Barnstead Int'l CEBA AppMEMORANDUM
April 28, 2003
TO:The Honorable Mayor and City Council Members
FROM:Michael C. Van Milligen, City Manager
SUBJECT:Barnstead International
Community Economic Betterment Account (CEBA) Application
Barnstead International has announced a proposal to expand the Dubuque operations
on Kerper Boulevard by transferring product and jobs of Every Ready Thermometer
Company (ERTCO), a manufacturing leader in thermometry instrumentation. Barnstead
International will increase employment by 20 positions, and retaining their existing
employees.
The expansion is conditioned on the approval of a State of Iowa CEBA application on
behalf of the company. As required by the CEBA program, the application requires a
commitment of City funds to the project.
Economic Development Director Bill Baum recommends City Council authorization to
submit a CEBA application for a $60,000 partially forgivable loan on behalf of Bamstead
International, with a commitment of $20,000 in local matching funds from UDAG funds
budgeted for economic development purposes.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
William Baum, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
April 28, 2003
TO:Michael Van Milligen, City Manager
FROM:Bill Baum, Economic Development Director
SUBJECT:Barnstead International
Community Economic Betterment Account (CEBA) Application
INTRODUCTION
This memorandum presents for City Council review and approval a resolution authorizing
the submission of a Community Economic Betterment Account (CEBA) program application
to the Iowa Department of Economic Development on behalf of Barnstead International, a
national manufacturer of laboratory equipment and dental products.
BACKGROUND
Bamstead Intemational has announced a proposal to expand the Dubuque operations on
Kerper Boulevard by transferring product and jobs of Ever Ready Thermometer Company
(ERTCO), a manufacturing leader in thermometry instrumentation. Bamstead International
will increase employment by 20 positions, and retaining their existing employees.
The expansion is conditioned on the approval of a State of Iowa CEBA application on
behalf of the company. As required by the CEBA program, application requires a
commitment of City funds to the project.
DISCUSSION
Over the next two years, Barnstead International will employ 20 new employees averaging
$34,500 per year. To help fund this expansion, the Company has requested a partially
forgivable CEBA loan of $60,000.
The Company will be investing $447,495 in relocation expenses, equipment, and training
costs. Additionally, the cost to terminate an existing lease and provide severance at New
Jersey is $1,200,000.
City assistance as public match for the CEBA application is required, and is proposed to be
$20,000 from the City's UDAG account. The Company is also asking for Enterprise Zone
(EZ) benefits through the City and State. No other City funds will be provided through EZ.
The CEBA application is in the process of being completed. Attached are relevant pages
from the application, as well as a listing of positions, wages, and benefits.
RECOMMENDATION
I recommend that the City Council authorize the submission of a CEBA application for a
$60,000 partially forgivable loan on behalf of Barnstead International, with a commitment of
$20,000 in local matching funds.
This project is consistent with the City's goals to expand local business, increase the
number of higher wage jobs and further diversify our economic base.
ACTION STEP
The action step for the City Council is to adopt the attached resolution.
attachment
F:\USERS\WBaum\Gen ED\Barnstead International\MEMO ON CEBA APP.doc
RESOLUTION NO. 154-03
A RESOLUTION AUTHORIZING THE FILING OF A COMMUNITY
ECONOMIC BETTERMENT ACCOUNT (CEBA) APPLICATION ON
BEHALF OF BARNSTEAD INTERNATIONAL
Whereas, Bamstead International has proposed the expansion of its existing
operations; and
Whereas, the City Council of Dubuque, Iowa has considered said proposal and
has determined that the proposed project will contribute to the local economy through.
the creation of over 20 new jobs for area residents; and
Whereas, the Iowa Department of Economic Development's Community
Economic Betterment Account (CEBA) was 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
Community Economic Betterment Account 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
Community Economic Betterment Account program on behalf of Bamstead
Intemational is approved.
Section 2. That the local match as identified in the application is hereby approved,
subject to the CEBA application approval.
Section 3. That the Mayor is hereby authorized to execute, and the City Manager is
hereby directed to submit said application to the State of Iowa Economic Development
Commission together with such documents as may be required.
Passed, approved, and adopted this 5th day of May, 2003.
