020-03
BOARD OF SUPERVISORS
Resolution
Barber and Ross Company
WHEREAS, Barber and Ross Company has made known its intent to relocate its
headquarters and part of its manufacturing operations by making new taxable real estate and
machinery and tools and vehicle investments and new jobs; and
WHEREAS, the company meets the policy guidelines of the Frederick County Economic
Development Incentives Fund as established by the Winchester-Frederick County Economic
Development Commission in 1995;
BE IT RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia
does hereby approve the payment of $150,000.00 to the Industrial Development Authority of
Frederick County, Virginia from the Frederick County Economic Development Incentive Fund to
assist in relocating a its headquarters and part of its manufacturing operations for Barber and
Ross Company in Frederick County, Virginia.
BE IT RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia
does hereby approve the payment of $125,000.00 to the Industrial Development Authority of
Frederick County, Virginia from the Governor's Opportunity Fund in relocating a its headquarters
and part of its manufacturing operations for Barber and Ross Company in Frederick County,
Virginia.
BE IT RESOLVED, that said funds are subject to an executed Memorandum of
Understanding outlining the required performance criteria.
BE IT FURTHER RESOLVED, that the Board of Supervisors for the County of Frederick,
Virginia, does authorize the County Administrator to execute the Memorandum of Understanding
on its behalf.
Upon motion duly made by Robert M. Sager ,seconded by Margaret B. Douglas
and on the votes hereafter recorded,
ADOPTED, this ~lh day October ,2003.
Richard C. Shickle Aye Sidney Reyes Aye
Lynda Tyler Aye Margaret B. Douglas Aye
W. Harrington Smith, Jr. Aye Robert M. Sager Aye
Gina Forrester Aye
A COPY TESTE:
BOS Resolution No.: 020-03
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING, (the "Memorandum") made and dated this
8th day of October, 2003, evidences the agreement among the COUNTY OF FREDERICK,
VIRGINIA, a political subdivision of the Commonwealth of Virginia (the "County"), the INDUSTRIAL
DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA, a political subdivision
of the Commonwealth of Virginia (the "IDA"), the WINCHESTER-FREDERICK COUNTY
ECONOMIC DEVELOPMENT COMMISSION, a joint commission of the City of Winchester and
Frederick County, Virginia (the "Commission"), and Barber and Ross Company ("Barber & Ross"),
a Delaware corporation, regarding a relocation of its headquarters and part of its manufacturing
facility in the Commonwealth of Virginia.
RECITALS
A. Barber & Ross intends to invest Ten Million Dollars ($10,000,000.00) in new taxable real
estate and taxable improvements, to invest One Million Five Hundred Thousand Dollars
($1,500,000.00) in new taxable machinery and tools, One Million Five Hundred Thousand
Dollars ($1 ,500,000.00) in new commercial vehicles and to create Four Hundred Seventy
Five (475) new jobs at a headquarters and manufacturing facility (the "Facility") to be
located in Frederick County, Virginia (collectively the "Project").
B. The County agrees to make a cash grant to the IDA in the sum of One Hundred Fifty
Thousand Dollars ($150,000.00), and the IDA agrees, upon receipt of such funds, to
make a cash grant to Barber & Ross in an identical amount (the "IDA Grant") to be
applied by Barber & Ross in order to complete the Project, as more fully set forth
hereinafter.
C. The IDA shall also receive a grant of One Hundred Twenty Five Thousand Dollars
($125,000.00) from the Governor's Opportunity Fund (the "Opportunity Fund Granf')
and the IDA, as administrator of the Opportunity Fund Grant, upon receipt of such funds,
MOU: Barber & Ross Company - October 2003
Frederick County, Virginia
page 1 of 5
shall disburse such funds to Barber & Ross as partial reimbursement for site purchase
costs and subsequent site development expenditures, as more fully set forth hereinafter.
NOW THEREFORE WITNESSETH: That for and in consideration in the sum ofTen Dollars ($10.00),
cash in hand paid by each of the parties hereto unto the other, the receipt and sufficiency of which is
hereby acknowledged, and other consideration deemed adequate at law, including, but not limited to,
the covenants and conditions set forth in this Memorandum, the parties do hereby agree as follows:
1. Recitals: The Recitals are made a material part hereof and incorporated herein by
reference as if set out in full.
