In an effort to help Bartlesville’s primary industry employers recruit talent, the Bartlesville Development Authority asked the City Council on Tuesday to approve the use of half a million dollars for its Resident Recruitment Program.
The program, which was launched last year, incentivizes employees of Bartlesville’s primary industries to move to Bartlesville and establish a residence locally. The council approved the request with a vote of 5-0. The program is set to launch Oct. 1.
The program
The RRP began in 2020, when the BDA stepped out of its traditional roles in facilitating the recruitment, retention and expansion of primary industry in Bartlesville by redirecting employer incentives — traditionally $10,000 per net/new job — to the employee upon purchasing a home in Bartlesville.
The council approved the expenditure of up to $150,000 in Half-cent Economic Development Sales Tax funds for the program at that time, which resulted in 16 new, well-employed residents joining the Bartlesville community and contributing to its sales tax base.
BDA President David Wood told the council Tuesday that the program is now poised to help local employers deal with the labor shortage currently impacting most labor markets throughout the country, including Bartlesville.
“With the acute labor shortage we’re experiencing, we’re proposing expansion of RRP to include all primary industry employers* within the city of Bartlesville,” Wood said. “Conversations with major employers suggest that this employee benefit would provide a competitive advantage for recruiting employees to Bartlesville industries, and would benefit the community overall as each recipient becomes a resident sales tax generator.”
Relocating employees
Wood said qualifications for the program will remain largely the same as with previous recipients under the pilot program, with some modifications. Under the modified program, relocating employees will be offered:
- $10,000 cash upon the purchase of a primary residence within the City of Bartlesville
- $20,000 cash assistance for new custom construction of a primary residence within the City of Bartlesville
- $10,000 cash assistance for new custom construction of a primary residence outside the city limits but within the Bartlesville School District
Existing employees who currently do not reside in Bartlesville could also be eligible if they were to purchase or rent a primary residence and move to Bartlesville, Wood said.
“While this is a departure from incentivizing ‘new jobs,’ the cost/benefit remains the same for Bartlesville’s sales tax collections,” he said. “A new resident — from an existing job or a new job — provides the same sales tax revenue to the city.”
Wood said that because a significant number of new hires are young, single, and “not in a position to purchase a home immediately upon job acceptance,” rental assistance will also be included in the program.
“We’ve scaled back the incentive commensurate with the employee commitment and extended a benefit of up to 25 percent, or $2,500, to new or existing primary industry employees that elect to move to Bartlesville and rent their primary residence, with a minimum six-month lease commitment,” he said.
“A well-employed tenant provides the same sales tax revenue to the city as a homeowner, so the risk of short-term residency is largely offset by the reduction in incentive. A long-term rental tenant would provide the same sales tax revenue as a homeowner, but for 25 percent of the public cost. In combination, it is likely a wash.”
To help drive resident retention, $7,500 in relocation incentives can be carried forward should the renter wish to convert to a Bartlesville homeowner. For renters who later contract for the construction a new, custom home, $17,500 in carry forward incentive funding could be applied, provided the allocated funds are still available.
Wood said that given the structure of the program, expanding the RRP appears to have “very little financial risk,” as every recipient of RRP funds will become a contributing resident.
“In this regard, the redirection of our traditional $10,000 incentive for new job creation reduces the risk of receiving little to no value from incentivizing a pool of non-resident employees,” he said.
Council approval
The council approved the one-time allocation of $500,000 from the Economic Development Fund to support the program. Assistance will be available on a first come, first served basis for an 18-month period or under the funds are exhausted, whichever comes first.
“This would, minimally, represent 50 new homeowner households or, at maximum, 200 new residential tenants,” Wood said. “For proforma purposes, BDA estimates 100 new residents at a cost of $5,000 each vs. Bartlesville’s historical job-creation incentive (with or without capturing a resident) of $10,000 per job.”
Looking ahead
“The Residential Recruitment Program was an innovative way to address issues we saw as limiting factors to the community’s growth in 2020 and continues to be a tool that we can now use to help our primary industries deal with a growing labor shortage,” Wood said. “We anticipate the program will continue to work as well as it has in the past and will provide future opportunities as well.”
Wood said the expanded program creates the potential for calls for the BDA’s participation in other non-core, mission-critical activities in the future.
“When this occurs, and we believe it will, BDA will evaluate these additional opportunities using the same criteria underlying the Resident Recruitment Program: Does the financial analysis of any proposed usage of the Economic Development Fund reasonably support BDA’s overarching goal of a positive, direct net benefit to the city’s sales tax revenue.”
More information
Due to the program expansions and a likely increase in applications, the Bartlesville Chamber of Commerce has agreed to take over the administrative duties of the program. Employers that would like to submit the names of applicants may do so and obtain more information from the BCC.
*”Primary employers” are defined as “enterprise bringing new revenue into the BDA service area with a minimum of half of the revenues coming from sales outside our service area or from local sales that would otherwise be transacted outside the area and consistent with the Oklahoma Department of Commerce qualifying NAICS codes specified under the Oklahoma Quality Jobs program.”