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Hormel Foods Corporation/Progressive Processing, LLC_IEDA Application Copyrighted September 16, 2019 City of Dubuque Action Items # 2. ITEM TITLE: Hormel Foods Corporation - lowa Economic Development Administration Application SUMMARY: City Manager recommending approval of the submission of a Business Financial Assistance Application to the lowa Economic Development Authority on behalf of Hormel Foods Corporation and Progressive Processing, LLC for the proposed expansion of its operations in Dubuque. RESOLUTION Authorizing the filing of an application with the lowa Economic DevelopmentAuthorityfor business financial assistance on behalf of Hormel Foods Corporation and Progressive Processing, LLC SUGGESTED DISPOSITION: Suggested Disposition: Receiveand File;Adopt Resolution(s) ATTACHMENTS: Description Type Hormel IEDAApplication-MVM Memo City Manager Memo Staff Memo Staff Memo Application to State Supporting Documentation Resolution of Approval Resolutions Dubuque THE CITY OF � uI�AaMca cih DuB E � � I � � I Maste iece on the Mississi i Zoo�•zoiz•zois YP pp zoi�*zoi9 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: lowa Economic Development Authority Business Financial Assistance Application for Hormel Foods Corporation and Progressive Processing, LLC DATE: September 12, 2019 Economic Development Director Jill Connors recommends City Council approval of the submission of a Business Financial Assistance Application to the lowa Economic Development Authority on behalf of Hormel Foods Corporation and Progressive Processing, LLC for the proposed investment of approximately $13 million for the expansion of its operations in Dubuque. The proposed project would add 58 jobs and promote the City's goal of retaining and expanding business to add to the economic base. Progressive Processing, LLC, located in Dubuque, lowa, is a wholly owned subsidiary of Hormel Foods Corporation. The plant officially opened on January 25, 2010, when it produced its first run of Hormel0 Compleats0 microwave meals. Along with microwave meals, the plant also runs a line of canned chunk chicken, and after an expansion in 2015, the plant now also produces SPAMO and Bacon Bits. The company currently employs 340 people at the Dubuque facility. The company is submitting an application to the State of lowa for Investment Tax Credits and Sales Tax Refund of $575,976. A local match is required and is based upon the expected increase in the company's local property taxes — more specifically, 45% of the increased value over five years. The exact figure remains to be determined and will be included in a proposed Amendment to the Development Agreement the City currently has with Progressive Processing, LLC. If the company receives an award from the lowa Economic Development Authority, that contract will be contingent upon further approval of the TIF rebate extension by the City Council. I concur with the recommendation and respectfully request Mayor and City Council approval. ic ael C. Van Milligen MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manager Cori Burbach, Assistant City Manager Jill M. Connors, Economic Development Director 2 Dubuque Economic Development Department THE CITY OF � 50 West 13th Street All•AmericaCity Dubuque,lowa 52001-4864 U� � "A¶ONA""`"�'�"� Office(563)589-4393 , I I�I TTY(563)690-6678 http://www.cityofdu buq ue.org 2007*2012*2013 Masterpiece on the Mississippi 2oi�*Zoi9 TO: Michael C. Van Milligen, City Manager FROM: Jill M. Connors, Economic Development Director SUBJECT: lowa Economic Development Authority Business Financial Assistance Application for Hormel Foods Corporation and Progressive Processing, LLC DATE: September 9, 2019 INTRODUCTION This memorandum presents for City Council review and approval a resolution authorizing the submission of a Business Financial Assistance Application by Hormel Foods Corporation and Progressive Processing, LLC to the lowa Economic Development Authority (IEDA). BACKGROUND Progressive Processing, LLC, located in Dubuque, lowa, is a wholly owned subsidiary of Hormel Foods Corporation. The plant officially opened on January 25, 2010 when it produced its first run of Hormel0 Compleats0 microwave meals. Along with microwave meals, the plant also runs a line of canned chunk chicken, and after an expansion in 2015, the plant now also produces SPAMO and Bacon Bits. The company currently employs 340 people at the Dubuque facility. DISCUSSION Subject to State of lowa and City of Dubuque approval, Hormel Foods Corporation and Progressive Processing, LLC are proposing to expand the Dubuque Progressive Processing facility to add capacity in SPAMO production. The company would invest approximately $13 million in remodeling and machinery/equipment. The company is proposing to create 58 new jobs with this expansion, 14 of which would qualify for the IEDA High Quality Jobs Incentive Program. The company is submitting an application to the State of lowa for Investment Tax Credits and Sales Tax Refund of$575,976. A local match is required and is based upon