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HomeMy WebLinkAbout2003-04-10 Info PacketCITY OF IOWA CITY www.icgov.org CITY COUNCIL INFORMATION PACKET April 10, 2003 MISCELLANEOUS ITEMS IP1 City Council Meeting Schedule and Work Session Agendas IP2 Memorandum from Transit Manager to City Manager: Update on Using a Mini- Bus on Fixed Route IP3 Memorandum from Assistant City Manager: Certificate of Recognition from National Organization on Disabilities IP4 Memorandum from City Clerk: Meeting Schedule through October IP5 Letter from Design Review Committee to Marc Moen & Bobby Jett and Tim Schroeder: Plaza Towers IP6 Memorandum from Senior Center Coordinator: Senior Center Commission Recommendations for Funding, Operational and Programming Changes at the Iowa City/Johnson County Senior Center IP7 Iowa City Police Department Use of Force Report - March 2003 IP8 Iowa City Police Department Monthly Liquor License (OFF PREMISE SALES) Report - March 2003 IP9 Memorandum from Dianna Furman: Utility Discount Program Statistics -FY02 and FY03 IPl0 PlasicsNews Article: Growing Alpla Doubling Size of Iowa Plant [Atkins] IPll New York Times Article: Mugging the Needy [Pfab] IP12 Meeting Materials: April 17 City Council Economic Development Committee CITY OF IOWA CITY www.icgov.org City Council Meeting Schedule and Work Session Agendas April 10, TENTATIVE FUTURE MEETINGS AND AGENDAS MONDAY, APRIL 21 6:30p Special Council Work Session · City Conference Board · Joint Meeting with Planning & Zoning Commission · Remaining Agenda TBA Emma J. Harvat Haft · TUESDAY, APRIL 22 7:00p Special Council Formal Meeting Emma J. Harvat Haft · WEDNESDAY, APRIL 23 4:00p Special Council Work Session Joint Meeting: JC Board of Supervisors, lC School District, Cities of Coralvilla and North Liberty Emma J. Harvat Hall WEDNESDAY, APRIL 30 8:30a Special Council Formal Meeting Executive Session - Staff Evaluations Emma J. Harvat Hall · MONDAY, MAY 5 6:30p Council Work Session Emma J. Harvat Hall · TUESDAY, MAY 6 7:00p Council Formal Meeting Emma J. Harvat Hall · MONDAY, MAY 19 6:30p Council Work Session Emma J. Harvat Hall · TUESDAY, MAY20 7:00p Council Formal Meeting Emma J. Harvat Hall Meeting dates/times/topics subject to change FUTURE WORK SESSION ITEMS Regulation of Downtown Dumpsters Downtown Historic Preservation Downtown Kiosks Senior Center Funding City of Iowa City MEMORANDUM Date: April 8, 2003 To: Steve Atkins, City Manager From: Ron Logsden, Transit Manager Re: Update On Using a Mini-Bus On Fixed Route We have been running a mini-bus on the Night Manville/Court Hill routes since January 13, 2003. Initially there was a little confusion among riders as they adjusted to the mini- bus, but everyone seems to have adjusted. We have not encountered any problems with capacity and have received some positive feedback from the non-bus riding public in the neighborhoods in which the mini bus runs. The mini bus is quieter and is less disruptive in residential neighborhoods at night. We put the mini-bus on a route that does not have any regular riders who are assisted by a wheelchair. Ifa regular rider using a wheelchair were to start riding, we may run into capacity issues, but we have not encountered that problem thus far. We have been tracking the operating cost of the mini bus and it is running $.48 per mile as compared to the operating cost of a 40 foot buses which is $.83 per mile. The operating cost includes fuel and maintenance. That route pair is 13.4 miles per trip and does 3 trips each night for a operational savings of $14.07 per night and an annual cost savings of $3,939.60. Overall, I would say that our trial period of using a mini-bus on fixed route has been a success to date. Ridership on the Night Manville/Court Hill has remained at the same level with the mini-bus as it was when we were running a 40-foot bus on that route. We will continue using the mini-bus on the Night Manville/Court Hill for the remainder of the Spring run pick which ends on May 17, 2003. I will update you again at the end of the trail period. There is one other night route pair that could potentially be run using a mini-bus. The Night North Dodge/Broadway would save $3,557 a year in operating cost. In order to run a second mini-bus at night, we would need to use one of the mini buses that we lease to SEATS for paratransit service. The other three night routes have higher ridership than a mini-bus can accommodate. City of Iowa City MEMORANDUM TO: FROM: DATE: RE: City Council Dale Helling, Assistant City Manager April 9, 2003 Certificate of Recognition from National Organization on Disabilities Attached please find a copy of a certificate of recognition from the National Organization on Disabilities (NOD). This recognition stems from an entry submitted in December, 2002, on behalf of Iowa City to the NOD sponsored Accessible America Contest. Iowa City was one of seven finalists in the competition. The entry was initiated by Nancy Ostrognai and Marilyn Belman who, along with Thomas Flynn from the UI Center for Disabilities and Development, prepared and submitted the entry form. Several City staff assisted by providing information on accessibility issues and measures previously addressed by the City as well as noting accessible features in our community. Marilyn, Nancy and Tom worked tirelessly gathering information and preparing the Iowa City entry in about two weeks time. They are to be commended for their efforts and for their initiative. cc. Nancy Ostrognai Marilyn Belman Thomas Flynn NATIONAL ORGANIZATION ON ABILITY vvvvvv, nod.org NATIONAL ORGANIZATION ON [ ] ABILITY vvvv~v, nod.org March 18, 2003 The Honorable Emest Lehman City of Iowa City 410 East Washington St. Iowa City, IA 52240 Dear Mayor Lehman: All of us at the National Organization on Disability want to recognize and commend Iowa City's efforts on behalf of people with disabilities, as demonstrated by your impressive entry being named as a finalist in the Accessible America 2002 competition. The judges carefully reviewed all entries and selected Irvine, California as this year's winner. We encourage the continuation of Iowa City's fine work promoting the full and equal participation of people with physical, sensory and mental disabilities in all aspects of community life. Because only one community is selected each year as a model of noteworthy progress in closing the participation gaps between people with and without disabilities, we encourage you to update your 2002 application and resubmit it for the 2003 competition. Details on the 2003 competition will be posted on our web site at www.nod.org beginning in May. We are pleased to enclose a certificate acknowledging the Iowa City's laudable commitment to the participation of people with disabilities in community life. If you would like to extend your community conunitment with a membership in N.O.D.'s Community Partnership Program, please complete and submit the enclosed application materials while the discounted membership rates are in effect. With all good wishes, ~Sincerely' ~ Vice President & Director Partnership Programs Enclosures It's abili~, not disabili~ that counts. 910 Sixteenth Street, NW · Washington, DC 20006 · 202-293-5960 · Fax: 202-293-799g · TDD: 202-293-Sg68 NATIONAL ORGANIZATION ON © ABILITY vvvvvv, nod.org 910 Sixteenth Street, NW Washington, DC 20006 Voice (202) 293-5960 Fax (202) 293-7999 TDD (202) 293-5968 "It's ability, not disability, that counts!" Community Partnership Program Membership Application Mayor/Chief Elected Official's Name: Term Expires:__ Local Government Name: Est. Pop.: Contact Person's Name: Title: Address: City/State/Zip: Phone: Fax: Email: The fiscal year for government ends _(month and day) [] Payment enclosed (please see rates on enclosed membership benefits sheet) Check Amount Voucher Amount [] We wilt submit a budget request to our local government for CPP membership for the next fiscal year. [] If pledging for a future date, please indicate date of planned payment Please mail your completed application and remittance information to: National Organization on Disability Community Partnership Program 9t0 Sixteenth St., NW Washington, DC 20006 Tax ID# 52-1238307 02AA Finalist (over) NATIONAL ORGANIZATION ON [ ABILITY vvvvvv, nod.org 910 Sixteenth Street, NW Washington, DC 20006 Voice (202) 293-6960 Fax (202) 293-7999 TDD (202) 293-5968 "It's ability, not disability, that countsF' Community Partnership Proqram Membership Benefits & Fees · "Best practices" information on disability programs and activities from communities throughout the U.S. that can be replicated in your town or city · How-to-do-it guidance and information on expanding the participation of people with disabilities in employment, education, voting and political participation, transportation, religious worship, and in recreational, social and cultural activities. · Information on planning and preparation for emergencies · Alerts and bulletins about disability legislation (e.g. Americans with Disabilities Act, Rehabilitation Act, and Voting Rights Act) and U.S. government programs of importance to mayors and their communities · Updates on President George W. Bush's New Freedom Initiative on disability · Complimentary copies, on request, of N.O.D.'s renowned Harris Surveys of attitudes toward and participation of people with disabilities in community life · Complimentary copies of other N.O.D. research reports and publications · Invitations to N.O.D. events in your area and in Washington, including at the U.S. Capitol · Eligibility for Accessible America Award- $25,000 community cash award competition CPP Membership Fees * (Membership Fees below cover annual membership through December 31, 2003) Population Fee New Membe¢* Under10,000 $200 $150 10,000 - 30,000 $400 $300 30,000 - 500,000 $600 $450 Over500,000 $1,000 $750 * Membership Fees subject to change for communities joining after December 31, 2003 ** Join before December 3'1, 2003 to receive the 25% new member discount 2/03 NATIONAL ORGANIZATION ON ABILITY www. n od. o rg PRESS RELEASE For information, contact: Nancy Statues, Contest Director 202/293-5960 StarnesN~nod.org Brewster Thackeray, Communications Director 202/955-6327 Thackeray~nod.org Irvine, California Wins $25,000 Accessible America Award WASHINGTON, D.C., February 20, 2003--The National Organization on Disability (N.O.D.) announced today that Irvine, California has won the second annual Accessible America Contest. Irvine is being heralded as a model city for its focus on disability issues and its successful design of programs, services and facilities that are accessible for citizens and visitors who have disabilities. The city is committed to giving men, women and children of all abilities the opportunity to participate fully in the life of the community. Located in Southern California, 40 miles south of Los Angeles, Irvine has a population of 143,072. According to the U.S. Census, more than 10 percent of the city's residents have one or another type of disability. The Accessible America Contest, administered by N.O.D.'s Community Parmership Program, is sponsored by a generous grant from UPS. The winning city receives a cash award of $25,000 to recognize and encourage comprehensive disability accessibility and opportunity. The money, to be presented to Mayor Larry Agran in a forthcoming ceremony, encourages further progress and may be used to fund local disability-related efforts. Dozens of towns, cities, and counties nationwide submitted applications endorsed by the mayor or chief elected official with a detailed description of community- wide efforts to be welcoming and accessible to persons who have disabilities. Applications came from places with populations ranging from 500 people to several million. Irvine's welcoming attitude impressed the judges, eight leading national disability advocates and experts. One of the nation's largest planned urban communities, Irvine uses its master plan to promote full access to schools, parks, religious institutions, recreational facilities and events for ail residents, workers and visitors. The City's Community Partners Emergency Response Team invites disability community involvement in brainstorming concerns and in preparing for emergencies. The Irvine Residents with Disabilities Advisory Board, chartered in 1990, responds to disability issues related to transportation, community awareness, employment, housing, accessibility and social/recreational facilities. Irvine's Access Reporting Policy forwards citizen complaints regarding community accessibility to the appropriate City department for swift investigation and resolution, culminating in a plan of action within two weeks. more - 910 16th Street, NW * Washington, DC 20006 * 202/293-5960 * TDD 202/293-5968 * www. nod.org Irvine Wins Contest--Add 1 "This is a particular series of programs that are near and dear to my heart," said Mayor Agran. "Our city has worked very, very hard and the benefits have accrued to tens of thousands of citizens with and without disabilities in our community." N.O.D. President Alan A. Reich stated, "We congratulate lrvine for its outstanding initiative and for leading a field of top-notch applicants also committed to our nationwide goal of full and equal participation of America's 54 million people with disabilities in all aspects of life. By winning this award, Irvine is setting the pace for communities nationwide." Joining Irvine as contest finalists were: Austin, Texas; Bloomington, Indiana; Charlotte, North Carolina; Iowa City, Iowa; Nashville, Tennessee; and Traverse City, Michigan. Bloomington, Charlotte, and Irvine were also finalists in last year's inaugural Accessible America contest, which was won by Venice, Florida. Ali U.S. cities and towns were eligible to enter the contest by the Dec. 31, 2002 deadline. Applicants were asked to demonstrate an exceptional commitment to offering their citizens with disabilities full and equal opportunities to participate in the life of their community, including access to jobs, education, religious worship, voting, transportation, housing, and the entire range of social, recreational, cultural, and sports activities. The award recognizes community-wide progress and encourages replication. "People with disabilities go about their daily lives in the communities of America. Communities that make it a priority to be accessible and welcoming to us help this nation toward our goal of full economic, cultural and social participation of people with disabilities in all aspects of life," said N.O.D. Community Parmership Director Nancy Stames. "We mayors recognize the importance of improving our communities to make them more accessible for people with disabilities," said Mayor Thomas Menino of Boston, the President of the U.S. Conference of Mayors and an N.O.D. Board Member. "N.O.D.'s Accessible America Contest highlights the strides we have made, and reminds all communities of the importance of our efforts in this arena. When people with disabilities are participating fully and equally, the entire community gains." For information about entering next year's Accessible America competition, contact Ms. Starnes at 202/293-5960. The deadline is October 31, 2003. The National Organization on Disability, founded in 1982, promotes the full and equal participation and contribution of America's 54 million men, women and children with disabilities in all aspects of life. For more information about ~ O.D. 's programs, including how communities can join the Community Partnership Program, visit www. nod. org. Community Partnership Program sponsor UPS is the world's largest global transportation company, offering the most extensive range of e-commerce and supply chain solutions for the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at UPS. com. - end - City of Iowa City MEMORANDUM IP4 DATE: TO: FROM: RE: April 8, 2003 Mayor and City Council ,~/ Marian K. Kart, City Clerk r,''~':~' Meeting schedule through October At your April 7 work session the following schedule was discussed and agreed upon: April 21 April 22 April 30 - Special Work Session - Special Formal - Special Formal/Executive Session (Evaluations) May 5 May 6 May 19 May 20 - Regular Work Session - Regular Formal - Regular Work Session - Regular Formal meeting June9 Junel0 June23 June24 June30 - Special Work Session - Special Formal - Special Work Session - Special Formal - Cancelled July 1 July 14 July 15 - Cancelled - Regular Work Session - Regular Formal August 4 August 5 August 18 August 19 - Cancelled - Cancelled - Regular Work Session - Regular Formal September 8 - Special Work Session September 9 - Special Formal September 22- Special Work Session September 23 - Special Formal October 13 October 14 October 27 October 28 - Special Work Session - Special Formal - Special Work Session - Special Formal Tentative Schedule subject to change by City Council U/03revision CITY OF I0 WA CITY IP5 2 April 2003 Marc Moen and Bobby Jett 123 Linn Street Iowa City, Iowa 52245 Tim Schroeder Neumann-Monson Architects 323 East College Street Iowa City, Iowa 52240 Gentlemen: Staff Design Review Committee recommends that Iowa City'City C. ouncil approve your proposal for Plaza Towers. We find that the building design, the relationship of the building to the site, the landscaping, signs and other physical elements are appropriate for the area and compatible with existing uses. We recommend that Council approve this design, taking into consideration the following: Site lighting will be supplied by existing public fixtures, so a limited amount of building lighting is anticipated - perhaps no more than sconces located at entryways. SDRC requires that a minimal level of lighting be provided at all times within the arcade, to prevent the arcade from dissolving into an unlit tunnel during evening hours. If you have questions about this decision, please contact Jann Ream at 356-5120, Respectfully, Planner Code Enforcement Assistant Development Regulations Specialist LINN STREET ELEVATION NEUMANN/vIONSON ARCHITECTS N .... , NEW LIBRARY FOO3I:RINT ' _~_ z NEUMANN MONSON ARCHITECTS ~ IOWEffi PLAN C-121 Senior Center Memorandum IP6 To: City Council From Linda Kopping, Senior Center Coordinator ~~ Cc: Steve Atkins, City Manager Re: Senior Center Commission Recommendations for Funding, Operational and Programming Changes at the Iowa City/Johnson County Senior Center Date: 1 April 2003 Since the Johnson County Board of Supervisors decided to reduce their funding of Center operations, members of the Senior Center Commission and staff have focused their attention on developing a comprehensive set of recommendations that will meet the Center's financial and operational challenges without compromising its future success. These recommendations are outlined in the attached document, Planning for Change: FY04 Funding, Operational and Programming Changes at the Iowa City/Johnson County Senior Center. Many people have had an opportunity to be involved in the yearlong effort that produced these recommendations. Commissioners met with members of the Board of Supervisors and City Councils of Iowa City, North Liberty, and Coralville. Five open meetings with participants and community members have been held to discuss the funding and programming ideas under consideration. In addition, input has been solicited through the Post and members of the Participant, Volunteer and Program Advisory Committees reviewed and critiqued the proposal. In an effort to facilitate discussion of the issues, drafts of the proposal, as well as issue focused "fact sheets", have been available for review at the Center, posted on the website, handed out at meetings, and featured in the Post. Members of the Commission and staff also have carefully examined senior center programming across the country--what programs are offered, what fees, if any, are involved, management of the program, and participation rates. In addition to research done and reported on by staff, in November of 2002 Commissioners and participants had several opportunities to meet with Constance Todd, the Director of the National Institute of Senior Centers. Todd led discussions, responded to questions related to trends in aging, retirement, and senior services, and served as a resource during one of three professionally facilitated goal setting sessions attended by the Commission and staff. Throughout this process the Commission has concentrated on developing broad policy statements related to the Center's purpose, financing, programming, membership, class fees, and marketing. Consequently details associated with the implementation of some of the recommendations still need to be established. The Iow-income subsidy program and organization of existing and future funding provide two examples. The comprehensive plan for the future outlined in Planning for Change was approved for recommendation to the City Council on March 24, 2003. The members of the Commission would welcome the opportunity to discuss this proposal with the City Council at an upcoming work session. Would it be possible to incorporate this discussion in to the agenda for the April 21, 2003 work session? The following table highlights some of the major components of the recommendations and notes where the subject is addressed in the proposal that is being submitted. Issue Highlights of Recommendations Location in Proposal Short and long-range plan that includes: · Operational budget reductions 1. Financing ·Governmental support · Participant cost sharing through membership fees. Pages 1-3 · Fundraising--including the creation of a Center Foundation. · Grant support Areas of the building will continue to be free and open to the public. Activities that are free and open to the public include: 2. Open ·Services and programs provided by any of the in-house agencies (e.g. nutrition program), volunteer attorneys, insurance counseling, tax preparation, etc. Page 3 Participation · Programs offered by the Center or other agencies that are free and open to the public. · Participants in the nutrition program can participate in the discounted parking program without becoming a member of the Center. Fee varies according to place of residence and level of operational support provided by the particular city or incorporated area. Recommended annuaJ memberships are: · Iowa City residents--S25 · Non-Iowa City residents of Johnson County--S40 3. Annual ·Non-Johnson County residents--S60 Center A Iow-income subsidy program and discounted family memberships will be available. Pages 3-4 Memberships Benefits: · Participation in Center sponsored programming. · Use of specially equipped areas of the building e.g. computer lab. · Home delivery of Post. · Opportunity to participate in discounted parking program. 4. Center Implementation ofa Center Contributorfundraising program. Contributors · Contributors will be recognized each year according to the level of contribution. Page 5 · Donations used to suppor~ operational costs. Changes intended to attract a new audience while maintaining current participant base. 5. Programming -Program format changes with increased off-site programming and extended hours Pages 5-6 · Increased emphasis on volunteer programs that address specific needs of the community. Recommendations include: 6. Marketing ,,Explore the possibility of changing the name of the Center to attract more participants. · Explore alternative options for printing and mailing the Post. Page 7 · Increased webpage development. PLANNING FOR CHANGE PROPOSAL Summary Planning for Change: FY04 Funding, Operational and Programming Changes at the Iowa City/Johnson County Senior Center Approved By: Senior Center Commission Iowa City/Johnson County Senior Center March 24, 2003 In 2002, when the Johnson County Board of Supervisors announced a decision to reduce county funding for the operation of the Center, members of the Senior Center Commission recognized the situation as both a crisis and an opportunity. The crisis involved a need to quickly develop short and long-term financial plans that would reduce spending and generate enough revenue to balance the Center's current and future operational budgets. The opportunity in this situation was the chance to participate in a thorough evaluation of the Center's operations and programming and recommend changes that would bolster participation and contribute to the Center's on-going success. While Commissioners had participated in numerous planning and goal setting sessions in which ideas for change had been discussed, substantive action had yet to be taken. Johnson County's decision to reduce operational funding for the Center proved to be the impetus necessary to take a serious look at planning and implementing changes for the future. Over the past several months Commissioners have met with staff, participants, Center advisory committee members, consultants, and well-known experts in the field of aging in order to participate in discussions focusing on the Center, its funding, and its future. After giving careful consideration to all of this information, members of the Commission have endorsed the following list of recommendations. Purpose of the Center 1. To promote wellness, community involvement and personal growth among people 50 years of age and older through individual and group activities and services designed to respond to their needs and interests. 2. To serve as a community resource for information on aging and aging services, for training of professional and lay leadership, and to facilitate research in the field of aging. Financing 1. The goal of the financial plan is to maintain, and eventually expand, resources that support continued accreditation status by the National Council on the Aging. Resources include current levels of staffing, programming, services, and building maintenance. PLANNING FOR CHANGE PROPOSAL Financial Plan A. Operational Budget Reduction Strategies 1. Approved a $44,630 reduction in the operational budget for fiscal year 2003. This included decreases in staff and computer support, delays in planned facility improvements, and sharp cutbacks in the publication and mailing of the Center's monthly newsletter (See Appendix A). 2. Submitted an operational budget for fiscal year 2004 that included an additional $8,395.00 reduction in spending. Specifically, the final (reduced) budget for fiscal year 2003 was $685,424.00 and the proposed budget for fiscal year 2004 totaled $677,029.00. 