Missing numbers, Missing expectations

Jul 21, 2010 — The Evening News and The Tribune

David A. Mann

Jul. 20, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- JEFFERSONVILLE -- During the last 10 years, the Jeffersonville City Council has granted tax breaks to more than 20 companies as a means of attracting commerce.

However, some receiving the benefit aren't living up to their end of the bargain: Falling short of job creation expectations and sometimes not even filing the appropriate paperwork to demonstrate their performance.

Council members say they're willing to be patient with companies not hitting job creation expectations, considering a tough economy. However, letters have been sent to companies that have fallen behind on filing their annual performance reports.

MISSING REPORTS

OB&E Rubber Co., JDC Veneers Inc. and Becker Acroma Corp. were among the companies that have not filed performance reports since 2007, according to city records. Without the reports, the public doesn't know if the company is living up to the job creation and salary promises it made when it received the tax break.

When contacted by a reporter last week, Nathan Endris, with OB&E Rubber, said he was unsure why the company hadn't filed the report but that he'd received the city's letter and would have the information sent to them. Further, he noted that the company has added employees since receiving the 2003 abatement.

Becker Acroma was reached and confirmed receipt of the city's letter. However, the person interviewed did not want to be quoted. A message left at JDC Veneers last week was not returned by press time.

"The impression I've got is that we've not been aggressive on getting those reports," said City Council President Nathan Samuel.

However, he said, recently appointed Redevelopment Director Paul Wheatley would be working on making sure the paperwork is up to date.

Samuel said if companies still refuse to fill out paperwork now that the process has been implemented, "I have no problem pulling back the abatements," he said.

EXPECTATIONS TOO HIGH?

The performance reports filed so far were approved by the council at a recent meeting. At the time, Wheatley told members that those missing job creation expectations are steel companies and the worldwide recession had adversely affected them in the last few years.

"It definitely has," said Jim Hagan, vice president and treasurer of Roll Forming Corp., one of the companies that's missed expectations.

According to a report it filed in January, the company expected to create 210 jobs and an estimated $7.5 million in local salaries when it received a property tax abatement 10 years ago.

It's created 32 jobs totaling $1.5 million in salaries. The abatement -- which allows the company to phase in property tax payments over 10 years -- is set to expire after this year.

Hagan said leaders are hopeful that markets will turn around in the near future, noting that it's stronger today than a few years ago when the recession started. The company has made significant tax contributions to the community, Hagan said. And he believes the Jeffersonville facility was built for the long haul, saying it would "still be there in 30 years."

Kasle Metal Processing LLC, also fell short on expectations, so far creating 52 jobs instead of the 78 promised when the council granted it a tax abatement in 2003. Salary estimates were off as well: It estimated $2.5 million and has produced $1.8 million.

Additionally, Key Electronics Inc., has created 115 jobs as opposed to the 137 it estimated when a five-year personal property tax abatement was granted in 2008. Salaries have come in at about $4.5 million as opposed to the $5.4 million initially estimated.

Calls made to Kasle Metal Processing and Key Electronics last week were not returned in time for publication.

None of the council members reached for interviews on the matter were upset over missed estimates, however, considering the economy.

"I hate to blame the economy but that is the fact," said Councilman Mike Smith. "I'm willing to do what I can to save the jobs we have."

The council has revoked tax abatements in the past. However, Councilwoman Connie Sellers said she doesn't believe there is any need for that now "as long as I don't see them decreasing those jobs."

She said if the council were to choose not to give the breaks it could risk losing the businesses to other states and regions that are willing to offer incentives.

"Under normal economic times, this would be very serious," said Councilman Ron Grooms.

However, he said, considering the circumstances, the council can wait another year and see if they hit expectations then.

Samuel said revoking the abatements and asking for a refund of those tax dollars could end up crippling companies that are already having a tough time.

Newstex ID: KRTB-0418-47153793