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McKesson Co Expans Finan AsstMEMORANDUM TO: FROM: SUBJECT: December 26, 2003 The Honorable Mayor and city Council Members Michael C. Van Milligen, City Manager McKesson Corporation Expansion Application for Financial Assistance from the State of Iowa The McKesson Corporation is the wodd's largest healthcare services company. The company currently employs 380 persons in Dubuque. The company is proposing to add 74 full time positions in Dubuque, and invest over $5 million in the company's existing facility on Locust Street in downtown. The company has requested State assistance to attract the expansion to Dubuque. In an effort to attract this investment, Mayor Terry Duggan, Iowa Department of Economic Development Director Mike Blouin and Greater Dubuque Development Corporation Executive Director Rick Dickinson traveled to San Francisco to meet with company officials. Economic Development Director Bill Baum recommends City Council approval to submit an application for financial assistance to the Iowa Department of Economic Development on behalf of McKesson Corporation. 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 TO: FROM: SUBJECT: December 23, 2003 Michael Van Milligen, City Manager McKesson Corporation Expansion Application for Financial Assistance from the State of Iowa INTRODUCTION This memorandum presents for City Council review and approval a resolution authorizing the submission of an application for financial assistance to the Iowa Department of Economic Development on behalf of McKesson Corporation. DISCUSSION The McKesson Corporation is the world's largest healthcare services company. The company currently employs 380 persons in Dubuque. The company is proposing to add 74 full time positions in Dubuque, and invest over $5 million in the company's existing facility on Locust Street in downtown. The company has requested state assistance to attract the expansion to Dubuque. We have been working with Rick Dickinson of the Greater Dubuque Development Corporation, and the state of Iowa on this expansion. Governor Tom Vilsack and Department of Economic Development Director Michael Blouin have visited with company officials who have expressed a commitment to keeping McKesson in the Dubuque area and assisting in any expansion plans. We have prepared the attached Project Review Form for financial assistance from the State. The IDED staff is reviewing, and will inform the City of the appropriate program(s) that fit this particular company and its expansion plans. RECOMMENDATION I recommend that the City Council authorize the submission of an application for financial assistance from the State of Iowa on behalf of McKesson Corporation. This project will have a substantial impact on employment in the city in the next twelve months. 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. F:\USERS\WBaum~V[cKesson\MEMOON state assistance.doc RESOLUTION NO. 9-04 A RESOLUTION AUTHORIZING THE FILING OF AN APPLICATION FOR FINANCIAL ASSISTANCE FROM THE STATE OF IOWA ON BEHALF OF MCKESSON CORPORATION Whereas, McKesson Corporation is proposing an expansion of its existing operations in Dubuque; and Whereas, the proposed project will contribute to the local economy through the creation of 74 new jobs for area residents; and Whereas, the Iowa Department of Economic Development's Financial Assistance Programs were designed to assist in the economic development efforts of local jurisdictions; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the filing of an application for financial assistance on behalf of McKesson is hereby approved. Section 2. 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 January 2004. Attest: Jeanne Schneider, City Clerk Terrance M. Duggan, Mayor SMART IDEA Michael Blouin, Director Iowa Department of Economic Development Project Review Form Business Development Division Iowa Department of Economic Development 10/15~2003 Introduction The Iowa Department of Economic Development (IDED) offers an array of financial assistance programs to aid businesses with start-ups and expansions. Funds are awarded from a variety of programs based on factors such a job creation, employee wage rates, value added to iowa agricultural commodities, competition with other Iowa firms, and impact of the project on the Iowa economy. In an effort to better serve businesses and communities, IDED is offering this Projecf Review form to help identify state assistance that may be available to interested businesses and communities considering new or expanded business operations in Iowa. Business: Name of Business: McKesson Corporation Address: One Post Street City: San Francisco State: California Zip: 94104 Contact Name: Susan Penway Title: Director, State Tax Phone: 415 983-8622 Fax: __ Email: Susan. Penway~,McKesson.com Sponsoring Community (if applicable): City of Dubuque Iowa Information about the Business: Provide a brief description and history of the Business. Include information about the Business' products or services, markets served and primary competitors. Agricultural business should include information on commodity usage and producer ownership, if applicable. McKesson is the wodd's largest healthcare services company. McKesson is the leading provider of supply, information, and