2. Terms and Conditions of Disbursement:
a. The obligations of the IDA to make disbursement of the IDA Grant to Barber & Ross
is expressly contingent upon receipt of such funds by the IDA from the County.
b. The obligation of the IDA to make disbursement of the Opportunity Fund Grant to
Barber & Ross is expressly contingent upon receipt of such funds by the IDA from the
Governor's Opportunity Fund.
c. Provided that the IDA receives the IDA Grant and Opportunity Fund Grant in a timely
fashion, the IDA shall disburse such funds to Barber & Ross after October 31,2003,
but no later than December 1, 2003.
3) Reimbursement/Default: Barber & Ross agrees to make reimbursement to the IDA of
the IDA Grant and the Opportunity Fund Grant, as described in Section 4, below, in the
event that Barber & Ross fails to satisfy all the following terms and conditions (the
"Conditions"), as reasonably determined by the IDA:
a. Barber & Ross acquires and has fully operational new taxable real estate in an
amount of not less than $10,000,000.00, new taxable machinery and tools in an
amount of not less than $1,500,000.00 and new taxable commercial vehicles in
an amount of not less than $1,500,000.00 at the Facility located in Frederick
County, Virginia by December 31, 2004;
MOU: Barber & Ross Company - October 2003
Frederick County, Virginia
page 2 of 5
b. Barber & Ross creates Four Hundred Seventy Five (475) net new jobs in
Frederick County, Virginia associated with the Project by December 31,2006;
c. Barber & Ross employees created by the Project will average an annual salary of
not less than $31,200 excluding benefits by December 31, 2006;
d. Barber & Ross maintains the level of taxable investment, creates new jobs and
wage levels as part of the Project until December 31, 2006; and
e. Barber & Ross maintains and continues the operation of the Project in Frederick
County, Virginia for a four (4) year period commencing on December 31,2006.
4. Refund:
a. In the event that Barber & Ross fails to meet all of the foregoing conditions
set forth in Section 3, above, the Conditions then and in that event Barber &
Ross shall refund to the IDA such portion of the IDA Grant and the Opportunity
Fund Grant as is proportionate to Barber & Ross's shortfall in satisfying the
Conditions (the "Barber & Ross Refund"). Upon receipt of the Barber & Ross
Refund from Barber & Ross, the IDA shall return the same, or such proportionate
share thereof as called for herein, to the County and to the Governor's
Opportunity Fund, respectively.
b. Notwithstanding the foregoing, if Barber & Ross has met ninety percent (90%) of
the investment and employment goals set forth in this Memorandum by
December 31 , 2006, maintains that level of investment and jobs created through
the Project for a period of two (2) years beginning on December 31, 2006, and
remains fully operational in Frederick County, Virginia for a period of four (4)
years until December 31, 2010, then and in that event, Barber & Ross shall be
deemed to have substantially complied with the terms of this Memorandum and
shall no longer be obligated to repay the Barber & Ross Refund or any portion
thereof unto the IDA.
MOU: Barber & Ross Company - October 2003
Frederick County, Virginia
page 3 of 5
5. CooDeration: The County agrees to use its best efforts to "fast track" any
building permits required for the construction and installation of the Facility by Barber
& Ross so that the appropriate building permits, if otherwise prepared and submitted
in proper form, can be issued in a timely manner in order to meet the deadlines set
forth above. The County and the Commission agree to reasonably cooperate with
Barber & Ross, its equipment suppliers and its equipment contractors, in order to
assist Barber & Ross in meeting its operational deadline so that the Facility is
equipped by not later than December 31, 2004. Nothing contained in this Section 5
shall be interpreted to in any way require the County to issue any building permits
unless and until all applicable terms and conditions as required by law for such
building permits have been met and satisfied by Barber & Ross.
6. Time: Time is of the essence as to all matters set forth in this Memorandum.
7. Blndlna Effect: This Memorandum shall be binding upon and inure to the
benefit of the parties hereto and their respective successors upon the date of
acceptance of this Memorandum.
8. Construction: This Memorandum and the terms thereof shall be interpreted
and construed in accordance with the laws of the Commonwealth of Virginia.