3. Continue efforts to reduce operational budget costs through cost saving measures and improved efficiency. B. Short-Term (3 Year) Strategies The short-term plan will address immediate needs for operational funding. 1. Action Steps a. Solicit a commitment from the City Council of Iowa City to fund 80% of the approved operational budget. b. In February 2003, the Johnson County Board of Supervisors decided to discontinue their long-term practice of providing a fixed percentage of the Center's operational budget. Rather, they have indicated that they will provide financial suppod in the form of annual grants. Next fiscal year, the grant will be for $75,000. In subsequent years this amount may be more, less or nothing at all. In light of this decision by the Board of Supervisors, the Commission recommends submitting an annual grant application to Johnson County for funding consideration c. Implement participant cost sharing through a basic membership fee. d. Encourage members to become Contributors by making an additional tax-deductible donation in conjunction with their annual membership fee. e. Initiate a participant and community-based pledge program to support the operational costs of the Center. Participants in the program will agree to donate a specific amount of money annually in fiscal years 2004, 2005, and 2006. It will be understood that a pledge is not in lieu of a membership fee. f. Collect fees from after hour and weekend building rental. g. Encourage voluntary contributions by participants and community members. h. Seek business support for special programs (e.g. a fund to pay membership fees for Iow-income elderly). C. Long-Term Strategies The long-term strategies are intended to generate revenue that will provide a financial cushion for the future and any unexpected expenses that may occur. Significant funding from any of these sources may take 18 months or more to produce. PLANNING FOR CHANGE PROPOSAL 1. Action Steps a. There will be a focused annual membership drive with the goal of increasing total membership by 5%, 10%, and 10% in fiscal years 2005, 2006, and 2007 respectively. b. Encourage businesses to fund specific projects or items in the operational budget (e.g. printing and mailing cost of the newsletter). c. Secure grant suppod through local and national agencies and foundations. d. Establish partnerships for comprehensive programs funded by several businesses and agencies. This may include contractual agreements with businesses or service providers interested in providing services at the Center (e.g. the Center provides programming space and a local fitness facility provides equipment and instruction). e. Establish a Center Foundation. Membership Benefits and Fees A. Open Participation 1. Participation in any of the following Center activities is free, available to all members of the community, and does not require a paid membership at the Center. a. Access to and use of all public areas of the building (e.g. the lobby, library, and ground floor Washington Street waiting area). b. Participation in services and programs sponsored by any in-house agency (e.g. congregate dining, Visiting Nurse Association, AARP, Elder Services, Inc), the Senior Center, community groups, or individuals that are open to the public. c. The Center's newsletter available for pick-up at the Center and other distribution sites. d. Use of services provided through the Volunteer Attorney Program, Volunteer Income Tax Assistance Program, and the Senior Health Insurance Information Program. e. Documented participants in the congregate dining program offered at the Center will be eligible to participate in the Center's discounted parking program without becoming a member of the Center. B. Annual Center Memberships 1. The Commission endorses the implementation of an annual Center membership fee. 2. Memberships are available to persons 50 years of age and older. 3. To ensure the participation of Iow-income elderly a discreetly managed Iow-income subsidy program will be implemented. 4. A discounted membership program will be offered to families interested in purchasing Center memberships for two or more people from the same dwelling unit. PLANNING FOR CHANGE PROPOSAL 5. The membership fee program will be evaluated after a period of one year to assess its success in generating revenue to support the operation of the Center. 6. Membership fees will not be waived for people enrolled in a class, group or activity that has an equipment, material, or instructional fee associated with participation. 7. People visiting the Center only to perform volunteer service for the Center will not be required to pay a membership fee. 8. Participants living in cities or areas that provide operational funding for the Center will pay a lower annual membership fee than participants living in areas that do not support the Center financially. Annual individual membership fees of $25, $40 and $60 are being recommended for residents of Iowa City, non-Iowa City Residents of Johnson County and non-residents of Johnson County respectively. (See table below) 9. In the family membership program one family member pays the full price for membership while each additional family member is eligible for a 40% discount. For example, a two-member family living in Iowa City would pay $41 annually ($25 for the first person and $16 for the second). As with individual memberships, family membership fees will vary according to place of residence. (See table below) Annual ~ Fees Individual $25 $40 $60 Fam//y $16 for each additional family member $24 for each additional family member $36 for each additional family member 10. All members are eligible for the same membership benefits. 11. Benefits of Membership a. Opportunity to enroll and participate in Center sponsored classes, class series, and programs. b. Access to, and use of, freestanding exercise equipment room, ceramics studio, painting studio, poolroom, and computer lab. c. Participation in Center sponsored activities, volunteer activities, and card groups. d. Home delivery of the Center's newsletter. e. Opportunity to participate in the Center's discounted parking program. 12. Membership does not guarantee that a person will be able to participate in a specific class. Enrollment in all Center sponsored classes will be on a space available basis with registration taken on a first-come-first-served basis. 4 PLANNING FOR CHANGE PROPOSAL Center Contributors 1. Members will be encouraged to become Center Contributors by donating funds in addition to their basic annual membership fee. 2. Membership at the Center is not required to become a Center Contributor. Non- members, organizations and businesses also are welcome to participate in this program. 3. Members do no.~t need to become a Center Contributor in order to enjoy the full benefits of membership. 4, All donations to the Center Contributors program are tax deductible. 5. Donations to the Center Contributors program will be used to support the operational expenses of the Center. 6. Each Center Contributorwill be acknowledged and recognized according to the amount of his or her contribution on an annual basis. The following levels of contribution are being recommended: Contributor $1 to $74 Bronze Contributor $75 Silver Contributor $150 Gold Contributor $250 Platinum Contributor $500 Supporting $1000 Contributor *All the Center Contributor levels noted on this table reflect annual donations irrespective ora membership fee. The entire amount is tax-deductible. Programming 1. Staff and volunteers will work together to develop and implement series of classes and programs offered on a semester or trimester basis. 2. Programming will target the interests of current participants as well as younger and mid-age retirees who currently are less frequent users of the Center. 3. When possible off-site locations will be used to enrich programming (e.g. a class on local theater held backstage at the Englert Theater or a fitness class held in a city recreation center). 4. As funding and staffing permit, operational hours will be extended to early mornings and evenings on weekdays as well as Saturday mornings. PLANNING FOR CHANGE PROPOSAL Programming Components A. Staff Developed Special Events 1. They will be offered nine to twelve times each year, and will be free and open to the public. These programs will provide socialization and entertainment opportunities. B. Fitness Programming 1. Fitness programming will be emphasized. 2. Efforts to secure funding to expand the Center's exercise facilities and add a fitness professional to the staff will be given high priority. 3. Efforts will be made to develop collaborative relationships with other agencies and services that provide fitness or health services in order to advance knowledge in the field of aging, enrich class offerings, and avoid duplication of services. C. Volunteer Programs 1. Volunteer program(s) that emphasize community service will be implemented. They will address high priority local needs, have measurable outcomes that can be acknowledged, and cultivate the recognition of seniors and the Center as valuable community resources. 2. Existing volunteer programs will undergo a critical evaluation exploring such issues as participation levels, community interest, use of space, service provided, and if relevant, revenue generated. They will either be modified to better meet the needs of participants, community members and Center, or they will be eliminated. 3. Developing a cooperative relationship with the Retired Senior Volunteer Program will be explored. D. Classes and Class Fees 1. The Center shall offer three categories of classes. In all instances, a membership at the Center is required for participation. a. Free Classes The majority of staff developed classes will be free of charge. Typically, free classes are taught by volunteer instructors and require very little in terms of such things as staff support, audiovisual equipment, or materials. b. Equipment and Material Fee-Based Classes These fees cover the actual costs associated with sponsoring the class. They pay for supplies, equipment replacement costs, and miscellaneous expenses. These fees are not intended to generate operational revenue. They are collected by the Center, maintained in the Gift Fund, and used to pay class expenses. PLANNING FOR CHANGE PROPOSAL Classes Provided by Independent Contractors Independent contractors have access to Senior Center facilities for the purpose of offering classes of interest to people 50+ years of age. They will pay the Center 25% of the gross class revenue as compensation for the use of space and equipment. This revenue will be used to support the programming costs of the class and other similar classes. Miscellaneous Considerations 1. Marketing A. Commissioners favor changing the name of the Senior Center and have given high priority to setting up a task force to pursue this matter. B. Commissioners endorse the exploration of alternative options for printing and mailing the Center's newsletter in order to reduce costs and increase its visual appeal. C. Other marketing efforts, e.g. webpage development, public service announcements, and special mailings, will be explored. PLANNING FOR CHANGE PROPOSAL Timeline The timeline approved by the Commission for this transition in funding and programming is as follows: Senior Center Commission Approve draft of plan January 21,2003 Meeting Staff or Commissioners meet Review draft of plan and receive January 21 to February with Center Advisory Group feedback. 10, 2003 Members Senior Center Commission Review advisory committee feedback February 18, 2003 Meeting and revise draft plan as needed. (Regular Meeting} Staff Publish summary of draft plan in the March 1, 2003 Post and on the Center's Website. Senior Center Commission Review draft plan with City Manager. March 4 to March 10, and Staff Public meeting(s) at the Center and 2003 one or two community based focus groups to review and make recommendations related to the draft of the plan. Review all recommendations and revise draft plan as needed. Senior Center Commission Consider participant community and March 18, 2003 Meeting administrative input and revise draft (Regular Meeting) ~lan as needed. Vote on the proposal. If not approved, the plan will be reviewed, modified and resubmitted for further consideration and another vote. This process will be repeated until a final draft is approved. Senior Center Commission Presentation of the final plan to the March 19, 2003 Johnson County Board of Supervisors for review and to the City Council of lewa City for final approval. Staff Implement a pilot program July 1,2003 to August incorporating the financial and 31, 2003 programming recommendations of the Commission. Staff Full implementation of all changes. September 1, 2003 FY03 Budget Reduction Recommendations and FY04 Revenue Generating Options Approvedby: Senior Center Commission April23,2002 Appendix A PLANNING FOR CHANGE PROPOSAL FY03 Recommendations Consequences Type Amount 6130 Temporary Employees Reduction of 3 hoars/week in temporary employee support for SCTV. Permanent $4,640 > Reduction in the current level of original and taped programrmng. > Increase reliance upon Work Study students for technical support. Typically Work Study students are less capable and reliable than part time temporaries. > Decrease availability of volunteer t~aniing and a reduction in the amount of support necessary to get programming on the air. > Community outreach achieved through public access television would be reduced. 8750 Work Study 75% reduction in Work Study funding. Remaining balance used to provide support for Permanent $3,000 SCTV. ~ Limit support necessary to get SCTV programs on the air. > Limit support necessary to get SCTV's programs on the air. > Reduce the amount of original and taped programunng and community outxeach currently done by SCTV. >' New volunteer training wouId be reduced. > Professional staff members will spend more time on tasks that can be accomplished just as well by people with less training and background. > Work output of the professional staff members will decline. Appendix A PLANNING FOR CHANGE PROPOSAL FY03 Recommendations Consequences Type Amount 6120 Permanent Par~ Time Combining the two permanent part time maintenance positions (one at 50% and thc other at Permanent $5,941.12 (w/ 69%) to one full time position. Cable TV would continue to be provided with (and fund) health 1.5 hours of maintenance work each weekday, insurance option) > Reduce maintenance support at the Senior Center by 1.5 hours a day. $6,905.47 )~ Limit flexibility for maintenance coverage due to illness or vacation. (w/o health insurance option) 8229 Bulk Mailing Limit Post mailing to registered members only (N=2,500). Make copies of the Post Permanent $6,960 available at various places throughout town for people to pick-up as desired. Represents a 3,500 per month reduction in circulation. (Estimated) )~ The Post is the primary promotional tool of the Center and it would have less visibility throughout the community. ~ Participation in Senior Center programming is likely to decline. 8168 ADA Services It will be difficult to provide signers if needed. Permanent $500 8823 ITS Server Support None known. The server will probably be removed before July 1, 2002. Permanent $5,589 9210 Capital Improvements Delay installation of the elevator fire alarm system until FY04 Temporary $18,000 Elevator Fire Alarm Total FY03 Reductions: $44,630.12 OFFICER 54, 15 4 officers 26 11 48, 16, 21 IOWA CITY POLICE DEPARTMENT USE OF FORCE REPORT March 2003 DATE INC # INCIDENT 03-01-03 3-10147 Public Intoxication Arrest 03-01-03 3-10259 Suicidal subject 03-05-03 3-11042 Public Intoxication Arrest 03-06-03 3-11143 Public Intoxication Arrest 03-06-03 3-11300 Warrant arrest FORCE USED The subject was placed under arrest and attempted to pull away from the officer who was trying to handcuff him. Subject was placed against a vehicle and told to relax. The subject continued to resist handcuffing and tried to pull his hand away from the officer. While the officer shaiggled to get the subject's hands behind his back the officer and suspect fell to the ground. A hands control technique was used to get the subject's hands behind his back to handcuff him. Officers responded to a suicide in progress call. They forced a door open to gain entry to the residence. Officers entered the residence with side arms drawn. One officer was armed with a "less lethal weapon". The subject was located and transported to University Hospitals. Upon arriving at the Jail the subject started spitting and kicking the squad car window. Subject got out of the car when requested and was placed against a wall. Officer told him that kicking and spitting was not allowed. Subject then cooperated with officers. Subject was sitting in the back seat of a cab when she was told she was under arrest. She refused to get out of the cab. The officer pulled her fi.om the car. When the subject was told he was under arrest he clinched up and told the officers that he wasn't going to go to jail and that they should shoot him. Each officer grabbed one of his wrists and directed him to the floor as he tried to pull away from them. Officers used a hands control technique and one officer used his baton as a lever, to get the subject's hands behind his back to handcuff him. The baton was not used OFFICER 34 51 52 93,57,40 59 DATE 03-12-03 03-15-03 03-16-03 03-17-03 03-19-03 1NC # 3-12431 3-13142 3-13199 3-13467 3-13754 INCIDENT Arrest Warrant Fight call Injured Animal Fight Warrant Arrest FORCE USED to strike the subject. Subject was placed under arrest and the officer had to use a hands control technique to get the subject's hands behind his back. After the subject was cuffed he was able to gain access to a small dagger he'd hidden inside of his pants. The officer held the subject down while a second officer pried the dagger from the subject's hands. After the subject was placed into the squad car he started kicking at the windows. The officer used a department issued leg restraint to prevent him from kicking. When the subject was told he was under arrest he tried to pull away and then attempted to grab the officer's hands. The Officer used a hands control technique to handcuffthe subject. While at the jail the subject again tried to grab the officer. The officer directed the subject against a wall and held him there until he became cooperative. A deer was injured after becoming entangled in a fence. The officer dispatched the deer with his side arm. Subject had been involved in a fight and fled when officers arrived. Officers chased him for several blocks before catching him. He refused to comply with verbal commands to stop resisting and attempted to pull away from the officers. Officers directed him to the ground where they attempted to handcuff him, but were unable to get both of his hands behind his back. A chemical agent was deployed and the suspect then cooperated. Officer attempted to place subject under arrest for a warrant. When the officer advised the subject that he was under arrest he pulled away and ran for about 4 blocks before he was apprehended without further incident. 21 03-20-03 3-13946 Disorderly conduct Subject attempted to interfere with a OFFICER 48,25 13 60 17,13,58 13 DATE 03-23-03 03-24-03 03-24-03 03-26-03 03-26-03 INC # 3-14398 3-14430 3-14447 3-14768 3-14792 INCIDENT Assist Other Agency Traffic Stop Injured Animal Intoxicated Person Traffic Stop FORCE USED peaceful protest and was confronted by the protesters. The officer approached the subject from behind and placed his arm around and under his chin and walked him out of the crowd without further incident. Officers assisted another agency with an arrest warrant of a person who had made a prior statement that he was going to commit suicide by cop. Officers drew their side arms when entering the residence to arrest the subject. Subject was told that he was under arrest for obstruction and did not comply with officer commands to place his hands behind his back. The subject fled from the officer and was apprehended after a short foot chase when the officer directed him to the grotmd. The subject continued to resist by refusing to place his hands behind his back so he could be handcuffed. Officer responded to a complaint of an injured deer. The officer dispatched the deer with his side arm. The subject was told that he was under arrest and attempted to pull away from the officers. He refused to be handcuffed and was directed to the ground where he continued to resist handcuffing. A chemical agent was deployed and the officers used a hands control technique to get his hands behind his back to handcuff him. After placing the subject into the patrol car he started kicking at the windows. The officers used a department issued leg restraint to prevent him from damaging the car. The officer attempted to stop a vehicle for speeding, when the driver attempted to flee. He drove down a dead end street where he left the roadway and drove along a creek. When the vehicle stopped the officer got out of his own car and ordered the driver from the car. At that point the driver drove offwith OFFICER DATE INC # 11, 38 03-28-03 3-15413 Robbery INCIDENT 94 03-31-03 3-15933 Traffic Stop FORCE USED the officer in foot pursuit. When the driver stopped again he did not comply with officer commands to get out of the car. The officer opened the car door and directed the subject to the ground where he was handcuffed. Officers stopped a vehicle in which at least one of the occupants was reported to have been involved in a robbery a few minutes earlier. Officers drew their side arms until all occupants were safely detained. An officer was conducting a traffic stop when the driver ran away on foot. A second officer was able to chase and catch the subject in a hallway to an apt building. The officer directed the subject to the ground where he was handcuffed. CC: City Manager, Chief, Captains, Lieutenants, Training Sergeant, City Clerk, Library Iowa City Police Department Monthly Liquor License (OFF PREMISE SALES) Report MARCH 2003 YEAR 2002 Business Name A&J MINI MART-2153 ACT CIR. AAJAXXX LIQUOR STORE BIG KMART-HOLLYVVOOD BLVD CUB FOODS DAN'S SHORT STOP CORP DELIMART - E. BENTON DELI-MART - MORMON TREK DELIMART-HWY 1 DELIMART-LWR MUSCATINE DOC'S STANDARD DRUGTOWN EAGLE FOOD CENTER- N.DOD. FAREWAY STORES INC GASBY'S - S. GILBERT Total Year to Date Totals 1 0 0 0 GASBY'S EAST - 2303 MUSCAT. HANDIMART - DUBUQUE ST. I ~ HANDIMART - N.DODGE HANDIMART-WILLOWCREEK ~ HARTIG DRUG - MORMON TREK HAWKEYE CON ST - Commerce HAWKEYE CON ST-KIRKWOOD 1 HY-VEE- N. DODGE ST 5 HY-VEE- S. 1ST AVE HY-VEE- WATERFRONT JOHN'S GROCERY INC KUM & GO - GILBERT/BURL KUM & GO- MORMON TREK KUM & GO- S. RIVERSIDE KUM & GO- W. BURLINGTON ST L&M MIGHTY SHOP INC LINN STREET CAFE MINI MART NEW PIONEER COOP NORTH DODGE EXPRESS 'ON THE GO CONV7 STORE OSCO DRUG 4 Arrest/Visit YTD 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 IP8 Column A is the number of times a license holder is visited specifically checking for underage sales. Column B is the number of people charged with possession under the legal age. Note this is not the total number of charges. Iowa City Police Department Monthly Liquor License (OFF PREMISE SALES) Report MARCH 2003 YEAR 2002 !Monthly Total Year to Date Totals ~ Ar_~rest/Visit Business Name I-- 1 ' PANCHEROS 0 m 0 00 ~-~ ,, ~W,o,~,,~ ~ ~ n nn P ZZA PALACE ~ 0 00 RUSS AMOCO SERV CE 0 ~ 0 00 SUBURBAN AMOCO 5 0 ~ 0.00 SUBURBAN AMOCO-KEOKUK 1 ~,' 3 : 0 ~ 0.00 T&M MINI MART , 0 ! 0.00 TOBAOC0 0U~ET ~US- S. RIV i 0.00 WAEGR~EN~ 0 ~ 0.00 TOTAL 12o 113, 0 ~ 0.00 Column A is the number of times a license holder is visited specifically checking for underage sales. Column B is the number of people charged with possession under the legal age. Note this is not the total number of charges. Date: To: From: Subj: Month 1 -Apr-03 City Manager and City Council Dianna Furman, Customer serV[~e Manager Utility Discount Program Statistics - Fiscal Year FY 02 and FY03 All Water Total Services Sewer Discount Water Tax Sewer Refuse Recycling Total Discount Discount Accounts Discount Discount Discount Discount Discount Discounts FY 02 Jul 116 84 Aug 127 94 Sept 128 93 Oct 136 107 Nov 136 113 Dec 142 117 Jan 147 122 Feb 146 124 Mar 148 122 Apr 153 118 May 154 126 Jun 156 132 200 835.52 221 896.00 221 1023.68 243 1043.84 249 1106.56 259 1151.36 269 1164.80 270 1216.32 270 1184.96 271 1205.12 280 1207.36 288 1254.82 FY02 Totals 1689 1352 3241 $13,290.34 FY O3 Jul 112 113 225 Aug 118 115 233 Sept 123 121 244 Oct 129 122 251 Nov 122 127 249 Dec 126 128 254 Jan 126 132 258 Feb 126 135 261 Mar 130 137 267 Apr 0 0 0 May 0 0 0 Jun 0 0 0 FY03 Totals 1112 1130 2442 cc: Kevin O'Mally Mari/Utility/NewDiscountMonthlyFY03.xls 41.99 760.56 658.05 224.70 2520.82 44.90 857.69 701.10 239.40 2739.09 51.25 980.49 808.71 276.15 3140.28 52.35 999.90 827.17 282.45 3205.71 55.47 1060.23 836.38 285.60 3344.24 57.77 1103.34 867.14 296.10 3475.71 58.20 1116.29 879.45 300.30 3519.04 61.09 1165.83 913.26 311.85 3668.35 59.39 1135.68 879.45 300.30 3559.78 60.32 1155.07 925.57 316.05 3662.13 60.37 1157.23 943.72 322.55 3691.23 62.91 1202.48 1049.62 360.77 3930.60 $666.01 $12,694~79 $10,289.62 $3,516.22 $40,456.98 932.26 46.57 892.16 695.24 238.99 2,805.22 1,006.18 50.07 963.26 769.48 264.52 3,053.51 1,042.02 52.03 997.76 783.00 269.12 3,143.93 1,068.90 53.45 1,023.62 803.25 276.08 3,225.30 1,129.38 56.57 1,081.80 907.87 312.09 3,487.71 1,133.86 56.68 1,086.11 816.75 280.72 3,374.12 1,138.34 56.93 1,090.43 843.75 290.00 3,419.45 1,192.10 59.78 1,142.12 870.74 299.31 3,564.05 1,178.66 58.84 1,129.21 877.50 301.61 3,545.82 0 0 0 0 0 0.00 0 0 0 0 0 0.00 0 0 0 0 0 0.00 $490.92 $9,406.47 $7,367.58 $9,821.70 $2,532.44[$29,619.11] March 24, 2003 Cra n's Intemahonal Newspaper for the P astics Industry $5 per copy Growing Alpla doubling size of Iowa plant By Joseph Pryweller PLASTICS NEWS STAFF With business growing faster than ex- pected, blow molder Alpla Werke Lehner GmbH & Co. KG has decided to expand its Iowa City, Iowa, plant to more than twice its current size. The company, based in Hard, Austria, opened the ex~rusion blow molding facility i~ December, one of three U.S.