A.Y. McDonald Financial Assistance ApplicationMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Correction to Agenda Item - Action #4
A.Y. McDonald Expansion
DATE: December 2, 2011
Dubuque
btail
All America City
11 111!
2007
Economic Development Director Dave Heiar is transmitting corrected job creation
numbers for the A.Y. McDonald Expansion, Action Item #4 on the December 5, 2011
City Council Agenda.
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Helar, Economic Development Director
SUBJECT: A.Y. McDonald Expansion
DATE: December 2, 2011
Dubuque
biltd
All- America City
r
a
2007
PURPOSE
The purpose of this memorandum is to correct information contained in my November
23 memorandum to you related to the A.Y. McDonald expansion project.
BACKGROUND /DISCUSSION
In my previous memorandum, I stated that A.Y. McDonald would be creating 25 new
positions in Dubuque. That is not correct. Although the company's plans are to create
25 new positions, 8 of these jobs will be created in Albia, Iowa while 17 of these jobs will
be created in Dubuque. Page 11 of the previously attached application to the State of
Iowa provides this breakdown. I have attached another copy of that page for your
convenience.
ACTION REQUESTED
Since the application has the correct information, no change needs to be made in the
recommendation that the Council approve the Resolution to authorize the Mayor to sign
the application for State Assistance on behalf of A.Y. McDonald.
Attachment
F: \USERS \Econ Dev\A.Y. McDonald\20111202_AY McDonald Expansion_Council Memo Chg.doc
Project Jobs
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 Iowa.) For jobs to be created, include the starting and final hourly wage
rate. For retained jobs, include the current hourly wage rate.
Is the hourly wage rate based on a 40 hour work week, 52 weeks per year? ® Yes ❑ No
If no please explain:
Full-Time CREATED Jobs
(Add additional rows as needed)
Job Title
Number of
CREATED
Jobs
Starting
Hourly Wage
Hourly Wage at
End of Year
Three
Foundry & Machine Shop Positions
17
$18.10
$19.60
Dubuque, IA
Machine Operator Positions
8
$11.00
$13.00
Albia, IA
Total CREATED Jobs
25
Full -Time RETAINED Jobs
(Add additional rows as needed)
Job Title
Number of
RETAINED Jobs
Current Hourly
Wage
Total Dubuque, IA employment
306
Total Albia, IA employment
73
Total RETAINED Jobs
379
IDED — Business Financial Assistance Application 11 v.7.11.2011
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: A.Y. McDonald Expansion
DATE: November 28, 2011
Dubuque
kard
All-America City
2007
Economic Development Director Dave Heiar recommends City Council authorization to
submit an application for financial assistance to the Iowa Economic Development
Authority on behalf of A.Y. McDonald for a major expenditure at the Dubuque facility.
A.Y. McDonald plans an expansion estimated to cost $2,663,872 and create 25 new
positions in Dubuque. The application requests $136,000 in financial assistance from
the 130% Component program (in the form of a $68,000 forgivable loan and a $68,000
loan, 0% 5 year term), and $163,444 from the High Quality Jobs program (in the form of
$143,194 in Investment Tax Credits and $20,250 in Sales Tax Refund).
The local match required for this application will be provided through a five year
reducing industrial tax abatement. Over five years, the abatement is estimated at
$30,600.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
Rick Dickinson, Executive Director & COO, Greater Dubuque Development
Corporation
Dan McDonald, Vice President of Existing Business, Greater Dubuque
Development Corporation
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: A.Y. McDonald Expansion
DATE: November 23, 2011
Dubuque
AID- America City
'1 1 1 II
2007
PURPOSE
The intent of this memorandum is to request City Council authorization to submit an
application for financial assistance to the Iowa Economic Development Authority on
behalf of A.Y. McDonald.
