OLDSMAR — This city has paid $554,000 of the $3.1-million the Nielsen Co. has received over the past six years to create new jobs in Pinellas.
But now — amid news that foreign contractors are reporting to work at Nielsen even as local residents are being laid off — some Oldsmar officials would like to close the city's checkbook.
"If there's a way to not pay them incentives because they are doing something wrong, we will certainly take that approach," Mayor Jim Ronecker says.
Nielsen says it has done nothing wrong and has followed every rule.
"Nielsen has been a major contributor to Oldsmar and the Tampa Bay area," bringing a $130-million facility and millions of payroll dollars to the area, said Karen Watson, Nielsen's chief communications officer.
A Pinellas County official agrees that Nielsen has met terms of its agreements with the city, county and state. Still, the layoffs and the presence of foreign contractors from India-based Tata Consultancy Services give some Oldsmar officials heartburn.
That wasn't what they had in mind years ago when they approved two incentives designed to keep Nielsen from moving from Pinellas to Atlanta.
"We're very disappointed with Americans losing their jobs to foreigners, especially with the economy the way it is," says Ronecker, who has been meeting with Nielsen representatives.
And in a twist that is legal but not popular with Oldsmar officials, Nielsen has submitted a reimbursement claim to the state for creating some jobs now filled by foreign contractors. If state officials approve Nielsen's 2007 tax refund claim under Florida's Qualified Target Industry program, Oldsmar's share of the payout would be $11,666.
A county official says QTI agreements allow companies to count contractors in requests for local support because businesses routinely contract out work such as cleaning, security or human resources.
"Unfortunately, when these contracts were written, they weren't even thinking about outsourcing," Ronecker says. "They didn't have the foresight to see how this would turn out."
And Ronecker says Nielsen officials can't give him a satisfactory two-sentence answer to this question: "If you are firing American workers and bringing in Indian workers at the same pay, how does that benefit you?"
The question, Watson says, is not one about using either Tata or Nielsen employees. Rather, she said, the company benefits from using both. "Our employees in Oldsmar are the majority of the workforce and we value their expertise," she said. "Our partners at TCS have a deep technical expertise in special areas required to make our business as successful as it needs to be."
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In 2003, the Nielsen Co., formerly known as Nielsen Media Research, consolidated several North Pinellas offices and began moving 1,233 existing jobs to a new 475,000-square-foot high-tech facility in Oldsmar.
To help with the transition, the city, county and state pledged money through the Qualified Target Industry program, which is used to attract or retain desirable businesses.
To qualify for full QTI reimbursement, Nielsen had a target of creating 600 jobs over four years. Maintain fewer jobs than the target — as the company did the past three years — and the reimbursement was less.
Pinellas County and Oldsmar, but not the state, also pledged money through a separate Job Creation Incentive program to reward Nielsen for creating "high wage" jobs paying at least 150 percent of the county's prevailing wage each year. In 2006, the most recent with data available, the prevailing wage was $36,690.
So far, Oldsmar has paid Nielsen $158,764 in QTI money and $395,804 through the Job Creation Incentive program. But city officials started grumbling after Nielsen let go of 240 Tampa-area employees last year, including many in Oldsmar. In mid April, the company said the Oldsmar location was losing another 110 positions.
Oldsmar currently has 1,700 workers on-site, Watson said. About 200 of those work for Tata, including 50 former Nielsen employees, she said. And 137 of the 200 Tata employees, she said, replaced other contract workers — not Nielsen employees.
But former Nielsen systems administrator Kristie Otto, laid off in October, says most workers who lost jobs in her round of layoffs were Nielsen workers, not contractors.
In late September, Mitchell Habib, executive vice president of global business services, spoke with Nielsen information technology employees by conference call, she said.
Habib told them the company was re-evaluating departments and looking at outsourcing, Otto said, but that only the desktop support group was likely to be outsourced soon.
Otto, 33, of Lutz didn't work in desktop support, she said, but within 10 days she and others in a variety of positions had lost their jobs. A few were contractors, she said, but most were Nielsen employees. "I was devastated," she wrote in an e-mail. She worried about finding a job and health insurance. "I was seven months pregnant and showing."
At an Oldsmar City Council meeting this month, most council members were concerned the QTI agreement allows Nielsen to count positions filled with contractors as new jobs.
A state audit of Nielsen's application for a 2007 QTI tax refund is under way, Ronecker said, and the city will continue looking into the incentives. "The first thing we're doing is trying to take out some of the ambiguities in the contract," Ronecker said, "and verify that what they are giving us is up to speed."
Watson says Nielsen "absolutely" has met the criteria for the QTI tax refund in Oldsmar.
Initially, she said contracted positions were not included in Nielsen's 2007 QTI claim. But the refund claim lists 1,730 jobs and Watson had said 200 of the 1,700 workers on site are contractors. When asked about that, she said contractors had been included.
Pinellas County Economic Development Director Mike Meidel said Nielsen has not included contractors toward the county's Job Creation Incentive grant so far and has met the program's criteria. He said the incentive agreement, as in the QTI agreement, allows Nielsen to be reimbursed for jobs filled by contracted workers if they work on site.
Oldsmar officials don't like that idea. But unlike the QTI program, which expires after the payment in process, the city's obligation under the Job Creation Incentive program will continue. A grant of $144,712, half the real estate taxes Nielsen paid to Oldsmar in 2007, is in the works.
And with six more years left in the agreement, Oldsmar could be handing half the real estate taxes Nielsen will pay to the city back to the company through 2013.