Terrance M. Duggan, Mayor
Attest:
Jeanne Schneider, City Clerk
F:~USERS~,WBaum\Gen ED~arnstead Internaflona~Resolutior~ approving CEBA app.doc
SMART IDEA
Michael Blouin, Director
Iowa Department of Economic Development
Application For
CEBA
Financial Assistance
Division of Business Development
Iowa Departmenl of Economic
Development
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 2
August 2002
August 2002
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 3
CEBA Application Table of Contents ......................................................................................................... 2
Introduction ................................................................................................................................... 3
General Instructions ..................................................................................................................... 3
Application Cover Sheet ............................................................................................................... 4
Application Security and Signatures ..............................................................................................5
Required Attachments and Submissions .................................................................................... 6 - 7
Rating and Evaluation for the CEBA Regular Program .................................................................. 8
Rating and Evaluation for the CEBA Venture Component ........................................................... ..9
August 2002
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 4
CoMMuNITY ECONOMIC BETTERMENT Account (CEBA) 1
FINANCIAL ASSISTANCE PROGRAM
Introduction
The purpose of the Community Economic Betterment Account (CEBA) program is to assist
communities of the State with their economic development efforts and to increase employment
opportunities for Iowans by increasing the level of economic activity within the state. The
program structure provides financial assistance to businesses and industries which require
assistance in order to create new job opportunities or retain existing jobs which are in jeopardy.
Also, the program may provide comprehensive management assistance to businesses involved
with the CEBA program. Assistance may be provided to encourage new business start-ups,
expansion of existing businesses, or the recruitment of out-of-state businesses into Iowa.
Although applications are submitted on behalf of businesses, only cities, counties, or
community colleges are eligible applicants. The individuals listed as the applicant contact
person should be prepared to complete paperwork and discuss funded projects for the full
duration of the project, usually three to five years.
A business receiving CEBA funds is required to make available at least 10 percent of the jobs
created to qualified Premise Jobs program participants. To meet the minimum requirements of
this provision, the business shall provide to the area Workforce Development Center, job
descriptions of the positions to be created and certify to the Department that qualified Premise
Job Participants shall receive hidng consideration. In addition, the business is encouraged to
undertake further affirmative action to hire Promise Job participants, such as publicly advertising
job openings. Premise Jobs is a program designed to assist individuals on government
assistance to garner the necessary skills and education for employment opportunities.
General Instructions for Submitting Applications
1)Before completing this form and applying for funds, make sure you have read the CEBA
administrative rules, application rating formulas, and the accompanying instructions.
2)Fill out the application cover sheet and any other required attachments completely. If any
questions are left unanswered or required attachments are not submitted, an explanation
must be included.
3)Only typed applications and business plans will be accepted and reviewed. Send the
odginal and one copy of the completed application form (pages 3-6) and attachments.
4)Use clear and concise language. Any inaccurate information of a significant nature may
disqualify the application from consideration and will certainly delay the review process.
5) Return the completed application form, business plan and any attachments to:
CEBA - Business Development
Iowa Department of Economic Development
200 East Grand Avenue, Des Moines, IA 50309
August 2002
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 5
Return Completed Applications to:
CEBA - Division of Business Development
Iowa Department of Economic Development
200 East Grand Avenue, Des Moines, Iowa 50309
Date Submitted: May 6, 2003
(Please check program component for which you are applying):
Small Business Gap financing x New Business Opportunity
_x_ New Product Development Venture Component Modernization
City or County Sponsoring Application City of Dubuque, Iowa
Mayor or Chairperson Terrance M. Du.q.qan, Mayor
Address City Hall, 50 West 13th Street, Dubuque, Iowa Zip Code 52001
Contact Person Bill Baum Title Economic Development Director
Phone 563 589-4393 Fax 563 589-1733 Email wbaum(~,cityofdubuque.or,q
Ownership Structure and History (Check Applicable Answers):
Corporation x Partnership Sole Proprietorship Limited Liability Co.
Cooperative
New Business Expansion of Existing Business x For Profit x
Not for Profit
Business Receiving Funding Bamstead International
Address 2555 Kerper Boulevard Dubuque, Iowa
Contact Person Brenda Hoefler
Phone 563 556-2241 Fax 563 589-0516
Person Authorized to Obligate Business
Federal ID Number 13-3326802
Zip Code 52001-1478
Title VP of Finance & Operations
Email bkhoefler(~,bamstead.com
Duncan Ross
Webeite www. bamsteadthermoline.com
Funding Information
Total Project Budget $ 447,795 Amount Requested from CEBA $ 60,000
Loan Amount $ 30,000 Forgivable Loan Amount $ 30,000
Spec#y loan and forgivable loan aroaucts. See Chapter 53, Section 261 in the Administrative Rules for maximum funding amount~
The Program is not designed to provide 100% funding for any project and limits assistance based on the type of project submitted.
August 2002
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 6
Security
it is expected that 100% of the award be secured. Acceptable security includes Personal Guarantee,
Corporate Guaranty, UCC Financing Statement, Mortgage on Real Estate or Irrevocable Letter of Credit.