BACKGROUND
A.Y. McDonald Manufacturing Company is a 155 year old Iowa based manufacturer of
waterworks brass, high pressure gas, plumbing and pump products. The Company was
founded in 1856 in Dubuque, IA and is still privately held and operated to this day by the 5th
generation of the McDonald family. A.Y. McDonald has a long tradition of trusted quality and
dependable service. The Company's vision is to be the leading producer of water and gas
distribution products to benefit the current and next generation of employees, customers, and
stockholders by continually growing and strengthening their business.
A.Y. McDonald Manufacturing Company produces and sells products, which serve four distinct
industries. The Water Service products consist of a line of underground valves, fittings and
service connections which primarily distribute water from the main to the home or structure.
The High Pressure Gas products consist of a line of valves and meter bars which assist with the
distribution of Natural Gas to residential and commercial installations. The Plumbing line
consists of valves, fittings and service connections which are used in the distribution of water in
residential or commercial installations. Finally, the Pump Product line offers an expansive range
of pumps from sump to sewage, submersible to booster pump systems, which serve multiple
industries and applications.
The A.Y. McDonald customer base consists of approximately 7,300 customers located primarily
within the United States, but some of the customer base is international. The Company sells
their products through wholesale distribution.
In January of 2011, the Reduction of Lead in Drinking Water Act was signed into law, which will
reduce the allowable lead content of wetted surfaces in drinking water pipes, pipe fittings, and
plumbing fixtures. This means that within the water distribution system in the United States, the
current inventory of 85 -5 -5 -5 leaded brass becomes obsolete on January 4, 2014. Therefore,
the company will no longer be able to produce and their customers will no longer be able to sell
valves, fittings, or fixtures that contain lead which exceeds the 0.25% weighted average limit for
wetted surfaces.
A.Y. McDonald is committed to educating and assisting customers with the transition to no -lead
brass. The company was the first manufacturer in the industry to offer and market a complete
line of no -lead brass products and has over 20 years of R &D experience in the development of
their no -lead product line.
While the Reduction of Lead in Drinking Water Act will substantially change the product
requirements within the industry, A.Y. McDonald will still utilize 85 -5 -5 -5 brass for non - wetted
surfaces in conjunction with the no -lead brass. This will create a number of complex issues
within their manufacturing processes. Balancing no -lead and 85 brass within the same
production facility to properly contain any possibility of cross - contamination is a substantial
challenge. Foreseeing the no -lead change years in advance, A.Y. McDonald Industries, Inc.
purchased a competitor in 2006 in Cambridge, Ontario. This company, Cambridge Brass is a
direct competitor to A.Y. McDonald Mfg. Co. and Cambridge Brass utilizes a similar
manufacturing process. A strong factor in proceeding with the purchase of Cambridge Brass
was the opportunity to segregate production requirements by facility if necessary with the
foundry in Dubuque producing either 85 brass or no -lead brass and the Cambridge operation
producing the other brass.
A.Y. McDonald plans a major expenditure at the Dubuque facility. This includes having
completed the preliminary engineering to install a 2 % ton coreless, 1250KW furnace that will
provide a melt capacity between 4000 — 5000 pounds per hour. The addition of this furnace
requires the installation of an additional transformer, a 2,000 KVA service entrance switch and
an 800 -amp power distribution panel dedicated to this furnace. The company has contracted
with Alliant Energy to supply the transformer, connections from the primary feed to the
transformer and from the transformer to the secondary feed. The company has contracted with
another Iowa based company, Foundry Equipment Company to complete the remainder of the
project, which includes the purchase and installation of the furnace and the cooler. There is an
additional concern of running no -lead and 85 brass within the same facility. In order to properly
segregate the no -lead and 85 brass product within the same facility, the company is required to
purchase two additional blast machines with dust collection.
DISCUSSION
In conjunction with Greater Dubuque Development Corporation, City staff has been
working with A.Y. McDonald to facilitate this local expansion. The attached application
requests the Iowa Economic Development Authority to partner in this expansion, which
is estimated to cost $2,663,872 and create 25 new positions in Dubuque. The
application requests $136,000 in financial assistance from the 130% Component
program On the form of a $68,000 forgivable loan and a $68,000 loan, 0% 5 year term),
and $163,444 from the High Quality Jobs program On the form of $143,194 in
Investment Tax Credits and $20,250 in Sales Tax Refund).