-based plants Alpla has launched since early 2002. But Alpla soon realized the iowa city plant, with only 58,000 square feet of manufactur- lng space, was too smali, said Kurt Berk~ mann, vice president for Alpla's U.S. arm, Alpla Inc. "It has far more growth potential in the medium term than we initially thought," said Berkmann, based at Alpla's U.S. head- quarters in McDonough, Ga. "We have proven that to be true in the short time we have been in Iowa City." The Iowa City plant currently makes high density polyethylene bottles for hair- care and personal-care products, including shampoo and hair gels. All those products currently go to consumer-products behe- moth Procter & Gamble Co., which has a plant in Iowa City. Alpla would like to expand those prod- uct offerings, both to P&G and to other customers, Berkmann said. The company also may add PET bottle manufacturing at the Iowa City site, he said. Alpia will add 8(;,000 square feet to the plant, with the work targeted for comple- tion by Aug. 1, Berkmann said. The compa- ny will spend $3.1 million to add onto the building and make other improvements, according to information tiled with the Community and Economic Development Department of lowa City. During the next two years, Alpla also plans to invest $9 million in new machin- ery and equipment, Berkmann said. Alpla has told lowa City officials that it plans to add at least 10 people by August, although that figure might change, Berkmann said. The city agreed March 19 to provide Alpla with five years of tax rebates for property improvements, said Steven Nas- by, community and economic develop- ment coordinator. The city also will pro- vide AIpla with $35,000 in upfront payments for s~e improve- ments that will be paid back. The company will receive a maximum of $475,000 in tax re- bates, he said. Another Iowa City bottle plant, owned by Toledo, Ohio- based Owens Illinois Inc., re- ceived similar financing when it opened last year, Nasby said. Alpla invested more than $40 million last year to open U.S. sites for HDPE bottles. The company, a major European producer of HDPE and PET bot- tles, also has U.S. plants in Houston, where it shares a ded- Icated facility with customer Clorox Co., and in McDonough, south of Atlanta. The company wants to add PET bottles in North America, providing a wider berth to com- pete for bottle business. The company also is considering sites for new U.S. plants this year, Berkmann said. The company was ranked as the largest custom blow mold-, er in Europe in a 2002 study by research group Applied Market Information Ltd. of Bristol, England. According to Alpla's Web site, the company record- ed sales of more than 1.3 bil- lion eurus ($1.37 billion) in 2001. Alpla would like to complete the Iowa City expansion in a fashion similarly efficient to the plant's original opening, Berkmann said. The company decided on the Iowa City site in March 2002, even before blueprints had been devel- oped. Worker training began in June, and the plant opened in December, he said. "It was a record-holder,' he said. "We opened the greenfield site in the shortest time period for any project that I had worked on. Now, we have the confidence that we can grow that business even more." Mugging the Needy Marian Karr From: Irvin Pfab [ipfab@avalon.net] Sent: Thursday, April 03, 2003 4:34 PM To: Iowa City City Council Subject: 4303fw..Mugging the Needy:The New York Times, Editorial/Op-Ed April 3, 2003 Mugging the Needy By BOB HERBERT had wanted today's column to be about the events in Tulia, Tex., where a criminal justice atrocity is at long last beginning to be corrected. (For those who don't know, prosecutors are moving to overturn the convictions of everyone seized in an outlandish drug sting conducted by a single wacky undercover officer.) But there is another issue crying out for immediate attention. With the eyes of most Americans focused on the war, the Bush administration and its allies in Congress are getting close to agreeing on a set of budget policies that will take an awful toll on the poor, the young, the elderly, the disabled and others in need of assistance and support from their government. The budget passed by the House is particularly gruesome. It mugs the poor and the helpless while giving unstintingly to the rich. This blueprint for domestic disaster has even moderate Republicans running for cover. The House plan offers the well-to-do $1.4 trillion in tax cuts, while demanding billions of dollars in cuts from programs that provide food stamps, school lunches, health care for the poor and the disabled, temporary assistance to needy families -- even veterans' benefits and student loans. An analysis of the House budget by the Center on Budget and Policy Priorities found that its proposed cuts in child nutrition programs threaten to eliminate school lunches for 2.4 million low-income children. Under the House plan, Congress would be required to cut $265 billion from entitlement programs over 10 years. About $165 billion would come from programs that assist low-income Americans. This assault on society's weakest elements has been almost totally camouflaged by the war, which has an iron grip on the nation's attention. The House budget does not dictate the specific cuts that Congress would be required to make. In its analysis, the center assumed (as did the House Budget Committee) that the various entitlement programs would be cut by roughly the same percentages. If one program were to be cut by a somewhat smaller percentage, another would have to be cut more. The analysis found that in the year in which the budget sliced deepest: 4/3/03 Mugging the Needy Page 2 of 2 ¶"The cut in Medicaid, if achieved entirely by reducing the number of children covered, would lead to the elimination of health coverage for 13.6 million children." ¶"The cut in foster care and adoption programs, if achieved by reducing the number of children eligible for foster care assistance payments, would lead to the elimination of benefits for 65,000 abused and neglected children." ¶"The cut in the food stamp program, if achieved by lowering the maximum benefit, would lead to a reduction in the average benefit from an already lean 91 cents per meal to 84 cents." When's the last time one of the plutocrats in Congress waded through a meal that cost 84 cents? The Senate budget is not as egregious. It calls for a total of about $900 billion in tax cuts, and there is no demand for cuts in entitlement programs. But it is not a reasonable budget. In fact, there's something obscene about a millionaires' club like the Senate proposing close to a trillion dollars in tax cuts for the rich while the country is already cutting social programs, rtmning up huge budget deficits and fighting a war in the Middle East. At least in the House budget the first -- if not the worst -- of the cuts are in plain view. In the Senate plan the inevitable pain of the Bush budget policies remains concealed. "There is a significant human toll in the Senate budget, but it's in the future," said Robert Greenstein, the center's executive director. "What I mean is that given the deficits we're already in, you can't keep doing tax cuts like this -- you can't keep cutting your revenue base -- without it inevitably leading to sharp budget cuts." House and Senate conferees are now trying to resolve the differences in the two budget proposals. They will do all they can to minimize the public relations hit that is bound to come when you're handing trainloads of money to the rich while taking food off the tables of the poor. So you can expect some dismantling of the House proposal. But no matter what they do, the day of reckoning is not far off. The budget cuts are coming. In voodoo economics, the transfer of wealth is from the poor and the working classes to the rich. It may not be pretty, but it's the law. _Copyright 2003 The New York Times Company I Privacy Policy *** eSafe scanned this email for malicious content *** *** IMPORTANT: DO not open attachments from unrecognized senders *** 4/3/03 AGENDA City of Iowa City City Council Economic Development Committee Thursday, April 17, 2003 9:00 a.m. Lobby Conference Room Civic Center 410 East Washington Street Call to Order Approval of Meeting Minutes - February 27, 2003 - March 13, 2003 Discussion of Request for CDBG Assistance - The Rack BBQ Discussion of Request for CDBG Assistance - ISED Microenterprise Development Discussion of Request for CDBG Assistance - The Pet Degree 6. Adjournment City of Iowa City MEMORANDUM DATE: April 8, 2003 TO: FROH: RE: Council Economic Development Committee Steven Nasby, Community and Economic Development Coordinator Q~O'~~ Summary of Applications for CDBG Economic Development Funds At your April 17 meeting, there will be three CDBG Economic Development applications on the agenda for your consideration. Two of the applications are new and one (The Rack BBQ) is a carryover from your last meeting. The following is a summary of these applications. The Riack BBQ This project is a start-up restaurant, locating at Pepperwood Plaza, that is requesting $40,738 from the City, $25,000 from the State's Targeted Small Business Loan program and the applicant's are contributing $28,950 in equipment. Tt will be creating two full-Lime positions and one part-time position. Included in this packet are an updated Personal Financial Statement and Summary of Project Costs & Proposed Financing Sources. Please note that the applicants have increased the amount of the CDBG Economic Development request from $30,738 to $40,738. The $10,000 increase is identified as working capital. The Targeted Small Business Loan program is scheduled to review The Rack's application on April 9 and render their decision on April 18. Znstitute for Social and Economic Develooment (:[SED} - Microenterorise TraininQ Classes for Soanish Soeakinq PersQns [SED is a non-profit organization that has been providing Microenterprise training in Iowa since 1988. ISED has been funded through Iowa City's CDBG program, in the past, to provide Hicroenterprise training to Iow-moderate income persons. This application is requesting $15,000 to offer two sessions of ISED's :t3-week Microenterprise development workshops in Spanish. ISED is anticipating that 40 persons will be enrolled, 30 of these persons will complete the formal training and eight will start or expand businesses that will create 10 new jobs (including owners). According to the budget, the total cost for this activity is $22,973 ($15,000 City CDBG funds and $7,973 as match from the applicant and in-kind resources). The Pet DeQree This project is an existing business, located at Pepperwood Plaza, that is requesting $100,000 from the City for operating capital (wages and rent). The application states that 5.375 fuji-time equivalents (FTEs) will be retained and 1.5 FTEs will be created. The applicant notes that these funds are needed to keep the business in operation as the volume of business activity has significantly declined at Pepperwood Plaza. MINUTES ECONOMIC DEVELOPMENT COMMITTEE THURSDAY, FEBRUARY 27, 2003 LOBBY CONFERENCE ROOM CIVIC CENTER Members Present: Ernie Lehman, Ross Wilburn, Dee Vanderhoef Members Absent: None City Council Members Present: In/in Pfab Staff Present: Steve Nasby, Steve Atkins, Karin Franklin Others Present: Terri Morrow RECOMMENDATION TO COUNCIL To recommend to Council the approval of the proposed TIF district of Pepperwood/South Gilbert Street Area, as delineated on submitted map. CALL TO ORDER Ernie Lehman called meeting to order at 3:30 P.M. APPROVAL OF MINUTES OF FEBRUARY 20, 2003 Motion: Vanderhoef moved to approve minutes as submitted. Wilburn seconded motion. All in favor 3-0. Discussion of Proposed TIF District Boundaries (Pepperwood/South Gilbert Street Area) Nasby reviewed what had transpired at the last Economic Development meeting. At the last meeting they heard from Southgate Development about a proposal for a TIF district to help them redevelop Pepperwood mail. The Council ED committee asked staff was to put together recommendations for a TIF district. Included in the February 27, 2003, packet was a map for the proposed district and an arial view from ICAD that further defined the area. The area is zoned commercial intensive with one small parcel of industrial. Nasby noted that staff had looked at this area for 3 things: Redevelopment opportunities. There are several older buildings within this district that could be remodeled or the whole site redeveloped. There are other business locations that may or may not be obsolete, including the Nissan dealership that has recently moved. Opportunity for new construction. There are a number of scattered sites within the district area that can be developed. Also, there are some newer propedies that have recently become available with the extension of Southgate Avenue. 3. Public improvements. The Highway 6 corridor, the South Gilbert Street corridor and possibly some trail improvements along the Iowa River. Wilburn noted a future public improvement could be a park concept by the River similar to the one previously done by Casey Cook. Vanderhoef noted the trail along Gilbert Street should continue with the proposed street work. Economic Development Committee Minutes February 27,2003 Page 2 Franklin expressed the need for Council to be aware, as the unknown in this is potential added value to the area. This is very important as TIF funds for public improvements would only come from the revenue that is potentially generated within this district. Lehman noted that Southgate's proposal is very attractive and the majority of the improvements are capital improvements. The access point to the mall is key and the cost of this improvement has yet to be determined. Franklin noted that in past discussion, the access point to Highway 6 was to be at Southgate's expense. She said that a development agreement, as currently being discussed, is that the City would not put money toward the access point but the TIF tax rebate would enable Southgate to fund the project as outlined. This outline includes the access point, parking lot improvements, facade improvements and interior tenant improvements. Franklin also said that each future TIF project should be evaluated on economic condition of area at the time, and any assistance would be commensurate. Vanderhoef noted the in-fill lots are important and can be a big improvement for the city. The development and building on these lots should be encouraged and a priority. Lehman expressed the importance of time on this project because it needs to go to the City Council for approval. Motion: Wilburn moved that the proposed TIF district, as shown on the map that was received in the packet, be placed on the agenda of earliest possible Council meeting. Vanderhoef seconded the motion. All in favor 3-0. Vanderhoef said that she also wants to look at the Sycamore\First Avenue TIF District to see if there are any changes that need to be done in zoning. Franklin said that could be considered, but that any rezoning for that area will not be included in the proposed amendment to the Urban Renewal Plan as it is going to Council on March 11. Meeting was adjourned at 3:48. data on citynt/pcd/rninules/ecodev/edc02-27-03.doc MINUTES ECONOMIC DEVELOPMENT COMMITTEE THURSDAY, MARCH13,2003-9:00A.M. LOBBY CONFERENCE CENTER Members Present: Ernie Lehman, Dee Vanderhoef, Ross Wilburn Members Absent: None Council Members Present: Irvin Pfab Staff Present: Steve Nasby Others Present: Anthony & Diane Bryant, Sharon Dralle, Vanessa Miller CALL TO ORDER Ernie Lehman called the meeting to order at 9:03 AM. PRESENTATION ON WORK KEYS - IOWA WORKFORCE DEVELOPMENT Vanderhoef introduced Sharon Dralle, Business Liaison with Iowa Workfome Development from the Cedar Rapids office. Dralle was present to give a presentation and overview of the Work Keys program to the committee. The Work Keys program was developed by ACT in Iowa City, and was found to be an exceptional tool for businesses and educators to identify what skills are need in the work place and to insure that individuals get the training/skills needed by partnering with training entities. A power point handout was handed out with information on the program. Dralle began working with the Work Keys program in 1995, as they were trying to find a tool to help businesses find a better match for workers. The program consists of 3 components; profiling, assessment, and instructional support/training. The skill areas that are evaluated are communication skills, listening, reading for information; problem solving skills involving applied mathematics and applied technology; interpersonal skills of teamwork and observation. Dralle is a licensed profiler for the program. Profiling is an in-depth job analysis. She meets with individuals that have a specific job and then makes a task list and identifies what skills are required to perform the job. For each skill that they identify in a job profile there is an assessment of that skill. There are ranges within each skill level. For example, in reading there is a range of 3 to 7. The level 3 is an entry level and 7 is more complex. If a business wants to use this program as an additional recruiting/screening tool, it will identify if the applicants skills match the skills required to do the job. Other businesses have used Work Keys to determine training needs for current employees by having the current employees assessed. Once the areas of need have been determined, there is instructional support. Work keys has partnered with Kirkwood Community College in this region to do customized training, provide self study books, and individualized computer software available through ACT. Businesses have used the program to determine which individuals will do best in specific jobs and thus become more productive and morale is improved. Work Keys has helped schools develop school curriculum by helping establish goals, planning and development. Over 21area school districts in Iowa have used the Work Keys program by assessing students and thus identifying and targeting training. The program meets EOC and ADA requirements for compliance. The program is a fee-based service; fees are listed in the handout. Lehman noted how the Work Keys program could be huge benefit to a business by being able to know ahead of time if an employee has the correct skills for the job. If the potential employee does not have the required skills they will identify this through the assessment and they can then take courses/training to better educate themselves. Vanderhoef asked if any profiling has been done on City/Government jobs. Lehman asked for clarification. Vanderhoef noted that the city has many different jobs with different skill levels that are unique to City employment. For example, the diversity of job skills specifically needed to be a City Planner verses the skills needed to be a Eirefighter. Dralle noted the Work Keys program is a National program and some of these jobs have been profiled. Economic Development Committee Minutes March 13,2003 Page 2 Lehman noted that the Work Keys program has a very impressive list of customers. The committee thanked Ms. Dralle for coming and providing the information presented. DISCUSSION OF REQUEST FOR CDBG ASSISTANCE - THE RACK BBQ Wilburn excused himself from the meeting due to a conflict of interest as it relates to CDBG funding. Nasby introduced Anthony and Diane Bryant, the applicants for CDBG funding for The Rack BBQ restaurant, a new start up business. Nasby distributed a hand out to committee members about the application. Both committee members and staff noted there were significant problems with the original application. Nasby had spoken with Ms. Bryant yesterday and they reviewed several of the problems. The most significant problem was concerning the cash flow numbers that were calculated in their original business plan. On page 13 of the business plan, they had an estimate of high sales average, number of sales and Iow number of sales. The original cash flow had used the high sales numbers and the committee questioned how the applicants came up with these numbers and the number of meals sold per day or per week. Ms. Bryant responded that the cash flow now reflects the Iow number estimate for the beginning and they have worked to adjust the numbers to reflect seasonal highs and lows. Lehman asked how the numbers were determined. Mr. Bryant responded that he had been in the restaurant business 10 years and also in Iowa City for quite a while. They took into consideration what their cash flow could be and what their competition is and to strive for 10 percent of that market. They are looking for help and guidance with their plan and have approached a local bank and the local SBA. He noted that they have been successful in other ventures and believe this one will also be successful. Nasby noted the addition of a letter from US Bank. Lehman questioned the fact that the letter references The Broom Closet, another business owned by the Bryants. Mr. Bryant explained that he was trying to borrow money against the other business. Lehman referenced pages 5 and 7, concerning the financial package that Bryant is trying to put together. Lehman noted that the applicant is investing approximately $29,000 and is applying for a $25,000 Targeted Small Business Loan (TSB). Bryant affirmed that the loan had been applied for and they still need to supply the revised financials. Vanderhoef asked if they are applying for a loan or grant. The Bryant's responded that they are looking for either source of funding from the State and/or the City. Lehman questioned if the only loan the business will have is from the State, if approved, and possibly a loan or grant from the City. The applicant also provided a letter from a bank stating that they had been denied a loan. Vanderhoef noted the 7% interest rate is most likely incorrect. Lehman asked if the equipment listed is already purchased. The Bryant's responded that it has been purchased and Nasby clarified that it could be used as collateral for a loan. Lehman asked for clarification of total liabilities, on page 18, the personal financial statement. The balance on properties is listed as $375,000, and clarified that this amount is against the real estate. The Suburban is a leased vehicle thus not a liability. Lehman clarified the year and model of all vehicles listed. The truck is a 1993 Ford equipment truck; the GMC is a 1995 van; the Ford truck is a 1988 4x4 pickup; the Volkswagen Golf is 1995. The auto scrubbers are floor cleaning equipment that have a $7,000 remaining balance owed. Lehman questioned the listed value of the vehicles and equipment and suggested that the items need to be listed with their current market value, taking depreciation into account. The committee agreed that it would take some time to review the new financial information. After reviewing this information, they would like to meet with the Bryant's again. Economic Development Committee Minutes March 13, 2003 Page 3 ADJOURNMENT Vanderhoef moved to adjourn the meeting. The meeting adjourned at 10:05AM. *NEXT MEETING IS SCHEDULED FOR THURSDAY, APRIL 17, 2003 AT 9:00AM.* data on cltynt/pcd/minutes/edcO3.13-O3.doc Summary of Project Costs and Proposed Financing Sources SOURCES (Summarize All Sources From Question USE OF FUNDS 2,7) Activity Cost A B C D Land acquisition $ Site preparation $ Building acquisition $ Building construction $ Building remodeling $43,950 $ 3,950 $15,000 $25,000 Machinery & equipment $25,000 $25,000 Furniture & fixtures (Office) $ 1,000 $1,000 Permanent working capital $ (detail:) Inventory $ 8,438 $ 8,436 Sign $ 3,070 $ 3,070 Trash Removal $ 112 $ 112 Advertising $1,000 $1,000 Prof Services $ 200 $ 200 Architect/Floor Plans $ 200 $ 200 Insurance $1,495 $1,495 Permits/Fees $ 225 $ 225 Other Other: Working Capitol $10,000 $10,000 TOTAL: $94,688 $28,950 $40,738 $25,000 $ 2.2. Terms of Proposed Financing Code Source (include all sources in Question 2.6) Amount Type(l) Rate Term Source A: Owner contribution $28,950 Source B: Economic Dev Grant $40,738 Loan/grant Source C: TSB $25,000 Loan/grant Source D: $ I Total: $94,688 ASSETS Current Assets PERSONAL FINANCIAL STATEMENT Amount Cash on Hand (US Bank-checking) Cash on Hand (US Bank-savings) Real Estate 442 Sierra Trail 713 l0th Avenue 2001-2003 8th Street Auto Carpet Mount Track/ GMC Van Ford Ranger Track/88 VW Golf Equipment 2 auto scrubbers 2 high speed scrubbers Carpet cleaner Total Assets LIABILITIES Current Liabilities $ 2,000 $ 1,000 $465,260 $ 6,800 $ 4,050 $ 1,500 $ 3,675 $ 1,600 $ 500 $ 500 $486,885 Amount Balance on auto Carpet Mount Track GMC Track VW Golf Balance on real estate Credit Card (Monthly balance) Other loans: Home equity loan Federal Tax liability Total Liabilities Total Net Worth $ 19,000 $ 7,000 $ 1,500 $375,000 $ 3,000 $ 7,000 $ 2,00o $414,500 $ 72,385 APR. ?.2003 9:S4AM GRADUATE COLLEGE H0.943 P.2/3 B$'S BARBEQUE & CAT-EI~G 1730 HIDDEN HOLLOW LNNW CEDAR RAPIDS, IOWA 52405 PURCHASE AGREE.M, RNT THE ITEMS LISTED ARE OWNED SOLELY BY BRENDA J BOUNDS DBA; B$'S BARBEQUE & CATERING AND ~ LISTED H~KEIN "AS IS" FOR SALE PURCHAS[3 PRICE IS FOR ALL ITEMS LISTED AND CANNOT BE PURCHASED SEPARATE OR IN INDIV1UAL QUANITIES. 1. SMOKER/BBQ GRILL 2, 1 2 DR STAINLESS STEEL REFRIGFA~,ATOR 3, 1 6 BLrRaNER STAINLESS STEEL OVEN/STOVE 4, 2 OAS DEEP FRYERS/W BASKETS 5, 1 3 DOOR MCCALL FREEZER 6. 1 STEAMTABLE (HOT FOOD) 7. I 3 COMPARTMENT SINK g. I HOOD VENT & FIRE SAFTEY SYSTEM 9. 1 DRAIN GREASE TRAP & ACCESSORIES I0,1 HEAT & HOLD .CABINET .. 12,500 1,500 1,500 3,000 1,500 1,100 850 2,500 500 550 25,500. "~Pr. 7.200~-- ~:55~M Insurance Associates ~RADUATE COLLEGE ...... FO Ilax t~O Trim D~dorseme~t Deducible Premium Property Liab'diW Total... 