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Travis County Commissioners approve changes to HP agreement

Monday, February 6, 2012 by Michael Kanin

The Travis County Commissioners Court voted to reconfigure its economic development agreement with Hewlett Packard last week. The change allows the tech firm to count the number of new positions it created at its Tandem and Ed Bluestein facilities as one credit, as opposed to the original agreement which had the firm counting the employees at each complex separately.


That action will allow the company to comply with two economic development agreements it signed with Travis County. Had the court decided against the change, the company would have forfeited roughly $115,000.


The court’s action came after Commissioner Sarah Eckhardt tried to attach road improvements along a substandard, private road that leads to HP’s Tandem facility to the amendment. In so doing, she seemed set to make a broader change in the way that the county approaches its economic development agreements.


“I don’t have any problem with aggregating the (employee count) for consideration of this amendment,” she said. “But I have a larger desire to see our tax abatement policies and actions more integrated in with our service delivery. Of course, a tax abatement means that we are not getting the revenue sources with which we pay for the infrastructure improvements that these businesses will need.”


County Judge Sam Biscoe argued against the idea. Biscoe favored approaching the issues separately, a move that would have the effect of short-circuiting Eckhardt’s attempt at a redefinition of the policy through the HP amendment. Ultimately, most of his colleagues agreed and the change to the development agreement passed 4-1. Eckhardt provided the sole no vote.


The county’s most recent economic development policy expired in September 2011. The court is set to approve a new version at its Feb. 7 meeting (See In Fact Daily, Jan. 23, 2012). Commissioners will take up improvements to the substandard road that runs to the Tandem facility at a later date.


According to a memo from senior county budget analyst Katie Petersen Gipson, HP’s employee figures changed as its needs changed. “Since signing the (development) agreements, HP has shifted their plans whereby most of the workers (489) are at the Tandem site,” she wrote. “If the requirements are combined, then HP has exceeded employee requirements for both agreements, however if they are not combined they are not in compliance at the Ed Bluestein site.”


Gipson added that, though the firm was “very close,” they had “not quite met the required investment (dollar) amount.” Still, she suggested that the court move forward with the change.


“Since (HP) has fulfilled the spirit of the agreement and has more than the required number of employees overall, (we recommend) that the requirements be amended whereby the totals of the two sites are averaged for the (employee) count, salary and property value,” she continued.


Head of the county’s Transportation and Natural Resources department Steve Manilla suggested that the company might agree to help pitch in for road construction. However, he added that they would also like help from their neighbors. “They’re interested in working with us to get the road up to standard so it can be maintained by the county,” he said. “But they would like to have some assurance that the other property owners on the other side of the street will contribute as well.


Eckhardt noted that this was “absolutely reasonable.”


She later added that her vote against the measure was “not because (she doesn’t) believe that the basis of the amendment is appropriate.”


“I’m voting against it because I believe that we should look at this in total, and not just for Hewlett Packard, but for any tax-abatement or tax-rebating circumstance,” Eckhardt said.

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