Sedgwick Claims CEBA Application (2)
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MEMORANDUM
February 28, 2006
TO:
The Honorable Mayor and City Council Members
C.'
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Sedgwick Claims Management Services, Inc.
Community Economic Betterment Account (CEBA) Application
Economic Development Director David Heiar is recommending City support of
Sedgwick Claims Management Services, Inc.'s proposal to hire 75 employees at a
facility located in the City of Dubuque.
To assist this project, Sedgwick has requested a forgivable CEBA loan of $150,000.
City assistance as public match for the CEBA application is required, and is proposed to
be $100,000 from the City's existing UDAG-funded economic development loan
program as a 0% five-year loan.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
/11 It L/ ~L
t I '.v l' "') /11" >
Michae c. Van Milligan
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
February 27, 2006
TO:
FROM:
Michael Van Milligen, City Manager
David Heiar, Economic Development Directo~
Sedgwick Claims Management Services, I~V I
Community Economic Betterment Account (CEBA) Application
SUBJECT:
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 Sedgwick Claims
Management Services, Inc., a national insurance claims management company. The
CEBA application is attached.
BACKGROUND
Sedgwick CMS has announced its intent to locate a new office operation in Dubuque to
manage disability claims for a prospective new client. Sedgwick will create 75 new
positions initially with the potential to add additional employees in the future.
The CEBA application on behalf of the company will provide financial assistance to enable
the company's startup in Dubuque. As required by the CEBA program, the application
requires a commitment of City funds to the project.
DISCUSSION
Sedgwick will commit to employ 75 new employees averaging $15.72 per hour plus
benefits. The Company will be investing over $2.2 million in startup operational expenses,
including computer equipment, furniture and fixtures and training costs.
To assist this project, Sedgwick has requested a forgivable CEBA loan of $150,000. City
assistance as public match for the CEBA application is required, and is proposed to be
$100,000 from the City's existing UDAG-funded economic development loan program as a
0% 5-year loan.
RECOMMENDATION
I recommend that the City Council authorize the submission of a CEBA application for a
$150,000 partially forgivable loan on behalf of Sedgwick CMS, Inc. with a commitment
of a $100,000 loan as local matching funds.
This project is consistent with the City's goals to recruit new businesses to the
community, increase the number of good paying jobs and further diversify our economic
base.
ACTION STEP
The action step for the City Council is to adopt the attached resolution.
attachments
F:IUSERSIPMyhreIWPDOCSIlOANDOClSedgwickICEBA APP memo.doc
RESOLUTION NO. 93-06
A RESOLUTION AUTHORIZING THE FILING OF A COMMUNITY
ECONOMIC BETTERMENT ACCOUNT (CEBA) APPLICATION ON
BEHALF OF SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.
Whereas, Sedgwick Claims Management Services, Inc. has proposed the
expansion of its operations to 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 75 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 CEBA
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 Community
Economic Betterment Account program on behalf of Sedgwick Claims Management
Services, Inc. is hereby approved.
Section 2. That the local match of$100,OOO identified in the application as a loan to
the company 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 Iowa Department of Economic
Development together with such documents as may be required.
Passed, approved, and adopted this 6th day of March 2006.
Roy D. Buol, Mayor
Attest:
Jeanne F. Schneider, City Clerk
IOWA
It I changing"
Mary Lawyer, Director
Iowa Department of Economic Development
Application for Financial Assistance
Section A - Applicant & Project Information
Business Development Division
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines, Iowa 50309
www.iowalifechanQ!!l9.com
9/19/2005
Instructions
1. All applicants shall complete Section A of the Application for Financial Assistance and attach only those section(s) for the
program(s) to which the applicant is applying.
Proq ram
Community Economic Bettermeant Account (CEBA)
Enterprise Zone Program (EZ)
High Quality Job Creation Program (HQJC)
Entrepreneurial Ventures Assistance Program (EVA)
Value Added Agricultural Products & Processes
Financial Assistance Program (VAAPFAP) Section F
Economic Development Set-Aside Program (EDSA) Section G
2. Please visit the IDED Web site, http://www.iowalifechanqinq.com/applications/busdev/index.htmlor contact IDED at (515)
242-4819 to see if this version of the application is still current.
3. Before filling out this application form, please read all applicable sections of the 2005 Iowa Code and Iowa Administrative
Code (rules). http://www4.leqis.state.ia.us/IAChtml/261.htm
4. Only typed or computer-qenerated applications will be accepted and reviewed. Any material change to the fonnat,
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 only be used when requested or as supporting documentation.
