The Tax Exemption Proposal for Pacific Fibre Products, Inc.: is this just a giveaway?

At their January 14, 2015 meeting, the Molalla City Council was given a 2-page draft agreement by Molalla City Manager Dan Huff. The draft agreement proposes that a business known as ‘Pacific Fibre Products, Inc.’ would be exempt from payment of property taxes.

(click on image to download/view 2-page PDF copy)

(click on image to download/view 2-page PDF copy)

Taken at face value, the draft agreement indicates that two years of property tax exemption would be earned by ‘the firm’ in exchange for a promise to pay at least $31.76 per hour to all new employees. So, on the surface, good jobs are coming to Molalla. Or, are they?

The draft agreement becomes more fuzzy with a closer inspection. First, the pay level is not a true hourly rate, but “an average level of compensation,” and can include any non-mandatory benefits that may be monetized. Then, it appears that the high wage level is no longer required for new employees hired on or after July 1st after the first full year of the tax exemption. And third, it also is not clear: is the firm allowed to fully dodge high-wage new-hires by employing temporary workers, part–time workers, or subcontractors, at any hourly rate, even down to minimum wage? If so, this agreement does nothing for Molalla, and is just a simple corporate giveaway to ‘the firm’.

A deeper inspection is even more troubling. It turns out that the ORS (Oregon Revised Statutes) cites which the parties have liberally inserted within the draft agreement do not exist. They were all renumbered years ago.

Here are a few notes:

  • In paragraph two of the first page, the first cite is ORS 285B.650 to 285B.728 (1997). An online search finds the 2013 Edition of ‘Chapter 285B — Economic Development II‘, at https://www.oregonlegislature.gov/bills_laws/lawsstatutes/2013ors285B.html. But, within this lengthy webpage, there is no ORS 285B.650, and no ORS 285B.728, nor are there any other ORS’s numbered between 285B.650 and 285B.728. In fact, further down in the webpage, annotations show that these statutes were renumbered in 2003, becoming part of ORS 285C. Sure enough, search online for ‘ORS 285C’ and you will find the 2013 Edition, aka ‘Chapter 285C — Economic Development III‘.
  • In the middle of the first page, just before the hourly wage is noted, there is a cite of ORS 285B.710. An online search produces the current version of the ORS, and indicates this cited ORS does not exist. The notes deep within the 2013 Edition of ORS 285B include: “…renumbered 285C.215 in 2003″. This ORS has to do with ‘first-source hiring agreements’ for enterprise zones.
  • At the bottom half of the first page, the agreement appears  very precise about the $31.76 per hour rate. Four provisions are delineated, with a reference to “…the definitions and guidelines in Oregon Administrative Rules (OAR), Chapter 123, Division 065….” Interestingly, an online search locates an OAR Chapter 123, but that chapter contains no Division 065; in fact, there is no division numbered between 061 and 070. So, just how binding is an agreement that references a nonexistent cite?
  • The fourth provision of the alleged OAR Chapter 123 Division 065 cites ORS 285B.707. An online search produces the current version of the ORS, and indicates this cited ORS does not exist. The notes deep within the 2013 Edition of ORS 285B include: “…renumbered 285C.135 in 2003″. This ORS has to do with eligibility requirements for enterprise zones.

    Chapter 123 has been marked with an orange ellipse.

    Chapter 123 has been marked with an orange ellipse.

Eight Questions that need to be Answered…

  1. What exactly does Pacific Fibre Products, Inc. do in Molalla?
  2. What is the annual dollar value of the proposed tax exemption?
  3. How many jobs, and at what pay rates?
  4. How many new employees were hired in the past three years, and at what pay rates?
  5. Are there environmental impacts from the work being done, such as industrial noise that diminishes quality of life in residential eighborhoods?
  6. What is the history of this company in Molalla?
  7. If there are any, who are the local people who are connected to or benefit from the presence of Pacific Fibre Products, Inc. in Molalla?
  8. and, how is this NOT a local example of Crony Capitalism?

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