9. Assianment: This Memorandum may not be assigned by any party hereto.
10. Ratification and ImDlementation: This Memorandum must be fully ratified by
all parties hereto not later than 5:00 p.m. on December 31, 2003, and the
implementation by Barber & Ross of the terms of this Memorandum must have
commenced by December 31, 2004; otherwise, this Memorandum and the terms
hereof shall be deemed withdrawn and of no further force and effect.
MOU: Barber & Ross Company - October 2003
Frederick County, Virginia
page 4 of 5
MOU: Barber & Ross Company - October 2003
Frederick County, Virginia
COUNTY OF FREDERICK, VIRGINIA
INDUSTRIAL DEVELOPMENT AUTHORITY OF THE
COUNTY OF FREDERICK, VIRGINIA
By:
(SEAL)
WINCHESTER-FREDERICK COUNTY ECONOMIC
DEVELOPMENT COMMISSION
By:
(SEAL)
BARBER & ROSS COMPANY
By:
(SEAL)
page 5 of 5
APPENDIX A
NET FISCAL IMPACT
PROPOSAL: Barber & Ross
1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
NET DIRECT FISCAL IMPACT
Annual Return $163,499 $194,315 $190,796 $182,410 $177,562
Cumulative Return $163,499 $357,814 $548,610 $731,020 $908,582
NET INDIRECT RESIDENTIAL FISCAL IMPACT
Annual Return ($40,504) ($45,488) ($50,472) ($50,472) ($50,472)
Cumulative Return ($40,504) ($85,992) ($136,464) ($186,936) ($237,408)
NET IMPACT
Annual Return $122,995 $148,827 $140,325 $131,938 $127,090
Cumulative Return $122,995 $271,822 $412,146 $544,084 $671,174
$412,1461
$671,1741
IThree (3) Year Return
IFive (5) Year Return
ASSUMPTIONS
Democ raohics
Persons per Residentiel Unit
Schooi Children per Residentiel Unit
2.60
0.70
Investment and Emoiovee Plan
(totals - 5 Year)
Real Estate
Machinery & Tools
Personal Property
Business License
Value of Trucks and Automobiles
$13,000,000
$10,000,000
$1,500,000
$0
$0
$1,500,000
Residentia~Non-Resldentlal Linkage
Employees
Averaae Hourlv Wace Emolovee
20%
475
$15.00
riB'"
ASSUMPTIONS
PROPOSAL: Barber & Ross
ASSUMPTIONS
Item
Persons per Residential Unit
School Children per Residential Unit
School Children per Residential Unit (Elementery)
School Children per Residentiai Unit (Middle)
School Children er Residential Unit HI h School
Value
Source
US Census 2000
NOTE: ALL VALUES ARE FY ANNUAL TOTALS
Residential
Per Residential Unit Real Estate Tax Revenue
Per Residential Unit Other General Fund Revenue
Per Residential Unit General Fund Service
Per Residential Unit General Fund Service (no educ)
$1,220
$1,665
$3,124
$830
Per Capita Fiscellmpact Analysis Model, Frederick County 2002
Per Cepita Fiscellmpect Analysis Madel, Frederick County 2001
Per Capita Fiscellmpact Analysis Madel, Frederick County 2002
Per Capita Fiscallmpacl Analysis Model, Frederick County 2001
Capital Facilities Cost per Pupil (Elementary)
Capital Facilities Cost per Pupil (Middle)
Capital Facilities Cost per Pupil (High)
Capital Facilities Costs: Fire & Rescue - Per Residential Unit
Capital Facilities Costs: Public Safety - Per Residential Unit
Ca ital Facilities Costs: Parkland - Per Residential Unit
Per Capita Fiscellmpact Analysis Madel, Frederick County 2002
Per Capita Fiscellmpact Analysis Madel, Frederick County 2002
Per Capita Fiscellmpact Analysis Madel, Frederick County 2001
Per Capita Fiscellmpact Analysis Madel, Frederick County 2002
Per Capita Fiscal Impact Analysis Madel, Frederick County 2002
Per Ca ita Fiscal 1m ctAnaI Madel, Frederick Coun 2002
Non-Residential
Real Estate Tax Retum
M&T, BPOl, BE, PP' Tax
Per Employee Other General Fund Revenue
Per Employee General Fund Service
Capital Facilities Costs: Public Safety - Per Employee
See Investment and Employment Plan Sheet
See Investment and Employment Plan Sheet
$175 Per Capita Fiscallmpacl Analysis Madel, Frederick County 2002
$132
$2
Per Capita Fiscellmpact Analysis Madel, Frederick County 2002
Per Capita Fiscellmpect Analysis Madel, Frederick County 2002
Average Hourly Wage Employee
Residential-Non-Residentiallinka e
Consultant Estimates
Taxes
Real Estate
Machinery and Tools
Year 1 (60%)
Year 2 (50%)