The local match required for this application will be provided through a 5 year reducing
industrial tax abatement as provided by City Ordinance Section 43 -21. Over 5 years the
abatement is estimated at $30,600.
2
RECOMMENDATION /ACTION STEP
I recommend the Council approve a resolution authorizing the Mayor to sign an
application for state financial assistance on behalf of A.Y. McDonald.
Attachment
F: \USERS \Econ Dev\A.Y. McDonald \IDED\20111123_AY McDonald Expansion Memo to Council.doc
3
RESOLUTION NO. 418 -11
A RESOLUTION AUTHORIZING THE FILING OF AN APPLICATION FOR STATE
FINANCIAL ASSISTANCE ON BEHALF OF A.Y. MCDONALD MFG.CO.
Whereas, A.Y. McDonald Mfg. Co. has proposed the expansion of its operations
in Dubuque, Iowa; 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 25 new jobs; and
Whereas, the Iowa Economic Development Authority's 130% Component
Financial and High Quality Jobs Program (HQJP) Assistance Program 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 130%
Component program and HQJP 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 130%
Component Financial Assistance Program on behalf of A.Y. McDonald Mfg. Co. is
hereby approved.
Section 2. That the local match identified in the application estimated at $30,600
consisting of a 5 year reducing industrial tax abatement as provided by City Ordinance
Section 43 -21 to the company is hereby approved, subject to the 130% Component and
HQJP 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 Iowa Economic Development Authority
together with such documents as may be required.
Attest:
Passed, approved, and adopted this 5th day of Dec: b , 20 1.
21 /Off
Kevin ' . Firnstahl, City Cler
F: \USERS \Econ Dev\A.Y. McDonald \20111123_ Resolution AY McDonald Application approval.doc
Roy b. Buol, Mayor
IOWA
economic DEVELOPMENT
Debi V. Durham, Director
Iowa Department of Economic Development
Business Financial Assistance
Application
Business Finance
Business Development Division
Iowa Department of Economic Development
200 E ast Grand Avenue
Des Moines, Iowa 50309 -1819
wvwv. iowalifechanging. com
Telephone: 515.725.3133
businessfinance@ ioagov
v.7.11.2011
Application Instructions
To Complete Electronic Form: Click on TEXT BOX to add text. Double click on YES/NO boxes and select "Checked ".
1. All applicants must complete the Business Financial Assistance Application and attach only those additional sections
for the components to which the applicant is applying.
Direct Financial Assistance — STATE of IOWA
® 130% Component
(no supplenrnt)
❑ 100% Component
(no supplemrt)
Entrepreneurial Component (and Supplement)
Supplemental irfoimition required
Tax Credits — STATE of IOWA
❑ Enterprise Zone Program (EZ)
Supplemental infonaut-ion required
Direct Financial Assistance — FEDERAL
❑ Economic Development Set -Aside Program (EDSA)
Supplemental irfonrnution required
❑ Infrastructure Component
(no supplement)
Value -Added Agriculture Component
Supplemental infon-ution required
❑ Disaster Relief Component
Supplemental infonaut-ion required
® High Quality Jobs Program (HQ)
(no supplement)
Public Faclities Set-Aside Program (PFSA)
Supplemental irfomution required
2. Please visit the IDED Web site at vwvwiowalifechanging.corn or contact IDED at 515.725.3133 to confirm that this is
the most current application version.
3. Before filling out this application form, please read all applicable sections of the 2009 Iowa Code and Iowa
Administrative Code ( rules). www .legis.state.iaus/IowaLawhtml
4. Only typed or computer - generated applications will be accepted and reviewed. Any material change to the format,
questions, or wording of questions presented in this application will render the application invalid and it will not be
accepted.
5. Complete the applicable sections of the application fully. If questions are left unanswered or required attachments are
not submitted, an explanation must be included.
