County adopts economic development incentive policy

By From page A1 | February 14, 2014

El Dorado County Supervisors adopted a new policy aimed at attracting businesses that can provide significant numbers of good-paying jobs. Policy J-7 for Economic Development Incentives was drawn up by the Chief Administrative Office and is authorized under the Economic Development section of the county’s General Plan. Using financial or procedural incentives is a common tool used by jurisdictions seeking to increase and improve local economic conditions, according to the agenda documents.

Policy J-7 describes the rationale for using public funds and services to reward or encourage private companies when the benefit to the greater public can be described and properly monitored. The policy further notes that “particular business sectors” should be targeted and includes examples such as “Advanced Manufacturing;” “Research and Development;” “Alternative Energy/Green Technology;” and “Health & Wellness.”

Economic and Business Relations Manager Jim Claybaugh defined Advanced Manufacturing in answer to District 2 Supervisor Ray Nutting’s question. Claybaugh described it as much by what it is not than what it is. “We’re not going after large, old time manufacturing,” he said. The term is also known as “Agile Manufacturing” and it involves “high-value product” and may feature “green” applications.

“I don’t want to lose our historical businesses (such as mining, timber and large ranching operations),” Nutting mused. “Can’t we go after that?”

Later discussion clarified that a large family-operated ranch is unlikely to provide many, permanent, full-time, high-paying jobs.

Financial incentives described in the policy could be a structured reduction in sales tax requirements or deferred or reduced property tax obligations. Such agreements between the county and the business could be time-limited — 5 years, for example, or some kind of gradual pay plan. A system of monitoring and enforcing the agreements also would be established with possible penalties for “non-performance.” Thus if Company ABC promised to hire 50 employees within three years and later could not or would not comply, the county could call in the marker and terminate the agreement.

Non-tax-related incentives could include assistance with the county’s permitting process such as “Priority Permit Processing” or “One-Stop Permit Pre-Meeting.” Reduction or deferral of permit or impact fees could also be used as an incentive.

The policy would also employ Community Development Block Grant funding programs aimed at giving assistance to very small businesses and micro-enterprises.

The process that was used to develop the policy was called into question by Lori Parlin and Sue Taylor. Parlin, a candidate for District 4 Supervisor and a founding member of the Shingle Springs Community Alliance, challenged that CEDAC and its Regulatory Reform subcommittee had violated the Ralph M. Brown Act by failing to provide sufficient time for public comment. Taylor, from Camino, and a representative of Save Our County and other activist groups, said the public had no opportunity to consider the business “sectors” identified for “incentivizing” in the policy proposal. “Put it off for a better, more transparent process,” Taylor suggested.

Board Chairwoman Norma Santiago pointed out that the four business sectors in the policy were only “examples” and that no decision has been made on which businesses to include in the program. CAO Terri Daly then weighed in saying, “It’s a policy, not an ordinance, so there is no Brown Act violation.”

Acknowledging that he is “not a big fan of incentives,” District 4 Supervisor Ron Briggs went on to suggest that “the weight of CEDAC has become inappropriate.” However he joined his fellow supervisors in adopting Policy J-7 for Economic Development Incentives. The CAO’s department will craft the detailed procedures that eventually will implement the policy.

Any and all incentive agreements between the county and private industry must first be cleared through County Counsel and ultimately be approved by the Board of Supervisors before they may take effect.

Contact Chris Daley at 530-344-5063 or [email protected] Follow @CDaleyMtDemo.

Chris Daley

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