7. Any inaccurate information of a significant nature may disqualify the application from consideration.
8. Upon completion of the application, please submit the following to the Business Finance Team at IDED:
. The original, signed application form and all required attachments
. One copy of the application form and all required attachments from which additional copies can easily be made.
If electronic copies of the application and required attachments are available, please e-mail these documents to
businessfinance(a)iowalifechanqinq.com in addition to submitting the original plus one copy.
Business Finance Team
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines IA 50309
Download and Complete
Section B
Section C
Section D
Section E
Application Due Dates
IDEO Board Meetin A lieation Due Date
October 20, 2005 Se tember 26, 2005
November 17,2005 October 24,2005
December 15, 2005 November 21, 2005
. EVA applications will be acted upon every other month starting in March.
Section A - Applicant & Project Information 2
Public Records Policies
Information Submitted to IDEO. The Iowa Department of Economic Development (IDEO) is subject to the Open Records law
(Iowa Code, Chapter 22). Treatment of infonmation submitted to IDEO 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 infonmation.
Confidential Records. IDEO automatically treats the following records as confidential and they are withheld from public
disclosure:
. Tax Records
. Quarterly Iowa Employer's Contribution and Payroll Report prepared for the Iowa Workforce Development Department
. Payroll Registers
· Business Financial Statements and Projections
. Personal Financial Statements
Other infonmation supplied to IDEO as part of this application may be 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 IDEO:
. Trade secrets [Iowa Code 922.7(3)]
. Reports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose.
[Iowa Code 922.7(6)]
. Infonmation on an industrial prospect with which the IDEO is currently negotiating. [Iowa Code 922.7(8)]
. Communications not required by law, rule or regulation made to IDEO by persons outside the government to the extent that
IDEO 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 922.7(18)J
Information supplied to IDEO 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, 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 IDEO's administrative rules relating to public
records are available from the Department upon request or at
http://www.iowalifechanqinq.com/downloads/chap 1690penrecords.doc.
Section A - Applicant & Project Information
3
4.
Applicant Information
1. Name of Business: Sedgwick Claims Management Services, Inc.
Address: 1100 Ridgeway Loop Road
City, State & Zip Code: Memphis, TN 38120
Contact Person: Joseph Labetti Title:
Phone: 901-415-7683 Fax:
Email: jlabetti@sedgwickcms.com
SIC or NAICS Code: 6411
Federal 10 Number: 36-2685608
Does the Business file a consolidated tax return under a different tax 10 number?
If yes, please also provide that tax 10 number: 52-2223216
Senior Vice President
901-415-7474
2.
3.
X Yes
o No
Is the contact person listed above authorized to obligate the Business? 0 Yes
If no, please provide the name and title of a company officer authorized to obligate the Business:
X No
Kimberly Brown, Corporate Counsel
5. If the application was prepared by someone other than the contact person listed above, please complete the following:
Name: Title:
Organization:
Address:
City, State, & ZIP Code:
Phone: Fax: Email:
Sponsor Information
Please review the following table to determine who needs to sponsor this application. Depending on the programs being
applied for, more than one sponsor may be necessary.
Pro ram
CEBA
EZ
HQJC
EVA
VAAPFAP
EDSA
1.
Sponsor Organization:
Official Contact:
Address:
City, State & ZIP Code:
Phone:
E-mail:
City of Dubuque
Roy Buol
50 West 13'h Street
Dubuque, IA 52001
563-589-4110
rd buol@cityofdubuque.org
Title:
Mayor
Fax:
563-589-0890
2. If IDEO needs to contact the sponsor organization with questions, should we contact the person listed above?
o Yes X No, please contact the following person:
Name: Dave Heiar Title: Economic Development Director
Address: 50 West 13'h Street
City, State & ZIP Code: Dubuque, IA 52001
Phone: 563-589-4393 Fax: 563-589-1733
E-mail: dheiar@cityofdubuque.org
Section A - Applicant & Project Information
4
If necessary, please list information on additional sponsors in an attachment.
Certification & Release of Information
I hereby give permission to the Iowa Department of Economic Development (lDED) 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. (High Quality Job Creation Program applications may be submitted up to 12 months following the completion of the
project.)
I understand that IDED reserves the right to negotiate the financial assistance. Furthermore, I am aware 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:
Signature
Date
Name and Title (typed or printed)
For the Sponsor(s):
Signature
Date
Name and Title (typed or printed)
Please use the following if more than one sponsor is required. (For example, use this if a signature from the local Enterprise
Zone Commission is required in addition to the signature from the Mayor of the sponsoring city.)