the expected increase in the company's local property taxes — more specifically, 45°k of the increased value over five years. The exact figure remains to be determined and will be included in a proposed Amendment to the Development Agreement the City currently has with Progressive Processing, LLC. The company is requesting an extension of the TIF rebates in the Development Agreement if this application is approved by the lowa Economic Development Authority. The rebates would not exceed the required local match. If the company receives an award from the IEDA, that contract will be contingent upon further approval of the TIF rebate extension by the City Council. RECOMMENDATION/ ACTION STEP I recommend that the City Council approve the Economic Development Assistance Application on behalf of Hormel Foods Corporation and Progressive Processing, LLC for the proposed investment of approximately $13 million for the expansion of its operations in Dubuque. The proposed project would add 58 jobs and promote the City's goal of retaining and expanding business to add to the economic base. z Prepared by: Jill Connors, Economic Development, 50 W. 13th Street, Dubuque IA 52001, 563 589-4393 Return to: Jill Connors, Economic Development, 50 W. 13th Street, Dubuque IA 52001, 563 589-4393 RESOLUTION NO. 342-19 AUTHORIZING THE FILING OF AN APPLICATION WITH THE IOWA ECONOMIC DEVELOPMENT AUTHORITY FOR BUSINESS FINANCIAL ASSISTANCE ON BEHALF OF HORMEL FOODS CORPORATION AND PROGRESSIVE PROCESSING, LLC Whereas, Hormel Foods Corporation and Progressive Processing, LLC have proposed making a Thirteen Million Dollar ($13,000,0.00.00) investment for the addition of production capacity in the City of Dubuque, Iowa; and Whereas, the City Council of the City of Dubuque, Iowa has considered the proposal and determined that the proposed project will contribute to the local economy through the creation of fifty-eight (58) full-time jobs in the City, fourteen (14) of which qualify for the Iowa Economic Development Authority Business Financial Assistance Program; and Whereas, financial assistance from the Iowa Economic Development Authority is designed to assist in the economic development efforts of local jurisdictions; and Whereas, the City of Dubuque, Iowa is eligible to apply for funding from the Iowa Economic Development Authority Business Financial Assistance Program. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the filing of an Application for participation in the Iowa Economic Development Authority's Business Financial Assistance Program on behalf of Hormel Foods Corporation and Hormel Foods Corporation and Progressive Processing, LLC, a copy of which is attached hereto, is hereby approved. Section 2. That the Mayor is hereby authorized to execute and the City Manager is hereby directed to submit the Application to the Iowa Economic Development Authority together with such other documents as may be required. Passed, approved, and adopted this 16th day of Septemb:r, 2019. Roy D. BI, Mayor Attest: Kevtfi S. Firnstahl, CRY- Clerk SECTION H Certification & Release of Information 1. Are there any judgments or court actions completed or pending against the applicant entity, or any current or prospective officer, principal, director, or owner? ® Yes ❑ No 2. Has any current or prospective officer, principal, director, or owner been accused or convicted of any wrongdoing or crime, other than a simple misdemeanor? ❑ Yes ® No 3. Have there been any current or past bankruptcies on the part of the applicant entity (or predecessor entities), or on the part of any current (or prospective) officer, principal, owner or in any business dealings of current (or prospective) officers, principals, or owners of the applicant entity? ❑ Yes IZ No 4. In the last five years have there been, or are there currently any investigations of potential violations of public health, safety (including workplace safety) or environmental laws by the applicant entity, or any current or prospective officer, principal, director, or owner'? ® Yes ❑ No 5. In the last five years have there been, or are there currently any violations of antitrust laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes ® No 6. If yes to any of the above, please provide additional explanation: 1. From time to time, Hormel Foods Corporation has been a party to litigation. In a small subset of these cases, a judgment may have been issued against the Company. To the extent these judgments are material, they have been disclosed in the Company's public 10-K filings as required by the U.S. Securities and Exchange Commission. 