6. Use clear and concise language. Attachments should onlybe used when requested or as supporting documentation.
7. Any inaccurate information of a significant nature may disqualify the application from consideration.
8. The following must be submitted to Business Finance at IDED in order to initiate the review process:
• One original, signed application form and all required attachments
• One electronic copy of the application form and all required attachments
Facsimile copies will not be accepted.
Business Finance
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines, IA 50309 -1819
Telephone: 515.725.3133
businessfinance@ iowagov
Applications are must be submitted to IDED Business Finance before 4:OOpm on the fourth Monday of
the month.
Applications will be reviewed by the IDED Board on the third Thursday of the following month.
IDED — Business Financial Assistance Application 2 v.7.11.2011
Public Records Policies
Information Submitted to IDED. The Iowa Department of Economic Development (IDED) is subject to the Open
Records law (Iowa Code, Chapter 22). Treatment of information submitted to IDED in this application is governed by the
provisions of the Open Records law All public records are available for public inspection. Some public records are
considered confidential and will not be disclosed to the public unless ordered by a court, the lawful custodian of the record,
or by another person duly authorized to release the information.
Confidential Records. IDED automatically treats the following records as confidential and they are withheld from public
disclosure:
• Tax Records
• Qiw terlyIouu E rnplowis Contribution and Payroll Report prepared for the Iowa Workforce Development Department
• Payroll Registers
• Business Financial Statements and Projections
• Personal Financial Statements
Other information supplied to IDED as part of this application maybe treated as confidential under Iowa Code section
22.7. Following are the classifications of records which are recognized as confidential under Iowa law and which are most
frequently applicable to business information submitted to IDED:
• Trade secrets [Iowa Code §22.7(3)]
• Reports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose.
[Iowa Code §22.7(6)]
• Information on an industrial prospect with which the IDED is currently negotiating. [Iowa Code §22.7(8)]
• Communications not required by law, rule or regulation made to IDED by persons outside the government to the
extent that IDED could reasonably believe that those persons would be discouraged from making them to the
Department if they were made available for general public examination. [Iowa Code §22.7(18)]
Information supplied to IDED as part of this application that is material to the application and /or the state
program to which the applicant is applying including, but not limited to the number and type of jobs to be
created or retained, wages for those jobs, employee benefit information, and project budget, are considered open
records and will not be treated as confidential.
Additional Information Available. Copies of Iowa's Open Record law and IDED's administrative rules relating to public
records are available from the IDED upon request.
IDED - Business Financial Assistance Application 3 v.7.11.2011
Applicant Information
Name of Business: A.Y. McDonald Mfg Co.
Address: 4800 Chavenelle Road, P.O. Box 508
City, State & Zip Code: 52004 -0508
Contact Person: Chad A. Huntington Title: Vice President of Human Resources
Phone: 563-583-7311, ext. 5357 Fax: 888 -840 -2438 Email: Huntington@ aymcdonald.com
Federal ID Number: 42- 1241524
NAILS Code for primarybtsiness operations: 332919
US DOT Number:
Does the Business file a consolidated tax return under a different tax ID number?
El Yes 111 No
If yes, please also provide that tax ID number: 42- 0404280
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:
If the application was prepared by someone other than the contact person listed above, please complete the following.
Name of Business:
Address:
City, State & Zip Code:
Contact Person: Title:
Phone: Fax: Email:
Sponsor Information
Sponsor Organization: City of Dubuque
Official Contact (e.g. Mayor, Chairperson, etc.): RoyD. Btrol
Address: 50 West 13th Street
City, State & Zip Code: Dubuque, IA 52001
Phone: 563-589-4110 Fax: 563 - 589 -4149
Title: Mayor
Email: rdbuol@ cityofdubuglue.org
If IDED needs to contact the sponsor organization with questions, should me contact the person listed above?
