there is zero statistical evidence e-zones achieve or even come close to achieving stated goals, especially not here where unemployment has doubled since the e-zones formed. Coos County and Curry County, where easily one third of the entire county is an e-zone, cannot show any benefit from the designations and have outpaced the state average unemployment rate since they were formed.

Elected officials are making policy without facts to the detriment of all the taxing districts and the taxpaying citizens utilizing government services.

Coos County does not have to pay for jobs, especially as regards ORC. ORC is here because Coos County has something they can’t get anywhere else.

Mary Geddry

On 10/29/10 2:45 PM, Sharon Comden wrote:

Correct. If ORC chooses to house their 2010 hired execs at the plant, their wages would count in the average. Some time ago I suggested that the Commissioners get a written commitment from ORC about which positions would be included in the calculations and at what rate? As you can see, that is probably still a good idea. Concerning the plant worker hires, there are many unknowns, including whether the mine sites can be safely operated during our rainy season.

Bottom line: extending the exemption will lose revenue for the County and all hiring after 2012 can be at any rate that ORC chooses. We don’t even require that the new jobs be offered to Coos County residents first. The Portland State evaluation of the effectiveness of Enterprise Zone pointed that loophole out too.

We all pay property taxes to support public services. ORC needs to pay its fair share too.

Sharon

From: Nikki Whitty [mailto:nwhitty@CO.COOS.OR.US]
Sent: Friday, October 29, 2010 2:26 PM
To: Sharon Comden; Kevin Stufflebean; Bob Main
Cc: ‘Clark Walworth’; ‘Julie Jones’; ‘Mary Geddry’
Subject: RE: Enterprise Zone Extension=Zero New Jobs or Higher Paying Jobs

Sharon, another thing I forgot to mention is that for a job to count the employee has to spend 75% of their time within the Bay Area Enterprise Zone. So any executives that might be hired but are based elsewhere would not count.

From: Sharon Comden
Sent: Friday, October 29, 2010 2:23 PM
To: Nikki Whitty; Kevin Stufflebean; Bob Main
Cc: ‘Clark Walworth’; ‘Julie Jones’; ‘Mary Geddry’
Subject: RE: Enterprise Zone Extension=Zero New Jobs or Higher Paying Jobs

Nikki, where is the commitment to hire 50 workers in 2011? When you say, “The wages must be paid for the ENTIRE length of the exemption. It covers all new jobs and they must create them by April 1st of the year they file for their first exemption” it doesn’t agree with what Mr. Fish told me. The exemption will only be base on qualifying 2010 and 2011 jobs, not all jobs.

Bottom line, if the exemption is extended two years, the subsidy will only enrich investors. The formula is so easy to manipulate, it won’t be difficult for ORC to make its numbers. It’s still a Trojan Horse, because ORC didn’t come here to get the subsidy, it came here to take our minerals, and would have whether it could be in an Enterprise Zone or not. Thank you for the reply.

Sharon

From: Nikki Whitty [mailto:nwhitty@CO.COOS.OR.US]
Sent: Friday, October 29, 2010 1:44 PM
To: Sharon Comden; Kevin Stufflebean; Bob Main
Cc: ‘Clark Walworth’; ‘Julie Jones’; ‘Mary Geddry’
Subject: RE: Enterprise Zone Extension=Zero New Jobs or Higher Paying Jobs

Sharon – jobs created before January 21, 2010 will not be counted in the jobs nor the wages. The wages must be paid for the ENTIRE length of the exemption. It covers all new jobs and they must create them by April 1st of the year they file for their first exemption. So, if they file between January 1 and April 1 of 2011, the 50 jobs must be created by April 1, 2011 and maintained throughout the entire five year abatement. Nikki

From: Sharon Comden
Sent: Friday, October 29, 2010 11:09 AM
To: Kevin Stufflebean; Bob Main; Nikki Whitty
Cc: ‘Clark Walworth’; ‘Julie Jones’; ‘Mary Geddry’
Subject: Enterprise Zone Extension=Zero New Jobs or Higher Paying Jobs
Importance: High

Unfortunately, the Enterprise Zone applied to ORC is a Trojan Horse that will cost taxpayers millions of dollars because this business has to locate where the minerals are and where the plant can access sea/rail shipping portals. So the Enterprise Zone benefits are false promises—a ”boondoggle” that rewards investors but does not create a sustainable economic base for Coos County. Once the minerals are gone, the jobs will be gone too—a sad reality.

Digging deeper into the Enterprise Zone regulations, the two year extension will NOT create an incentive for higher paying jobs because it would allow ORC to pay any wages they wish after 2012. ORC has demonstrated that they put their investors’ interests foremost, so it is safe to presume that they will take advantage of this loophole after they meet the 2012 average compensation target.

Arthur Fish, incentives coordinator with Business Oregon (an arm of the OEDD), described to me how the average annual salary figure is calculated during a recent phone conversation. Mr. Fish explained that the legislation requires only the jobs created during the first two years of the exemption to be included in the average compensation figure reported for all subsequent years, including years four and five (see table). He acknowledged that there is a decided bias because higher paying management and technical jobs are often brought in early, skewing the formula towards a higher average rate than if lower paying jobs hired later were included in the average. Indeed, Cheryl Wilson, Dan Smith, Joe Drew, and Todd Lessard are all making six figure salaries, based on a recent financial statement on Industrial Mineral’s website. The three recently hired new executives’ salaries are not listed, but should be similar. It should be noted that none are from Coos County and one could assume that when the company disbands after minerals are gone—these people will move on to greener pastures. There is another loophole built into the formula. The compensation averages are easily manipulated because promotions of existing people into new jobs are counted, so if you wanted to meet the target average for the second year, you could create a new job description, give a manager a different title, and still comply.

In ORC’s case, the World story indicated that the exemption years begin 2010 and could run through until 2015 if the additional years are approved. Based on Mr. Fish’s explanation of how the yearly exemption claims are evaluated, no new jobs would be counted in the formula after 2012, so the million dollars in lost revenue is NOT an incentive to hire workers at above average wages, because the formula excludes new hires after 2012, and has a built in bias towards higher salaried management and technical jobs.

Voters are angry at government that makes financial decisions that favor business interests at the expense of taxpayers. Approving the extension will only benefit investors and further erode public trust in their elected representatives. I realize that you may not have been aware of the loopholes in the Enterprise Zone regulations, so I am sharing this with you now. Please consider these facts when you make your decision next Monday.

Sharon Comden

Bandon