Please list below the secudty to be pledged, the value and position of that security, and the amount owed
(if applicable). If for some reason, this standard is not possible, an explanation must be provided.
Collateral description Corporate Guaranty from parent company, Apoaent
Technolo.qies Company
Note: All awards secured by Personal Guarantees will require a current financial statement from each of
the personal guarantors, which must be attached to the application as an exhibit.
Violations of Law
Has the business been cited or convicted for violations of any laws or regulations (including
environmental or safety regulations? If yes, please explain.
RELEASE OF INFORMATION AND CERTIFICATION
I hereby give permission to the Iowa Department of Economic Development (IDED) to research the
company's history, make credit checks, contact the company's financial institutions, and perform
other related activities necessary for reasonable evaluation of this proposal. I understand that all
information submitted to IDED relating to this application is Subject to the Open Records Law
(2001 Iowa Code, Chapter 22) and that confident'mlity may not be guaranteed. Copies of iowa's
Open Records law and IDED'S administrative rules relating to public records are available from
the Department upon request. I hereby certify that all repreaentafions, warranties, or statements
made or furnished to the IDED 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 he made, directly or indirectly, a false statement in writing for
the purpose of procuring economic development assistance from a state agency or subdivision.
Signature of Company Officer Authorized to Obligate Business
Duncan Ross, President
Signature Type Name and 3-~e
Signature of Mayor or Chairperson Authorized to Obligate City or County
Terranca M. DuR.qan~ Mayor
Type Name and Title
NOTE: IDED will not provide assistance in situations where it is determined 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 by IDED prior to discove~ of the incorrect, false, or misleading
representation, IDED may initiate legal action to recover CEBA funds.
The Department reserves the right to negotiate the amount, terrn, interest rate, security and other conditions of any
CEBA loan or forgivable loan prior to the award.
Augu~ 200?
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 7
._x_ A. Provide a bdef description and history of the Business and describe the proposed project.
The business plan which shall include at a minimum; marketing study, feasibility study,
projected profit and loss statements for three yearn into the future, project budget,
production operations, management structure, personnel needs, description of product
or process, status of product/process development and patent status (if applicable).
C. Supplemental information not included in a business plan as outlined above.
__x_ D. For existing businesses, the business plan shall also include: profit and loss
statements and balance sheet for past three years, schedules of aged accounts
receivable, aged accounts payable, and a schedule of other debts.
_NIA E. Personal financial statements of principal owners and/or those who may be
guaranteeing the debt if other than principal owners.
x F. Community resolution authorizing submission of the application and map indicating
location of project.
x G. List of FTE jobs pledged dudng project pedod with name of position and the starting
wage for jobs to be created and the current wage for existing jobs to be retained.
H. Does business operate any other facilities in Iowa? Yes
location and number of FTE employees at each.
No x If yes, attach
I. Will any current FTE employees lose their jobs if the project does not proceed? Yes
__ No x If yes, attach explanation regarding the number, location and why.
x J. Copies of the company's Quarterly Iowa Employer's Contribution and Payroll Report for
the past year and a copy of the most recent payroll report for one-pay pedod.
x K. Descdpfion of fringe benefits provided by company to employees.
__x_L. Complete project budget on page 6 showing sources and uses for all project funding.
Attach cost estimates and other documentation regarding project financing as needed.
,x M. If Corporation, copy of Corporate Resolution authorizing company officials to execute
application and necessary loan documents, if approved.
x N. Business' Federal Identification Number
,X
O. Has any part of project started? Yes __ No x If yes, attached explanation.
P. Explain the need for the specific type of assistance requested and why state assistance
is needed and can not be obtained elsewhere.
August 2002
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 8
SUMMARY OF PROJECT COSTS AND PROPOSED
FINANCING SOURCES
USE OF FUNDS SOURCES
(Summarize All Sources from Questions 27)
A~ I ~v/rrY COST SOURCE A SOURCE B SOURCE C SOURCE D SOURCE E
1. Land ..
Acquis~t,on I$
2. Site . I
preparab°n/$
3. Building.
Acquisition I $
4. Building ]
Constructiq $
S. Building [ [ 7,500
Remodelin~ $ 7,S00 /
6. Machinery &l / 60,000 20,000 S8,000
EquipmentI $138,000 [
7. Furniture &! ] 23,900
Fixtures ! $ 23,900 /
8. Pe.n~. anent ~
Working ~ $ j
TransiUon Cost I I 178,395 ! 80,000
9. Ot.h. er: . IS 258,395I
Recrmtment I I 20,000
10. Other: $ 20,000
_
f $ 4.4.'7,795 I $ 60,000 $ 20,000 $287,795 $ 80,000
Additionally, the Company cost to terminate lease and provide severance at New 3ersey
facility is $1,200,000.