® Yes ❑ No, please contact the following person:
Name: David J. Heiar Title: Economic Development Director
Address: 50 West 13th Street
City, State & Zip Code: Dubuque, IA 52001
Phone: 563-589-4393 Fax: 563- 589 -1733 Email: dheiar@ cityofdubuque.org
If necessary, please list information on additional sponsors in an attachment.
IDED — Business Financial Assistance Application 4 v.7.11.2011
Certification & Release of Information
I hereby give permission to the Iowa Department of Economic Development (IDED) 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 IDED 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 IDED related to this application is subject to Iowa's Open Record Law
(Iowa Code, Chapter 22).
I understand this application is subject to final approval by IDED and the Project may not be initiated until final approval is
secured.
I understand that IDED reserves the right to negotiate the financial assistance. Furthermore, I am are that financial
assistance is not available until an agreement is executed within a reasonable time period following approval.
I hereby certify that all representations, warranties, or statements made or furnished to 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 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:
November 18, 2011
Signature Date
Chad A. Huntington, Vice President of Human Resources
Name and Title (typed or printed)
For the SrJOns r(s):
Signature Date
Roy D. Buol, Mayor
Nacre and Title (typed or printed)
Plain use the follouing if more than one sir is required. (For example, use this if a sigrattaee from the local E rik pris° Zone Commission is
required in addition to the sig ature from the May of the spoworing city)
December 5, 2011
Signature Date
Nacre and Title (typed or printed)
IDED will not provide assistance in situations where it is determined that anyrepresentation, warranty, or statement made
in connection with this application is incorrect, false, misleading or erroneous in any material respect. If assistance has
alreadybeen provided prior to discovery of the incorrect, false, or misleading representation, IDED may initiate legal action
to recover incentives and assistance awarded to the Business.
IDED - Business Financial Assistance Application 5 v.7.11.2011
Business Information
Provide a brief description and history of the Business. Inclur1P information about the Business' products or services and its markets
and /or customers.
A.Y. McDonald Manufacturing Company is a 155 year old Iowa based manufacturer of waterworks brass,
high pressure gas, plumbing and pump products. The Company was founded in 1856 in Dubuque, IA and is
still privately held and operated to this day by the 5th generation of the McDonald family. A.Y. McDonald has
a long tradition of trusted quality and dependable service. Our vision is to be the leading producer of water
and gas distribution products to benefit the current and next generation of employees, customers, and
stockholders by continually growing and strengthening our business.
A.Y. McDonald Manufacturing Company produces and sells products which serve four distinct industries.
Our Water Service products consist of a line of underground valves, fittings and service connections which
primarily distribute water from the main to the home or structure. Our High Pressure Gas products consist of
a line of valves and meter bars which assist with the distribution of Natural Gas to residential and
commercial installations. The Plumbing line consists of valves, fittings and service connections which are
used in the distribution of water in residential or commercial installations. Finally, our Pump Product line
offers an expansive range of pumps from sump to sewage, submersible to booster pump systems which
serve multiple industries and applications.
The A.Y. McDonald customer base consists of approximately 7,300 customers located primarily within the
United States, but we do have a number of international customers. We sell our products through wholesale
distribution. We enjoy firm customer relationships with both National Accounts and Independent
Distributors.
Business Structure:
❑ Cooperative ® Corporation
❑ Partnership ❑ S- Corporation
❑ Limited Liability Company ❑ Not for Profit
❑ Sole Proprietorship
State of Incorporation: Iowa
Identify the Business' owners and percent ownership: 5th Generation of the McDonald Family, 100%
Does a w rnan, minority, or person with a disability own the Business?
If yes, is the Business certified as a Targeted Small Business?
❑ Yes
❑ Yes
List the Business' Iowa locations and the current number of employees at each location
Dubuque, Iowa 306
Albin, IA 73
® No
❑ No
What is the Business' worldwide ei iployment? Please include employees of parent company, subsidiaries, and other affiliated entities in
this figure. 704
Project Information
Project Street Address: 4800 Chavenelle Road
Project City Dubuque Project County. Dubuque
Type of Business Project:
❑ Startup
❑ New Location in Iowa
• Expansion of Iowa Company
❑ Relocation from another State
Briefly 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.)
