Strategic Investment Program adds 4,200+ jobs to OKC
SIP funds have helped qualified companies like GE Oil & Gas, Continental Resources and Centek increase their capital investment and create jobs in Oklahoma City.
To help employers add more jobs to the Greater Oklahoma City region, Oklahoma City uses its groundbreaking Strategic Investment Program (SIP), a discretionary incentive fund designed to help companies that are looking to expand or locate their operations in Oklahoma City. The SIP is modeled after the state’s well-known Quality Jobs Program in that it provides qualifying companies who meet certain annual wage and new payroll/employment thresholds with cash payments. The program also ensures accountability and transparency through a pay-for-performance model, meaning companies only receive funding if they meet their goals.
The SIP fund was created as part of the voter-approved 2007 General Obligation bond program, and since that time it has created more than 4,200 jobs in Oklahoma City. Companies who have used the fund have invested an estimated amount of $929 million in capital investments within Oklahoma City.
How does the program work?
In order to receive SIP funds, a company must meet strict criteria. Qualifying applicants must create new direct jobs within the limits of Oklahoma City. Those jobs must be primary, meaning that the goods and services are primarily sold outside the state of Oklahoma. The jobs must meet qualifying average wage thresholds, which is 100 percent of the Oklahoma City Metropolitan Statistical Area’s average wage. The company must provide 50 percent of the employee health care benefits, and the company must create at least 50 full-time jobs with an annual new payroll equal to or greater than $1.75 million.
In order to qualify for incentive funds, companies must submit corporate financial information for scrutiny, and calculations are done in order to make sure the city “gets its money’s worth” on its investment.
How does a company receive funds?
The funds are dispersed on an annual basis and only after the company meets their previously agreed-upon wage and job creation goals. If a company qualifies with the program guidelines and meets their wage and job creation goals, incentive funds can be used to pay for capital expenses like site acquisition, construction, renovation, engineering, design and equipment. The program is pay-for-performance – no funds are released until companies prove they have fulfilled previously agreed-upon requirements.
How is the SIP program funded?
A portion of the 2007 General Obligation Bond approved by the voters of OKC in 2007 ($75 million of the $835.5 million package, or less than 9 percent) was dedicated to funds used to establish the SIP program. Since its creation, $64.5 million has been set aside for SIP projects, and $45 million has been made in payments. Companies continue to meet their obligations in order to receive the remaining payments.
See the original article in CityScape.