care management products and services designed to reduce costs and improve quality across healthcare. McKesson solutions empower healthcare professionals with the tools they need to deliver care more effectively and efficiently. Founded in 1833, with annual revenues of more than $50 billion, McKesson ranks as the 20th largest industriaI company in the United States. The company has a Dubuque facility employing 380 persons. Business Structure: BCooperative Partnership [] Corporation [] S-Corporation [] Limited Liability Company [] Sole Proprietorship [] Not for Profit Does a woman, minority, or person with a disability own the Business? If yes, are you certified as Targeted Small Business? [] Yes [] No [] Yes [] No Business Stage: [] Startup [] Expansion of Iowa Company [] New Location in Iowa Current Total Sales: $50 Billion Projected Total Sales: Year1: $.__ Year2: $__ Year 3: $.__ Current Number of Iowa Employees: 380 Employee Benefits: List the employee benefits provided by the Business: Health Insurance, Dental Insurance, Vision Insurance, 401 K with Match, Stock Purchase Plan at Discount, Basic Life Insurance, Disability Insurance. With respect to medical and dental insurance plans, please attach a memo that outlines the following: a) The total cost (premiums) per employee for each benefit. b) The amount and pementage of the premiums paid by the employee. c) A summary of the plan provisions (deductibles, co-payments, eligibility requirements, etc.). Information about the Project: Describe the proposed project for which state assistance is being sought. Include a project timeline with dates: The company proposes a major expansion in Dubuque, Iowa. 74 new full time good-paying positions will be added to the workforce, all projected to be employeed in one year after start. Project address: 700 Locust Street, Dubuque, Iowa 52001 Is the Business actively considering locations outside of Iowa? [] Yes [] No If yes, where and what assistance is being offered? Company will provide details List the jobs that will be retained and/or created as the result of this project. For retained jobs, include the current wage rate. For jobs to be created, including the starting wage rate. Job Title Skills, Education, or Number of Retained (R) orStarting or Current Experience Required Jobs Created (C) Wage Rate Proiect Manager I $50,000-60,000 Liaison 1 $50,000-60,000 Software Engineers 2 $50,000-60000 Customer and Product 18 $28,000-38,000 Support Support/Agreement 33 $28,000-38000 R&D specialist 2 $50,000-60000 Product Manager 1 $90,000 Programmers 2 $65,000-75,000 Design Anatyst 1 $55,000-65,000 Support/Project 4 $65,000-75,000 Management Two other employees 2 $??? Computer Operators 4 $21,000-27,000 System Administrators 3 $40,000-50,000 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Total Number of Retained Jobs: Total Number of Created Jobs: 74 Over what time frame will these jobs be created? 12 months Project Budget: The budget should attempt to identify all sources of funding being considered including owner equity/investment, your primary lender as well as all public funds (local loan funds, federal programs, city assistance, etc.) Please be as detailed as possible. AMOUNT BUDGETED Use of Funds ~t Activity Source A Source B Source C Source D Source E Source F Source G Source H Land Acquisition ~ ~' $ $ $ $ $ $ $ $ Site Preparation ~ ,,. ~.~ $ $ $ $ $ $ $ $ Building Acquisition~ ~;, $ $ $ $ $ $ $ $ Building $~ $ $ $ $ , $ $ $ $ Construction Building Remodeling [:~3~! ; $ $ $ $ $ $ $ $ Machinery & $ $ $ $ $ $ $ $ Equipment I Computers ~:~r300;O00 ~ $ $ $ $ $ $ $ $ Furniture & Fixtures ~§~000;, ~ $ $ $ $ $ $ $ $ Working Capital $ $ $ $ $ $ $ $ $ ,,~ ~_ $ $ $ $ $ $ $ $ ~$ ~,,~ , $ $ $ $ $ $ $ $ ~, $ $ $ $ $ $ $ $ , $ $ $ $ $ $ $ $ : $ $ $ $ $ $ $ $ TERMS OF PROPOSED FINANCING Source of Funds Amount Type Rate Term Conditions Source A: $ Soume B: $ Source C: $ Source D: $ Soume E: $ Soume F: $ Soume G: $ Source H: $ TOTAL $ 'r'~v~ Request for State Assistance: What amount of state assistance is needed for this project to occur in the State of Iowa? $___ Please explain why state assistance is needed and how the above amount was determined: Does your company have a preference for a particular form of assistance (rank in order of importance)? __ Direct financial assistance (loan or forgivable loans) __ Tax incentives (income tax credits and sales tax refunds) __ Infrastructure and utility improvements Please identify improvements: __ Additional Information: Does the company have a completed business Plan? [] Yes [] No Have you contacted anyone at the IDED about your project? [] Yes [] No If yes, please indicate whom: __ Are you working with a local development organization? [] Yes [] No If yes, please indicate whom: __ Submittal Completed forms with attachments should be mailed: Iowa Department of Economic Development ATTN: Business Finance Team 200 East Grand Avenue Des Moines, Iowa 50309 Phone: 1-800-532-1215 Fax: (515) 242-4776 The Business Finance team will review completed Project Review forms upon receipt. The IDED will contact the contact listed on the form and appropriate information will be provided based on your project. The Iowa Department of Economic Development thanks you for your interest in doing business in the State of Iowa.