The Cranston City Council voted Monday to submit a redesignation application to the State of Rhode Island Enterprise Zone Council that would allow local businesses to take advantage of tax credits for expansion and job creation.

“This is a job creation bill. It costs nothing to the City of Cranston to do this,” said Councilman Michael Favicchio. “This is such a simple, easy way to promote some job growth in the city. We’re just taking advantage of a program and making it available in the city.”

The Council voted 7-1 to approve the enterprise zone designation, with Councilman Jim Donahue absent from the meeting and Ward 1 Councilman Steve Stycos voting against the resolution.

“I do not think this is a good economic strategy in that it is not targeted. It takes very scarce public resources and gives them to businesses, some of which may have made those decisions anyway,” he said.

Stycos argues that the types of businesses that would benefit from the enterprise zone are medium to large businesses that are going to expand or hire additional employees regardless of the tax credit.

“I think those businesses were probably going to do that anyway. We shouldn’t be using money to give to them when we have such needs in our schools and our libraries and elsewhere in our community,” he said.

Favicchio countered that making that assumption is unfair, especially because the enterprise zone targets distressed areas of the city. The enterprise zones currently in place are no different from when the program was initially instated in the city years ago. The largest section is the Elmwood Enterprise Zone, which covers the Elmwood-Wellington corridor. The second, the Arlington Enterprise Zone, includes the Garfield Avenue and Cranston street areas, with Niantic Avenue serving as a natural boundary. The final section, the Fields Point Enterprise Zone, is much smaller, and includes a small portion of the city on the Cranston-Providence border, where Johnson & Wales University is located.

“I would venture to say that not every doctor’s office, law office or accountant’s office are all doing extremely well in this economy. They’ve all suffered decreases in income. I think they do need incentive because they need to rehire or retrain people; this is the kind of bill that we need,” he said.

The city’s Department of Economic Development also supported the resolution. Director of Economic Development Larry DiBoni explained that applicants for the program go through the city, which then forwards the request to the State Enterprise Zone Council. The council forwards a letter of good standing to the State Division of Taxation and the business is then approved or denied for the program. This process happens each year, and the tax credit is only granted if the business proves that they are solvent and profitable, and have fulfilled the expansion or job creation requirements. It is incumbent upon the Enterprise Zone Council to follow up to ensure applicants are meeting those requirements. That was a major concern for Councilman Richard Santamaria, who wanted to ensure that applicants were being followed up with.

“I want to make sure if we’re handing out tax incentives that there’s meaningful job creation with it,” he said.

He approved the resolution, as did Councilman Emilio Navarro.

“It’s something that has to be done in order to invite businesses or have businesses look at these depressed areas,” he said.

Navarro did express concern, however, that of a lengthy list of Enterprise Zone beneficiaries, only a handful was from Cranston. DiBoni assured him that his department is working to reach out to more businesses. Just over two years ago, they did a direct mailing to eligible businesses, and the staff at Economic Development continues to meet with owners to explain their eligibility.

“Just because you sit in an enterprise zone doesn’t mean you’re automatically enrolled in the program,” DiBoni said, explaining that it is incumbent upon the business to apply.

In other Council news, a resolution sponsored by Favicchio was unanimously approved, giving the green light to the Berkshire Group to assist in developing cost-saving strategies for the city. Berkshire has worked with businesses, universities and municipalities across the country to help them find potential savings. There is no upfront cost to the city, but if any recommendations are implemented, the consulting group takes 10 percent commission on the savings generated only.

“It’s strictly incentive based only compensation,” Favicchio said. “With the knowledge that they have of many cities around the country...I think it would be very helpful in our strategy in dealing with the budget process. It’s strictly a fact finding mission.”

Favicchio said the company, now that it has the blessing of the City Council, could be ready to present it findings as soon as the next City Council Finance Committee meeting in February.