4. From time to time, Hormel Foods Corporation has been subject to investigations relating to potential violations of public health, safety or environmental laws: To the extent these potential violations are material, they have been disclosed in the the Company's public 10-K filings as required by the U.S. Securities and Exchange Commission. I hereby give permission to the Iowa Economic Development Authority (IEDA) to research the Business' history, make credit checks, contact the Business' financial institutions, insurance carriers, and perform other related activities necessary for reasonable evaluation of this application. I also hereby authorize the Iowa Department of Revenue to provide to IEDA state tax information pertinent to the Business' state income tax, sales and use tax, and state tax credits claimed. I understand that all information submitted to IEDA related to this application is subject to Iowa's Open Record Law (Iowa Code, Chapter 22), unless specifically marked as confidential section. I understand that IEDA reserves the right to negotiate the financial assistance. I understand this application is subject to final approval by IEDA and the Project may not be initiated until final approval is secured. Furthermore, I am aware that funds will not be disbursed until a contract has been executed and the appropriate terms have been met. I understand that upon execution of the contract and prior to the issuance of a tax credit number or the disbursement of Award Funds, a recipient shall pay IEDA a one-time compliance cost fee in the amount of $500. In addition, if tax benefits are greater than $100,000, the Recipient shall remit to IEDA a compliance cost fee 0.5% of the value of the Tax Incentives claimed pursuant to the contract. The fee will be due and payable upon filing the Recipient's annual tax return for each tax year in which tax credits are claimed under the contract. I hereby certify that all representations, warranties, or statements made or furnished to IEDA in connection with this application are true and correct in all material respect. I understand that it is a criminal violation under Iowa law to engage in deception and knowingly make, or cause to be made, directly or indirectly, a false statement in writing for the purpose of procuring economic development assistance from a state agency or subdivision. For the Business: For the Sponsor(s): Signature 9/16/19 Date Signature Date Gary Jamison, VP & Treasurer Roy D . Buol, Mayor Name and Title (typed or printed) Name and Title (typed or printed) IEDA — Business Financial Assistance Application 12 v.1.28.19 I W,4�� Debi V. Durham, Director lowa Economic Development Aufhordy Business Financial Assistance Application Business Finance - Business Development Division lowa Economic DevelopmentAuthority 200 East Grand Avenue Des Moines, lowa 50309-1819 iowaeconomicdevelopment.com Telephone�. 515348.6153 Email�. businessfinance(d!iowaeda.com Application Instructions To Complete Electronic Form: Clickon TEXT BOX to etltl ta;.T Double clickon YES/NO boxes entl select"Checketl". 1. FUI applicants must complete the Business Financial Assistance Flyplication and attach onlv those additional sections for the components to which the applicant is applying. STATE of IOWA—Financial Assistance Proaram High Quality Jobs Program (HQJ) � Tax Credits ❑ Direct Financial Assistance 2. Before filling out this application Porm, please read all applicable sections of the lowa Code and lowa Administrative Code (rules). https:/iWww.leqis.iowa.qov4aw/administrativeRules 3. Only tvoed or comouter-aenerated applications will be accepted and reviewed. My material change to the Pormat, questions, orwording ofquestions presented in this application will renderthe application invalid and it will not be accepted. 4. Complete the applicable sections of the application fully. If questions are leR unanswered or required attachments are not submitted, an explanation must be induded. 5. Use clear and concise language. Altachments should only be used when requested or as supporting documentation. 6. My inaccurate information of a significant nature may disqualify the application 6om consideration. 7. The following must be submitted to Business Finance at IEDA to initiate the review process: • One original, signed application form and all required attachments • One elec[ronic copy of the application form and all required attachments Facsimile cooies will no[ be acceo[etl. Applications must be submittetl to IEDA Business Finance before 4:00 p.m. on the fourth Montlay ofthe month. Applications will be reviewetl by the IEDA Boartl on the thirtl Fntlay ofthe following month. Public Records Policies During the application process, the information submitted by you to IEDA is exempt from disclosure under the "industrial prospects" exemption found in Section 22.7(8). However, once you receive an award, the industrial prospects exemption no longer applies and all documents submitted and generated during the application and negotiation process become public records under lowa's Open Records Law(lowa Code, Chapter 22), unless 1) The information belongs to one of the classes of records automatically treated as confidential; or 2) You have applied for and received written notice that your information will be treated as confidential. Automatically Confidential Records IEDA automatically treats the following records as confidential and will withhold them from public inspection even without a request for confidential treatment: • Tax Records and Tax Liability Information • Quarterly lowa Employer's