Year 3 (40%)
Year 4 (30%)
60%
50%
40%
30%
$0.73
$2.00
$1.20
$1.00
$0.80
$0.60
$4.20
$1.26
Personal Property
property taxed at 30% of original value
Sales Tax
Income Sent on Taxable Products
Weldon Cooper Center, University of Virginia
Weldon Cooper Center. University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
American Chamber of Commerce and Research Association
Other Assumotions
Revenue and Expenditure (Operating & Capital) Levels will remain a11999 - 2000 levels
No changes in any tax rates
No slack capacity in any general fund revenues and operating expenditures
No changes in number of persons per residential unit or school children per residential unit
APPE=ND1X C
INVESTMENT AND EMPLOYMENT PLAN
PROPOSAL: Barber & Ross
Projected Plans 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Value of New Construction
Phase 1 10,000,000
Phase 2
Phase 3
Phase 4
Annual Value 10,000,000
Value 01 Machinery & Tools 1,500,000
Phase 1 900,000 750,000 600,000 450,000 450,000
Phase 2
Phase 3
Phase 4
Annual Value 900,000 750,000 600,000 450,000 450,000
Value 01 taxable personal property
Phase 1
Phase 2
Phase 3
Phase 4
Annual Value
Value 01 Trucks and Automobiles 750,000 750,000
Phase 1 750,000 675,000 607,500 546,750 492,075
Phase 2 750,000 675,000 607,500 546,750
Phase 3
Phase 4
Annual Value 750,000 1,425,000 1,282,500 1,154,250 1,038,825
Sale. Tax Retum from Employ...
Phase 1 25,414 28,803 32,191 32,191 32,191
Phase 2
Phase 3
Annual Value 25,414 28,803 32,191 32,191 32,191
Projected Employment 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Phase 1 375
Phase 2 50
Phase 3 50
Phase 4
Annual Value 375 50 50
Projected Wages 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Phase 1 11,700,000 11,700,000 11,700,000 11,700,000 11,700,000
Phase 2 1,580,000 1,560,000 1,560,000 1,560,000
Phase 3 1,560,000 1,560,000 1,560,000
Phase 4
Annual Va/us 11,700,000 13,260,000 14,820,000 14,820,000 14,820,000
APPfNnlX n
DIRECT FISCAL IMPACT
PROPOSAL: Barber & Ross
DIRECT REVENUES
Real Estate Tax Return 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Revenues $73,000 $73,000 $73,000 $73,000 $73,000
Cumuletlve Revenues $73,000 $146,000 $219,000 $292,000 $365,000
M&T, BPOL, BE, PP' Tax 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Revenues $49,500 $74,850 $65,865 $57,479 $52,631
Cumulative Revenues $49,500 $124,350 $190,215 $247,694 $300,324
Sales Tax 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Revenues $25,414 $26,803 $32,191 $32,191 $32,191
Cumulative Revenues $25,414 $54,217 $86,406 $116,600 $150,791
Local sales tax receipts reflect portion of purcheses by new workers
(Based on 54,5% of annual payroll spent on taxable purchases - US Chamber 2000) (New taxable sales based on proportion of total taxable
sales between Winchester and Frederick County for 1999 - Virginia Department of Taxation)
Other General Fund Revenue 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Revenues $65,637 $74,389 $83,140 $83,140 $83,140
Cumulative Revenues $65,637 $140,026 $223,166 $306,306 $389,446
DIRECT REVENUES
Annual Revenues
DIRECT EXPENDITURES
General Fund: Operating Costs 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Costs $49,374 $55,957 $62,540 $62,540 $62,540
Cumuletive Costs $49,374 $105,331 $167,872 $230,412 $292,952
Capital Facilities Costs 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Costs $679 $769 $660 $860 $860
Cumulative Costs $679 $1,448 $2,308 $3,167 $4,027
DIRECT EXPENDITURES 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annuel Costs $50,053 $56,726 $63,400 $63,400 $63,400
NET
Annual Return $163,499 $194,315 $190,796 $182,410 $177,562
APPENOIX r
RESIDENTIAL FISCAL IMPACT
PROPOSAL: Barber & Ross
INDIRECT REVENUES
Potential New Residential Units 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Units 75 10 10
Cumulative Units 75 85 95 95 95
Real Estate Tax Return 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Revenues $91,500 $103,700 $115,900 $115,900 $115,900
