For the last decade, Lodi employers in the commercial and industrial sectors who add new positions have been able to apply for electric bill discounts based on how many new positions they create in a year.
Typically, an employer was able to receive as much as a 2% discount on their utility bill just by adding as many as three jobs as part of the Economic Development Rate Discount Program.
However, City of Lodi staff has been discussing making adjustments to the program that would make for a more competitive business environment by expanding opportunities for discounts and as well as entice new employers to move to town.
“There’s a quirk in the way the program is organized that has often confounded me a little bit,” City Manager Steve Schwabauer told the Lodi City Council during Tuesday morning’s shirtsleeve session.
“And that is, that if you’re an employer and you bring in 10 new jobs, you get that full discount that year,” he said. “If you bring in 10 the next year you get the next discount. So if you continually grow slowly, you continue to get the discount. But if you grow all at once, if you have 100 new employees, you get the discount in year one, but not in year two.”
According to Tuesday’s staff report, the existing EDR program requires participating businesses to renew a contract with Lodi Electric Utility on an annual basis.
Employers that add four to six new jobs a year receive a 4% discount on their electric bills, and those that add seven to nine new jobs receive a 6% discount.
Businesses that add more than 10 jobs see an 8% discount.
Astrida Trupovnieks, the city’s business development manager, said changes to the EDR program would now be available to businesses adding more than 20 positions annually, and participation would last a maximum of five years.
An employer would also receive a maximum discount of 8% each year on their electric bills, she said.
“This allows a company making a sizable investment to enjoy the discount a period longer than one year,” she said. “As the number of positions increases, the discount rate remains the same, but the number of years the rate stays in place increases.”
As an example, a business that creates 10 to 20 jobs in the first year of the program will receive the 8% discount.
A business that creates 21 to 30 jobs the first year will receive an 8% discount, and if they create 10 more jobs during the second year of participation, they’ll maintain that 8% discount.
Even if a business adds more than 50 for five consecutive years, they maintain that 8% discount each year of the program, Trupovnieks said.
According to Tuesday’s staff report, seven employers in Lodi participated in the EDR program in 2019 and 2020. The program provided about $350,000 in discounts each year.
If all seven employers participate in the new program and hire at least 51 new people, it is estimated that about $2 million in discounts would be provided during the five-year period, or $400,000 annually, staff said.
Trupovnieks said the changes to the program will primarily impact employers creating more than 20 jobs each year.
“Any aspect of this program can be modified,” she said. “For example, should the city council wish to reserve that 8% discount for the super jobs creators, so to speak, it can choose to do so by maintaining the existing discount for one to 10 jobs, and providing the 8% discount for those creating more than 10 jobs.”
She added that participating employers will be required to maintain the number of jobs they create over the five-year period, sign an affidavit stating the EDR is an influencing factor to locate or remain with Lodi Electric Utility, and submit a report indicating the number and date of hire of new jobs.
If 20% of jobs are lost in any given year, an employer will lose one year of electric bill discounts, she said.
“This is a great direction to go,” Vice Mayor Mark Chandler said. “We know there are some companies expanding right now that would be able to take good advantage of (the program). So I’m fully supportive of it.”
Pat Patrick, president and CEO of the Lodi Chamber of Commerce, agreed.
“The Lodi Chamber of Commerce is very much in favor of this program,” he said. “(Companies expanding) value the partnership they have had, or are having, with the city. This can only put icing on the cake. It’s one of the things that I think makes Lodi livable and lovable.”
No action was taken during Tuesday’s session. An agenda item requesting a vote from the council will be presented at a future regular meeting.
Chandler opposes retail cannabis
The council conducted a special meeting before its shirtsleeve session Tuesday morning to allow vice Mayor Mark Chandler to provide feedback regarding a proposal to plan for future regulation and taxation of cannabis in Lodi.
Chandler was unable to provide comments during the Sept. 21 shirtsleeve session, and staff did not want to move forward without his input.
On Tuesday, Chandler said he opposed the proposal.
“When you look at all the emails that we received, and the conversations I’ve had with people, and the emails I’ve received, I’m going lean against this because I don’t feel it represents the community values that make Lodi, Lodi,” he said. “And we’ve had many, many emails to that effect. People are rightfully concerned about the safety of their children, and they’re rightly concerned about the message it sends to the youth of our area. It says that this is okay, and yet we know that this is the first place to start for people that do heavy drugs.”
Mayor Alan Nakanishi opposed regulation and taxation last week, but councilmen Doug Kuehne, Mikey Hothi and Shak Khan supported some sort of plan to do so.
Because three council members supported a future plan, staff will present further information at a future meeting for approval.