Contribution and Payroll Report prepared for the lowa Workforce Development Department • Payroll Registers • Business Financial Statements and Projections (unless those statements are already publicly available elsewhere, e.g., 10-K filings) • Personal Financial Statements Exemptions to the Open Records Law If you wish to have additional information treated as confidential, you must fill out the confidential treatment request form. This form is available by request. Under the Open Records Law, IEDA may lawFully treat certain information as confidential if that information falls within an exemption to the Open Records Law. The following exemptions represent records which may lawFully be treated as confidential under the Open Records law and which are most often applicable to the information submitted to IEDA: • Release of information would give an unfair advantage to competitors — lowa Code Sec. 15.118 • Trade secrets — See lowa Code section 22.7(3), see also lowa Code Ch. 550 • Information on an industrial prospect with which the IEDA is currently negotiating — See lowa Code section 22.7(8) • Communications not required by law, rule or regulation made to IEDA by persons outside the government to the extent that IEDA could reasonably believe that those persons would be discouraged from making them to IEDA if they were made available for general public examination — lowa Code section 22.7(18) Non-Confidential Information Information that is submitted to IEDA as part of the application process or that is contained in a contract for program benefits is generally considered material to the eligibility requirements of the program or to the amount of incentives or assistance to be provided. Such information is generally not given confidential treatment. Such information includes but is not limited to, the number and type of jobs incented, the wage levels for the incented jobs, your company's employee benefit information, and your project budget. Additional Information Available. Copies of lowa's Open Record law and IEDA's administrative rules relating to public records are available from the IEDA upon request. SECTION A Applicant Information Date Application Submitted: 1. Name of Business: Hormel Foods Corporation (Parent Company of Progressive Processing, LLC) 2. Entity Name(s) for contracting (please include all that are involved in proposed project): Hormel Foods Corporation, Progressive Processing, LLC 3. Address: 1 Hormel Place 4. City, State &Zip Code: Austin, MN 55912 5. Contact Person: Kari PollakTitle: Plant Manager 6. Phone: 563-557-4505 Fax: Email: kmpollak@hormel.com 7. FEIN: 41-0319970 Hormel Foods Corporation 8. Please indicate your tax period end date: 10-27-19 9. NAICS Code for primary business operations: 311 10. US DOT Number: 11. Does the Business file a consolidated tax return under a different tax ID number? ❑ Yes (If yes, please also provide that tax ID number) � No a. Is the contact person listed above authorized to obligate the Business? ❑ Yes �No If no, please provide the name and title of a company officer authorized to obligate the Business: Gary Jamison, VP - Treasurer 12. If the application was prepared by someone other than the contact person listed above, please complete the following: Name of Business: Hormel Foods Corporation Address: 1 Hormel Place City, State & Zip Code: Austin, MN, 55912 Contact Person: Jim Fleming Title: Director of Taxes Phone: 507-437-5233 Fax: Email: jdfleming@hormel.com $pO11SOC �IIfOCCT12t1011 (A sponsor organization is a city or county) 13. Sponsor Organization: City of Dubuque Official Contact (e.g. Mayor, Chairperson, etc.): Roy Buol Title: Mayor 14. Address: 50 West 13'h Street 15. City, State &Zip Code: Dubuque, lowa 52001 16. Phone: 563-589-4100 Fax: Email: rdbuol@cityofdubuque.org 17. If IEDA needs to contact the sponsor organization with questions, should we contact the person listed above? ❑ Yes � No, please contact the following person: Name: Jill Connors Title: Economic Development Director Address: City of Dubuque, 50 West 13'h Street City, State & Zip Code: Dubuque, IA 52001 Phone: 563-589-4393 Fax: Email: jilconno@cityofdubuque.org If necessary, please list information on additional sponsors in an attachment. SECTION B Business Information 1. Provide a brief description and history of the Business. Include information about the Business' products or services and its markets and/or customers. Proqressive Processinq. LLC. is a whollv owned subsidiary of Hormel Foods Corporation. located in Dubuaue. lowa. The plant officiallv opened on January 25. 