Targeted Jobs Tax Credit Prog App
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MEMORANDUM
September 1, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Targeted Jobs Withholding Tax Credit Program Application
The Targeted Jobs Withholding Tax Credit Program is a program for cities located
adjacent to neighboring states to remain competitive in attracting new jobs. Receiving
pilot project status for this program will make incentives available in the amount of up to
3% of the wages paid by the company on new eligible jobs. An eligible job is one that
pays a wage of at least $15.65 per hour, which is the county average wage. The
incentives can be used for a variety of purposes, from infrastructure improvements,
working capital expenditures, relocation costs, and any other costs incurred to create
new qualified employment.
Four communities will receive pilot project status within the program. The cities of Sioux
City and Council Bluffs were defined as pilot project cities, which leaves two cities to be
chosen from the eastern side of the state. Dubuque is competing against seven other
communities along the Mississippi River. The other cities are: Clinton, Bettendorf,
Davenport, Burlington, Fort Madison, Muscatine and Keokuk.
Economic Development Director David Heiar recommends City Council approval of an
application to the Iowa Department of Economic Development for the Targeted Jobs
Withholding Tax Credit Program for pilot project status.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
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Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
September 1, 2006
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Directo~~
SUBJECT: Targeted Jobs Withholding Tax Credit Program Application
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving an
application to be submitted to the Iowa Department of Economic Development for the
Targeted Jobs Withholding Tax Credit Program for pilot project status.
BACKGROUND
In the 2006 Iowa legislative session, House File number 2731 was approved to create
the Targeted Jobs Withholding Tax Credit Program. The City of Dubuque is eligible to
apply for pilot project status within this program.
The Targeted Jobs Withholding Tax Credit Program is a program for cities located
adjacent to neighboring states to remain competitive in attracting new jobs. Receiving
pilot project status for this program will make incentives available in the amount of up to
3 percent of the wages paid by the company on new eligible jobs.
The legislation defines that four communities will receive pilot project status within the
program. The cities of Sioux City and Council Bluffs were defined as pilot project cities,
which leaves two cities to be chosen from the eastern side of the state. Dubuque is
competing against seven other communities along the Mississippi River. The other
cities are; Clinton, Bettendorf, Davenport, Burlington, Fort Madison, Muscatine, and
Keokuk.
DISCUSSION
The application consists of 4 sections:
· Need for pilot project status. The city shall demonstrate why status as a pilot
project city is necessary, including how the city will utilize the program to attract
and retain employers.
. Planned and current projects. The city shall provide information on planned
and current economic development projects that are or will take place in an
urban renewal area. The city shall demonstrate its ability to enter a withholding
agreement with an eligible business within one year of approval as a pilot project
city.
· Use of withholding funds. The city shall indicate if approved as a pilot project
city, how the city plans to utilize withholding funds generated from this program.
The city shall provide an estimate on the number of withholding agreements the
city anticipates executing, the amount of withholding the city expects to generate
as a result of this program, and the investment to be leveraged by use of this
program.
. Urban renewal areas. The city shall identify the number of urban renewal areas
in its city and the location of the urban renewal areas where withholding funds
may be utilized.
· Matching funds. The city shall identify its ability to provide matching funds for
projects involving withholding credits, including the potential sources of matching
funds.
Our application must demonstrate a need but also must substantiate our ability to utilize
the development program. Receiving pilot project status will make available another
economic development tool that the City can utilize to attract new jobs to the area.
Receiving project city status for this program will make incentives available in the
amount of up to 3 percent of the wages paid by the company on new eligible jobs. An
eligible job is one that pays a wage of at least $15.65 per hour, which is the county
average wage. The incentives can be used for a variety of purposes, from
infrastructure improvements, working capital expenditures, relocation costs, and any
other costs incurred to create new qualified employment.
The deadline for the application is September 29th, 2006. Requests for letters of
support have been sent to our local state legislators and area development
organizations.
RECOMMENDATION
I recommend to the City Council adopt the attached Resolution approving the City of
Dubuque's application for the Targeted Jobs Withholding Tax Credit Program.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
attachments
F:\USERS\Adejong\Border Cities Application\Resolution Cover memo. doc
RESOLUTION NO. 437-06
A RESOLUTION ENDORSING AN APPLICATION FOR THE IOWA DEPARTMENT OF
ECONOMIC DEVELOPMENT TARGETED JOBS WITHHOLDING TAX CREDIT
PROGRAM.
Whereas, the City of Dubuque is interested in promoting further economic
development opportunities in the City in order to attract new job creating businesses to
this community; and
Whereas, receiving pilot project status within the program will make available
additional incentives to encourage new quality jobs to the City; and
Whereas, the Iowa Department of Economic Development has a new program
called the Targeted Jobs Withholding Tax Credit Program and the City of Dubuque is
eligible to receive pilot project status within the program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the City Council of the City of Dubuque hereby endorses the
application to the Iowa Department of Economic Development Targeted Jobs
Withholding Tax Credit Program.
Section 2. That the City Manager is authorized to sign, on behalf of the City
Council, the application for Targeted Jobs Withholding Tax Credit Program.
PASSED, APPROVED and ADOPTED this 18th day of September, 2006.
Roy D. Buol, Mayor
ATTEST:
Jeanne F. Schneider, City Clerk
F:\USERS\Adejong\Border Cities Application\council Resolution.doc