40,000 500 $00,000 l,O00oO00 50,000 5,000 ~00,000 $644.00 $I,496,00 APP! JCATION FOR ECONOMIC DEVEIJOPMENT SUPPORT PRO ECTS CITY OF IOWA CITY Economic Development Division 2002 Application for Financial Assistance for Economic Development Support Projects INSTRUCTIONS An "Application for Economic Development Support Projects" should be completed for projects and programs that support economic development activities such as micro- business enterprise training programs, area business development programs, or specific area facade renovation programs. An "Application for Business Financial Assistance Projects" should be completed when requesting financial assistance to directly assist a private business. Prior to completing an application, an applicant is strongly encouraged to contact the City's Economic Development Coordinator to discuss the project for which they are requesting funding. (See contact information at bottom of this page). If this application is reproduced, it must remain in the original format and order in its entirety, or the application may be returned for correction. An electronic copy of the application is available in Microsoft Word. Fill out the application completely. If any questions are left unanswered or required attachments are not submitted, an explanation for the omission must be included. Only typed applications will be accepted and reviewed. Application Deadlines: The City Council Economic Development Committee meets the third Thursday of the month. Completed applications for Economic Development Support Projects should be submitted to the Economic Development Coordinator two weeks prior to the meeting at which the applicant wishes to have the Committee review the application. Submit completed applications, with attachments to: Economic Development Coordinator City of Iowa City 410 E. Washington Street Iowa City, IA 52240 Phone: (319) 356-5236 Fax: (319) 356-5009 January 2003 1 \\server-ic\vista\my documen s\sarah\c~lbg\2-24-03+cdbg.doc City of Iowa City Application For Economic Development Support Projects Oraanization Reauestinq FinanCe A~¢~tgnce Organization Name: Tn~titote for ~qoeial and Econnmic Develo?ment Name of Authorized Person to Obligate the Organization: Paola l¥1el(enna Organization Address: Organization Contact Person: Christine Pig~ley Telephone: (310) 338-2331 E-mail Address: cpig~ley@i~ed.or~ Date of Application Submittal: 2/2~/200~ 910 23rd Aven.e: Cnralville: IA ~;2246 Title: Director of Microenterpri~e Fax: (.319) 338-~824 Release of Information and Certification NOTE: Please read carefully before signing I hereby give permission to the City of Iowa City (the City) to research the organization's history, make credit checks, contact the organization's financial institution, and perform other related activities necessary for reasonable evaluation of this proposal. I understand that all information submitted to the City relating to this application is subject to the Open Records Law (1994 Iowa Code, Chapter 22) and that confidentiality may not be guaranteed. I hereby certify that all repre- sentations, warranties or statements made or furnished to the City in connection with this application are true and correct in all material respects. 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 political subdivision. SIGNATURE OF ORGANIZATION OFFICER AUTHORIZED TO OBLIGATE ORGANIZATION: NOTE: The City will not provide assistance in situations where it is determined that any repre- sentation, 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 by the City prior to discovery of the incorrect, false or misleading representation, the City may initiate legal action to recover City funds. January 2003 2 j:\development-ed\cdbgs\iowa city\2003\2-24-03 cdbg.doc Section 1: Description of Organization and Proposed Project 1.1. Describe in detail the proposed "project". Since 1988, the Institute for Social and Economic Development (ISED) has provided microenterprise development training in Iowa. ISED has evolved into a national leader in the use of microenterprise development as a poverty alleviation tool, helping Iowans to start, expand, or strengthen over 1700 small businesses. In order to accomplish our mission of improving the social and economic well being of Io~vans, ISED continues to expand its microenterprise services in response to the changing demographics of the Iowa City area. With 80% growth in Iowa City's Hispanic population from 1990 to 2000, the need for Spanish-language microenterprise training has grown. In order to meet the need, ISED proposes to offer two sessions of our 13- week microenterprise development workshops in Spanish. ISED currently offers and will continue to offer microenterprise classes to low-income individuals in the Iowa City area. Other organizations, such as SCORE and the SBA, also offer advisory services to potential small business owners, but no organization offers classes in Spanish. The Spanish-speaking residents of Iowa City are a growing population with a strong interest in business ownership. Hispanic residents have a lower median income than the population as a whole and a higher percentage of persons living in poverty. Microenterprise creates jobs for the new business owner and for any employees the owner may hire in addition to increasing tax revenues for Iowa City. ISED has developed and revised our microenterprise curriculum over the fifteen years we have held classes in Iowa. The curriculum includes the following components: · Personal assessment of readiness to own a business, including the potential owner's experience, energy level, and financial management skills · Business feasibility assessment, including examination of the market for the product or service offered, existing competition, and break-even analysis · Marketing strategies for the small business owner · Financial planning and basic accounting. Throughout the class, participants work on a business plan based on the curriculum. This plan is their map to building their business and a tool they can use in seeking financing. After class completion, the business trainer continues to work with clients on a one-on-one basis, helping them to finalize business plans and apply for financing. ISED can provide clients with additional financing help through a variety of resources. Our Loan Guarantee Fund provides a partial guarantee on a commercial loan. The guarantee is up to 50% of the loan to a maximum value of $5,000. Iowa Community Capital, ISED's community development financial institution, expects to be making loans by the time of the project. Finally, we have relationships with local banks that are familiar with our training program and take it into consideration when making loans. Once the business is rurming, the ISED trainer provides counseling and technical assistance as requested by clients. January 2003 3 \\server-ic\vista\my documents\sarah\cdbg~-24-03+cdbg.doc 1.2. Describe why the proposed project is needed, the goals of the project, and the strategy to achieve these goals (include information from studies/research or other supporting documentation.) Hispanic residents of Iowa City have lower incomes than the Iowa City population as a whole. When Hispanic clients come to ISED, it is difficult for us to serve them if they are not comfortable speaking English. Data from the 2000 Census shows the need for Spanish-language classes: · From 1990 to 2000, the Hispanic population of Iowa City grew by 80%, from 1,018 to 1,833 · The median income for Hispanic households in Iowa City is $29,441, only 84% of the median income for all Iowa City residents · 25% of Iowa City's Hispanic residents are living below the poverty level · 1,054 Iowa City households choose Spanish as the language spoken at home. The majority speaks English well, but the fact that they choose to speak Spanish at home indicates they are more comfortable communicating in that language. In addition, the Hispanic population of the United States as a whole is highly motivated toward business ownership. According to the 1997 Economic Census, from 1992 to 1997 the number of Hispanic-owned firms grew by 39%, while the number of all firms grew by 17%. Iowa City stands to benefit from new jobs and tax revenues created by Hispanic business owners. ISED's experience providing Spanish-language training elsewhere in Iowa shows that it is more effective than working with Spanish-speaking individuals in English. While State budget cuts have made it more difficult to serve certain populations, ISED will continue to try to serve all low-income Iowa City residents through a variety of programs. Expanding to offer Spanish- language classes will help meet the needs of a currently underserved population. The primary goals of this project are business outcomes and new jobs. Business outcomes include new business starts and the strengthening or expansion of existing businesses. Our goal is to create ten new jobs as a result of eight new or expanded businesses, each of which ~vill increase the tax base for Iowa City. In addition, we will achieve 40 client enrollments and 30 class completions. While not all participants will start a business right away, the training gives participants assets they can use in their daily life. Past participants in ISED workshops cited several skills they learned in the program as useful in their jobs. These skills include marketing, customer service, cash management, stress management, budgeting, and time management. The workshops also include a financial literacy component. Financial literacy can help low-income individuals better manage their money and plan for the future. Goals of this Project: Hispanic Clients Enrolled in Training 40 Clients Completing Formal Training 30 New Businesses/Existing Businesses 8 Strengthened or Expanded New Jobs (Including Owners) 10 January 2003 4 \\server-ic\vista\my documents\sarah\cdbg~-24-03+cdbg,doc With our MIS system, we track program outcomes by measuring client outcomes, business outcomes, and financial outcomes: · Client outcomes include total client enrollments, total clients completing the program, total clients completing business plans, total clients starting/expanding/strengthening businesses, and total clients who remain in business · Business outcomes include total business starts, expansions, or strengthens; net gain in employment; business profitability; and business survival · Financial outcomes include total loan value, number of loans, loan sources, and loan repayment/default. This data collection enables ISED to measure the success of workshops and plan future workshops. 1.3. Describe how the proposed project supports one of the following economic development goals of the City · Diversify and increase the property tax base by (1) encouraging the retention and expansion of existing industry and (2) attracting industries that have growth potential and are compatible with existing businesses. · Increase employment opportunities consistent with the available labor force. · Provide and protect areas suitable for future industrial and commercial development. · Cooperate with local and regional organizations to promote economic development within Iowa City. · Improve the environmental and economic development health of the community through efficient use of resources. The businesses resulting from this project will employ business owners and 2 additional employees. Microenterprise development is an excellent way to create employment opportunities consistent with the available labor force, as the potential business owner assesses his skills and talents and creates a business that allows him to use his abilities. Often the business utilizes the business owner's abilities more fully than traditional employment, providing a more satisfying and rewarding career for the business owner and allowing Iowa City to take advantage of the talents of its residents. 1.4. Provide a description and history of the sponsoring organization and the project, if it is an existing project. ISED's mission is to strengthen the social and economic well being of individuals and communities. ISED began providing microenterprise training to Iowans in 1988. Since then, we assisted 1856 Iowans to start, expand, or strengthen 1711 businesses. Businesses assisted by ISED have created 2517 new jobs. These businesses have accessed $9,000,000 in financing. In 1999, ISED was awarded a Presidential Award for Excellence in Microenterprise Development. 1.5. Provide evidence of your organization's capacity and experience to undertake and complete the proposed project within an established timetable and budget. ISED has fifteen successful years of experience providing microenterprise training in the Iowa City area. The timetable and budget for the proposed project are based on previous classes held in Iowa City, and we are confident that the budget and timetable for this project are feasible. January 2003 5 \\server-lc\vista\my docurnents\sarah\cdbg~2-24-03+cdbg.doc 1.6. List the names of the organization owners or board of directors, if a not-for-profit organization. ISED Board of Directors: Dory Briles Lois Eichaker John Else Susan Genalo Robert Oberbillig Mary Chavez Muramatsu Al Gross 1.7. What date will the project begin? July 1, 2003 1.8. Be completed? July 1, 2004 1.9. Has any part of the project been started? If yes, please describe. The project has not been started. Section 2: Financial Contributions to the Proposed Project 2.1. What type and amount of financial assistance are you requesting from the City (for example, grant, forgivable loan, loan, etc.)? We request a CDBG grant in the amount of $15,000. 2.1a. If Community Development Block Grant Funds are being requested, please describe how the proposed project addresses the priorities, strategies, and goals cited in CITY STEPS 2001-2006. Micro-business is identified as a high priority in CITY STEPS. Micro-business is a valuable tool for both individual and community development. To low-income individuals, it offers self- sufficiency. To communities, it offers new.jobs, tax revenues, and the chance to utilize the skills of all residents. A variety of agencies assist people wishing to start or expand businesses in Iowa City, but none offer Spanish-language classes. This project would meet an unmet need consistent with the goals and priorities of CITY STEPS. 2,2. Explain why assistance is needed from the City, and why it cannot be obtained elsewhere. Please provide specific supporting documentation (e.g. grant or loan denial). If the City did not provide financial assistance, could the project proceed? Since the proposed workshops focus on Iowa City residents, Iowa City is the most natural source of funding for the project. Due to the state of the economy, competition for grant money from private sources is tight, and many organizations provide microenterprise training in locations all across the country. While a strong need for this project exists, finding funding from another source is unlikely. ISED will provide a cash contribution from committed SBA funding as well as AmeriCorps*VISTA volunteers time. Without City of Iowa City support, this project will not proceed. January 2003 6 \\server-ic\vista\my documents\sarah\cdbg\2-24-03+cdbg.doc 2.3. In what form is the organization's contribution to the project (e.g. cash, in-kind, etc.)? Please explain clearly. ISED will provide a cash contribution to this project from a grant from the U.S. Small Business Administration. ISED will also contribute 150 hours of Americorps*VISTA volunteer time valued at $16.05 an hour provided by the Corporation for National Service. 2,4, Identify all agencies or institutions involved in the project (financial and otherwise) and describe their involvement. The Broadway Neighborhood Center has agreed to contribute the use of their meeting room as well as assist in marketing and recruiting clients. 2.5. Summar, of Project Costs and Proposed F nancing Sources SOURCES (Summarize All Sources From USE OF FUNDS Question 2.6) Expense Categories (salaries, equipment, Other supplies, etc) Cost Applicant City Other (1) (2) Salaries/Fringe $10,710 $4,443 $6,267 Classroom Contractors $4,760 $4,760 Supplies and Services $432 $103 $329 Printing and Copy $243 $14 $229 Curriculum $400 $400 Communication $521 $58 $463 Occupancy $816 $221 $595 Administration $2,683 $726 $1,957 Volunteer Time (CNS) $2,408 $2,408 $ TOTAL: $22,973 $5,565 $15,000 $2,408 $ Januar~ 2003 7 \\server-lc\vista\my documents\sarah\cdbg\2-24-03 +cd bg.doc 2.6. Terms of Proposed Financinq Code Source (include ali sources in Question 2.5) Amount Type¢) Rate Term Applicant SS,SdS Cash/Committed City of Iowa City $I5,000 Grant Other (1):Corporation For Nil. Svc. $2,408 In-Kind Match Other (2): $0 Total: $22,973 (~lFor example: cash, grant, in-kind contribution, equity, direct loan, etc. 2.7. Generally a decision by the City on this application can be expected within 30 days of receipt of the application. If there is an urgent need for a more immediate decision on this application, please indicate the desired timeframe and the reason for the urgency. There is no need for more immediate action. Section 3: Economic Impact 3.1 How will this project benefit the City/County? The project will provide jobs for Iowa City residents, alleviating the need for the City and County to provide services to under-employed individuals. In addition, Iowa City will benefit from the tax revenues generated by the businesses. In a more intangible sense, the businesses will contribute to the diversity and strength of the Iowa City business community, making Iowa City a more attractive place to live and work. 3.2 How could this project lead to the growth of the Iowa City property tax base? Microenterprise contributes to the growth of the property tax base by increasing demand for rental space. The more demand there is for rental space, the greater the value of the available space and the greater the taxes paid on the space. Section 4: Community Involvement; Compliance with Lawi Repayment Agreement 4.1 Please describe your organization's history of contributing to the community through volunteer work, financial contributions, or other means. If a new organization, please describe commitment to becoming involved in the community. Since 1988, ISED has provided microenterprise workshops to Iowa City residents. We continue to expand our services and raise money from a variety of sources in order to create programming benefiting Iowa City residents. In addition to microenterprise classes, we recently created the January 2003 \\server~lc\vista\my documents\sarah\cdbg~2-24-03+cdbg.doc Micro Business Network, a network that helps small business owners to collaborate and support one another. For this summer, a teen microenterprise club is planned. Area youth will learn the basics of microenterprise. They will create a t-shirt business, gaining direct experience in running a small business. 4.2 Has the organization been cited or convicted for violations of any federal or state laws or regulations within the last five years (including environmental regulations, Occupational Safety And Health laws, Fair Labor Standards, the National Labor Relations Act, the Americans With Disabilities Act)? If yes, please explain the circumstances of the violation(s). ISED has not been cited or convicted for any such violations. 4.3 Financial assistance from the City of Iowa City may require a repayment clause in the agreement with the City. The repayment clause requires a prorated repayment of the financial assistance if the organization does not meet its obligations of this agreement. Is the organization willing to enter into an agreement that contains a repayment clause? Due to the nature of this project, ISED would be unwilling to enter into a repayment clause agreement. January 2003 9 \\server-ic\vista\my documents\sarah\cdbg~-24-O3+cdbg.doc Section 5: Required Attachments Check off each attachment submitted. If not submitted, explain why. Organization/project plan (if new organization/project) Please see answer to question 1.1 Profit and loss statements (3 year historical and 2 year projections) (Audited financial statements attached) Balance sheets (3 year historical and 2 year projections) (Audited financial statements attached) Letters of commitment of project funds (from banks, applicant, etc.) Letter of Award from the Corporation for National Service attached. Contract with the SBA attached. Map indicating the location of the project within the community Cost estimates for construction, machinery/equipment, furniture & fixtures, and operating expenses. Not applicable Authorization to conduct business in Iowa. Copy of letter confirming status as a 501(c)(3) organization is attached. Certificate of Incumbency listing the current board of directors and current officers if a corporation or a listing of the general partners if a partnership Organization resolution authorizing the application for City funds Organization signatory authorization naming an officer to execute the City application and City loan documents, if approved Other Explanation/other comments: January 2003 \\server-ic\vista\my documents\sarah\cdbg\2-24-O3+cdbg.doc 10 Upon rev/ew of a submitted application, the City reserves the right to request additional information in order to assist the City with its evaluation of an application. January 2003 11 \\server-lc\vista\my documents\sa rah\cdbg~-24-03 +cdbg.doc June 19, 2002 JUN 2 200 Charles Palmer Institute for Social & Economic Development 910 - 23ra Ave. Coralville, IA 52241 CORPORATION FOR NATIONAL Dear Charles: Your AmeriCorps*VISTA Project Application has been approved. Enclosed you will fred a Memorandum of Agreement between the Corporation for National and Community Service and Institute for Social & Economic Development. Please sign and return to the State Office and I will in return mail you a copy for your files. Also, enclosed is a Project Progress Report for future use. Please make copies to have in your office. The submission of the repotl is due to the State Office within 30 days al~er end of each reporting period, reporting are listed on the report. We are looking forward to working with your organi?ation. Please contact the office if you have any questions. Sincerely, State Program Assistant Enclosures PART I - FACESHEET APPLICATION FOR FEDERAL ASSISTANCE ~T~EO~SO.mSSION: ~ 910 23~a Avenue Coralville, Iowa 52241 I'ELEPHOI, m ~X'tn~R: (319) 338- 2331 F~:(319) 338- 5824 1412 I-1 131ols13[ lnI Co~omtion for National Se~ice FGP: 94.011~ ~ Utili~tion of~eriCo~s VISTAs to promote scP: 94.016 ~ I { I I I ~ Micr~nte~fise activities in cen~al and ~tem Iowa Confessional Districts 1, 2, & 3 [ ~. PRO~SED PROm~: ST~T DA~: 7/1/02 ~ DATa: 6/30/03 a. ~D~ $ 30,0~ O~ 12372 ~S? 16. IS ~ ~PLIC~ D~L~0~ OH ~Y ~ DE~ F. TOT~ 48,773 ~ ~ ff "Y~," a~ ~ expiation ~ HO 17. TO THa B~T OF MY KNOW~E AND BELmF, ALL DATA ~ THIS ~PUCATIO~PLICATI~ A~ TKUE ~D ~R~, THE ~NT HAS BEEN DULY AU~OK~D BY THE ~0 BODY OF THE APPLIC~ ~D THE APPLICA~ ~LL COMPLY ~H T~ A~ACH~ ASSU~NC~ IF THE ASSIST~CE IS AWNED. Paula McKenna Vice President (319) 338-2331 ~ k ~M ~L~ May 28, 2002 Modified Standard Form 424-NSSC (Rev 4/0I) 2. Date Submitted ~,pplicant identifier APPLICATION FOR FEDERAL ASSISTANCE May 22, 2002 VISTA Program 1. Type of Submission: 3. Date ReceNed by State State Application Identifier ApplicaEon Preappfication ] Construction [ ] Construction 4. Dale Received by Federal Agency Federal Identifier [×] Nonconstrucfion [ ] Nonconstruction 5. APPLICANT INFORMATION Legal Name: Organizational Unit: Institute for Social & Economic Development Economic Development Division Address(give city, county, state, and zip code): Name and telephone number of the person to be contacted ~r mette~ involving this :910 - 23rd Avenue application (give area cede); Coralville, IA 52241 (Johnson Co.) Paula McKenna, Vice President or Charles M. Palmer, President (319) 338-2331 6. Employer Identification Number (LIN): 7. Tybe of Applicant: (entel' appropriate letter in box) [ N ] A_ Slate H. Independent School Dish,ct 4 ~ - 1 3 0 5 3 5 4 B. Counly I. SlateConlroitedlnstituleo(Highmteamm9 C. Municipal J. Pr~ate University 8. TYPE OF APPLICATION: D. Township K. Indian TriBO Ix] New [ ] Continuation [ ] Revision E. Interstate L. Individual If Rm,qston, enlef appropdale letter(s) in BOX(OS): I ] ! ] F. Intonnunicipal M. Profil Organization A. iccrease Award B. Decrease Award C. Increase Duea~on ~,. Special District N.C~her (Spec~7): Nonprofit Ow,;lanLzatio~ D. Oe~mse Duratio~ Other (SpecIfy): 9. Name of Federal Agency: Corporation for National Service 10. Catalog of Federal Domestic 11. Descriptive Title of Applicant's Project Assistar~e Number; Title: Entrepreneur Program Utilization of AmeriCorps VISTAs to promote 12. Areas Affected by Project (Cities, Counties, States, ETD.): microenterprise activities in central & eastern Iowa Central & Eastern Iowa 13. Proposed Project: 14. Con0ressional Districts of: Start Date I Ending Date ~. Apprmant b. Project 7/1/2002I 6/30/2003 . Iowa District 1 Iowa Districts 1, 2 & 3 15. ESTIMATED FUNDING; 16. IS APPLICATION SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER 12372 PROCESS? ~. Federal $ 30,000 a. YES. THIS PREAPpLICATION./APPLICATION WAS MADE AV.~LABLE TO THE ~). Applicant STATE EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON: *. State May 22, 2002 cl. Local $ 18,773 b. NO. [ I PROGRAM IS NOT COVERED BY E,O. 12372 [ ] OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW. e. Other [. Program Income $ 17. Is lhe P, pplicant Delinquent on any federal debt? [ ] Yes. if"Yes,'agachanexptanation. Ix] No. g. TOTAL $ 48,773 18 TO THE BEST OF MY KNOWLEDGE AND BELIEF. ALL DATA IN THIS APPLICA'I~3N/PR E APPLIC^TK)N ARE TRUE AND CORRECT, THE DOCUMENT H~S BEEN DULY AUTHOR[ZED BY THE GOVERNING BODY OF THE APPLICANT AND THE A~PLICANT WiLL COMPLY WiTH 1HE A~rACHED ASSURANCES iF THE ASSISTANCE I$ AWARDED Paula McKenna Vice President (319) 338-233 l '-~"~ tlS'e~-/,"-',-----o~- May 22, 2002 -- AMENDMENT OF SOLICITATION~ 31FICATION OF CONTRACT SEE BLOCK 6 Institute for Social and Economic Dev. 910 23rd Avenue Coralville IA 52241 Vendor ID: 00002211 CAGE: 11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS SBA~Q~ 96-Y-0001 13. THIS ITEM APPLIES ONLY TO MOOIFICATIONS OF CONTRACTS/ORDERS. IT MOOIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14. X .:. IMPORTANT: C~traclor ~ is n~, [] is required to ~ this document and relum i copies to the issuing PPLIES OR SERVICES A~ PRICES/COSTS O00S SUPPLIES OR SERVICES ISED SBAHQ-96-Y-0001 EIN 42-1305354 ML Funding - FY 2002 1 EA UNIT PRICE 200,000.00 AMOUNT 200,000.00 SBA~Q-96-Y-0001 00012 Page - 2 Attachment 1 SF 30 Continuation of Block 14 Narrative This modification is issued under the authority of 15 U.S.C. Section 636(m) as amended, 13 CFR Part 120 and the Recipients Application for Federal Assistance dated 4/8/02 to: Increase the award by $200,000. The nonfederal share $40,000 for a total of $240,000. THE RECIPIENT MUST SUBMIT BUDGET DETAILS FOR THE FEDERAL SHARE AND NON-FEDERAL MATCH. PAYMENTS WILL BE AUTHORIZED WHEN THE SBA APPROVES THE BUDGET FOR YEAR 2002 AND ISSLrES A MODIFICATION OF THE AWARD. This modification is issued as deemed necessary by the Small Business Administration, Office of Procurement and Grants Management to: 2. Notify the recipient that Federal funds awarded in Fiscal Year 2002 and ALL prior years will expire on 4/30/03. Advise the recipient that the carryover policy is only applicable to the Fiscal Year 2002 funds. Carryover funds can not impede the expenditure of any possible future funding. Carryover of unexpended funds is permissible if funds are to be used for a non-recurring, non-severable project or activity within the scope of this Grant Agreement. A carryover request must be made no later than 60 days before the end of the budget period (NO EXCEPTIONS WlI,L BE CONSIDERED) or the de-obligation process will beg/n. Approved requests will require the issuance of an award modification. Expenditures for funds carded over to the next budget period must be tracked separately. Refer to the revised Notice of Award for the details of the Carryover Policy. 