Signature
Date
Name and Title (typed or printed)
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 prior to discovery of the incorrect, false, or misleading representation, IDED may initiate legal action to recover
incentives and assistance awarded to the Business.
Section A - Applicant & Project Information
5
Proiect 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.
Sedgwick Claims Management Services, Inc. (Sedgwick CMS) is a leading national third-party administrator of
workers' compensation, liability, disability, and FMLA claims. More than three decades ago, Sedgwick CMS opened
for business with the goal of providing top-quality claims administration services for on-the-move companies. Today,
we are a leader and standard setter in the third-party administration (TPA) industry.
Sedgwick CMS represents clients in all fifty states and has over fifty clients that experience at least 1,000 claims
a year.
Primary competitors are other TPA's, broker affiliates and insurance carriers.
2.
Business Structure:
o Cooperative
o Partnership
X Corporation
OS-Corporation
o Limited Liability Company
o Sole Proprietorship
o Not for Profit
State of Incorporation: Illinois
3. Identify the Business' owners.
Fidelity National Financial, 40%; Thomas H. Lee Partners, 40%; Evercore Capital Partners, 20%
Does a woman, minority, or person with a disability own the Business?
If yes, is the business certified as a Targeted Small Business?
DYes
DYes
X No
o No
4. List the Business' Iowa Locations and the Current Number of Employees at each Location.
Sedgwick CMS is the Third Party Administrator for the State of Iowa, we have a dedicated unit in Des Moines that
employs 14 colleagues.
5. What is the Business' worldwide employment? (Please include employees of parent company, subsidiaries, and other
affiliated entities in this figure.)
4,100
6. 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.)
The Company anticipates having a need to hire and train approximately 75 individuals to manage disability claims for a
prospective new client. The Company anticipates it will be conducting a four-month comprehensive training program
beginning with a 3-week classroom program designed to familiarize new employees with the tools and systems used to
manage disability claims. The trainees would need to receive extensive training in the use of a proprietary
computerized claim system, technical training relating to the handling of specific disability claims per client service
instructions, training on federal and jurisdictional laws and statutes impacting the processing of disability claims.
Medical terminology, treatment schedules, and record keeping requirements would be a part of the training curriculum.
Upon completion of the classroom training, graduates would complete a competency examination and be assigned a
mentor to complete the on-the-job training to take place over a periOd of three additional months.
Target kickoff date is June 1st, 2006 and we are currently reviewing available locations with 20,000+ SF of space to
lease. Staffing would occur over a phased time line beginning with recruiting in February & March, jobs offered in April
and training beginning in May.
Section A - Applicant & Project Information
6
Additionally, if this model proves successful we'd consider making Dubuque a center of excellence and adding more
clients and corresponding personnel. Clients themselves are located anywhere within the US along with their
employees, customers and vendors.
7. Project Address (Street Address, City, and County):
Several buildings under consideration including one in the Dubuque Technology Park, the Eagle Point Software facility
and the Field Office Building.
8. Type of Business Project:
o Startup 0 Expansion of Iowa Company X New Location in Iowa
o Relocation from another State
9. Please identify the management at the project location and his/her/their experience.
Joseph Labetti, SVP will be responsible for the build out of this operation. Joe has over 19 years experience within the
insurance & risk management fields, has been a colleague with Sedgwick since 1997 and possesses a MS in
Management, BET in Mechanical Engineering, is a Chartered Property & Casualty Underwriter (CPCU) and an
Associate in Risk Management (ARM).
Part of his responsibility will be the hiring of a management team to run day to day operations.
10.
Has any part of the project started?
If yes, please explain.
Yes
XNo
Note that we have presented the Dubuque model as an option to a one of the country's top businesses. As part of the
presentation we've taken into account the discussions and incentives provided to date from State and City personnel
thereby offsetting the fact that the staff will come to us without our specific industry experience. We viewed this option
as an attractive alternative to placing these jobs offshore, namely evaluation of a possible entree into India. Since this
proposal has been submitted we expect a final agreement at anytime and thus to some extent this project is already in
the works. We have made this "timing" fact clear during all of our discussions with IDED & GDDC and indicated that
corollary development was underway (i.e. that as we were working through possible incentives within the community at
the same time we're building the possible option for our prospective client).