TERMS OF PROPOSED F~rNANC~NG
I CODE:~E (ihdu~ ail Sources in qu~on 26)AMOU~ TYPE(l) RATE. : TEP~
August 2002'
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 9
Source A: STATE ASSISTANCE (CEBA) $ 60,000 50/50 0% 5 year
Source B: CTrY OF DUBUQUE $ 20~000 loan 0% 5 year
Source C: BARNSTEAD INTERNATIONAL $287~795 Equity
Source D: NORTHEAST lrOWA COf4f4UN~TY COLl.. $ 80,000 3ob Trn
Source E: $
Source F: $
I TOTAL: $447,795
(1) For example: Forgivable Loan, Dired~ Loan, Grant, Equity, e~c.
August 2002
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 10
RATING AND EVALUATION FOR THE
COMMUNITY ECONOMIC BETTERMENT ACCOUNT (CEBA)
REGULAR PROGRAM
The following information is needed from applicants to assist the Iowa Department of Economic
Development in evaluating requests for funding. An existing business plan may suffice for
items below; however, some addenda may be necessary and should be noted on the
documentation checklist form (See Exhibit t). All applications and business plans should
contain clear and concise language. The maximum total score possible is 200 points and
projects that score less than 120 points will not be recommended for funding. The IDED staff
shall evaluate and rank applications on the following criteria:
1)Local effort compared with local resources - Maximum 20 point_~: This includes
assistance from the city, county community college, chamber of commerce, economic
development group, utilities or other local sources, compared to the resources
reasonably available from those sources.
The form of local assistance compared to the form of CEBA assistance requested will be
considered (in-kind, grant, loan, forgivable loan, job training, tax abatement, tax
increment financing, etc.).
2)Community Need - Maximum 10 points. This includes considerations such as
unemployment rates, per capita income, major closings and layoffs, declining tax base,
etc.
3)private contribution compared with CEBA request - Maximum 30 points. The
greater the contribution by the assisted business, the higher the score. Conventional
financing will be considered a private contribution. Contribution in the form of new cash
equity by the business owner will result in a higher score.
4)Comprehensive community and economic development plan - Me=imum 10 point~
A community submitting a comprehensive community and economic development plan
meeting the requirements of 261 - Chapter 80 will receive 10 points.
5) Extra points if small business, as defined by SBA - Maximum 10 points
6) Project impact on the state and local economy which includes the followin,q:
Cost / Benefit Analysis - Maximum 40 points_ This factor compares the amount
requested to the number of jobs to be created or retained as defined in the program rules
and the projected increase in state and local tax revenues. Also considered here is the
form of assistance requested. For example, a forgivable loan will receive a lower score
than a loan.
Quality of iobs pledged - Maximum 40 points_ Higher points to be awarded for higher
wage rates, lower turnover rates, full-time, career-type positions, relative safety of pledged
jobs, health insurance and other fringe benefits offered and paid for by employer, other
related factors.
Augur2002
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 11
Economic impact - Maximum 40 points. Higher points to be awarded for base economic
activities such as greater percentage of sales out of state or import substitution, higher
proportion of in-state suppliers, greater diversity of state economy, fewer in-state
competitors, potential for future growth of industry, consistency with state strategic plan for
economic development for targeted cluster industry development, increased value to
agricultural commodities, degree of utilization of agricultural or value-added technology
from an Iowa educational institution, a project which is not a retail operation, a project
which includes remediation or redevelopment of a brownfield site
7) Final impact score. Sum of project impact scores (maximum 120 points) multiplied by a
reliability factor (as a percent). Measures the feasibility of the business venture, the reliability
of the job creation and financial estimates, the likelihood of success, the creditworthiness of the
business and whether the project would occur without state assistance.
RATING AND EVALUATION FOR THE
COMMUNITY ECONOMIC BETTERMENT ACCOUNT (CEBA)
VENTURE COMPONENT
The following information is needed from applicants to assist the Iowa Department of Economic
Development in evaluating requests for funding. An existing business plan may suffice for
items below; however, some addenda may be necessary and should be noted on the
documentation checklist form (See Exhibit 1). All applications and business plans should
contain clear and concise language. The maximum total score possible is 110 points and
projects that score less than 60 points will not be recommended for funding. The IDED staff
shall evaluate and rank applications on the following criteria:
1)Jobs associated with the project- Maximum 10 points. Factors considered include, but are
not limited to, the number of jobs to be created, if any, or the potential for job creation as a result
of the project, the quality of jobs, wages and benefits.