IDED — Business Financial Assistance Application 6 v.7.11.2011
In January of 2011, the Reduction of Lead in Drinking Water Act was signed into law, which will reduce the
allowable lead content of wetted surfaces in drinking water pipes, pipe fittings, and plumbing fixtures. This
means that within the water distribution system in the United States, the current inventory of 85 -5 -5 -5 leaded
brass becomes obsolete on January 4, 2014. This means that we will no longer be able to produce and our
customers will no longer be able to sell valves, fittings, or fixtures that contains lead which exceeds the
0.25% weighted average limit for wetted surfaces.
A.Y. McDonald is committed to educating and assisting our customers with the transition to no -lead brass.
We were the first manufacturer in the industry to offer and market a complete line of no -lead brass products
and we have over 20 years of R &D experience in the development of our no -lead product line. During the
initial phase of no -lead brass development, we helped the city of Los Angeles become the first in the country
to transition to no -lead brass.
While the Reduction of Lead in Drinking Water Act will substantially change the product requirements within
our industry, we will still utilize 85 -5 -5 -5 brass for non - wetted surfaces in conjunction with our no -lead brass.
This will create a number of complex issues within our manufacturing processes. Balancing no -lead and 85
brass within the same production facility to properly contain any possibility of cross - contamination is a
substantial challenge. Foreseeing the no -lead change years in advance, A.Y. McDonald Industries, Inc.
purchased a competitor in 2006 in Cambridge, Ontario. This company, Cambridge Brass is a direct
competitor to A.Y. McDonald Mfg. Co. and Cambridge Brass utilizes a similar manufacturing process. A
strong factor in proceeding with the purchase of Cambridge Brass was the opportunity to segregate
production requirements by facility if necessary with our foundry in Dubuque, IA producing either 85 brass or
no -lead brass and our Cambridge operation producing the other brass.
Our plans at this time and the work completed to date will focus on a major expenditure at our Dubuque, IA
facility. This includes having completed the preliminary engineering to cost and install a 2 % ton coreless,
1250KW furnace that will provide a melt capacity between 4000 — 5000 pounds per hour. The addition of
this furnace requires the installation of an additional transformer, a 2,000 KVA service entrance switch and
an 800 -amp power distribution panel dedicated to this furnace. We have contracted with Alliant Energy to
supply the transformer, connections from the primary feed to the transformer and from the transformer to the
secondary feed. We have contracted with an Iowa based company, Foundry Equipment Company to
complete the remainder of the project, which includes the purchase and installation of the furnace and the
cooler. There is an additional concern of running no -lead and 85 brass within the same facility. In order to
properly segregate the no -lead and 85 brass product within the same facility, we are required to purchase
two additional blast machines with dust collection.
Running two separate feeder metals in the same facility is difficult, but our desire is to enhance our operation
at our corporate facility in Dubuque, IA.
Project Timeline add additional iv-as as tamed)
Activity Completion Date
Transformer & Electrical Feed Installation
12/15/11
2V2. Ton Coreless Furnace Installed
06/15/12
Addition of Free Standing building for clean & maintenance operations
12/01/12
Please identify the project management for the project location and experience. Foundry Equipment Company, Solon, Iowa.
Has any part of the project started? ® Yes ❑ No
If yes, please explain. The 2V2. ton coreless,1250KW furnace has been ordered due to a 35 week lead titre. The transformer has been
ordered and site work is being prepared in Dubuque, IA for the location of this transformer.
Identify the Business' competitors. If any of these competitors have Iowa 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 Iowa
IDED — Business Financial Assistance Application 7 v.7.11.2011
competitor. Mueller Water Products of Georgia and The Ford Meter Box Company of Indiana Both Mueller and Ford sell their
products in the State of Iowa, but they do not have Iowa locations. This project will better position AY. McDonald against our
competition We are the leaders in No -Lead brass and this dedicated furnace project will assist AY. McDonald Mfg. Co. in taking
market share from our competition
Will any of the current Iowa employees lose their jobs if this project does not proceed in Iowa?
