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Sedgwick Claims CEBA Application (2) i5~~~E ~<k~ 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 Q) OJ "C " co U Q) .e- n. ~ ~ c W I- W Cl c ::> m I- Z ::> o ::iE <( :J: '" e " o en ~~~~~~~~~~~~~~~~- Cl '" e " o en ~~~~~~~~~-----~-~ LL '" e " o en --------------~-- w '" e " o en --------------~-- c '" e " o en c c 0000 0 8888 ~ R~~g ~ C'\.lt-"<;t _ --------------~-- 0; -'~ <( " I- '" 00:: I- .l!i '6 ~ " " '" <= W '" <= ",Q) ,,"- <= ~ ~ 0 w <= .~ "E Kf~ x >- '" '" -"- ~Q) 2t~ oJ!! CLQ) w,", " <= .E' w U Q) e 0.. 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" " " LL '0 '" e " o en ~- fJ{3 ~ " '" " ,,-- me w " ~ 2 "" 0 <= 0 W "w 0 .0", ]gm-d:: ~ " o UJ wu..: " " " ~ '" " o 0 UJ UJ 0:c..... "'''<( 221- 550 UJ UJ I- .<= " '" " '0 " " m > "''' a; " -;;15 a= .~ "10 <= Q) 1:" x= J9~ ~~ 3: g o .- a; " .o[ij ~~ ~ .~ ~ ~ a:::.8 C' '" ." Q. "- <( I <( c o t5 '" UJ m '" e " o en o c o c o c ci c:i' .... "' <00 -------------~~-~m " o .<= ~ ~ 10 2.. "E c " 08 g E ~t~ 000 0..... N ~ C> to _ c: ............ N- tA-______ 0_ .$ a:5 0> -E ~b E 20 ~ c75 ai (5 Q:i~""ffi ~o" 5U..9 iri "c '" " ~ E ~ E 00 UJ U <( '" e " o en c c " 6~ ..., w ~ " ~~~~~~~~-~----~-~ o '" o ci "' "lii o U c c 0000 a <:> 88gg 25 0 61O~L.Cici 6 N ~q:::~~:g N --------------~-~ Isle! - ]j en 81 !21:~I~ ~ ill ~ "t:I 5U'!;;;wo.?) -ffi!!:!~ .Q 5 c: c:;:::: ::J (j) ~I ~ c: 3: l'tI :::I _ ~ LL. ~ g :~ ~ -gEl ~ ~ ~ "E 1; ,~ ~ ~I _ a ~ ~ t) 0 Q) .!: :E ~ ~ ~ ....... ~ ~I ~ CDI ~I ~ ~ (,.)JC:: 13 ~ ~ ID ill ~ u ..c: 2; en U ill ~ 1~ ro ~ ~ ~ ~ ~'ffi ~ <r: a: .s .S .S ~ ..... 'SI ~j ~ .2 ~ co ~ -g CLl ;g ;g ;gl~' ~ is E E"2 '- ffi .0 ~V5&ldLfi~6&88~~&~ ~ '" ~ " o UJ 2< '" ~ > gJit c '" "OO..c. ~6 0i::i e e " " o 0 UJ UJ c .Q ro E .E -" 13 '" "e- D- "" 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 o - fn .- - ~ (.) CI) .c U c o .- - CO (.) .- - a. a. <C > en c: .- 0) c: CO ..c: CJ .~,,,. ""~ ci- w >- o-j .8 ;;: cO 0," 16..0 g~ 0.-0 g-'~ ~5. -Q) U '" a. U) Q) ,s '" c ;S .E .0 ::> en.!::: ai .~ .s::::'" ;;:15. -0 x Q) Q) -go u- c Q) 0- > ~ .~ '" Q) c ~ g.9 u_ ~ ~ 16~ ,sQ) ~ c .e~ -00 Q)w 160 Q) - c .s:::: (f) .$:2 ~~ :!:::c: 0;0 ,sQ) 0; "-0 Q) ,s '" ,s .;< "* U '0 oS x o .0 '" c '0 c o a. Q) U) ~ ~ ~o o.U Q) ,s .s .E .0 ~JB .9~ "'0:.0 .~ .~ ::> Q) ~m .!a l5.. U),,; U) Q) Q)-o c ::> "in C3 ~.!: Q)o ,sc t:: _!a 0-0 t:5$ ~Jg .s:::: E ~~ Q) c ::; '" u... "= U) '" .s:::: Cl c<<: 0'" 'Be ..w '" LLa. c;1; :fin. ..~ "'> w c o~ 'Bw .. '" e cu 0-. 'BU ..:E: '" u c .!2[;j 1:) .. '" m c<<: om 'Bw ..u '" <<: c o 'B .. '" -0 Q) -0 ::> U .s c Q) Q) .0 o C c 0) E '" '" 0) '" E '" .g> Iv .J2 0) '" .l!l "0 -0 '" '" 0) '" Q) 0) C Z "0 -0 0 '" a.::> t5 Q5 .l!l 0) C ~ U 0) 0) en .2 ~ c .<= Q5 0'" 0 U) '" ~ -0 E => => 0 a: 0) z '" 0 '" ~ :i5 "0 0 I 0 Z '" J!l 0 => 0) <3 '" 0) 0 ro "- C '" > :i5 .0 '" a: C m "" '" U) '" '" ro oijj 0) C .C 0) E C C <5 E C ro ." '" e &.'0 '" g '" u u ~ ~ .2 m C 0) C ~ 0) C .1a & '" :E: '" ro "" '" a. 0) U) C .l!l w u E 0) 0) 0 C .<= E g 02 '" '" ",,!-!:: 0) :g. .2 "" J!l u:: J!l '" is .l!l 0 '" ill :> c 0 :i5 0'" .to -' a. u C e C "" => => '" '" 0) C Q5 0) c ~ 0) => => "0 C <<: 2 0 > '" 0 ~ E !;: 0 0 a. ~ 0) 0) 0) g;~ u u 0) ro 0 Ii; ~ e u c 0) ~ ~ => C C '" 0 .S: ro c "5 u a ~ '" c 'f6 "0 C 05 .2 0 E E .2 '" '" 10 ~ "0 :a5 o<e "0 "0 0) Co Q5 .<= uiCi E E => 0. 15. -' 0) 0) .<= u '" Ci. => '"' => u '" 0) 0) 0) "0 E 0 0 .g> CoX Co en en 0 << a: 0 <<: << U) :;; :;; :;; f- in w 0 0 <<w "'" IOWA h I changing" 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