Community Benefit Agreements (CBAs) have emerged as a meaningful tool in the toolkit of community planning and local economic development. These agreements are cocreated through a synergetic and collaborative process between project developers and community representatives, outlining specific benefits that the developer commits to providing in exchange for the community’s support of the project. Investing in community-identified critical needs contributes to community capacity and resiliency, which increases the community’s ability to host a qualified workforce and business support services – supporting the business over its lifetime of operations. These agreements can be used on private and public land projects, or in conjunction with projects not captured within traditional tax generation systems. This allows businesses to demonstrate a clear public benefit in exchange for tax incentives, serving the broader interests of society.
What is a CBA?
A community benefit agreement (CBA) outlines how a project will function within a community and support its wellbeing through investment in direct benefits. Benefits are cocreated between a business or project owner and local representatives from each community it impacts. This process is intended to be dynamic and engaging, guiding the business’ community investment based on locally identified needs.
CBAs frequently address community resilience and capacity to host a qualified workforce and related business services. The CBA focus of value alignment and community building can reduce public opposition to large scale projects, increase community support, and earn a social license to operate – reducing permitting barriers and positively impacting project economics.
Who initiates a CBA?
A community benefit agreement can be initiated in different ways:
- By Community: A community may seek a specific project and initiate the process with a potential developer. This may be a part of their strategic plan for economic development with desired benefits.
- By Government: A governmental jurisdiction may add CBA’s (mandatory or voluntary) into project permitting applications, offering preference points during permit review and ranking process. Permitting jurisdictions may also adopt community benefit ordinances to mandate CBAs and prioritize benefits.
- By Project Owner: A project owner may voluntarily initiate a CBA with the community to build good will and increase community capacity to host workforce.
Who Benefits?
Agreements are co-created between business and community representatives, driven by community priorities.
Potential Industry Benefits
-
- Value alignment
- Cultivate community support
- Reduce hurdles in local permitting
- Increase recruitment and retention
Potential Community Benefits
-
- Align industry values with community values
- Sales sharing and funding local initiatives
- Economic and business development
- Address needs - hospital/childcare/housing/roads
Characteristics of CBAs
These agreements can be simple or complex, scalable, and utilized on both private & public lands projects.
- They are rooted in a collective, collaborative and participatory process between the business owner and affected communities.
- Plans are individualized for local differences.
- All participants agree to emphasize community wellbeing and project sustainability, with mutual benefits, to create a symbiotic relationship.
- Benefits may be financial and/or non-financial.
- Financial benefits focus on money in the form of taxes, royalties, and payments to towns, counties (i.e. to fund initiatives).
- Non-financial benefits are more comprehensive and include civil and community infrastructure, workforce and economic development,housing, education, and emergency response (fire, EMS, etc.).
- Overly detailed CBAs might constrain a project.
Sample Provisions
Examples of provisions in real-life agreements:
- For every ounce of gold the mine sells, it deposits $1 into a designated community foundation account for critical needs.
- A solar project agreed to fund six town initiative accounts totaling $1.5 million to support community-identified priorities.
- An oil refinery will provide youth employment and technical skill-building programs.
- A sports arena agreed to construct 100-160 affordable housing units.
- Community representatives agreed to provide public support for the project.
Considerations
- Community benefit agreements created prior to jurisdictional permit approval can be integrated into the County or Town development agreement with CBA responsibility transferring with project ownership.
- Implementing the agreements with projects can ensure direct benefits necessary to increase community capacity through community infrastructure development. Public land projects, and those receiving tax abatements, may strain communities lacking capacity to meet basic critical needs (emergency response services, childcare, housing, etc.). Research has shown this is true in disenfranchised urban, rural, frontier and Tribal communities. If higher demands are placed on civil and community infrastructure, without additional revenue streams to cover their costs, these projects may negatively impact the safety and quality of life for locals – including the industry workforce.
- A community benefit plan (CBP) is not to be confused with a community benefit agreement (CBA). CBPs are created by the project owner, frequently as a requirement to apply for federal funds. There is no federal accountability for CBPs to be co-developed with communities, nor is there a duty to fulfill benefits.
- A desired outcome of community benefit agreements is mutual and reciprocal support for sustainability between a project and host community. The community benefit agreement must be co-created to achieve this outcome, requiring meaningful engagement between the project owner and the community. It is a participatory process that could be lengthy and where a skilled, unbiased facilitator may be beneficial.
- Towns and counties can prepare for, and support, the cocreation of CBAs with future projects by keeping strategic development plans current. A strong vision and value statement, defining their culture, values, goals, and direction, will promote collective and targeted efforts.
- State-level guidance may support local jurisdictions in creating comprehensive CBAs that meet critical community identified needs - such as business support services, infrastructure (social and civil), education, social programs, and emergency response - through establishment of various mechanisms such as sales sharing, product sharing, foundation or initiative funding and more.
Additional economic and community development resources on community benefit agreement, permit ranking, and energy development are available within this education series through the Extension Library, searchable by author name: https://extension.unr.edu/publications.aspx