Cumulative Revenues $91 ,500 $195,200 $311,100 $427,000 $542,900
General Fund Revenue (Other) 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Revenues $124,882 $141,533 $158,184 $158,184 $158,184
Cumulative Revenues $124,892 $266,415 $424,599 $582,783 $740,967
INDIRECT REVENUES 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Ravenues $216,382 $245,233 $274,084 $274,084 $274,084
INDIRECT EXPENDITURES
General Fund: Operating Costs 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Costs $65,363 $73,662 $81,961 $81,961 $81,961
Cumulative Costs $65,363 $139,025 $220,986 $302,946 $394,907
Capital Facilities Costs 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Costs $191,523 $217,059 $242,595 $242,595 $242,595
Cumulative Costs $191,523 $408,581 $651,177 $893,772 $1,136,367
INDIRECT EXPENDITURES 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Costs $256,886 $290,721 $324,556 $324,556 $324,556
Annual Return
Cumulative Return
($40,504)
$40,504)
($50,472)
$136,484)
($50,472)
$186,936)
($50,472)
($237,408
APPENDIX F
INDIRECT RESIDENTIAL CAPITAL FACILITIES COSTS
PROPOSAL: Barber & Ross
POTENTIAL NEW STUDENTS
Elementary 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual New Public School Students 29 4 4
Cumulative New Public School Student 29 33 37 37 37
Middle 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual New Public School Students 11 1 1
Cumulative New Public School Student 11 12 13 13 13
High 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual New Public School Students 13 2 2
Cumulative New Public School Student 13 14 16 16 16
POTENTIAL CAPITAL FACILITIES COSTS
Elementary 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Capital Facilities Costs 68,246 77,345 86,445 86,445 86,445
Cumulative Capital Facilities Costs 68,246 145,591 232,036 318,481 404,926
Middle 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Capital Facilities Costs 40,291 45,663 51,036 51,036 51,036
Cumulative Capital Facilities Costs 40,291 85,955 136,990 188,026 239,062
High 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Capital Facilities Costs 58,538 66,343 74,148 74,148 74,148
Cumulative Capital Facilities Costs 58,538 124,881 199,029 273,177 347,325
POTENTIAL OTHER CAPITAL FACILITIES COSTS
1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Capital Facilities Costs 24,447 27,707 30,967 30,967 30,967
Cumulative Capital Facilijies Costs 24,447 52,154 83,121 114,087 145,054
TOTAL RESIDENTIAL CAPITAL FACILITIES COSTS
1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
Annual Capital Facilities Costs 191,523 217,059 242,595 242,595 242,595
Cumulative Capital Facilities Costs 191,523 408,581 651,177 893,772 1,136,367
~~
~~ WINCHESTER I FREDERICK COUNTY
~ ~ Economic /Jer.Jelopment Commission
DATE:
October 2,2003
FROM:
CC:
Frederick County Board of Supervisors
Patrick Barker, Executive Director .
TO:
John R. Riley, Jr., County Administrator'
Local Government Agreements for a headquarters and manufacturing
facility for Barber & Ross Company
Attached for your review and comments are the Memorandum of Understanding (MOU)
and BOS resolution headquarters and manufacturing facility for Barber & Ross Company.
As you recall, BOS seemed favorable in providing a local match to the Governor's
Opportunity Fund of $150,000.00 to secure this location. Governor Warner has approved
a grant amount of $125,000.00 from the Governor's Opportunity Fund to assist in
Frederick County securing the location of this project.
RE:
I would like to request that the MOU for this project be placed on the BOS's October 8th
agenda. As you are aware, the Governor had already formally announced the State's
financial assistance.
Thanks for your help. I am available if you have any questions or comments on these
materials on this project. .
45 E. Boscawen Street - Winchester, VA 22601
phone: 540-665-0973 - fax 540-722-0604 - a-mail info@wininva.com
web: http://www.winlnva.com