Item 17 - Public Hearing for Five-Year Economic Development Subsidy Reports

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(4) A statement of the public purposes for the economic development subsidy. On August 5, 2013, the City Council approved the execution of a sales tax sharing agreement with IPC (USA), Inc., an independent wholesale distributor of gasoline, diesel, jet fuel, and other refined petroleum products throughout the United States. The Agreement provided for a 50 percent sharing of local sales tax generation, plus a 70 percent (IPC) and 30 percent (City) sharing of additional sales tax generation above $1.4 million dollars. On November 1, 2019, IPC (USA), Inc. was acquired by TACenergy, one of the largest national wholesale fuel suppliers in the county, with annual sales exceeding 2.7 billion gallons and more than $5 billion in revenue. Since the agreements execution, IPC has been a top ten sales tax producer for the City. This sales tax generated is directly deposited into the City’s General Fund which is primarily used to fund police, fire, homeless reduction, and parks and recreational services for the City’s residents. Without this agreement, several of the City’s general services may be cut or reduced for its residents. (5) The net tax revenue accruing to the local agency as a result of the economic development subsidy. Since the commencement of the Agreement, $4,097,060 in total sales tax has been generated by TACenergy. The City has retained 50% of that amount: $2,048,530. (6) The net number of jobs created by the economic development subsidy, broken down by full-time, part-time and temporary positions. The Agreement has retained approximately 20 positions. The company has reported that challenges arising from the COVID-19 pandemic, along with regulatory changes at both the Federal and State levels, have impacted the fuel sales sector. However, their overall growth has aligned with the broader trends in transportation fuel demand, and it is expected that further hiring will take place in the near future. EXHIBIT 1