2)Additional funding sources - Maximum t0 points. The amount of the total project
costs coming from sources other than CEBA Venture funds including, but not limited to,
private equity investment, conventional loans, owners equity investment, or other
acceptable forms of investment as determined by the department.
3)Strength of the business plan - Maximum 60 poipte Factors to be considered, but
are not limited to, a description of the business and the overall industry, the experience
level of the business management team, a description of the product and production
plan, project financial projections, feasibility of the product and project, market
identification and marketing strategy.
4)Potential return on investment of the CEBA Venture award- Maximum 10 points.
5)Potential for future growth of the business - Maximum 5 points.
August 2002
Community Economic Betterment Account (CEBA) Financial Assistance Program Page 12
7)Local financial support- Maximum 10 points. The amount of the total project costs
attributable to local funding sources including, but not limited to, city, county, community
college; chamber of commerce, economic development groups, utilities or other local
sources compared to the resources reasonably available from those sources.
Comprehensive community and economic development plan - Maximum 5 points.
A community submitting a comprehensive community and economic development plan
meeting the requirements of 261 -Chapter 80 will receive five extra points.
For more information, see General Program Information - CEBA Administrative Rules, Economic
Development [261], Chapter 53, Community Economic Betterment Program, in the Iowa
Administrative Code, located at the following web site link:
http ://www. leg is. state, ia. us/lAC, htm I
August2002
Headcount Requirements to relocate ERTCO to Barnstead International
Position Salary .Benefits Benefits%
Mfg. Hourly Employees
Mfg. Position 27,500 11,423 41.5%
Mfg. Position 27,500 11,423 41.5%
Mfg. Position 27,500 11,423 41.5%
Mfg. Position 27,500 11,423 41.5%
Mfg. Position 27,500 11,423 41.5%
5 Mfg. Positions 137,500 57,113 41.5%
Salaried Employees
Product Manager 60,000 17,240 28.7%
Marketing Anaiyst 40,000 13,660 34.2%
Calibration/QA 27,500 11,423 41.5%
Calibration/QA 27,500 1 'i ,423 41.5%
CaIibration/QA 27,500 11,423 41.5%
Regulatory Affairs 40,000 13,660 34.2%
Production Supervisor 40,000 13,660 34.2%
Buyer - Purchasing 40,000 13,660 34.2%
Mfg. Eng. 45,000 14,555 32.3%
Customer Service 27,500 11,423 41.5%
Customer Service 27,500 11,423 41.5%
Finance/Administration 35,000 12,765 36.5%
Human Resoumes 35,000 12,765 36.5%
1 position TBD 40,000 13,660 34.2%
1 position TBD 40,000 13,660 34.2%
15 Salaried Positions 552,500 196,398 35.5%
Total Headcount Additions
20 Positions 690,000 253,510 36.7%
Average 34,500 12,676 36.7%
Benefits - All positions will be eligible for Bl's generous benefits program including:**
Health Insurance (including vision) - Recognized as one of Dubuque's finest plans.
Dental Insurance
Defined Benefit Pension
401K - Company Match 50% on first 6% of earnings
Life Insurance
Long Term Disability
Accidental Death & Dismemberment
Long Term Care Insurance
College Savings Plan
ESPP
Medical Flexible Spending Account
Dependant Care Flexible Spending Account
Bonus Plan - Salaried Positions Only **
City Manager's Office
City Hall
50 West 13ffi Street
Dubuque, Iowa 52001-4864
(563) 589-4110 office
(563) 5894149 fax
ctymgrScityoffiubuque.org
April 28, 2003
Mr. Neal Johnson
U.S. Army Corps of Engineers - Regulatory Branch
Rock Island District
P.O. Box 2004
Rock Island, IL 61204
RE:Southwest Arterial Addendum to 1999 EA
Dubuque County
Iowa DOT Project No. STP,U-2100(627)--70-31
Dear Mr. Johnson:
This letter is in response to your concerns raised during a conference call with HDR on
Friday, April 25, 2003, regarding the City of Dubuque's definition of "reasonably
foreseeable" as used in the February 6, 2003, DMATS resolution. The DMATS
resolution states:
"the Northwest Arterial south extension to the Southwest Arterial is
desirable and in the long-range transportation plan but is not financially
attainable in the reasonably foreseeable future."
Stated in years, the City of Dubuque defines "reasonably foreseeable" as 15 years or
more.
Sincerely,
Michael C. Van Milligen
City Manager
MCVM:vjd
CC:Mayor Terry Duggan
Dubuque City Council
Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Mike Koch, Public Works Director
Bill Baum, Economic Development Director