Section A - Applicant & Project Information
7
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12. Employee Benefits: Please identify all employee benefits provided by and paid for (in full or in part) by the Business.
Employee Benefits Total Annual Cost Portion ofTotal Plan Provisions
Provided by the (show on a per Annual Cost Paid (Include deductibles, coinsurance %, office visit
co-payments, annual out-of-pocket maximums,
Business employee basis) by the Business. face amounts, etc.)
Empioyee Family Employee Family
Medical/Health $3,924 $11,772 $3,144 $9,420 $250/$500 deductible. $1500/$2500 out of
Insurance pocket maximum. $25 per office visit, $50
per specialist office visit.
$50/$100 deductible, preventative 100%
Dental Insurance $348 $1,056 $276 $840 after deductible, restorative 80%, $1,500
annual maximum.
Vision Insurance $77.40 $237 $0 $0 $10 exam visit, $25 co-pay on eye glasses
and contacts
One time base salary 100% funded by
Life Insurance Varies 100% company
100% funded by company based on length
Short Term Disability Varies 100% of service. Less than 1 yr, 50% of base.
(STO) One or more years of service 100% of base
for 90 davs, 60% for next 90 days.
40% of base pay with maximum monthly
Long Term Disability Varies 100% benefit of $5,000. Supplemental L TO of
(LTO) 20% is available at 100% employee
exoense.
. If the business's plan is self-insured, please use the amount paid by the business for costs associated with employee and family coverage
during the past three years and then, determine the business' average annual contribution per employee for that three year period.
Does the Business offer a pension plan, 401(k) plan, and/or retirement-plan? X Yes 0 No
If yes, please indicate the amount contributed on a per employee basis by the Business to the plan. For 401 (k) plans, please
provide infonmation on the company match and indicate the average annual match per employee (show average as a
percentage of salary).
401(k) only, business matches 66~3 cents for every $1 employee contributes up to first 6% saved. Effective 4/1/06, our match
will increase to $1 dollar for every $1 employee contributes up to the first 6% saved if the company hits its defined targets.
Current colleague demographics indicate that those making $36,000 in salary or more contribute on average 3% to their 401 (k)
accounts.
Does the Business offer a profit-sharing plan? 0 Yes X No
If yes, please indicate totai amount paid out each year for the past three years and then, determine the average annual bonus or
contribution per empioyee for that three year period.
Does the Business offer child care services? 0 Yes X No
Child care services include child care services on-site at the facility in which the project will occur or off-site child care
subsidized by the business at the rate of 50% or more of the costs incurred by an employee.
Section A - Applicant & Project Information
9
13. 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 competitor.
Typical competitors are other Third Party Administrators or insurance companies. We are not completely aware of the
Dubuque business community to identify such competitors, at the same time though we don't recognize any of our
normal competition. Regardless, since the clients we pursue are nationwide we don't foresee any local impact other
than individuals wanting to join our firm.
14. Will any of the current Iowa employees lose their jobs if this project does not proceed in Iowa?
D Yes X No
If yes, please explain why and identify those jobs as "retained jobs" in the following question.
15. List the jobs that will be retained and/or created 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 retained jobs, include the current
hourly wage rate. For jobs to be created, including the startina hourly wage rate.
