A month after reworking a draft of the city’s guidelines for companies seeking tax abatements, the Kendallville Economic Development Advisory Committee decided to take more time to continue mulling it over.

With only about half of the normal attendees at Sept. 24’s afternoon’s meeting, committee members decided to table the discussion another month and then had a lengthy conversation, retracing some of the decisions they made in August and asking new questions.

At the heart of the effort is Kendallville’s desire to update the abatement guidelines for today’s strong economy. Those rules guide what kind of tax breaks firms can get for adding new equipment and hiring new workers.

Tax abatements run from three to 10 years, with property taxes phasing in by a percentage each year until the company is paying the full amount. Tax abatements generally save a company about half the amount it would have otherwise paid.

Last month, the general consensus of the board seemed to be re-writing the rules to emphasize job creation and especially high wages for new positions over dollar investment in machinery. The thought at the time was that since the economy is doing so well, the city should only incentivize projects that are going to be adding high-quality jobs.

This month, while looking at a draft, board members now questioned whether the job creation totals previously penned might to be high for many firms to meet, especially because it’s hard for companies to find workers in a tight labor market.

For example, for a three-year abatement, a firm would need to invest at least $250,000, create three jobs and have wages of $15 per hour. But for a 10-year tax break, a company would have to invest $5 million and create 20 jobs with $20-per-hour wages.

Some board members felt the new job guidelines would hamstring firms, especially as industrial machinery becomes more and more automated, not requiring many workers to operate.

That reopened the philosophical debate about what the city wants to be incentivizing more with the new rules — investment that adds to the city’s assessed value or job quality.

“I’m thinking you’re looking to create jobs,” Ken Olry of Flint & Walling said.

“It is about growing jobs, but it’s also about growing our earning potential,” Mayor Suzanne Handshoe agreed.

But city councilman Frank Walkup expressed concerns that companies could be investing millions in equipment that maybe only adds two or three positions and, if they’re not receiving abatements, maybe they make that investment elsewhere.

One thing most of the committee seemed to agree on Monday, though, was that the wage requirement needs to remain high at at least $15 per hour.

“There was a time when we thought $9.50 was a high wage. Now it’s a laughable issue,” Kendallville Local Development Corp. representative Jerry Steinbarger said.

One point of discussion regarding wages was whether Kendallville wants to gauge wages for the new jobs only or for the wages of most of the plant’s laborers.

The city is not using average wage, since that number can be grossly skewed by a few large supervisor or administrative salaries compared to the average hourly worker.

The board appeared more supportive of language that would call for wages to be for “the majority” of workers. That way a company would have to prove they’re paying high wages to most of their workers and not just the new jobs coming online if they want to get a tax break.

“If they want an incentive, they have to step it up and help their employees,” Kendallville Area Chamber of Commerce Executive Director Lynette Leamon said.

The board ultimately voted to table the discussion to next month for further consideration by all of the committee. If approved, the draft of the new guidelines would then go before the Kendallville City Council for its approval before going into effect.

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