2010. when it produced iYs first run of Hormel�Compleats� microwave meals. Alonq with microwave meals. the plant also runs a line of canned chunk chicken. After an expansion in 2015. the plan now also produces SPAM�and Bacon Bits. Hormel Foods Corporation is a multinational manufacturer and marketer of consumer-branded meat and food products. manv of which are amonq the best known and trusted in the food industrv. The companv eniovs a stronq reputation amonq consumers, retail qrocers, and foodservice and industrial customers for products hiqhlv reqarded for aualitv, taste, nutrition, convenience, and value. Hormel Foods and its' subsidiaries are located in all 50 states throuqh a direct sales force assiqned to offices in maior cities throuqhout the United States. Their efforts are supported bv sales brokers and distributors. Hormel Foods International (HFIC), a whollv owned subsidiary in Austin, has established numerous ioint venture and license aqreements internationallv that include Australia, China, Mexico, Canada, Korea, Japan, Brazil and manv other nations. HFIC exports products to more than fortv countries. The headauarters for Hormel Foods is in Austin, Minnesota alonq with its research and development division and flaqship plant. Companv facilities that manufacture meat and food products are located in lowa, Georqia, Illinois, Wisconsin, Kansas, California, Arkansas, and Colorado. Custom manufacturinq of selected Hormel Foods products is performed bv various companies that adhere to strinqent corporate quidelines and aualitv standards. Hormel Foods has more than 20.000 emplovees. Hormel Foods common stock is listed on the New York Stock Exchanqe under the ticker svmbol HRL. 2. Business Structure: ❑ Cooperative � Corporation ❑ Limited Liability Company ❑ Partnership ❑ S-Corporation ❑ Sole Proprietorship 3. State of Incorporation: Delaware 4. Identify the Business' owners and percent ownership: Hormel Foods Corporation 5. Does a woman, minority, or person with a disability own the Business? ❑ Yes � No 6. Progressive Processinq currentiv has 340 emplovees located in Dubuaue, lowa. Burke Corporation: Nevada (353 employees); Hormel Foods Corporation: Algona (262 employees); Hormel Foods Corporation: Knoxville (199 employees); and Osceola Foods, LLC: Osceola (819 employees). 7. What is the Business' worldwide employment? (Please include employees of parent company, subsidiaries, and other affiliated entities in this figure.) Hormel Foods and subsidiaries emplov over 18,300 emplovees worldwide. Project Information 8. Project Street Address: 1205 Chavenelle Court Project City&Zip Code: Dubuque, lowa 52001 Project County: Dubuque 9. Type of Business Project: ❑ Startup � Expansion of lowa Company ❑ New Location in lowa 10. Does the project site qualify as a"Brownfield" or"GrayField" site? ❑ Yes � No If yes, please explain and document as Attachment A6. 11. Describe the proposed project for which assistance is being sought. (Include project timeline with dates, facility size, infrastructure improvements, proposed products/services, any new markets, etc.) Hormel Foods Corporation ("Hormel"l. Proqressive Processinq's parent companv. oroposes to expand utilization of the Dubuaue facilitv to add capacitv in SPAM�production. The proposal is to move the SPAM�line currentiv in Fremont. Nebraska to Proqressive Processinq. The anticipated proiect completion date is April 2020. 12. Pro'ect Timeline (add additional rows as needed) Beginning Activity Date Activity Completion Date Move Fremont line to Dubu ue Se tember 2019 A ril 2020 13. Has any part of the project started*? ❑ Yes � No If yes, please explain. *For IEDA's purposes, starting the project includes:the start of construction or rehabilitation, the purchase of a building, the execution of a lease, or the installation of equipment to be used in the project. 14. Identify the Business' competitors. If any of these competitors have lowa locations, please explain the nature of the competition (e.g. competitive business segment, estimated market share, etc.) and explain what impact the proposed project may have on the lowa competitor. Hormel Foods and subsidiaries compete domesticallv and internationallv with various companies includinq but not limited to ConAqra Foods. Kraft Foods. Smithfield Foods. Oscar Maver Foods. Carqill Inc.. and Tvson Foods. 15. Will any of the current lowa employees lose their jobs if this project does not proceed? ❑ Yes � No If yes, please explain why and identify those jobs as "retained jobs" in the Project Jobs Section E. 16. Is the Business actively considering locations outside of lowa? ❑ Yes � No If yes, where and what assistance is being offered? 17. Please identify the company project management for the project location and experience. Kari Pollak is the Plant Manaqer and will oversee the proiect. She has 20 vears of experience and tenure with Hormel Foods Corporation. SECTION C Applicant's Project Budget 1. Does the Business plan to lease the facility? ❑ Yes � No If yes, please provide the Annual Base Rent Payment(lease payment minus property taxes, insurance, and operating/maintenance expenses) for three years in the budget below, and only major renovation costs your company expects to incur. Administrative rules require that the lease be in place for a minimum of five years. 