Job Title Skills, Education, or Experience I Number of Retained (R) or Starting or Current Wage
Required Jobs Created ICI Rate
Vear 1 ofthe Proiect
Clerical 1vr. EXD, HS Dearee 6 C $20,000
Claims Analvst 1-3vrs. Exo, AS Deoree Dreferred 2 C $32,000
Disabilitv Snecialist I 1 vr EXD., AS Dearee oreferred 10 C $25,600
Disabilitv Soecialist II 2vrs Exo, BS Dearee meferred 9 C $36,000
Onerations Manaaer 5-8vrs EXD, BS Dearee Dreferred 1 C $92,000
DEP Schedulino 1 vr Exo, AS Dearee oreferred 7 C $24,000
DEP Sunervisor 3-5vrs Exp, BS Dearee preferred 1 C $48,000
intake CSR I 1-2 vrs Exo, AS Deoree nreferred 8 C $24,000
Intake CSR II 3 vrs EXD, BS Dearee Dreferred 2 C $28,000
Intake Assistant 1 vr Exp, HS Deoree 1 C $20,000
Intake Team Leader 5 vrs Exp, BS Dearee preferred 1 C $40,000
Intake Manaaer 5-8 vrs Exp, BS Dearee oreferree 1 C $50,000
FMLA Assistant 1 vr Exo, HS Dearee 1 C $20,000
FMLA Examiner 1 vr EXD, AS Dearee Dreferred 11 C $25,600
FMLA SUDervisor 3-5 vrs Exo, BS Deoree meferred 1 C $48,000
Juirs/IT Coordinator 3 vrs EXD, BS Dearee Dreferred 1 C $32,800
L TD Active 2vrs medical exo, BS Deoree oreferred 5 C $38,800
L TO Maintenance 1 vr medical eXD, AS Dearee Dreferred 2 C $28,000
Siillervisor 4-5vrs exo , BS Deoree oreferred 4 C $48,000
Performance Analyst 3yrs exp, BS preferred, Prof. 1 C $44,000
Certification
Vear 1 Subtotal 75
Job Title Skills, Education, or Experience Number of =t'l' ~e:~linl:~ ;~) ar I Starting or Current Hourly
Required Job. Created ICI Wage Rate
Vear 2 of the Proiect
Vear 2 Subtotal ~
Vear 2 of the Proiect
Total Number of Retained Jobs:
Section A - Applicant & Proiect Information
10
Total Number of Created Jobs: 75
16. Discuss each of the following items with respect to the proposed project:
a) the current employment conditions in the community, include any business closures, unemployment rates, etc.
and if applicable, the community's need for assistance in attracting the Business.
Since January of 2003, the DUbuque metro area has experienced an increase of 1,600 jobs. In addition,
during this same period, new commercial/industrial construction spending has exceeded $170 million.
However, despite this progress, the most recent numbers show that DUbuque lost 500 jobs in December and
the unemployment rate rose to 5.1 percent.
From a broader perspective, Dubuque County has experienced declining manufacturing employment, going
from 37% of the total jobs in 1978 to the current level of about 17 percent. Unfortunately, some of the
manufacturing jobs have been replaced with varying types of lower-paying service jobs. During just the past
few months, some of Dubuque's large manufacturers, like Flexsteel industries, have shed jobs. However,
thanks to a growing interest in this region's financial services/insurance industry talent, Dubuque's economy
has been resilient. The proposed project from Sedgwick CMS could provide an additional boost for Dubuque,
while hitting a targeted cluster/industry for the State of Iowa.
b) impact of the proposed project on the community and the state, include projections that reflect the impact on local
and state tax revenue and any additional costs the community will incur as the result of the proposed project;
Sedgwick CMS' proposed project, based on 75 jobs and $2,298,000 in new direct payroll, would be a positive
impact for Dubuque and the entire State of Iowa.
c) impact the proposed project will have on current employees, including the potential for increased skills and wages;
and
We do not expect any impact on the 13 current employees located in Des Moines.
d) impact the investment will have on the ability of the business to expand, upgrade, or modemize its capabilities.
If this project is successful (using an untested workforce and training heavily) there is the potential for us to place
more business in Dubuque and thus expanding this materially.
17.
Is the Business actively considering locations outside of Iowa?
If yes, where and what assistance is being offered?
X Yes
D No
As indicated in this document along with earlier documents submitted to the City & State, offshore locations were part
of our analysis along with Michigan as a primary source for experienced personnel.
18. There are three general justifiable reasons for assistance. Check the box next to the reason why assistance is needed
to complete this project
D 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.
D Rate of Return Gap - The Business can raise sufficient debt and equity to complete the project, but the
retums are inadequate to motivate an "economic person" to proceed with the project. Project risks outweigh the
rewards.
X Locational 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 8.
What measures were analyzed to determine the amount and form of assistance needed?
Section A - Applicant & Project Information
11
. Educational level
. Industry experience
. Cost of training new employees/management
. Cost of facility
The process of choosing a potential location for expansion has been a very competitive process. The potential
new location in Dubuque is competing with an existing operation in Michigan as well as a new location in India.
India by far is the lowest cost location, however because we have not established an operation in India we'd prefer
to establish the operation in the US if the US cost differential is tempered. The Michigan location advantage is the
abundant labor force with the required skill sets that we're seeking. This labor force does not exist to any extent in
Dubuque. The risk and training cost associated with this fact is material. Our existing operation in Michigan
eliminates start up costs such as, travel cost, living expresses, and airline costs. The assistance from the CEBA
program that may be provided and Iowa work ethic would allow Dubuque to remain competitive in this selection
process.
19.
What amount of state assistance is requested based on the above-identified need?
