09-22-2003 EDA Packet - Laserfiche WebLink

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To: Mr. Michael Grochala Ms. Mary Divine Cc: Paul Steinman From: Rob Davidson Patrick Pelstring Subject: Business Subsidy — Job Growth Objectives On behalf of Distribution Alternatives, Inc. we wanted to propose a jobs growth proposal, consistent with the State of Minnesota's Business Subsidy policy. As we have previously discussed, Distribution Alternatives, Inc. reviewed a number of different sites for development of their facility, including one site in Wisconsin. The Lino Lakes site assures that all of the existing employees will continue to be Minnesota jobs. More importantly, the current employment will all represent new employees working in the City of Lino Lakes. We would expect that many of these employees also consider living in Lino Lakes, near the Distribution Alternatives, Inc. facility. The State's Business Subsidy legislation requires a "payback" of the business subsidy if the company does not meet its job creation objectives. As a result, most agreements are written very conservatively in terms of job growth. Distribution Alternatives does project significant job growth, but the "payback" requirements can may create very difficult situations. If a company does not meet the job growth objectives are most often a function of economic conditions, which are out of the control of the company. Further, any required payback may add to a difficult financial situation, further impairing the company's ability to preserve the jobs of its existing workforce. We want to respond positively to the prospect of additional job growth in our new Lino Lakes facility. For this reason, we are proposing a job growth "target" that represents our best intentions, based on current economic and business forecasts. We would propose a significantly lower "job growth objectives" required for the State's business subsidy requirement. As such, we propose a two year plan, as follows: Accounting Information Systems Marketing & Customer Service Operations Management Warehouse Staff Totals Current # of Employees* 2 5 13 4 39 63 Current Ave. Hourly Rate $ 20.49 $ 23.85 $ 21.11 $ 26.01 $ 13.37 Target Job Job Growth Minimum Growth Objective** Hourly Rate 1 0 $14.50 2 1 $ 16.00 2 1 $15.00 0 0 $ 17.50 10 2 $ 10.00 15 4 * Full Time employees currently employed and moving to Lino Lakes. Does not include the temporary employees, which may number up to 60 people, depending on the season. ** Represents the job growth objectives subject to State Statute's requirements. These job growth estimates are meant to be cumulative through the entire company, regardless of job classification.