2. Please complete the budget below. Include onlv costs the companv plans to incur directiv: Use of Funds Cost Source A Source B Source C Source D Source E Source F Base Rent 3 ears Tenant Im rovements Land Ac uisition Site Pre aration Buildin Ac uisition Buildin Construction Buildin Remodelin $2,515,000 2,515,000 Mf . Machiner & E ui . $9,991,400 9,991,400 OtherMachiner & E ui . $500,000 500,000 Rackin , Shelvin , etc.' Com uter Hardware Com uter Software Furniture & Fixtures Workin Ca ital Research & Develo ment Other TOTAL $13,006,400 $ $ $13,006,400 $ $ $ ' Racking,shelving and conveyor equipment used in distribution center projects only 3. Please complete the chart below with proposed financing for the project (tax benefits should be reflected as indirect financin under#5 below : PROPOSED FINANCING Source of Funds Form of Funds Conditions/Additional I nfo rm ation AmOuM (Loan,Grant, In- Rate and Commitment Include when funds will be Add additional lines as needed Kind, Donation,etc.) Term Status disbursed; If loan,whether payments are a level term, balloon, etc Source A: IEDA (see#4 below) $ Source B: Local Government $ Source C: Business $13,006,400 Com an Funds Source D: Other Source $ Source E: Other Source $ Source F: Other Source $ TOTAL $ 4. Direct financial assistance(loans/forgivable loans) must be secured with acceptable collateral. Please select the type of collateral your company will pledge to secure the IEDA financing, and document its value in Attachment A5.* Explain: No collateral,fundin disbursed at the end of the 5- ear contrad ❑ Irrevocable letter of credit ❑ Dedicated certificate of de osit CD ❑ *The IEDA Board has the final discretion on what collateral will be accepted. 5. Please com lete the chart below with tax credits and other indirect financin ex ected for the roject: TAX CREDITS AND INDIRECT FINANCING Source of Funds Amount Description Investment Tax Credit 500,256 Based on 4% ITC Sales, Service&Use Tax Refund 75,450 Assume 50% of building remodeling subject to 6% sales tax. Research Activities Credit 3%/10% Local Pro ert Tax Exem tion Tax Increment Financing 115,000 Extension of existing TIF agreement with city of Dubu ue 260E Job Trainin Funds 267,214 lowa 260E ro ram In-kind Contribution Other 106,488 lowa New Jobs Tax Credit TOTAL $1,064,408 6. There are three justifiable reasons for providing assistance. Check the box next to the reason why assistance is needed to complete this project. ❑ Financing Gap - A gap exists between the financing required and the financing on-hand and the provision of tax incentives or assistance is necessary to fill the gap. � Rate of Return Gap—The likely returns of the project are inadequate to motivate a company decision maker to proceed with the project even if sufficient debt or equity can be raised to finance the project, and the projecYs risks outweigh its rewards, making the provision of tax incentives or assistance necessary to reduce the projecYs risks. ❑ Location Disadvantage(Incentive)—The business is deciding between a site in lowa ("lowa site") and a site in another state ("out-of-state site") for its project and the cost of completing the project at the out-of-state site is demonstrably lower, making tax incentives or assistance necessary to equalize the cost differential between the two sites. Note: The authority will attempt to quantify the cost differential between the sites. 7. Please provide a brief explanation of the need for assistance.The proposed expansion of the Progressive Dubuque facility is dependent on obtaining desired financial results. We have included anticipated tax incentives into our expansion modeling, which provides the desired results. If, however, the incentives are not granted/approved, locating the expansion in Dubuque becomes less viable. There are three options to meeting the sufficient benefit requirement. These options are detailed in the chart below. Please complete questions 1-3. If your company meets Option 1 or 2, no additional information is required. If you would like to utilize Option 3, please also complete questions 4-6. Option 1 Option 2 Option 3 70% single Coverage 60% Family coverage Moneta E uivalent Total Number of Pay 70% of premium costs Pay 60% of premium costs for Provide medical and pay the Employees in for a standard medical plan, a standard medical plan, monetary equivalent of Option US single coverage. family coverage. 1 or Option 2 in supplemental 201+ $1700 maximum deductible $3750 maximum deductible employee benefits. 50-200 $2500 maximum deductible $5250 maximum deductible Benefits Counted Toward 0-49 $3000 maximum deductible $6000 Maximum deductible Monetary Epuivalent:Medical coverage, Dental coverage, Vision insurance, Life 'In addition, the IEDA will assess the affordabilitv of plans that are pualified under /nsurance, Pension, 401(k) the deductible and premium percentape paid bv the emplover criteria. Plans that (company's Average are not offered at a reasonab/e cast to emplovees will be deemed not pualified contribution, Short-/long-term and the business is not eliqible for benefits under the Hiqh Qualitv Jobs Proqram. disability insurance, Child care services, Other nonwage com ensation 1. How many full-time, permanent employees does your company currently employ within the U.S.?340 at Proqressive Processinq and over 17.000 in the U.S. for Hormel Foods Corporation and subsidiaries. 