$150,000
What type/fonm of assistance is preferred (e.g. loans, forgivable loans, tax incentives, etc.)?
Forgivable loan.
20. Please indicate what program(s) the Business is applying to and download and submit those applicable sections:
x
D
D
D
D
D
CEBA
EZ
HQJC
EVA
VAAPFAP
EDSA
(Complete Section B)
(Complete Section C)
(Complete Section D)
(Complete Section E)
(Complete Section F)
(Complete Section G)
The Department reserves the right to review this application and detennine, based on the proposed project and available
program funds, which financial assistance program{s) is best suited for the Business' project. The actual program{s) utilized
may vary from the programs indicated above.
Section A - Applicant & Project Information
12
21. Return on Investment Infonmation - Business Taxes
IDEO is required to calculate the return on state and local government investments in this project. Data from other parts of the
application will be combined with the estimates requested below to calculate the required return on investment information.
Instructions for Question 21
IDEO is asking for a best estimate on the increase In taxes associated with this project.
Estimates should only include the expected increase in tax liability resulting from this project.
At minimum, IDEO needs estimates for the first three years of the project.
Show data as if no tax abatements or tax credits awarded for this proiect were taken.
For partnership forms of ownership (e,g. limited partnerships, s-corporations, LLC, etc.), please estimate the
partners' increase in Iowa tax liability due to this project.
Sales and use taxes refer to the taxes paid on materials, etc. that the Business purchases, not taxes you
collect from sales to your customers.
Applicants will not be held to these numbers with respect to any award from or contract with IDEO.
This page of the application will automatically be treated as confidential.
Increase in Tax Collections Associated with this Project
State Business Taxes
Year 1
Year 2
Year 3
Year 4
YearS
State Corporate Income Tax' $ $
State Business Sales and Use Tax $ $
. Insurance Companies: Provide State Insurance Premium Tax
$
$
$
$
$
$
Local Business Taxes
Local Real Estate Property Tax
Local Option Sales Tax
Year 1
Year 2
Year 3
Year 4
Year S
$
$500
$
$
$
$
$
$
$
$
Attachments
Please attach the following documents:
A 1 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, and
. patent status (if applicable),
(Any infonmation outlined above not included in the business plan should be submitted as supplemental infonmation via
a separate attachment.)
Section A - Applicant & Project Information
13
A2 Copies of the Business' Quarterly Iowa Employer's 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.
A3 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.
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;
. Scheduie of aged accounts payable; and
. Schedule of other debts.
Application Checklist
Section A - Applicant & Project Information
14
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Section B - CEBA
1. Which program component is the Business applying for?
D Small Business Gap Financing
X New Business Opportunity
D New Prod uct Development
D Modernization Component
2. Funding Information:
Total Amount Requested:
Loan Amount:
Forgivable Loan Amount:
$150,000
$0
$ 150,000
See Chapter 53, Section 261 in the CEBA Administrative Rules for maximum funding amounts. The CEBA program is
not designed to provide 100% funding for any project and limits assistance based on the type of project submitted.
3. Security:
D
D
D
D Personal Guarantee D Other:
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.
X
D
D
Corporate Guaranty
UCC Financing Statement
Irrevocable Letter of Credit
Surety Bonds
Mortgage on Real Estate
Escrow Account
4. Does the business certify that at least 10% ot the positions to be created will be made available to qualified Promise
Job Participants? X Yes D No
5. Are underground tanks (whether or not in current use) for the storage of petroleum products, agricultural or other
chemicals, waste oil or other liquid waste or any other inflammable, corrosive, reactive or explosive liquid or gas
located on the project site?
DYes
XNo
If yes, please explain:
Will the Business be storing above-ground, on or about the project site, in tanks or otherwise, any liquid or gas (as
described above) or any inflammable, corrosive, reactive or explosive solid, for any length of time or any purpose?
DYes
XNo
If yes, please specify:
Will the Business be treating, transporting or disposing of any liquid, gas, or solid (described above) either on or about
the project site or at a landfill or other treatment facility or upon any publiC street or highway, or on any waterway or
body of water, or in any aircraft?
DYes XNo
If yes, please specify the substance and what the Business will be doing with it.
Section B - CEBA
2/4/2005
6. Does the Business generate solid or hazardous waste? D Yes X No
If yes, please describe and provide a copy of the Business' solid and hazardous waste reduction plans.
Attachments
Please attach the following documents:
B3 Community resolution authorizing the submission of the application
Section B - CEBA
2/4/2005
2