4. The Recipient is required to reference block 4, Requisition Number and block 10A, Grant Number on all future correspondence regarding this award. SBAHQ-96-Y-0001 00012 Page-3 Proposed project location: Broadway Neighborhood Center, 2105 Broadway Street INTERNAL REVENUE SERVICE DISTRICT DIRECTOR P 0 BOX A-~290 OPN 22-2 CHICAGO, IL 60690 DEPARTMENT OF THE TREASURY Date: 0 3 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT 1~01 8ROADWAY SUITE 116 IOWA CITY, IA 52240 Employer Identification Number: 42-1305B54 Contact Person: MS. D. TOBLER Contact Telephone Number: (312) 886-1278 Our Letter Dated: December 14, 1787 Addendum Applies: No Bear Applicant: This modifies our letter of the above date in which He stated that you would be treated as an organization that is not a private foundation until the e~piration of your advance ruling period. Your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section §01(c)(3) is still in effect. Based on the information you submitted, He have determined that you are not a private foundation within the meaning of section 50?(a) of the Code because you are an organization of the type described in section 50~(a)(1) and 170(b)(1)(A)(vi). Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section 509(a)(1) status, a grantor or contributor may not rely on this determination if he er she was in part responsible for, or was a~are of, the act or failure to act, or the substantial or material change on the part of the organization that resulted in your loss of such status, or if he or she acquired knowledge that the Internal Revenue Service had given notice that you would no longer be classified as a section 50~(a)(1) organization. If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help resolve any questions about your private foundation status, please keep it in your permanent records, If you have any questions, please contact the person whose name and telephone number are shown above° Sincerely yours, R. S, Nintrode, Jr. Distric~ Director Letter 1050(00/CG) Date: 00090102 07/07/2000 NECRE4T RY OF' NT T E 504ADN-000117934 INSTITUTE FOR SOCIAL & ECONOMIC ATTN:DEANNA NURNBERG 1901 BROADWAY STE 313 IOWA CITY, IA 52240 CERTIFICATE OF GOOD STANDING Name: INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT Begin date~ 19871009 Expiration: PERPETUAL I, CHESTER J. CULVER, secretary of state of the state of Iowa, custodian of the records of incorporations, certify that the nonprofit corporation named on this certificate is in good standing and was duly incorporated under the laws of Iowa on the date printed above.  /~~[LVER SEC~ATE CHESTER J. CU , o 2OO3 Mary Chavez Muramatsu Iowa Department of Corrections Executive Officer 420 Watson Powell Jr. Parkway Des Moines, IA 50309 515/242-5714 work Matw.chavez~doc.state.ia.us Lois Eichacker 2330 Harper Lane Fort Madison, IA 52627 319/372-8040 home 319/372-6747 fax loiseichacker~,aol.com Susan Genalo (Vice Chair, ISED Executive Committee) Des Moines Register Vice President of Finance 715 Locust, 8~h Floor Des Moines, IA 50309 800/532-1455 work 515/284-8206 work 515/286-2520 fax sgenalo(~dmre~.com ISED Board of Directors 2003 - 2005 2OO4 Al Gross (Chair, ISED Finance Committee) Wells Fargo Home Mortgage Branch Manager Emerging Markets 2840 Ingersoll Avenue Des Moines, IA 50312 515/237-5452 work 515/237-5241 fax alan.gross~wellsfargo.com Dory Briles DMACC Senior Vice President of Development 2006 Ankeny Blvd. Ankeny, lA 50021 515/964-6603 work 515/965 -7022 fax dlbriles~,,dmacc.edu 2005 John Else (Chair, ISED Board) ISED East 249 E. Main Street, Bldg. 2, Suite 2 Newark, DE 19711 302/368-3939 work 302/368-3978 fax ielse~,ised.org Robert Oberbillig 3663 Grand Avenue - #506 Des Moines, lA 50312-4342 515/277-0811 home 515/778-8351 cell pboberbillig~aol.com Board Committees Executive John Else, Chair Susan Genalo, Vice Chair Lois Eichacker Al Gross Corporate Officers Chuck Palmer, President ISED: 1111 9th Street, Suite 200 Des Moines, IA 50314 515-283-0940 phone 515-283-0348 fax cpahner(~ised.org Paula McKenna, Treasurer, Vice President, & Secretary ISED: 910 23~dAvenue Coralville, IA 52241 319-338-2331 phone 319-338-5824 fax pmckenna~,,ised.org J:\Development-ED\Vendor Partner\Boardlist 2003.doc 3/3/03 ISED creating opfJorttlnio,, buildi~g capacity 910 23mAvenue o Coralvil~,lA52241 phone 319-338-2331 fax 319-3384824 www.~edorg March 6, 2003 Tracy Hightshoe, Steve Long & Steve Nasby City of Iowa City Dept. of Planning & Community Development 410 E. Washington St. Iowa City, IA 52240 Dear City of Iowa City, Planning & Community Development: This letter is to serve as an organizational resolution authorizing ISED to apply for City of Iowa City, CDBG funding for the 2003 program. Vice President, Paula McKenna is an authorized officer of the organization and will execute the application and grant documents if approved. If you have any questions please contact me at 338-2331. We thank you for your consideration and look forward to working with you to provide this needed program to the Hispanic residents of Iowa City. Sincerely, Paula McKenna Vice President, Director of Finance and Administration Iowa Locations: Cedar Rapids, Davenport, Des Moines, Sioux City and Waterloo Other Locations: Newark, DE; Washington, DC; Louisville, KY; Gulfport, MS; Omaha, NE; New City, NY; and Salt Lake City, UT INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES FINANCIAL AND COMPLIANCE REPORT YEAR ENDED JUNE 30, 2002 AND SlX MONTHS ENDED JUNE 30, 2001 CONTENTS INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 1 - 2 CONSOLIDATED FINANCIAL STATEMENTS Consolidated balance sheets Consolidated statements of activities Consolidated statements of cash flows Notes to financial statements 3 4 5 6-8 SUPPLEMENTARY INFORMATION Schedules of: Expenditures of federal awards Functional expenses Schedule of grant and contract revenue, by source 9-11 12- 15 16- 17 INDEPENDENT AUDITOR'S REPORT ON Compliance and on internal control over financial reporting based on an audit of financial statements performed in accordance with government auditing standards Compliance with requirements applicable to each major program and internal control over compliance in accordance with OMB Circular A433 Schedule of findings and questioned costs Summary schedule of prior audit findings 18 - 19 20- 21 22 - 25 26 ORGANIZATION INFORMATION 27 McGladrey&Pullen Cedified Public Accountants INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION To the Board of Directors Institute for Social and Economic Development Coralville, Iowa We have audited the accompanying consolidated balance sheets of the Institute for Social and Economic Development and its subsidiaries (collectively the "Institute") as of June 30, 2002 and 2001, and the related consolidated statements of activities and cash flows for the year ended June 30, 2002 and six months ended June 30, 2001. These financial statements are the responsibility of the Institute's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards general accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Institute for Social and Economic Development and its subsidiaries as of June 30, 2002 and 2001, and their changes in net assets and their cash flows for the year ended June 30, 2002 and six months ended June 30, 2001 in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated January 7, 2003 on our consideration of the Institute's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards, and should be read in conjunction with this report in considering the results of our audit. and consulting firms. The accompanying supplementary information is presented for purposes of additional analysis or is required by U. S. Office of Management and Budget Circular A-133 Audits of States, Local Governments, and Nonprofit Organizations and is not a required part of the basic consolidated financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly presented in ali material respects in relation to the basic consolidated financial statements taken as a whole. Iowa City, Iowa January 7, 2003, except for the last paragraph of Note 3, as to which the date is January 17, 2003 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 2002 and 2001 ASSETS 2002 2001 Current Assets Cash and cash equivalents Restricted cash accounts (Note 5) Certificates of deposit Mutual fund Accounts receivable and unbilled services, less allowance for doubtful accounts 2002 and 2001 $500 Earnings in excess of payments on contracts Prepaid expenses Total current assets Office Equipment Less accumulated depreciation LIABILITIES AND NET ASSETS 350,047 $ 335,824 918,436 724,329 350,514 378,441 72,498 88,539 700,678 464,644 73,095 35,672 14,338 26,816 2,479,606 2,054,265 210,592 200,690 129,570 102,577 81,022 98,113 $ 2,560,628 $ 2,152,378 Current Liabilities Accounts payable Accrued expenses Advance payments on Individual Development Account matching grants (Note 5) Payments in excess of earned revenue Total current liabilities Net Assets, unrestricted See Notes to Financial Statements. $ 84,736 $ 104,259 177,511 138,541 918,436 724,329 457,630 383,895 1,638,313 1,351.024 922,315 801,354 $ 2,560,628 $ 2,152,378 3 INSTITUTE FOR SOCIAL AND ECONOMIc DEVELOPMENT AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF ACTIVITIES Year Ended Jane 30, 2002 and Six Months Ended June 30, 2001 Revenue and suppo~: Year Ended Six Months Ended June 30, June 30, 2002 2001 Grant and contract revenue (Note 5) Other revenue Investment income: Interest and dividends Net (depreciation) in fair value of investment securities Contributions Total revenue and support Expenses: Program services: Research and evaluation Consulting Economic development General and administrative Total expenses Change in net assets before insurance settlement Other change in net assets, insurance settlement (Note 3) Change in net assets Net assets, beginning of period Net assets, end ofperied See Notes to Financial Statements. 3,888,308 $ 1,692,057 10,725 27,345 15,288 (17,061) (7,101) 21,855 8,580 3,920,447 1,719,549 480,380 239,506 874,443 381,584 1,828,923 742,220 3,183,746 1,363,310 694,992 331,638 3,878,738 1,694,948 41,709 24,601 79,252 120,961 24,601 801,354 776,753 $ 922,315 $ 801,354 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended June 30, 2002 and Six Months Ended June 30, 2001 Cash Flows from Operating Activities Excess of revenue and support over expenses Adjustments to reconcile to net cash provided by operating activities: Depreciation Net depreciation in fair value of mutual fund Changes in certain working capital items: Accounts receivable Earnings in excess of payments on contracts Prepaid expenses Accounts payable and accrued expenses Advance payments on Individual Development Account matching grants Payments in excess of earned revenue Net cash provided by operating activities Cash Flows from Investing Activities Purchase of certificates of deposit Redemption of certificates of deposit Purchases of mutual fund Purchase of equipment Proceeds from involuntary conversion of property Net cash provided by investing actlvities Cash Flows from Financing Activities Payments on equipment notes payable Increase in cash and cash equivalents Cash and cash equivalents: Balance, beginning Balance, ending Supplementary Information Cash payments for interest See Notes to Financial Statements. Year Ended Six Months Ended June 30, June 30, 2002 2001 120,961 $ 24,601 27,806 14,972 17,061 7,101 (236,034) (67,250) 07,423) 145 12,478 3,666 19,447 26,394 194,107 77,962 73,735 139,210 192,138 226,801 (231,119) 078,440 259,046 376,276 0,020) (671) (10,715) (4,255) 119,021 16,192 111,930 (22,167) 208~30 316,564 1,060,153 743,589 $ 1~268,483 $ 1,060,153 $ $ 600 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS Note 1. Nature of Activities and Significant Accounting Policies Nature of activities: The Institute for Social and Economic Development's ("ISED") mission is to improve the social and economic well being of individuals and communities. ISED's economic development programs, including micro enterprise training, provide direct services to individuals to assist them to become socially and economically self sufficient. Research and evaluation programs assist other organizations by helping them evaluate the success of their programs. The consulting program provides assistance to other organizations by helping them provide program services similar to ISED. Accounting estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial state~nents and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. A summary of ISED's significant accounting policies follows: Interest in financially interrelated corporations: ISED has a controlling financial interest in two not-for-profit corporations, the ISED-Nebraska and Iowa Community Capital. ISED appoints their management. Under AICPA Statement of Position 94-3, these subsidiaries are consolidated in the financial statements. All inter- company transactions and account balances are eliminated in consolidation. Contributions received and restricted net assets: Contributions, including the uncollected portion of any pledges receivable, are treated as contributions in the period received and as increases to unrestricted, temporarily restricted or permanently restricted equity. As of June 30, 2002 and 2001, there were no permanently restricted or temporarily restricted amounts of net assets arising from donor contributions. Revenue recognition: Revenues from contracts and grants are recognized at estimated realizable amounts as services are performed. A majority of the contracts and grants provide for billings based upon actual costs incurred plus allocated costs for administration. Certain contracts provide for fixed payments in advance or scheduled payments. Payments which exceed earned revenues are presented as a liability on the consolidated balance sheet. ISED recognizes revenue and an equal expense when it disburses funds for matching grants discussed in Note 5. Service revenue for administering this program is recognized as the services are performed. Insurance settlements: Directly related expenses associated with a May 2000 fire in ISED's main office were previously charged to expenses as a casualty loss. Gains resulting from the subsequent settlement of insurance claims for business interruption coverage are recognized upon settlement. 6 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS Note 1. Nature of Activities and Significant Accounting Policies (Continued) Cash and cash equivalents: The Institute considers all highly liquid debt instruments purchased with a maturity date of less than three months to be cash equivalents, including cash balances held in restricted bank accounts. Certificates of deposit, which have maturities over throe months, are classified as investments. Mutual fund: The investment in a mutual fund is reported at fair value and the net appreciation or depreciation in fair value is recognized in the statement of activities. Dividends are recognized when received. Office equipment and depreciation: Office equipment is stated at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets. Note 2. Retirement Plan ISED provides retirement benefits to permanent employees working at least 16 hours per week under tax deferred 403 (b) arrangements. ISED makes discretionary contributions totaling 3% of eligible compensation. ISED's contributions totaled $51,571 and $22,269 for the year ended June 30, 2002 and six months ended June 30, 2001, respectively. Note 3. Casualty Loss and Insurance Settlements In May 2000, a tim destroyed ISED's administrative office. During the year ended December 31, 2000, ISED recognized a gain on the involuntary conversion of assets destroyed in the fire because the proceeds from insurance exceeded the basis of the assets. During the year ended June 30, 2002, ISED recorded a gain of $79,252 resulting from claims to the insurance company for business interruption and lost profits. As of June 30, 2002, ISED had submitted data to the insurance company for additional claims that had not been accepted or settled by the insurance company. On January 17, 2003, ISED received a final settlement of $50,000 from the insurance company as a result of the additional claims. This amount will be recognized as a gain during the year ending June 30, 2003. INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS Note 4. Leases and Rent Expense ISED rents its main office in Coralville, Iowa under a month-to-month lease that requires payment of $3,875 per month. Other satellite offices are rented under other short-term agreements. The amount charged to rent expense totaled $102,260 and $52,493 for the year. ended June 30, 2002 and six months ended June 30, 2001, respectively. Note 5. Restricted Cash and Prepayments Received on Contract Services ISED administers Individual Development Accounts for eligible low-income individuals. The Individual Development Accounts are savings accounts established by the participants in a designated bank whereby the participants commit to a personal savings program for business development, education or the purchase of a home, car or computer. ISED controls disbursements from the individuals' savings accounts and upon achievement of the savings goals, 1SED provides matching grants on behalf of the individuals that are funded by a Federal grant or a combination of Federal and Iowa grant. The savings accounts of the individuals are under the control of a financial institution and are not recorded on ISED's financial statements. ISED also maintains restricted bank accounts for advance payments received to fund the grants. 8 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2002 Program Title Catalog Of Federal Domestic Assistance Number Federal Expenditures U. S. Department of Health and Human Services: Direct programs: Refugee and Entrant Assistance - Discretionary Grants IDA match Total Job Opportunities for Low Income Individuals New Assets for Independence Demonstration Program IDA match Total Total Direct Pass-through programs: State of Kansas: Temporary Assistance for Needy Families Medical Assistance Program (Medicaid, Title XIX) Child Care Mandatory and Matching Funds of the Child Cam & Development Fund Total State of Kansas Employee and Family Resources: Consolidated Knowledge Development and Application Program Centers for Disease Control and Prevention - Investigations and Technical Assistance Total Employee and Family Resources Counseling Center of Lake View: Consolidated Knowledge Development and Application Program Douglas County, Nebraska, Consolidated Knowledge Development and Application Program University of Nebraska at Omaha, Consolidated Knowledge Development and Application Program People Works, Inc., New Assets for Independence Demonstration Program Total other Total U. S. Department of Health and and Human Services 93.576 93.576 93.593 93.602 93.602 93.558 93.778 93.596 93.230 93.283 93.230 93.230 93.230 93.602 $ 1,135,180 342,469 1,477,649 129,190 3,972 74,015 77,987 1,684,826 39,653 24,880 13,423 77,956 22,919 42,883 65,802 14,483 6,049 20,432 41,122 82,086 1,910,670 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES EXPENDITURES OF FEDERAL AWARDS (Continued) Year Ended June 30, 2002 Program Title Catalog Of Federal Domestic Assistance Number Federal Expenditures U. S. Small Business Administration Direct programs: BusinessLINC Women's Business Ownership Assistance Microloan Demonstration Program Program for Investment in MicroEnterprise Total U. S. Small Business Administration U. S. Department of Justice: Pass-through programs: City of Omaha, Nebraska: Local Law Enforcement Block Grants Program State of Nebraska: Drug Court Discretionary Grant Program Total U. S. Department of Justice 59.000 59.043 59.046 59.049 16.592 16.585 24,810 99,953 120,900 119,212 364,875 68,113 5,857 73,970 10 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES EXPENDITURES OF FEDERAL AWARDS (Continued) Year Ended June 30, 2002 Program Title Catalog Of Federal Domestic Assistance Federal Number Expenditures U. S. Department of Housing and Urban Development Pass-through programs: City of Sioux City, Iowa: Community Development Block Grants/Entitlement Grants City of Des Moines, Iowa: Community Development Block Grants/Entitlement Grants Total U. S. Department of Housing and Urban Development U. S. Department of Agriculture Direct programs: Rural Business Opportunity Grants Pass-through programs: State of Kansas: State Administrative Matching Grants for Food Stamps Program Total U. S. Department of Agriculture Total expenditures of federal awards 14.218 $ 52,517 14.218 69,604 122,121 10.773 67,822 10.561 20,114 87,936 $ 2,559,572 Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Institute for Social and Economic Development and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, "Audits of States, Local Governments and Non-Profit Organizations." Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. 11 Total General And Functional Administrative Expenses $ 379,119 $ 1,753,572 96,858 447,157 84,568 598,063 7,425 207,192 48,838 167,140 33,146 128,973 19,219 105,765 23,478 28,252 416,484 2,341 26,140 $ 694,992 $ 3,878,738 13 Total General And Functional Administrative Expenses $ 160,069 $ 760,772 42,209 189,272 40,747 198,859 5,620 108,412 31,374 80,811 6,562 42,084 24,116 83,714 14,972 14,972 17,961 185,688 5,969 12,403 $ 331,638 $ 1,694,948 15 INSTITUTE FOR SOCIAL AND ECONOMIC AND SUBSIDIARIES SCHEDULE OF GRANT AND CONTRACT REVENUE, BY SOURCE Year Ended June 30, 2002 Grant And Contract Revenue Percentage Of Grant And Contract Revenue State: Virginia Louisiana Kansas Iowa Total state Foundation: American Express Foundation Annie E. Casey Foundation Aspen Institute - 141ELD Cedar Rapids Seniors Charles Stewart Mort Foundation Chrysalis Foundation Cooperative Housing Foundation Council of Michigan Foundations Milbank Memorial Fund Ms. Foundation for Women Voices for Children Total foundation Other institutions: Community Development Financial Institution Ethiopian Community Development Council House of Mercy Human Services Planning Alliance National Immigration Forum Project Now Various Corporate Sources Total other institutions Local government: Multnomah County Oregon City of Omaha Total local government 58,977 19,443 48,631 409,113 536,164 13.79% 12,610 110,772 58,662 567 49,426 10,182 5,977 73,446 46,675 40,543 4,564 413,424 10.63% 41,746 12,000 40,622 4,843 15,586 19,077 30,029 163,903 4.22% 6,748 37,307 44,055 1.13% 16 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES SCHEDULE OF GRANT AND CONTRACT REVENUE, BY SOURCE (Continued) Year Ended June 30, 2002 Percentage Grant And Of Grant Contract And Contract Revenue Revenue University and College: Des Moines Area Community College Lewis University University of Iowa Total university and college Federal and all other Total grant and contract revenue 27,053 3,759 2,118 32,930 0.85% 2,697,832 69.38% $ 3,888,308 100.00% 17 McGladrey&Pullen Certified Public Accountants INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors Institute for Social and Economic Development Coralville, Iowa We have audited the consolidated financial statements of the Institute for Social and Economic Development and its subsidiaries (collectively the "Institute") as of and for the year ended June 30, 2002 and have issued our report thereon, dated January 7, 2003. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the Institute's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Institute's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial statement reporting that, in our judgment, could adversely affect the Institute's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. The reportable condition is described in the accompanying schedule of findings and questioned costs as item II-A-02-1. McGladrey & Pullen, LLP is an independent member f~m of RSM Intema6onal, an affllialion of ~ndependent acc~Jn~ng and c~nsui'a!g 18 A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively Iow level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is not a material weakness. We also made additional suggestions to management concerning the general ledger that we have reported to management of the Institute in a separate letter dated January 7, 2003. This report is intended for the information and use of the audit committee, management and Federal awarding agencies and pass-through entities and is not intended to be and should not be used for anyone other than these specified parties. Iowa City, Iowa January 7, 2003 19 McGladrey & Pullen Certified Public Accountants INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Board of Directors Institute for Social and Econonfic Development Coralville, Iowa Compliance We have audited the compliance of the Institute for Social and Economic Development and its subsidiaries (collectively the "Institute") with the types of compliance requirements described in the "U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement" that are applicable to each of its major Federal programs for the year ended June 30, 2002. The Institute's major Federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of the Institute's management. Our responsibility is to express an opinion on the Institute's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Cimular A-133, Audits of States, Local Governments and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Institute's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the lnstitute's compliance with those requirements. In our opinion, based on our audit, the Institute complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2002. McGladrey & Pullen, LLP is a~ inde~m(lent membe~ firm of RSM Intema~k~eal, an affliation of independent accoun~ng and consulting f~ms. 20 Internal Control Over Compliance The management of the Institute is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered the lnstitute's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. We noted one matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgment, could adversely affect the Institute's ability to administer a major Federal program in accordance with applicable requirements of laws, regulations, contracts and grants. The reportable condition is described in the accompanying schedule of findings and questioned costs as item III-A-02-1. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is not a material weakness. This report is intended for the information and use of the audit committee, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Iowa City, Iowa January 7, 2003 21 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2002 I. Summary of Independent Auditor's Results Financial Statements Type of Auditor's report issued: Unqualified Internal control over financial reporting: Material weaknesses identified? Reportable conditions identified that are not considered to be material weaknesses? Noncompliance material to financial statements noted? Feder~ Awards Internal control over major programs: Material weaknesses identified? Reportable conditions identified that are not considered to be material weaknesses? Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Section 501 (a) of Circular A-1337 Yes Yes X Yes Yes Yes X Yes X No X No X No X No 22 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2002 Identification of major programs: CFDA Number Name of Federal Program U. S. Department of Health And Human Services: 93.576 Refugee and Entrant Assistance - Discretionary Grants Dollar threshold used to distinguish between Type A and Type B programs Auditee qualified as low-risk auditee? Yes X $300,000.00 No II. Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards A. Reportable Conditions in Internal Control II-A-02-1 Finding: A number of general ledger adjustments are not posted on a timely basis and a substantial period of time was required to prepare the Institute's adjusted general ledger for the year ended June 30, 2002. The final general ledger adjustments to unbilled services, accrued expenses and insurance receivables were not posted until approximately five months after year-end. In addition, the database used to reconcile and provide accountability for disbursements from individual development accounts was not reconciled on a timely basis. Therefore the general ledger presented for audit required material adjustments to appropriately record, summarize and report financial data consistent with the assertions of management. Recommendation: We recommend that the Institute allocate additional resources to provide a controllership function between the financial accounting staff and the director of finance and administration. This position should be filled by someone with sufficient general ledger accounting experience. The assigned individual would be responsible for management of the day-to-day accounting functions and monthly general ledger adjustments, ensuring the timely preparation of complete and accurate interim financial statements. 23 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2002 Auditee Response: Turnover in staff and delays in data input from partner organizations associated with the Individual Development Account programs and the related information management system, MIS-IDA, caused the reconciliations for a six-month period to be delayed. The total program dollars were reconciled on a monthly basis; however, the program has several sources of funding and these separate reconciliations were delayed. As participants exit from the system, we rely on the data from MIS- IDA to determine the source of funds associated with each participant. Because of the delay in data input, the reconciliation of the source of funds was also delayed. An additional position has been added to assume the financial management responsibilities of the program and data management responsibilities have been shifted to different staff persons. We have every confidence that the data can be kept current on a monthly basis. Due to data input and data processing limitations, there will remain an approximate 45-day delay in data reconciliations. We have also had an outside data management service evaluate the system and we are waiting for the recommendations from that evaluation. An additional accounting position has been added to perform general ledger account reconciliations. Unfortunately, there was a turnover in the position during the 2002 fiscal year and timeliness of account reconciliations was again delayed. In addition to filling that position, a position was added to the Administrative staff for contract management and a third position was added to the finance staff. Responsibilities have been shifted from the Director of Finance & Administration to these new positions and to existing staff. Competent and well-trained individuals have filled key financial positions and the timeliness of reconciliations has significantly improved over the last 12 months. We will continue to make shifts in responsibilities as competence improves and we are prepared to add additional personnel as needed to insure preparation of timely and accurate financial statements. Interim financial statements are intemal documents used only for management purposes. Accrued marketing expenses and insurance recovery entries were recorded in a manner that presented clearly the information needed by management to make sound financial decisions. The adjustments to GAAP were done at the end of the year to prepare the statements for the audit. B. Compliance Findings There were no instances of noncompliance that are material to the financial statements of the Institute for Social and Economic Development as of and for the year ended June 30, 2002. 24 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT AND SUBSIDIARIES SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2002 IlL Findings and Questioned Costs for Federal Awards A. Reportable Conditions in Internal Control III-A-02-1 Please see finding II~A-02-1 for details of specific reportable conditions in Internal Control over Federal Awards. B. Compliance Findings No compliance findings that are material to the financial statements. 25 INSTITUTE OF SOCIAL AND ECONOMIC DEVELOPMENT SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS Year Ended June 30, 2002 Audit Finding: A number of general ledger accounts, primarily certificates of deposit, accounts receivable and a mutual fund, were not reconciled to the supporting detail on a regular basis. In addition, material adjustments to the general ledger related to the casualty loss and insurance proceeds in the year ended December 31, 2000 were not recorded until months after the events occurred. Therefore, the interim financial statements require material adjustments to appropriately record, summarize and report financial data consistent with the assertions of management on a timely basis. Corrective Action Taken: An additional accounting position was added in early 2002 to perform general ledger account reconciliations. Unfortunately, there was a turnover in the position during the 2002 fiscal year and timeliness of account reconciliations was again delayed. See additional details in our corrective action plan for the year ended June 30, 2002. 26 INSTITUTE FOR SOCIAL ECONOMIC DEVELOPMENT BOARD OF DIRECTORS AND MANAGEMENT June 30, 2002 Board of Directors Term Expires John Else, Chair Robert Oberbillig, Vice Chair Susan Genalo, Vice Chair A1 Gross, Treasurer Dory Briles Lois Eichacker, Personnel Mary Chavez-Muramatsu David Rosenthal 2002 2002 2003 2OO4 2004 2003 2004 2002 Management Charles Palmer Paula McKenna Linda Swenson President Vice President Secretary 27 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT FINANCIAL AND COMPLIANCE REPORT SIX MONTHS ENDED JUNE 30, 2001 AND YEAR ENDED DECEMBER 31, 2000 CONTENTS INDEPENDENT AUDITOWS REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 1 FINANCIAL STATEMENTS Balance sheets Statements of activities Statements of cash flows Notes to financial statements SUPPLEMENTARY INFORMATION 2 3 4 5-7 Schedules of: Expenditures of federal awards Functional expenses INDEPENDENT AUDITOR'S REPORT ON 8 -10 11 - 14 Compliance and on internal control over financial reporting based on an audit of financial statements performed in accordance with government auditing standards Compliance with requirements applicable to each major program and internal control over compliance in accordance with OMB Circular A-133 Schedule of findings and questioned costs Summary schedule of prior audit findings 15 -16 17 - 18 19 -22 23 ORGANIZATI~)N INFORMATION 24 MCGLADREY& PULLEN' LLP Certified Public Accountants INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION RSM To the Board of Directors Institute for Social and Economic Development Coralville, Iowa We have audited the accompanying balance sheets of the Institute for Social and Economic Development (the "Institute") as of June 30, 2001 and December 31, 2000, and the related statements of activities and cash flows for the six months ended June 30, 2001 and the year ended December 31, 2000. These financial statements are the responsibility of the Institute's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards general accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Institute for Social and Economic Development as of June 30, 2001 and December 31, 2000, and its changes in net assets and its cash flows for the six months ended June 30, 2001 and the year ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated October 2, 2001 on our consideration of the Institute for Social and Economic Development's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards, and should be read in conjunction with this report in considering the results of other audits. The accompanying supplementary information is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Cimular A-133 Audits of States, Local Governments, and Nonprofit Organizations and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly presented in all material respects in relation to the basic financial statements taken as a whole. I I Iowa City, Iowa October 2, 2001 II INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT BALANCE SHEETS June 30, 2001 and December 31, 2000 ASSETS 2001 2000 Current Assets I I I I I I Cash and cash equivalents Restricted cash accounts (Note 6) Certificates of deposit Mutual fund Accounts receivable, less allowance for doubtful accounts 2001 and 2000 $500 Insurance claim receivable (Note 4) Earnings in excess of payments on contracts Prepaid expenses Total current assets Office Equipment (Note 2) Less accumulated depreciation LIABILITIES AND NET ASSETS 335~24 $ 97,222 724,329 646,367 378,441 376,276 88,539 94,969 464,644 397,394 119,021 35,672 35,817 26,816 30,482 2,054,265 1,797,548 200,690 196,434 102,577 87,604 98,113 108,830 $ 2,152,378 $ 1,906,378 I I I I I ! I I Current Liabilities Equipment notes payable (Note 2) Accounts payable Accrued expenses Advance payments on Individual Development Account matching grants (Note 6) Payment in excess of earned revenue Total current liabilities Net Assets, unrestricted See Notes to Financial Statements. $ $ 22,167 104,259 68,896 138,541 147,510 724,329 646,367 383,895 244,685 1,351,024 1,129,625 801354 776,753 $ 2,152,378 $ 1,906,378 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT STATEMENTS OF ACTIVITIES Six Months Ended June 30, 2001 and Year Ended December 31, 2000 2001 2000 Revenue and support: Grant and contract revenue Other revenue Investment income: Interest and dividends Net (depreciation) in fair value of investment securities Contributions Total revenue and support Expenses: Program services: Research and evaluation Consulting Economic development General and administrative Casualty loss (Note 4) Total expenses Change in net assets before involuntary conversion Other change in net assets, gain on involuntary conversion (Note 4) Change in net assets Net assets, beginning of period Net assets, end of period See Notes to Financial Statements. $ 1,692,057 $ 2,441,937 10,725 31,726 15,288 31,518 (7,101) (10,464) 8,580 19,058 1,719,549 2,513,775 239,506 771,418 381,584 134,740 742,220 1,074,340 1,363,310 1,980,498 331,638 493,307 149,011 1,694,948 2,622,816 24,601 (109,041) 97,563 24,601 (11,478) 776,753 788,231 801,354 $ 776,753 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT STATEMENTS OF CASH FLOWS Six Months Ended June 30, 2001 and Year Ended December 31, 2000 Cash Flows from Operating Activities Excess (deficit) of revenue and support over expenses Adjustments to reconcile to net cash provided by operating activities: Depreciation Net depreciation in fair value of mutual fund Gain on involuntary conversion of property Changes in certain working capital items: Accounts receivable Eamings in excess of payments on contracts Prepaid expenses Accounts payable and accrued expenses Advance payments on Individual Development Account matching grants Payments in excess of earned revenue Net cash provided by operating activities Cash Flows from Investing Activities Purchase of certificates of deposit Redemption of certificates of deposit Purchases of mutual fund Purchase of equipment Proceeds from sale of equipment Proceeds from involuntary convemion of property Net cash provided by (used in) investing activities Cash Flows from Financing Activities Payments on equipment notes payable Increase in cash and cash equivalents Cash and cash equivalents: Balance, beginning Balance, ending Supplementary Information Cash payments for interest Assets acquired by capital lease Insurance proceeds receivable due to involuntary conversion See Notes to Financial Statements. 2001 2000 $ 24,601 $ (11,478) 14,972 21,768 7,101 10,464 (97,563) (67,250) (17,660) 145 (35,817) 3,666 (13,361) 26394 56,621 77,962 646,367 139,210 136,419 226,801 695,760 (378,441) (376,276) 376,276 (671) (1,007) 0,255) (61,507) 13,174 119,021 111,930 (425,616) (22,167) (19,267) 316,564 250,877 743~589 492,712 $ 1,060,153 $ 743,5119 600 $ 1,219 41,434 119,021 4 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT NOTES TO FINANCIAL STATEMENTS Note 1. Nature of Activities and Significant Accounting Policies Nature of activities: The Institute for Social and Economic Development's ("ISED") mission is to improve the social and economic well being of individuals and communities. ISED's economic development programs, including micro enterprise training, provide direct services to individuals to assist them become socially and economically self sufficient. Research and evaluation programs assist other organizations by helping them evaluate the success of tbeir programs. The consulting program provides assistance to other organizations by helping them provide program services similar to ISED. Accounting estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. A summary of ISED's significant accounting policies follows: Contributions received and restricted net assets: Donor contributions, including the uncollected portion of any pledges receivable, are treated as contributions in the period received and as increases to unrestricted, temporarily restricted or permanently restricted equity. As of June 30, 2001 and December 31, 2000, there were no permanently restricted or temporarily restricted amounts of net assets arising from donor contributions. Revenues: Revenues from contracts and grants are recognized at estimated realizable amounts as services are performed. A majority of the contracts and grants provide for billings based upon actual costs incurred plus indirect costs for administration. Certain contracts provide for fixed payments in advance or scheduled payments. Payments which exceed earned revenues are presented as a liability on the balance sheet. Casualty loss and gains on involuntary conversion: Directly related expenses associated with a May 2000 fire in ISED's main office are classified as a casualty loss. These expenses include payroll, temporary occupancy and other directly related and incremental expenses associated with the relocation of the office, the recovery of records and interruption of operations. Gains resulting from insurance proceeds in excess of the basis of assets destroyed are recognized in the period in which the assets were destroyed, based upon the amount of insurance confirmed by the insurance carrier. Pending insurance claims for business interruption coverage will be recognized upon settlement. I ! INSTITUTE OF SOCIAL AND ECONOMIC DEVELOPMENT NOTES TO FINANCIAL STATEMENTS Note 1. Nature of Activities and Significant Accounting Policies (Continued) Cash and cash equivalents: The Institute considers all highly liquid debt instruments purchased with a maturity date of less than three months to be cash equivalents, including cash balances held in restricted bank accounts. Certificates &deposit, which have maturities over three months, are classified as investments. Mutual fund: The investment in a mutual fund is reported at fair value with the net appreciation or depreciation in fair value recognized in the statement of activities. Dividends are recognized when received. Office equipment: Office equipment is stated at cost. Depreciation is computed by the straight-line method over the estimated useful lives &the assets. Note 2. Equipment Financing Notes Equipment financing notes which required minimum payments for periods of nine to eighteen months were recorded at their net present value using an estimated incremental borrowing rate of 10%. Note 3. Retirement Plan 1SED provides retirement benefits to permanent employees working at least sixteen hours per week under tax deferred 403 (b) arrangemants. ISED makes discretionary contributions totaling 3% of eligible compensation. ISED's contributions totaled $22,269 and $38,793 for the six months ended June 30, 2001 and the year ended December 31, 2000, respectively. Note 4. Casualty Loss and Gain on Involuntary Convemion In May 2000, a fire destroyed ISED's administrative office. During the year ended December 31, 2000, ISED recorded a gain of $97,563 resulting from the insurance proceeds orS119,021 which exceeded the book value of equipment destroyed by the fire. The insurance settlement was collected in February 2001. As of June 30, 2001, ISED had submitted data to the insurance company for additional claims for business interruption and lost profils that had not been accepted or settled by the insurance company. In the year ended December 3 I, 2000, ISED incurred payroll costs to relocate the main office and to reconstruct records and other expenses related to disaster recovery that ISED believes should be covered under a pending insurance claim. These expenses have been separately classified from program services and. general and administrative expenses. Since the insurance company has not offered any settlement on the claim, such settlement, if any, will be recorded upon receipt. ! ! INSTITUTE OF SOCIAL AND ECONOMIC DEVELOPMENT NOTES TO FINANCIAL STATEMENTS Note 5. Leases and Rent Expense ISED rents its main office in Coralville, Iowa under a month-to-month lease which requires payment of $3,875 per month. Other satellite offices are ranted under other short-term agreements. Office equipment was leased under short-term leases for portions of 2000 and 2001. The amount charged to rent expense totaled $52,493 and $79,919 for the six months ended June 30, 2001 and the year ended December 31, 2000, respectively. Note 6. Restricted Cash and Prepayments Received on Contract Services ISED administers Individual Development Accou. nt.~ for eligible Iow income individuals. The Individual Development Accounts are savings accounts established by the participants in a designated bank whereby the participants commit to a personal savings program for business development, education or the purchase of a home, car or computer. 1SED controls disbursements from the individuals' savings accounts and upon achievement of the savings goals, ISED provides matching grants on behalf&the individuals that are funded by a Federal or Iowa grant. ISED maintains restricted bank accounts for advance payments received for grants. The savings accounts of the individuals are under the control of a financial institution and are not recorded on ISED's financial statements. 7 I I I I I I INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT EXPENDITURES OF FEDERAL AWARDS Six Months Ended June 30, 2001 and Year Ended December 31, 2000 Program Title Expenditures Catalog Of Federal Six Months Domestic Ended Year Ended Assistance June 30, December 31 Number 2001 2000 U. S. Department of Health and Human Services: Direct programs: Refugee and Entrant Assistance - Discretionary Grants Job Opportunities for Low Income Individuals Consolidated Knowledge Development and Application Program Centers for Disease Control and Prevention - Investigations and Technical Assistance New Assets for Independence Demonstration Program Total Direct Pass-through programs: State of Kansas: Temporary Assistance for Needy Families Medical Assistance Program (Medicaid, Title XIX) Child Care Mandatory and Matching Funds of the Child Care & Development Fund Total State of Kansas People Works, Inc.: New Assets for Independence Demonstration Program Total U. S. Department of Health and and Human Services 93.576 $ 703,311 $ 843,296 93.593 60,842 36,219 93.230 18,803 3,076 93.283 18,786 93.602 6,548 93.558 93.778 93.596 808,290 882,591 9,396 5,895 3,181 18,472 93.602 25,460 1,853 852,222 884,444 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT EXPENDITURES OF FEDERAL AWARDS (Continued) Six Months Ended June 30, 2001 and Year Ended December :M, 2000 Program Title Expenditures Catalog Of Federal Six Months Domestic Ended Year Ended Assistance June 30, December 31 Number 2001 2000 U. S. Small Business Administration Direct programs: Women's Business Ownership Assistance Microloan Demonstration Program Total U. S. Small Business Administration U. S. Department of Justice Pass-through programs: City of Omaha, Nebraska: Local Law Enforcement Block Grants Program Iowa Department of Corrections: Byrne Formula Grant Program State of Nebraska: Drug Court Discretionary Grant Program Total U. S. Department of Justice 9 59.043 $ 58,546 $ 89,367 59.046 49,550 119,595 108,096 208,962 16.592 46,618 64,474 16.579 3,090 34,791 16.585 10,101 26,011 59,809 125,276 I I I I I I INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT EXPENDITURES OF FEDERAL AWARDS (Continued) Six Months Ended June 30, 2001 and Year Ended December 31, 2000 Program Title Expenditures Catalog Of Federal Six Months Domestic Ended Year Ended Assistance June 30, December 31, Number 2001 2000 I I I I I I I I I I I I I U. S. Department of Housing and Urban Development Pass-through programs: City &Sioux City, Iowa: Community Development Block Grants/Entitlement Grants City of Davenport, Iowa: Community Development Block Grants/Entitlement Grants City oflowa City, Iowa: Community Development Block Grants/EntitlementGrants City of Des Moines, Iowa: Community Development Block Grants/Entitlement Grants Total U. S. Department of Housing and Urban Development U. S. Department of Agriculture Pass-through programs: State of Kansas: State Administrative Matching Grants for Food Stamps Program Total Expenditures of Federal Awards 14.218 $ 16,723 $ 36,534 14.218 13,961 5,352 14.218 5,791 17,611 14.218 623 37,098 59,497 10.561 4,766 '$ 1,061,991 $ 1,278,179 Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Institute for Social and Economic Development and is presented on the accrual basis'of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, "Audits of States, Local Governments and Non-Profit Organizations." Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. 10 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT FUNCTIONAL EXPENSES Six Months Ended June 30, 2001 Program Services Research And Economic Evaluation Consulting Development Total I I I I I Salaries Payroll taxes and employee benefits Contractual services Travel and mileage reimbursements Occupancy and equipment rental Communications Supplies Depreciation Participant stipends Other Total expenses $ 141,678 $ 209,241 $ 249,784 $ 600,703 35,420 51,563 60,080 147,063 8,128 17,158 132,826 158,112 16,749 55,236 30,807 102,792 13,027 8,313 28,097 49,437 5,881 10,914 18,727 35,522 5,473 20,051 34,074 59,598 12,461 5,500 185,688 203,649 689 3,608 2,137 6,434 $ 239,506 $ 381,584 $ 742,220 $ 1,363,310 11 I I t I I I I I I I I i i I I I I I I I I I I I I I I I I ! I ! Total General And Functional Administrative Expenses 160,069 $ 760,772 42,209 189,272 40,747 198,859 5,620 108,412 31,374 80,811 6,562 42,084 24,116 83,714 14,972 14,972 203,649 5,969 12,403 $ 331,638 $ 1,694,948 12 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT FUNCTIONAL EXPENSES Year Ended December 31, 2000 Program Services And Economic Evaluation Consulting Development Total I I I I I I Salaries Payroll taxes and employee benefits Contractual services Travel and mileage reimbursements Occupancy and equipment rental Supplies Communications Depreciation Participant stipends Other Total expenses $ 408,192 $ 72,487 $ 491,191 $ 971,870 102,048 18,122 122,264 242,434 63,368 8,888 169,731 241,987 84,293 23,443 60,355 168,091 31,422 2,856 46,571 80,849 39,724 6,452 55,067 101,243 20,655 2,434 44,361 67,450 17,267 76,002 93,269 4,449 58 8,798 13,305 $ 771,418 $ 134,740 $ 1,074,340 $ 1,980,498 13 ! ! ! ! ! ! ! ! ! ! ! ! ! ! Total General And Functional Administrative Casualty Loss Expenses $ 269,867 $ 68,758 $ 1,310,495 67,788 17,190 327,412 43,097 7,256 292,340 5,905 205 174,201 60,956 30,012 171,817 13,415 14,927 129,585 7,148 3,856 78,454 16,092 5,676 21,768 93,269 9,039 1,131 23,475 $ 493,307 $ 149,011 $ 2,622,816 14 MCGLADREY&PUl J.EN, LLP ®Certified Public Accountants RSM INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONIROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors Institute for Social and Economic Development Coralville, lowa We have audited the financial statements of the Institute for Social and Economic Development as of and for the six months ended June 30, 2001 and the year ended December 31, 2000, and have issued our report thereon, dated October 2, 2001. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the Institute for Social and Economic Developmenfs financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. lntemal Control Over Financial Reporting. In planning and performing our audits, we considered the Institute for Social and Economic Development's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial' statement reporting that, in our judgment, could adversely affect the Institute for Social and Economic Development's ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. The reportable condition is described inthe accompanying schedule of findings and questioned costs as item II-A-00/01-1. 15 A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively Iow level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is not a material weakness. We also noted other matters involving the internal control over financial reporting that we have reported to management of the Institute of Social and Economic Development in a separate letter dated October 2, 2001. This report is intended for the information and use of the audit committee, management and Federal awarding agencies and pass-through entities and is not intended to be and should not be used for anyone other than these specified parties. Iowa City, Iowa October 2, 2001 16 I ! I I I I I I I I I I I I I I I I I MCGLADREY& PUl I .EN, LL P Certified Public Accountants RSM INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WI'IH OMB CIRCULAR A-133 To the Board of Directors Institute for Social and Economic Development Coralville, Iowa Compliance We have audited the compliance of the Institute for Social and Economic Development with the types of compliance requirements described in the "U. S. Office of Management and Budget (OMB) Cimular A-133 Compliance Supplement" that are applicable to each of its major Federal programs for the six months ended June 30, 2001 and the year ended December 31, 2000. The Institute for Social and Economic Development's major Federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of the Institute for Social and Economic Development's management. Our responsibility is to express an opinion on the Institute for Social and Economic Development's complianea based on our audits. We conducted our audits of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, dudits of States, Local Governments, andNon-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Institute for Social and Economic Development's compliance with those requirements and performing such other procedures as we considered necessary in the cimumstances. We believe that our audits provide a reasonable basis for our opinion. Our audits do not provide a legal determination on the Institute for Social and Economic Development's compliance with those requirements. In our opinion, based on our audits, the Institute for Social and Economic Development complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the six months ended June 30, 2001 and the year ended December 31, 2000. 17 Internal Control Over Compliance The management of the Institute for Social and Economic Development is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered the Institute for Social and Economic Development's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Repot'table conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgment, could adversely affect the Institute for Social and Economic Development's ability to administer a major Federal program in accordance with applicable requirements of laws, regulations, contracts and grants. The reportable condition is described in the accompanying schedule of findings and questioned costs as item III-A-00/01-1. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively Iow level the risk that noneomplianoe with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is not a material weakness. This report is intended for the information and use of the audit committee, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Iowa City, Iowa October 2, 2001 18 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT SCHEDULE OF FINDINGS AND QUESTIONED COSTS Six Months Ended June 30, 2001 and Year Ended December 31, 2000 Summary of Independent Auditor's Results Financial Statements Type of Auditor's report issued: Unqualified Internal control over financial reporting: Material weaknesses identified? Reportable conditions identified that are not considered to be material weaknesses? Noncompliance material to financial statements noted? Federal Awards Internal control over major programs: Material weaknesses identified? Reporlable conditions identified that are not considered to be material weaknesses? Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Section 501 (a) of Circular A-1337 Yes X Yes Yes Yes X Yes X Yes X No X No X No No 19 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT SCHEDULE OF FINDINGS AND QUESTIONED COSTS Six Months Ended June 30, 2001 and Year Ended December 31, 2000 Identification of major programs: CFDA Number Name of Federal Program II. U. S. Department of Health And Human Services: 93.567 Refugee and Entrant Assistance - Discretionary Grants Dollar threshold used to distinguish between Type A and Type B programs Auditee qualified as low-risk auditee? Yes $300,000.00 X No Findings Relating to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards A. Reportable Conditions in Internal Control H-A-00/01-1 Finding: A number of general ledger accounts, primarily certificates of deposit, accounts receivable and a mutual fund, were not reconciled to the supporting detail on a regular basis. In addition, material adjustments to the general ledger related to the casualty loss and insurance proceeds in the year ended December 31, 2000 were not recorded until months after the occurring events. Therefore, the interim financial statements require material adjustments to appropriately record, summarize and report financial data consistent with the assertions of management on a timely basis. Recommendation: We recommend that the vice president of administration and finance verify that the general ledger accounts are reconciled and adjusted on a more timely basis and that the Institute develop procedures to reconcile cash and investment accounts on a regular basis. 20 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT SCHEDULE OF FINDINGS AND QUESTIONED COSTS Six Months Ended June 30, 2001 and Year Ended December 31, 2000 Auditee Response: Certain reconciliations not critical to the operations of the Institute were not performed regularly following the fire in May 2000 because staff were engaged in disaster recovery. Adjustments identified during reconciliation of certain accounts were not posted in a timely manner for the same reason. All accounting activity relating to the fire was reflected in a single program as the expenses were incurred. Final adjustments reflecting the casualty loss and the insurance proceeds were delayed pending settlement and auditor recommendations. The interim financial statements, which are for internal use only, provided the necessary data for management decisions and the entries not made (which are not critical to internal, operational or programmatic decision-making) were noted during the monthly financial reviews. In addition to the fire, the Institute has experienced rapid growth in the number and scope of programs administered during the period covered by the audits. To address the above concerns and to accommodate growth, the Institute has added two additional positions in the finance area during fiscal 2001. One of these two additional employees will perform the general ledger account reconciliations normally performed by a controller. This employee will have responsibility for supervising all day-to-day accounting processes and will report to the Vice President of Finance and Administration. All general ledger account reconciliations are presently being done on a timely basis and this practice will continue in the future. B. Compliance Findings There were no instances of noncompliance that are material to the financial statements oftbe Institute for Social and Economic Development as of and for the year ended December 31, 2000 or as of and for the six months ended June 30, 2001. 21 INSTITUTE FOR SOCIAL AND ECONOMIC DEVELOPMENT SCHEDULE OF FIND~GS AND QUESTIONED COSTS Six Months Ended June 30, 2001 and Year Ended December 31, 2000 Findings and Questioned Costs for Federal Awards A. Reportable Conditions in Internal Control m-A-00/01-1 Please see finding II-A-00/01-1 for details of specific reportable conditions in Internal Control over Federal Awards. B. Compliance Findings No compliance findings that are material to the financial statements. I I I I INSTITUTE OF SOCIAL AND ECONOMIC DEVELOPMENT SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS Six Months Ended June 30, 2001 and Year Ended December 31, 2000 The prior year single audit disclosed no findings in the Schedule of Findings and Questioned Costs and no uncorrected or unresolved findings exist from prior single audits. 23 INSTITUTE FOR SOCIAL ECONOMIC DEVELOPMENT BOARD OF DIRECTORS AND MANAGEMENT June 30, 2001 Board of Directors Term Expires John Else, Chair 2OO2 Robert Oberbillig, Vice Chair Susan Genalo, Vice Chair Richard Stanley Al Gross Dory Briles Lois Eichaker Miehele Howell Mary Chavez-Muramatsu David Rosenthal 2002 2003 2001 2001 2001 2003 2003 2003 2003 Management Charles Palmer President Paula McKenna 24 Vice President APPLICATION FOR BUSINESS FINANCIAL ASSISTANCE CITY OF IOWA CITY Economic Development Division 2002 Application for Business Financial Assistance Projects INSTRUCTIONS An "Application for Business Financial Assistance Projects" should be completed when requesting financial assistance to directly assist a private business, An "Application for Economic Development Support Projects" should be completed for projects and programs that support economic development activities such as micro-business enterprise training programs, area business development programs, or specific area fa~:ade renovation programs. Prior to completing an application, an applicant is strongly encouraged to contact the City's Economic Development Coordinator to discuss the project for which they are requesting funding. (See contact information at bottom of this page). If this application is reproduced, it must remain in the odginal format and order in its entirety, or the application may be returned for correction. An electronic copy of the application is available in Microsoft Word or on the City's Web site (www.icgov.org). Fill out the application completely. If any questions are left unanswered or required attachments are not submitted, an explanation for the omission must be included. Only typed applications will be accepted and reviewed. Application Deadlines: The City Council Economic Development Committee meets the third Thursday of the month. Completed applications for Business Financial Assistance projects should be submitted to the Economic Development Coordinator two weeks prior to the meeting at which the applicant wishes to have the Committee review the application. However, under special circumstances the Economic Development Committee will call special meetings to review Business Financial Assistance Applications. Submit completed applications, with attachments to: Steven Nasby Community and Economic Development Coordinator City of Iowa City 410 E. Washington Street Iowa City, IA 52240 Phone: (319) 356-5236 Fax: (319) 356-5009 City of Iowa City Application for Business Financial Assistance Business Requesting Financial Assistance: Business Name: The Pet De.qree Name of Authorized Person to Obligate the Business: Business Address: 1971 Broadway, Iowa City, Iowa 52240 Business Contact Person: Donald E. Morrison, Jr. Title: Telephone: (319) 354-9408 Fax: E-mail Address: t hepet boyCEJhot mail.com Business Federal ID~: 42-1462133 Date of Application Submittal: April 3, 2003 C~)wner Donald E. Morrison, Jr. Release of Information and Certification NOTE: Please read carefully before signing I hereby give permission to the City of Iowa City (the City) to research the company's history, make credit checks, contact the company's financial institution, and perform other related activities necessary for reasonable evaluation of this proposal. I understand that all information submitted to the City relating to this application is subject to the Open Records Law (1994 iowa Code, Chapter 22) and that confidentiality may not be guaranteed. I hereby certify that all repre- sentations, warranties or statements made or furnished to the City in connection with this application are true and correct in all matedal respects. 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 prccudng economic development assistance from a state agency or political subdivision. SIGNATURE OF COMPANY O,,FFICER AUTHORIZED TO OBLIG~AT~E BUSINESS: NOTE: The City will not pnSvide"as{~istance in situations where it is dete~ined th~ any repre- sentation, ~ffanty or stateme~ made in connexion ~th this appli~tion is incoffe~, fal~, misleading or erroneous in any material ms~. If assistan~ has already ~n pmvid~ by the dty pdor to discove~ of the incoffe~, fal~ or misleading representation, the city may initiate legal a~ion to recover ci~ funds. Section 1: Description of Business and, Proposed Project 1.1. Descdbe in detail the proposed "project" (for example, company relocation, plant expansion, remodeling, new product line, size of building expansion, number of new jobs, amount of investment in machinery and equipment etc.): My pdmary objective is to temporarily supplement the Pet Degree's operating income that has been lost due to drastic vacancy rates at the Pepperwood Place. The decline in tenants began with the loss of anchors Best Buy (which relocated relocation to Coralville in 1998) and Econofoods (which closed its doors in 1999) and has escalated to a vacancy rate of nearly 70 percent. Resulting in a subsequent and nearly parallel decline in revenues, it has become extremely difficult to cover my rent and to provide Competitive wages to my remaining staff. Therefore, this application is a request for monies to cover the rent and to adjust the houdy rates for my employees in an effort to avoid turnover and attrition. In anticipation of approval by the iowa City City Council of the current TIF proposal for this area, I believe that the improvements to the Pepperwood Place will begin to provide relief within a year. At this time my business requires no physical improvements nor inventory adjustments for operation. 1.2. Provide a description and history of business: I purchased The Pet Degree in October 1996. This business opened its doors in 1978 in the strip mall on First Avenue (Iowa City) and then subsequently moved in 1983 to our current location at Pepperwood Place. It is not franchised. From its inception through a pedod after I bought it, the store provided a vadety of traditional pets (i.e., cats, dogs, hamsters, birds) and pet supplies to Iowa City and the surrounding community. Even though we maintained the largest kennels in the area, I removed the kennels in 1999 based on the concern of keeping dogs and cats in confined spaces, and since that time we have not sold them. While we provide food, supplies, and specialty items for all kinds of pets, we now specialize in exotics (reptiles, birds, rodents, and fish). In response to both customer demand and community loyalty, I developed the menu of services the Pet Degree offered to include pet boarding for regular customers, foster care for exotics for the Iowa City Animal Shelter (please see Section 6.1), and consignment services of items such as fish tanks and bird cages, 1,3. Describe the organizational structure of the business, including any parent companies, subsidiaries, sister companies, etc. I am the sole owner of The Pet Degree and do not anticipate any incorporation or partnerships in the near future. 1.4. List the names of the business owners and the percent of ownership held by each. Donald E. Mordson, Jr. - 100 percent 1.5. List the business' five-digit and six-digit North American Industry Classification System (NAICS) codes or the primary and secondary Standard Industrial Codes (SIC codes)). NAICS - Miscellaneous Store Retailers, Pet & Pet Stores - ft453910, IWl5391 1.6. Will the project involve a transfer of operations or jobs from any other Iowa City or Johnson County facility or replace operations or jobs currently being provided by another Iowa City or Johnson County company? If yes, please indicate the facility(s) and/or company(s) affected. No, I plan to keep the business intact at its current location. 1.7. What date will the project begin? Immediately, Be completed? Completion is dependent on the pre,qress of the City's TIF project, but I anticipate seeing immediate relief as soon as the City's pro,qress gets unde~vay. 1.8. Has any part of the project been started? If yes, please describe. Because I am committed to staying at this location, I have initiated various negotiations with my landlord, the mall's owner, Southgate Development, in an attempt to adjust the rent. Currently we have an agreement that rent is calculated monthly based on vacancy rates. Further, as my staff has declined, I have not replaced those employees; rather, adjusted workload among remaining staff and assumed additional responsibilities myself. Section 2: Financial Contributions to the Proposed Project 2.1. What type and amount of financial assistance are you requesting from the City (for example, grant, forgivable loan, loan, property tax exemption, tax increment financing rebate, etc.)? I am requesting a grant. 2.1a. If Community Development Block Grant Funds are being requested, please describe how the proposed project addresses the priorities, strategies, and goals cited in CITY STEPS 2001-2006. Not applicable at this time. 2.2. Explain why assistance is needed from the City, and why it cannot be obtained elsewhere. (Specific supporting documentation evidenced by cash flow statements, income statements, etc., is requested.) If the City did not provide financial assistance, could the project proceed? Throughout the emigration of tenants from the mall and the subsequent and drastic decline in business, I have maintained my desire to remain in this location. Further, as sales dropped and my operating income suffered, I have made as many cutbacks and reductions to expenditures as possible. At the present time, the Pet Degree is generating enough sales to cover all of its monthly operating expenses, minimum wages to the skeleton staff, and make payments to back rent obligations. This grant is 2,3. 2.4. targeted specifically to alleviate the current rent burden and to adjust wages to a more competitive rate in order to avoid turnover of my current staff. As well, the grant is targeted only to carry the store through the City's TIF project, at which time I am confident the Pet Degree can generate more than enough business to return to eadier profit margins. Should I apply for a small business or personal loan, the addition of that obligation to my debt ratio subjects the store to a great deal of dsk of not being able to repay the loan, and jeopardizes the store's long-term future. In what form is the business contribution to the project? Please explain cleady (for example, sale of stock, equity investments, subordinated debt, etc.). All of the profits from the store are returned directly to the store for general operating funds. In order to alleviate some of the cash flow pressure, I also have returned as an active manager working full-time hours, taking a cut in wages. My salary is below the average area wage for a retails store manager, and I withdraw a minimal owner's draw only at the end of the year rather than quarterly or monthly as I had been able to do in more profitable years. Identify all agencies or institutions involved in the project (financial and otherwise) and what their involvement is: I am buying the Pet Degree from Steve Wahlert and Phil Smoker of the Quad Cities. In light of the past and current business problems of the mall, they have agreed to defer the obligations of our contract until resolutions are reached for the TIF proposal, the outcome of this grant application, and renegotiations of the lease with Southgate. 2.5. What type and amount of security will the assisted business provide the City?. If no security is offered, an explanation must be provided. Note: as a general rule, for those businesses not publicly traded, personal guarantees are required in addition to other pledged business assets. Mortgage $ What seniority or position?. Lien on $ What seniority or position? Personal guarantee $ . Other $ None (if none, please explain) I would be happy to negotiate these requirements with the City as necessary. 2.6. Summary of Project Costs and Proposed Financing Sources SOURCES (Summarize All Sources From Question USE OF FUNDS 2,7) Activity Cost A B C D Land acquisition $ Site preparation $ Building acquisition $ Building construction $ Building remodeling $ Machinery & equipment $ Furniture & fixtures $ Permanent working capital $ (detail:) Other Lease & Wages $100,000 $100,000 Other $ TOTAL: $100,000 $100,000 $ $ $ 2.7. Terms of Proposed Financing Code Source (include all sources in Question 2.6) Amount Typem Rate Term Source A: , City of Iowa City $100,000 Grant Source B: $ Source C: $ Source D: $ I Total: $100,000 ¢l)For example: forgivable loan, direct loan, grant, equity, tax abatement, etc. 2.8. Generally a decision by the City on this application can be expected within 30 days of receipt of the application. If there is an urgent need for a more immediate decision on this application, please indicate the desired timeframe and the reason for the urgency. Not requested. Section 3: Quality of Jobs to Be Created 3.1. How many employees am currently employed by the company worldwide (total employment including all locations, subsidiaries, divisions, affiliates, etc.)? The Pet Degree operates at only the one facility at Pepperwood Place. My current staff is comprised of myself, working as a full-time manager; two full-time supervisors; and six part- time staff, each working approximate 15 hours per week. The request for wage assistance applies to my current staff only. Any new hims, as projected in Section 3.3, would be employed based on increases in revenues, not on approval of funds from this grant. 3.2. If an existing Iowa City business, how many total individuals have been employed by the company at the Iowa City facility dudng the past year? I lost one full-time manager this year, which is the full-time management position I am currently filling. This was a repercussion of being forced to cut back both hours of store operation and hours available to the employees. Additionally, I have not replaced the four employees lost to attrition in the years previous to the past 12-month pedod. 3.3. If awarded funds, how many new full-time employees will you add to the payroll at the Iowa City facility within 12 and 24 months of the award date? The business acknowledges if it fails to create the jobs pledged below by the end of the project petfod and maintain them for a period of time (usually 36 months from the date of the award), it may be required to reimburse City funds for the employment shortfall, ff the loan~grant was based on job creation. Please note: Wages for the projections cited here am not included in this grant request, but are included to depict actual staff size required to run the Pet Degree when business returns to peak operations. As occupancy increases in Pepperwood Place, it is my intent to replace this positions as budget allows. Full-Time: Part-Time: 12 months 1 (one) 12 months 1 (one) Cumulative Cumulative Full-Time: Part-Time: 24 months 1 (one) 24 months 1 (one) Cumulative Cumulative Note: Jobs created or retained using Community Development Block Grant Funds must be "held by" or "available to" Iow- or moderate-income individuals. 3.4. What is the estimated annual payroll for the new employees resulting from this project? As indicated in Sections 3.3 and 3.6, projections for new employees are not included in this grant request, so I have not estimated annual payroll for new employees. I have included these projections to depict both the positions that have been lost due to the decline in business during the past few years as well as the potential to add them back to the staff as revenues increase. 