2. What is the total premium cost for a standard medical plan for single employee coverage? $5,860 or$5,591 a. What portion of this cost is paid by the business? 77% or 84% b. What is the deductible associated with this plan? $ $750 or$2,000 3. What is the total premium cost for a standard medical plan for family coverage? $18.753 or$17,812 a. What portion of this cost is paid by the business? 81% or 88% b. What is the deductible associated with this plan? $2,250 or$4,000 No additional information reauired, in this section, if vour companv meets the reauirement for Option 1 or Option 2 4. Does your company provide additional benefits to full time employees? ❑Yes ❑No If yes, please provide the annual amount offered bythe business, per employee in the chart below: Benefit Annual amount paid by the business er em lo ee : Dentallnsurance—Sin le lan $ Dental Insurance—Famil lan $ Pension Use 3-year average calculated below) $ Retirement Plan - i.e. 401 k Use 3-yearaverage calculated below) $ P�ofit Sha�in Plan (Use 3-year average calculated below) $ Childcare Services $ Life Insurance covera e $ Disabilit Insurance covera e $ Health Savin s Account HSA contribution $ TOTAL $ 5. Does the Business offer a pension plan, 401(k) plan, and/or retirement-plan? ❑ Yes ❑ No If yes, please indicate the amount contributed on a per employee basis by the Business to the plan for the last three years. For 401(k) plans, please provide information on the company match and indicate the average annual match per employee. Year Ending Average Actual Match per Em lo ee $ $ $ $ Three- ear Avera e: $ 6. Does the Business offer a profit-sharing plan? ❑ Yes ❑ No If yes, please indicate total amount paid out each year for the past three years and then, determine the average annual bonus or contribution er em lo ee for that three ear eriod. Year Ending Average Actual Share per Em lo ee $ $ $ $ Three- ear Avera e: $ Notes: 1. A qualified plan must be offered to all full-time permanent employees. 2. If you have multiple health insurance plans,please provide information on each plan. SECTION E Project Jobs 1. List the jobs that will be created and/or retained as the result of this project. (A retained job is an existing job that would be eliminated or moved to another state if the project does not proceed in lowa.) For jobs to be created, include the startinq and final hourly wage rate. For retained jobs, include the current hourly wage rate. Full-Time CREATED Jobs (Add additional rows as needed) Job Title Number of Starting Wage at 36 months CREATED Jobs Hourl Wa e followin the award Production Associate 37 15.92 18.22 Industrial Maintenance Tech 10 22.00 24.25 Qualit Control Auditor 5 15.65 17.95 Production Su ervisor 4 27.5 36.44 Administrative - Clerical 2 16.00 16.50 Total Full-Time CREATED Jobs 58 Full-Time RETAINED Jobs (Add additional rows as needed) Number of Current Hourly JobTitle (AT-RISKjobsonly) RETAINED Wage Jobs Total Full-Time RETAINED Jobs 2. Is the hourly wage rate based on a 40 hour work week, 52 weeks per year? � Yes ❑ No If no please explain: Business Financial Assistance Application — Hormel Foods Corporation and Proqressive Processinq, LLC Page 10 — original redacted from City Council copy, as it contains confidential information SECTION G Attachments Please attach the following documents: A1 Project Plan Please provide an executive summary for your project. This information should include, at a minimum, expanded information about the company's products and services and any other project related information that has not already been described in the application for financial assistance. Please note, a traditional business plan, including an executive summary, market analysis, organization and management structure, marketing and sales management, service and product line narrative, financial projections, feasibility study and patent status, as well as any other relevant information, may be requested by the lowa Economic Development Authority to evaluate the feasibility of this project. A2 Payroll Information (Confidential) • Copies of the Business' Quarterly lowa Employer's Contribution and Payroll Report for the past year. This report should include the monthly employment totals. • A copy of the most recent payroll report for one pay period. The copy of the most recent payroll report for one pay period must be in Excel format and include the following information: o Company name, date of payroll and source of payroll information o Employee name and/or employee identification number o Current hourly wage - do not include bonuses or other benefit values o Indicate if the employee is full time (40 hours per week, 52 weeks per year) or part time. o A sample Excel spreadsheet can be provided by IEDA staff A3 Affidavit that states the Business has not, within the last five years, violated state or federal statutes, rules, and regulations, including environmental, worker safety regulations and antitrust laws, or, if such violations have occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment. A sample affidavit can be provided by