❑ Yes ® No
If yes, please explain why and identify those jobs as "retained jobs" in the Project Jobs section.
IDED — Business Financial Assistance Application 8 v.7.11.2011
Project Budget
AMOUNT BUDGETED
Use of Funds
Cost
Source A
Source B
Source C
Source D
Source E
Source F
Source G
Land Acquisition
$136,0W
1/2 forgivable
0% -15 yr.
Source B: Other State
(Community College,
IDOT, etc.)
$
5 year decreasing abatement (based on $400,000
assessed value)
Site Preparation
Source C: Local Government
$
In -kind Contribution
Building Acquisition
$
TOTAL
$194,044
Source E: Other Private Sources
$
Building Construction
$675,000.00
Source F:
$
Building Remodeling
$
TOTAL
$
Mfg. Machinery& Equip.
$2,188,872.00
Other Machinery & E quip.
Racking, Shelving, etc?
Computer Hardware
Computer Software
Furniture & Fixtures
Working Capital
Research & Development
Job Training
TOTAL
$2,863,872.00
$
$
$
$
$ •
$
$
1 Racking, shelving and conveyor equipment used in distribution center projects only
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) and the length of the lease agreement.
PROPOSED FINANCING
Source of Funds
Amount
Form of Funds
Rate and
Term
Commitm
ent Status
Conditions /Additional
Information
(List tax benefits separatelybelow, not as a
source of direct finandng)
(Loan, Grant, In -Kind
Donation etc.)
Include when funds will be disbursed;
If loan, whether payments are a level
teniy balloon, etc
Source A IDED*
$136,0W
1/2 forgivable
0% -15 yr.
Source B: Other State
(Community College,
IDOT, etc.)
$
5 year decreasing abatement (based on $400,000
assessed value)
Tax Incrernent Financing
Source C: Local Government
$
In -kind Contribution
Source D: Business
$
TOTAL
$194,044
Source E: Other Private Sources
$
Source F:
$
Source G: I
$
TOTAL
$
* Identify the collateral used to secure IDED funds:
TAX CREDITS AND INDIRECT FINANCING
Source of Funds
Amount
Description
Investment Tax Credit
$143,194
High Quality Jobs
Sales, Service & Use Tax Refund
$ 20,250
Sales Tax Refund
Research Activities Credit (3 % /10 %)
Withholding
Local Property Tax Exemption
$ 30,600
5 year decreasing abatement (based on $400,000
assessed value)
Tax Incrernent Financing
260E Job Training Funds
In -kind Contribution
Other
TOTAL
$194,044
What rneasures s re analyzed to determine the amount and form of assistance needed?
Is the Business actively considering locations outside of Iowa?
If yes, where and what assistance is being offered?
❑ Yes ❑ No
IDED — Business Financial Assistance Application 9 v.7.11.2011
There are three general justifiable reasons for assistance. Check the box next to the reason why assistance is needed to complete this
project.
❑ Financing Gap - The Business can only raise a portion of the debt and equity necessary to complete the project. A
gap between sources and uses exists and state and /or federal funds are needed to fill the gap.
❑ Rate of Return Gap — The Business can raise sufficient debt and equity to complete the project, but the returns are
inadequate to motivate an "economic person" to proceed with the project. Project risks outweigh the rewards.
❑ Location Disadvantage (Incentive) — The Business is deciding between a site in Iowa (site A) and a site in another
state (site B) for its project. The Business argues that the project will cost less at site B and will require a subsidy to equalize
costs in order to locate at site A. The objective here is to quantify the cost differential between site A and site B.
IDED — Business Financial Assistance Application 10 v.7.11.2011
Full-Time RETAINED Jobs
Project Jobs
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 Iowa.) For jobs to be created, include the starting and final hourly wage
rate. For retained jobs, include the current hourly wage rate.
