The Powell Community Improvement Corporation is reviewing four job creation incentive agreements, but currently lacks funds to fulfill them.

The Powell Community Improvement Corporation is reviewing four job creation incentive agreements, but currently lacks funds to fulfill them.

Powell recently created the CIC as a means of attracting business to the city using financial incentives. It currently has no funds.

City manager Steve Lutz recommended the CIC board send the issue to the city finance committee, which could make a recommendation to city council.

CIC board members Richard Brahm and Brad Sprague expressed concern about entering incentive agreements before funds to pay them are available.

Two of the agreements are for businesses that moved to the city with the understanding they could participate in job-creation relocation grant-loans.

To receive these relocation incentive payments, the agreement requires the business to turn in appropriate invoices, for which the CIC would reimburse them. Those funds will be needed at the beginning of the agreement, CIC board members said.

The other two agreements are for businesses that would be paid up to $10,000 annually based on the amount of income tax revenue their businesses generated for the city. Those payments would need to be made from 2011 to 2016.

"We're entering a contract with a financial component and we don't have any financial capacity. At what point is Powell obliged to appropriate the money?" Sprague said.

City attorney Gene Hollins said that the "potential incentive payments" would likely be included in the "annual appropriations ordinance."

Brahm said, "My point last time was that we should not enter into any contract that doesn't carry with it the obligation of the city of Powell to fund it, because then you're going to get sued if you don't get the funds but you've promised to give some guarantee over and above what the city's willing to do."

Hollins said based on those previous discussions, he had amended the four agreements to say they are contingent on the CIC getting city funding.

As at previous meetings, they discussed having Powell council as a party in the agreements. However, Hollins said using three-party agreements between city council, the CIC and a business seeking the incentive will slow the process down, because they would require council approval.

Brahm said the CIC needs to think about "what kind of agreement" it needs with the city "that funds the agreements that are accepted by the CIC."

"No city in its right mind unless it's in a fiscal emergency is going to not perform an incentive agreement and let that message get out to the business community," Hollins said.

Other aspects of the CIC that city staff is working on are:

Getting liability insurance to cover the CIC and its board members is in progress, Lutz said.

Developing an inventory of public and private lands and buildings that the CIC could review to see what non-residential properties are vacant or available for development. City development director Dave Betz said they can use various databases already available to the city to accomplish that inventory. Betz said it would need to be updated frequently as properties become available, leased or developed.

Developing a job-creation-incentive application and a check list of criteria for granting incentives.

A CIC is a not-for-profit and "a legal method of taking public money ... and making loans, grants, investments, incentives, acquiring property" and "conveying it to private business," Hollins has said. "It's a legal mechanism through which those types of incentives or deals can be done and not be subject to a (legal) challenge."