IEDA staff. A4 Financial Information (Confidential, unless already publicly available) (Existing Businesses Only) • Profit and loss statements and balance sheets for past three year-ends; • Current YTD profit and loss statement and balance sheet; • Schedule of aged accounts receivable; • Schedule of aged accounts payable; and • Schedule of other debts. A5 Collateral documentation (If requesting direct financial assistance only) A6 Brownfield or GrayField site documentation (if applicable) IEDA—Business Financial Assistance Application 11 v.1.28.19 SECTION H Certification & Release of Information 1. Are there any judgments or court actions completed or pending against the applicant entity, or any current or prospective officer, principal, director, or owner? � Yes ❑ No 2. Has any current or prospective officer, principal, director, or owner been accused or convicted of any wrongdoing or crime, other than a simple misdemeanor? ❑ Yes � No 3. Have there been any current or past bankruptcies on the part of the applicant entity (or predecessor entities), or on the part of any current (or prospective) officer, principal, owner or in any business dealings of current (or prospective) officers, principals, or owners of the applicant entity? ❑ Yes � No 4. In the last five years have there been, or are there currently any investigations of potential violations of public health, safety (including workplace safety) or environmental laws by the applicant entity, or any current or prospective officer, principal, director, or owner? � Yes ❑ No 5. In the last five years have there been, or are there currently any violations of antitrust laws by the applicant entity, or any current or prospective officer, principal, director, or owner? ❑ Yes � No 6. If yes to any of the above, please provide additional explanation: 1. From time to time, Hormel Foods Corporation has been a party to litigation. In a small subset of these cases, a judgment may have been issued against the Company. To the extent these judgments are material, they have been disclosed in the Company's public 10-K filings as required by the U.S. Securities and Exchange Commission. 4. From time to time, Hormel Foods Corporation has been subject to investigations relating to potential violations of public health, safety or environmental laws. To the extent these potential violations are material, they have been disclosed in the the Company's public 10-K filings as required by the U.S. Securities and Exchange Commission. I hereby give permission to the lowa Economic Development Authority(IEDA)to research the Business' history, make credit checks, contact the Business'financial institutions, insurance carriers, and perform other related activities necessary for reasonable evaluation of this application. I also hereby authorize the lowa Department of Revenue to provide to IEDA state tax information pertinent to the Business' state income tax, sales and use tax, and state tax credits claimed. I understand that all information submitted to IEDA related to this application is subject to lowa's Open Record Law(lowa Code, Chapter 22), unless specifically marked as confidential section. I understand that IEDA reserves the right to negotiate the financial assistance. I understand this application is subject to final approval by IEDA and the Project may not be initiated until final approval is secured. Furthermore, I am aware that funds will not be disbursed until a contract has been executed and the appropriate terms have been met. I understand that upon execution of the contract and prior to the issuance of a tax credit number or the disbursement of Award Funds, a recipient shall pay IEDA a one-time compliance cost fee in the amount of$500. In addition, if tax benefits are greater than $100,000, the Recipient shall remit to IEDA a compliance cost fee 0.5% of the value of the Tax Incentives claimed pursuant to the contract. The fee will be due and payable upon filing the RecipienYs annual tax return for each tax year in which tax credits are claimed under the contract. I hereby certify that all representations, warranties, or statements made or furnished to IEDA in connection with this application are true and correct in all material respect. I understand that it is a criminal violation under lowa law to engage in deception and knowingly make, or cause to be made, directly or indirectly, a false statement in writing for the purpose of procuring economic development assistance from a state agency or subdivision. For the Business: For the Sponsorlsl: Signature Date Signature Date Gary Jamison, VP&Treasurer Name and Title (typed or printed) Name and Title (typed or printed) IEDA will not provide assistance in situations where it is determ ined that any representation,warranty, or statement made in connection with this application is incorrect,false, misleading or erroneous in any material respect. If assistance has already been provided priorto discovery of the incorrect,false, or misleading representation, IEDA may initiate legal action to recover incentives and assistance awarded to the Business.