Is the hourlywage rate based on a 40 hour work week 52 weeks per year? ❑ Yes ❑ No
If no please explain:
Full -Time CREATED Jobs
(Add additional You as neded)
Job Title
Number of
CREATED
Jobs
Starting
Hourly Wage
Hourly Wage at
End of Year
Three
Foundry & Machine Shop Positions
17
$18.10
$19.60
Dubuque, IA
Machine Operator Positions
8
$11.00
$13.00
Albia, IA
Total CREATED Jobs
25
Job Title
(Add additioml nous as needed)
Number of
RETAINED Jobs
Current Hourly
Wage
Total RETAINED Jobs
IDED — Business Financial Assistance Application 11 v.7.11.2011
Employee Benefits
Please identi fy all e lo benefits provided by and paid for (in full or in part) by the Business.
Employee
Benefits Provided
by Business
Total Annual Cost
(show on a per
employee basis)
Portion of Total
Annual Cost Paid
by the Business
Plan Provisions
Employee
Family
Employee
Famly
Deductible
(Indnde coinssance %, office visit co-
payments, annual out -of- pocket
ma rams face amounts, etc.)
Medical Insurance
$5,685
$14,725
$4,150
$10,749
Employee
N/A
$20 office co-pay, $100 ER & Hospital
co -pay
Family
N/A
Dental Insurance
$293
$880
$293
$880
Emyfloyee
$5Q
80%/20% Co- inssance after'
deducible $1,000 annual max
Family
$100
Vision Insurance
$97
$290
$97
$290
Employee
N/A
Exams & Eyewear every2 years
Family
N/A
Life Insurance
$70
$70
$70
$70
$30,000 Flat Coverage
Short-term
Disability
$256
$256
$256
$ 256
$385 weekly for production employees
100% replacement for office employee;
Long -term
Disability
106
106
0
0
Health Savings
Account
N/A
N/A
N/A
N/A
Does the Business offer a pension plan, 401(k) plan, and /or retirement-p an? ® 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 (show
average as a nercentaee of salary.
Year Ending
Average Actual Match
per Employee ( %)
2010
$3,450
2009
$3,344
2008
$3,316
Three -year Average:
$3,370
401(K) A) Office employees
3% money purchase contribution
50% match up to 4%
= 5% Company Contribution for employees
B) Production employees
Offered, but no company match
Pension A) Production employees
$4,472.00 contributed annually to production employee pensions
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 em.lo •e for that three -ar iod.
IDED — Business Financial Assistance Application 12 v.7.11.2011
Business Taxes
CONFIDENI'IAL
IDED — Business Financial Assistance Application 13 v.7.11.2011
Attachments
Please attach the following documents:
Al
Business Plan
At a minimum, include:
• Marketing study
• Feasibility study
• Projected profit and loss statements for three years into the future
• Project budget
• Production operations
• Management structure
• Personnel needs
• Descriptions of product or process
• Status of product /process development
• Patent status (if applicable)
(Any information outlined above not included in the business plan should be submitted as supplemental information via a
separate attachment.)
Copies of the Business' Quarterly Iowa Employer C Contribution and Payroll Report Summary Page (Page 1) for the
past year and 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:
• Company name, date of payroll and source of payroll information
• Employee name and /or employee identification number
• Current hourly wage - do not include bonuses or other benefit values
• Indicate if the employee is full time (40 hours per week 52 weeks per year) or part time.
A sample Excel spreadsheet can be found at http: / /www.iowalifechanging .com /applications/bus dev /payroll template.xls
Affidavit that states the Business has not, within the last five years, violated state or federal statutes, rules, and regulations,
including environmental and worker safety regulations, 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
found at http: / /www.iowalifechanging com /applications/bus _dev /sampleaffidavit.doc.
A4 Financial Information (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.
IOWA
economic DEVELOPMENT
IDED — Business Financial Assistance Application 14 v.7.11.2011