3.5. What is the starting average hourly wage rate (not including fringe benefits) projected to be: Please note: The houdy rate for all employees dudng the first 90 days of employment is $5.15. After this probationary period, the rates are increased to the wage assigned to that particular position. The rates listed below are the projections after the probationary period. For the new employees? $6.50 for sales; $9.00 for supervisors; $12.00 for manaRers For existing employees? $6.50 for sales; $9.00 for suPervisors; $12.00 for manaf:lers For existing and new employees? $6.50 for sales; $9.00 for supervisors; $12.00 for manaRers 3.6. In the following table, list positions and hourly rates for each job classification to be created and retained, List of Positions and Hourly Rate for Created and Retained Positions (use additional sheets if needed) No. Hours HouHy Create Retain Position Title Per Week Rata of Pay 1 Manager 40 $12.00 1 Day Supervisor 40 $9.00 1 Night Supervisor 30 $9.00 7 Sales Staff 15 $6.50 *4 Sales Staff 15 $6.50 *Please See notes for Sections 3.1 and 3.3 Note: Every applicant should provide average hourly wages for all new and existing jobs which meet or exceed the average county wage rate by industry, Ninety percent of the project positions should have a wage greater than the federal poverty wage rate for iowa City (30% of median income for a four person household in Iowa City). Under special circumstances, consideration will be given to those companies who cannot meet this requirement. (Contact the Economic Development Coordinator at the City for current figures,) 3.7. Wilt any of the current employees lose their jobs if the project does not proceed? If yes, how many? Explain why: There is definitely a risk of losing more of my current staff, in-part due to Iow wages and in- part due to a shortage of hours, both of which are directly linked to the drastic decline of business. The portion of the grant I am requesting for wages would enable me to offer more competitive, equitable wages for this Iowa City/Johnson County area. 3.8. Please describe the types of worker safety programs that would be available for your employees. Due to the unique population of animals that The Pet Degree offers, part of our hiring process includes recruiting personnel who already have experience with exotic pets as well as the simple desire to be around birds, reptiles, arachnids, fish, rodents, etc. Then, as part of each employee's orientation, a manager instructs them in the proper handling of the animals and products, and in waste disposal. The most hazardous chemical any staff will use is bleach. 3.9. Does the business provide standard medical and dental insurance for full-time employees? If so, what percentage of the standard medical and dental insurance package expense does the company provide? No, not at this time. Section 4: Economic Impact 4.1. Please document how much of your operating expenditures (raw materials, supportive services, machinery, equipment, and labor) will be spent within Johnson County. The majority of my expenditures are spent in Johnson County. In addition to contracting labor and materials locally, I purchase nearly all my animal inventory through local breeders. 4.2, What Johnson County companies do you expect to sell to that currently buy from non-eastern Iowa companies? What percentage of your sales will fall into this category? I am not expecting any change in customer base. I have a large following of loyal patrons, but have seen a significant decline in walk-in business. At this time we do not cater any specific products or services to other companies. 4.3. What other Johnson County companies could be considered to be your competitors? Virtually any entity that provides pet food or supplies is a competitor, For example: Pet stores - Brennemans, Petland, Ma & Paws, Sea of Marvels, etc, Grocery stores, K-Mart, Wal-Mart, Target 4.4. How will this project benefit the City/County? The grant will enable me to, first, maintain the Pet Degree in its current state by alleviating the lease burden and avoid decreasing employee hours or, worse, jobs altogether. Secondly, as the business regains its footing, I hope to increase my staff to a total of 13. Regardless, by providing employment at all, the City/County will benefit from the reinvestment of those wages into the local economy. Further, revenues from the store will pay for the taxes that return to the area in various forms. From a community-based perspective, the Pet Degree is a very active community volunteer and although I, personally, would continue to support various activities, the impact would suffer without the store behind me. 4.5. How will this project grow the property tax base of Iowa City? Not applicable at this time. 4.5 Beyond the present project, what future growth potential is there for the Iowa City operation? As a lifelong resident of Iowa City, I would entertain opportunities to expand product lines and services to the area through the store. At this time, however, exploring new ventures is not financially feasible. Section 5: Environmental Impact 5.1. Please describe the energy and resource effiCiency programs, waste reduction, waste exchange, and recycling programs at your Iowa City operation. The Pet Degree is a staunch supporter of earth-friendly products and recycling programs. Internally, we shred newspapers and other animal-safe papem to line animal cages; the same materials used to ship animals to the store are used in their confinements at the store or to transport them home with our customers; and we accept virtually all aquariums, cages, and other equipment for repair and then resale. Any other recyclable item that cannot be recycled in the store is sent to Iowa City Carton. 5.2. Do you use recycled materials in the production of any products or through the provision of any services at your facility? If so, please describe. We do not have a production facility within the store for any of our equipment or supplies. Our recycling efforts are directed at reuse of already existing items (newspapers, cardboard) where appropriate and safe internally, and sending them on to recycling centers when they are not. 5.3. Will you be treating, transporting, stodng, and disposing above ground, on or about your business premises, in tanks or otherwise, for any length of time or for any purpose: petroleum products, agricultural or other chemicals, waste oil or other liquid waste, or any other inflammable, corrosive, reactive, or explosive liquid or gas? If yes, please specify. NO. 5.4. Will the Iowa City operation develop renewable energy resources or products that conserve energy? If so, please describe. NO. section 6: Community Involvement; Compliance with Law; Repayment Agreement 6.1. Please describe your business' history of contributing to the community through volunteer work, financial contributions, or other means. If a new start-up business, please descdbe commitment to becoming involved in the community. The Pet Degree is a long-time, active community volunteer. Because of our expertise with exotic animals, we are a reliable source for sanctuary and information for rescue agencies, as well as the general public. We have a long history with several local agencies, including: The Iowa City Animal Shelter Leash on Life/Friends of the Animal Shelter Foundation Mix-and-Match Rescue League Animals All About Additionally, we work closely with vadous rescue leagues throughout the Midwest to find assistance and new homes for exotics. Besides rescue leagues and animal service organizations, the Pet Degree takes an active role as an educator and employment opportunity. We have worked with the Grant Wood employment program and the Mayor's Youth Program on several occasions. 6.2. Has the business been cited or convicted for violations of any federal or state laws or regulations within the last five years (including environmental regulations, Occupational Safety And Health laws, Fair Labor Standards, the National Labor Relations Act, the Americans With Disabilities Act)? If yes, please explain the circumstances of the violation(s). No, the Pet Degree has never been cited for a violation of any ordinance or code at any city, state, or federal level. 6~3. Financial assistance from the City of Iowa City requires a repayment clause in the loan agreement with the City. The repayment clause requires a prorated repayment of the financial assistance if the company does not meet its job attainment obligation and other obligations of this agreement. Is the company willing to enter into a loan agreement that contains a repayment clause? Not applicable as we are applying for grant funding. Section 7: Required Attachments Check off each attachment submitted. If not submitted, explain why. [ ] Business plan (if new business) Not applicable - This is an existing business [~/~ Profit and loss statements (3 year historical and 2 year projections) [~/~ Balance sheets (3 year historical and 2 year projections) [] Letters of commitment of project funds (from banks, applicant, etc.) Not applicable - Project proposes only assistance for current lease/rent and wages [ ] Description of fdnge benefits provided to employees Not applicable - Company does not provide benefits for employees at this time [ ] Copies of the company's quarterly Iowa "Employer's Contribution and Payroll Report" for the past year and a copy of the most recent monthly payroll register Map indicating the location of the project within the community [] [] Cost estimates for construction, machinery/equipment, permanent working capital, and purchases. Not applicable - Project does not propose any of these categories Certificate of Good Standing from the Iowa Secretary of State or an authorization to conduct business in Iowa. [ ] Certificate of Incumbency listing the current beard of directors and current officers if a corporation or a listing of the general partners if a partnership [] [] Not applicable - Company is a sole proprietorship Corporate resolution authorizing the application for City funds Not applicable - Company is a sole proprietorship Corporate signatory authorization naming an officer to execute the City application and City loan documents, if approved Not applicable - Company is a sole proprietorship [ ] Other Explanation/other comments: Upon review of a submitted application, the City reserves the right to request additional information in order to assist the City with its evaluation of an application. 1971 Broadway St Iowa City IA 52240-7049 US Note~: 02003 MapQuestcom, Ir~.; O2~03 GDT. Inc. ~ 0S k)' Dr fro'aWed Ci~ Aspen Ct Dic ke, flson L~ Heming~a~ Ln LaflgentmPg Ave STATE OF IOWA DEPARTMENT OF AGRICULTURE & LAND STEWARDSHIP FEE: $ 50.00 DES MOINES ANIMAL WELFARE LICENSE N0.0002231-00 MORRISON, DON PET DEGREE 1971 BROADWAY IOWA CITY, IA 52240 THE AFORESAID, HAVING DEPOSITED THE REQUIRED FEE, IS HEREBY GRANTED THE ABOVE LICENSE PURSUANT TO CHAPTER 162, CODE~OF IOWA. THiS LICENSE"SHALl- REMAIN IN FULL FORCE FROM THE DATE OF ISSUE UNTIL ITS EXPIRATION DATE, UNLESS REVOKED OR SUSPENDED FOR CAUSE BY THE SECRETARY OF AGRICULTURE FOR NONCOMPLIANCE WITH CHAPTER 162, CODE OF iOWA OR RULES PROMULGATED PURSUANT THERETO. DATE OF ISSUE: JANUARY 7, 2003 EXPIRATION DATE: JANUARY 17, 2004 ** CLASSIFICATION(S) ** PS PET SHOP Emuloyer's Contribution & payroll Report Iowu ~o~k~orce Development - Attn: Tax 1000 Eos~ C.c~d Aveeue Payment Comimtatto~ (If no wages th~s qsuarter, see instructions)_ 13. k~a ~co.,~,~ I "~ ~"~'q-). ,.2~ 273647- 8 1. Total Wages (NI Pages) ....................... i"} ~ ~. ~ % T,.,.u.w.~ ~ 2. Taxable Wages (All Pages) ................... $ - ' '~' 2002 $18,600 12. Page_ [ of ~ O. 50% 3. Contribution Due (item 2 X O. 0050 ) ..... ...~ ........... $ 4. Surcharge Due (Item 2 X 0 · 00037 ) .................... $ - 5. Total Ilees 3 and 4 .............................. $ 6. interest Due (See Instructions) ............... $ 7. Penalty Due (See InstTuctions) ................ $ - 8. Total Due (Items 5, 6 and 7) ................. $ 9. Amount Due from previous Quarter .......... $ 10. Credit Due from Previous Quarter ............ $ 11. Amount Paid. .................................. $ 42-1462133 O4-30-02 Employ~ Name & Address J & D E#TERPZSES LC PET DEGREE 1971 BROADWAY ST ZOlA CZTY IA 52240-7049 %5' 0.037% (Make cheek pal~ble to Iowa Workfor~e Development) If total due is less than $1.00, no payment is required; however, you are still required to file this report with Iowa Workforce Development. ~1 diskette ~a~roUU~in~ 14. Check if paymll reporting is b~- ~:~ magnetic tape ~:1 cartridge 15. Social Secudty Number Last Name Fimt Name 17. Total Wages Paid 18, Taxable Wages Paid L~ 19. Totals For This Page .............. OR OWNERSHIP, please complele and return the "EMPLOYERS NOTICE OF CHANG 25. If there are any CHANGES in ~,~)ur FEDERAL ID NUMRFR, ACCOUN~ NAMe, I ERTIFY that this o~t is iTUe and correct and that no part of the cu,,bJb6lton was deducted [mm any employee's wages. C~ PrepareCsTelef~Number .'~,Cj , ' j~-~,,-~.p~.,~ ........ ~""1 ~: IO~',','' ~-x ---------4-=:-. ~ ..... ~ ~ :., ,~.,,,,.~ .... ...~_ _ ,-, ~ua C, · *' "'L~ ............... ,-,, j .,a C,',=,~'('L'~ mwx wtmmu, tm~ ~mm, ommmmer ~xv-~m~m MI ~&Y~ To~l W~ge~ Paid Tax~le Wages pa~d I 'gq Totals For 31~is Page ~--------I Employer's Contribution & Payroll Report 6~00 (2om) 12. Page Io~o Workfmce Development - Aam Tax ~111~1 IOOCI EQ.~ 6mnd Avenue pa3~nent Computation (If no wages this fluarte,r,,,s.e~, i~n~stm~) 13. 1 Total Wages (All Pages) $ t '~ '~ ~'~- 273647- 8 2. Taxable Wages (All Pages) ................... $ ['~ H ~:~:~.'~:~-~ Year ma~/e Wage Base [ of 3. Contribution Due (Item2X 0.0050 ) .................. ;*$ 4. Sumharge Due (item 2 X O. 00037 ) .................... $ 5. Total lines 3 and 4 .............................. $ 6. Interest Due (See Instructions) ............... $ 7. Peoalty Due (See Instructions) ................ $ 8. Total Due (Items 5, 6 and 7) ................. $ 9. Amount Due from Previous Quarter .......... $ 10. Credit Due from Previous Quarter ............ $ 11. Amount Paid. .................................. $ IAPR-aAY-JU. I Ram 2002 $18~600 0.50% 42 - 1462133 07- 31 -02 Employer Name & Address J & D ENTERPTSES LC PET DEGREE 1971 BROADWAY ST ]:OWA CTTY TA ,52240-7049 (M~ke eheck payable to Iowa Work~oree Development) If total due is less than $1.00, no payment is required; however, you are still required to file this report with Iowa Workforce Development. Pa~'~ell ~'~"'~"E_ 14. Check if paymll reporling is by: {~ magnefictape {~ cartridge {~ d*~_:,kette [_ 2-02 ] Sumhan~e Rate O. 037% 15_ Social Security Number 16. Last Name First Name MI 17. Total Wages Paid 18. Taxable Wages Paid 19. Totals For This Page 25. If ~here am any CHANGES in your FEDERAL ID NUMBER, ACCOUNT NAME, ADDRESS, OR OWNERSHIP, please complde and retum ~he 'EMPLOYER'S NOTICE OF CHANGE". I CERTIFY that this report is true and correct and lflat no part of the contribution was deducted from any employee's wages, Employer's Payroll Con~uation Sheet 60o103 ('to01) IO~VA wuitK.FOR(:S DEVELOPMENT - SO319'.O209 zooo F~t Grattd Avenue - Des Idoine~ l°w~ So3~L Telephone (515) 281-5339 Name Quatsr & year Taxable Wages Paid /.._ MI Totals For This Page : Employer's Contribution Iowe Wodch~e Development - A~ T~ 1~ ~ G~ A~ue ~ Moils, I~ ~319~2~ Pa~t ~mpu~on (if flO ~ges ~is qoa~er, see instm~ons) 1 Total Wag~ (NI Pages) ....................... $ ~G~ ,~ 2. T~able Wag~ (All Pages) ................... $ 3. Con~bution Due ptem 2 X O, ~50 ) .................... 4. Sumha~e Due (item 2 X 0,0~37 ) 5. Total lines 3 and 4 .............................. $ I 6. interest Due (See Instm~ions) ............... 7. Penal~ Due (See Instructions) ................ $ 8. Total Due (Items 5, 6 and 7) ................. $ 9. Amount Due Eom Previous Quader .......... $ O. Credit Due ~om Previous Quader ............ $ Report 65-53o0(2oo2) 12. Page of 273647'8 [ JOL'AUG-SEPI 2002 $18,600 0.50~ 42-1462133 10-31-02 Employer Name & Address J & O ENTERPZSES LC PET DEGREE 1971 BROADWAY ST ZOWA CZTY ZA 52240-7049 3'021 0. 037~ T total due is less than $1.00, no payment is required; however, you are still required to file this report with Iowa Norkforce Development. PaFroll~g 14. Check if payroll mpo~ting is by: ~] magneticlape [~ cartridge ~ diskette 5. Social Security Number 16. Last Name Fimt Name MI 17. Total Wages Paid 18. Taxable Wages Paid 19. Totals For This Page abor Market l~form~ian~ O. Enta-numbe~ of em~ix~es 21. Fa' each rr~lh, m~x~t Ihe nurn~ o~ covered work, s .~paU wages ~g=~~ 5. if Ihere are any CHANGES in y~ur FEDERAL ID NUMBER, ACCOUNT NAME, ADORESS, OR OM/NERSHIP, p/ease camplete and ~ the "EMPLOYER'S NOTICE OF CHANGE". CERTIFY that this report Is true and correct and that ~o pa~t of the contribution was deducted from any empleyan's wages. Pdnt[u~ ~ ~_.4~-.g~ ~A..~.Preparer's Name Preparer's Telephone Numbe A[ o zed ' a ' i Employer*s Payroll Coo::~mntion Sheet 6OO1O3 (2001) iOWA WOE~CE iI~/ELOPM'I~IT I0oo East Graml A.venue - Des Moines, lowa 5o319-o~09 Employer's Contwibution Iowa Wo~kforce Devetupme~t - Aen: Tax 1000 East Grcmd Avenue Payment Computation (If no wages this quarter, see 1. Total Wages (All Pages) 3. Contdbution Due (Item2X 0.0050 ) .................... $ 4. Surcha~je Due (Item 2 X O. 00037 ) .................... 5. Total lines 3 and 4 .............................. $ 6. Interest Due (See Instructions) ............... 7. Penalty Due (See Instructions) ................ $ 8. Total Due (items 5, 6 and 7) ................. $ 9, Amount Due from Previous Quarter .......... 10. Credit Due from Previous Quader ............ $ 11. Amount Paid. .................................. & Payroll Report s~300(2002) 12. Page 273647-8 I OCT-NOV-DEC 2002 $18,600 0.50% 42-1462133 01 -31 - 03 Employer Name &/~ddress J & D ENTERPTSES LC PET DEGREE 1971 BROADWAY ST ZOWA CTTY TA 52240-7049 (Make cheek payable to Iowa Worldoree Development) If total due is less than $1.00, no payment is required; however, you are still required to file this report with Iowa Workforce Development. Payroll Lisfin~ 14. Check if payroll reporting is by: [~ magnetJctape (~ cartridge [~ diskette 15. Sodal Security Number 16. LastName FirstName MI 17. Total Wages Paid /5'9 4-02 I O. 037% Paid 19. Totals For This Page Labor Market Informat~n Siagle Worksite [-~ Coun[yNumber I..~,3~.=~.~ 24.1fthenumberofer~loyeesinc~asedordeoaased 1.0seesonelc~ange 3.{~yolf 5.~lv~)rksileOpena3g ~ease ~e~ ~e t~x(es) ~o i~ me reasm(s~ Z ~] ~a~ dis,~a 4.~lra~ 6. I"JI ,~ dosiog Coml~ete the 'Mufip~ Waksite Rep(x1'. ff net received, p~eese if you hat~ queslfons regaining Labe~ Market ~ fore.lion, p~ea se contact Reseamh & Informa~3~ Serc~es 25. I[ 8tere are any CHANGES in ~mur FEDERAL ID NU~ ACCOUNT NA~ ADDRESS, OR GWNERSH~, Please cc~mplele and totem the ~ NO~ OF CH~GE'" I CERTIFY tflat this report is tree and con.ct and that no part of tile conffibuflon was deducted from aw employee's wages, Pdnt Preparer's Name Prepamr's Telephone Number Authorized Signature 33fie B Employer's Payroll Continuation Sheet 6~0103 (2o02) IOWA WORKFORCE DEVELOPMENT Attm Tax ~ o~ looo East Grand Avenue - Des Moines~ Iowa 5o31~o~o9 Page -- of Telephone (51S) 281~339 Employer Name & Address Iowa Account Number I Social Secufi~ Number Last Name Rmt Name MI To%l Wages Paid Taxab{e Wages Paid 04J03~3 Employee Wages, Taxes and Adjustments Gross Pay Hourly Overtime Hourly Regular Bonus Total Gross Pay Adjusted Gross Pay Taxes Withheld Federal Withholding Mndic~re Employee Social Security Employee IA - Withholding Total Taxes Withheld Net Pay Employer Taxes and Contributions Federal Un~mpIo~eent Medicare Company Social Socuflty Company IA * Unemployment Company Total Employer Taxes and Contributions Pet Degree Payroll Summary March 1 - 30, 2003 Dugan, Danielic M Hours Rate Mar I - 30, '03 Emmerich, Beth A Hours 10.35 120.95 9.98 103.29 6.65 804.32 0.00 907,61 907.61 -83.00 -13.16 -56.27 -177.43 730.18 7.26 13.16 56.27 4.87 81.56 69.75 Rate 7173 5.15 Page 1 04/03/03 Employee Wages, Taxes and Adjustments Gross Pay Hourly Overtime Hourly Regular Bonus Total Gross Pay Adjusted Gross Pay Taxes Withheld Federal Withholding Medicare Employee Social Security Employee IA - Withholding Total Taxes Withheld Net Pay Employer Taxes and Contributions Federal Unemployment Medicare Company Social Security Company IA - Unomploy~Ttent Company Total Employer Taxes and Contributions Pet Degree Payroll Summary March I - 30, 2003 Emmerloh, B... Mar I - 30, ~3 Kaise~,Cs~eA Hours Mar I - 30, '03 0.00 359.21 0.00 359.21 359.21 0.00 -5.21 -22.28 -3,00 -30.49 2.87 5.21 22,28 1.93 32.29 5.15 235.10 235,10 -10.00 -3.41 -I0.00 -37.99 197.11 1.88 3.41 14.58 1.26 21.t3 Kapp, WillC Hours 33.35 Page 2 04/03/03 Employee Wages, Taxes and Adjustments Gross Pay Hourly Overtime Hourly Regular Bonus Total Gross Pay Adjusted Gross Pay Taxes WlthheM Federal Withholding Social Security Employee IA - Wtthhotding Total Taxes WRhheld Net Pay Employer Taxes and Contributions Federal Unemployment Medicare Company Social Security Company IA - Unemployment Company Tntal Employer Taxes and Contributions Pet Degree Payroll Summary March I - 30, 2003 Kspp, Will C Rate Marl-30,~3 kacina, Shalna C. Hours Rate Mar I - 30, '03 7,73 0.00 5.15 171.76 0,00 171.76 171.76 0.00 -2.49 -10.65 0.00 -13.14 168,62 1.37 2.49 10.65 0.92 16.43 7.73 0.00 5.15 355.09 0.00 355.09 355.09 -15.00 -5.15 -22.02 -3.00 -45.17 5.15 22,02 1.91 31,.92 Page 3 Employes Wages, Taxes and Adjustments Gross Pay Hourly Regular Bonus Total Gross Pay Adjusted Gross Pay Taxes Withheld Federal Withholding Medicare Employes Social Security Employes IA. Withholding Total Taxes I/~thheld Ne~ Pay Employer Taxes and Contributions Federal Uesmployment Medicare Company Social Security Company IA - Unemployment Company Total Employer Taxes and Contributions Pet Degree Payroll Summary March 1 - 30, 2003 Morrlson, Jr., Donald E Hours Rate Marl-30,~3 R~hmond, StaciR Hours 160 0,00 1,600.00 GOO 1,600.00 1,600.00 -186.00 -99.20 -370.40 1,229.60 12.80 23.20 8,59 143.79 Rate 5.15 Page 4 04~03/03 Employee Wages, Taxes and Adjustments Gross Pay Hourly Overtime Hourly Regular Total Gross Pay Adjusted Gross Pay Taxes Withheld Federal Withholding Medicare Employee So~ial Seeurity Employee IA - Withholding Total Taxes Withheld Net Pay Employer Taxes and Contributions Medicare Company So=iai Seeurtty CcK4~any IA - Unemployment Company Total Employer Taxes and Contributions Pet Degree Payroll Summary March I - 30, 2003 Richmond, St... Saflguter, Ryan R Mar I -30, '03 Hours Rate Mar I - 30, '03 0.00 -3.69 -15.80 0.00 -19.49 236.28 2.04 3.6~ 15.80 1.37 22.90 0.~ 174.42 0.~ 174.42 174.42 0.00 -10.8t 0.00 -13.34 161.08 1.40 2.53 10.81 0.94 16.6~ Schilling, Jee... Hours Page 6 04/0~/03 Empioyes Wages, Taxes and Adjustments Gross Pay Houdy Overtime Hourly Regular Bonus Total Gross Pay Adjusted Gross Pay Taxes Withheld Federal Withhotding Medicare Employes Social Security Employes iA. Withholding Total Taxes Withheld Net Pay Employer Taxes and Contributions Fede~st Uftm'nployment Medicare Company Social Security C(xnpany iA * Unomployment Company Total Employer Taxes and Contributions Pet Degree Payroll Summary March 1 - 30, 2003 Schilling, Jesslca S Rate Mar t - 30, '03 $chmitt, Steven J Hours Mar 1 - 30, 7.73 0.00 5.15 464.74 GOO 464.74 464.74 -6,74 -28.81 .-6.00 -48.55 41e,19 3.72 6.74 28.81 2.49 41.7e 116.C5 9.38 6.25 0.00 725.32 0.00 725.32 725.32 -10.52 -44.97 -15.00 -126.49 5.80 10.52 44.97 3.89 6~.18 Page 6 04/03/03 Employee Wages, Taxes and Adjustments Gross Pay Hourly Regular Bonus Total Gross Pay Adjusted Gross Pay Taxes ThFfthheld Federal Withholding Medicare Employee Social Security Employee IA - Withholding Total Taxes Withheld Net Pay Employer Taxes and Contributions Federal Unemployment Medicare Company Social Security Company IA - Unemployment Company Total Employer Taxes and Contributions Pet Degree Payroll Summary March 1 - 30, 2003 TOTAL Hours Rate Mar I - 30, '03 10.35 103.29 786.71 5,144.73 0.00 5,248.02 5,248.02 -357.00 -76.10 -325,39 -124.00 ~8Z49 41.98 76.10 325.39 28.17 471.~4 Page 7 04/03/02 Pet Degree Balance Sheet As of December 31, 2002 ASSETS Current Assets Checking/Savings Checking- Hills Savings Wells Fargo Checking - Wells Fargo Total Checking/Savings Accounts Receivable Accounts Receivable Total Accounts Receivable Other Current Assets Salestax Bond Rent Deposit Employee Loans Receivable Inventory - Merchandise Undeposited Funds Utility Deposits Total Other Current Assets Total Current Assets Fixed Assets Building Computer Equipment Depreciation Original Cost Compnte~ Equipment - otheF Total Computer Equipment Equip,, Furniture, & Fixtures Depreciation Original Cost Equip,, Furniture, & Fixtures - Other Total Equip,, Furniture, & Fixtures Total Fixed Assets other Assets Goodwill Total Other Assets TOTAL ASSETS LIABILITIES & EQUITY Llebilitles Current Liabilities Accounts Payable Accounts Payable Total Accounts Payable Other Current Liabilities Payroll Liabilities Child Suppor~ Federal Withholding Payable FICA Tax Payable FUTA Tax Payable IA W'dhholding Tax Payable Medicare Tax Payable SUTA Tax Payable Total Payroll Liabilities Dec 31, '02 -48.16 5.00 5,101 94 5,060.78 4,959.95 4,959.95 6,010.00 755.00 4,993.95 71,206.24 126.00 1,080.84 84,172.03 ~4,192.76 1,600.00 -3,882.50 3,513.62 2,330.03 1,961.15 -19,412,00 36,813.71 8,895.72 26,297.43 29,858.58 30,981,69 30,9~1.69 155,033.03 78,093.25 78,093.25 1,251.33 4,906.00 -472.13 -268.54 154.00 -110.32 -479.44 4,980.90 P~el 04/03/03 Pet Degree Balance Sheet As of December 31, 2002 Sales Tax Payable Total Other Current Liabilities Total Current Liabilities Long Term Uabititles Business Loan - Phil Business Loan - Sheila Total tong Term Liabilities Total Liabilities Equity Donald Morrison, Capital Donald Morflson, Drawing Donald Morrison, Capital - Other Total Donald Morrison, Capital Jill Monison, Capital Jill Morrison, Drawing Jill Morrison, Capital - Other Total Jill Morrison, Capital Opening Bet Equity Retained Earnings Net Incolste Total Equity TOTAL MABILtTIES & EQUITY Dec 31, '02 1,760.45 6,741.35 84,834.60 78,757.91 -1,737.82 77,020.09 161,854.69 -63,214.72 .12,381.23 -75,595.95 -21,258.55 -9,960.92 -3t ,2t 9.47 1,000.00 60,854.41 ~8,139.35 -6,821 .~ 166,033.03 Page 2 Pet Degree Balance Sheet As of December 3t, 2001 TMal C.ITmlt AMMS ToM Eq.~, Fumit.~ & Fixt./. 'I'MM Fixed A~MS GoodMI 1,~0~1t 5.OO 1,332.8~ 3,M022 3.MO.22 6,010.00 755.00 4,g93.95 71,022,51 t ,M0.84 88,~5.41 3,513.82 1,961 49,417.00 6.4~.72 18,04~57 42,972.12 42,972,12 1.25t.33 4,421 3.3{~.13 6,195.57 Pet Degree Balance Sheet A~ of December 31, 2~01 Long Ta J Pet Degree Balance Sheet As of December 31, 2000 Accoun~ Fle~va~e Acce.nts P*ya~ Tmal Accounts payro, u,,~ c~dsumm FICA Tax Pa,j~l~ FUTA Tax Meclk:ere T~ur Ply. l~ SUTA Tax PayMde S~les Tax Payal~ To(al Olhm' Cenmlt Ualdl#km Tc~l Gun-em ~ 5,155.67 5.0O 3,874.59 9,O3526 2,123.70 2,123.70 6,010.00 755.00 4,99~.95 71,027-51 loo.C~ 3,513.62 2~0~OO 1,961.15 -19,41200 28915.86 14,~4.42 16,045,57 30,981.69 2~0.37 4,~r/.7~ 1,770.07 71,312.32 Plgel Pet Degree Balance Sheet A~ Of December 31, 2000 -474.40 .87,768.44 158,080.76 -25,T81.16 ,417.37 18.61 1,000.00 -t 13,717.86 -16,746.00 Pet Degree Profit & Loss January through December 2002 Ordinary Income/Expense Income Discrepancies Shortages Discrepancies - Other Total Discrepancies Sales Total Income Cost of Goods Sold Purchases Purchases - Freight In TOtal COGS Gross Profit Expense Web Hosting Education Penalty Uncetegorized Expenses Aotomobite Lease Payment Advertising Expense ~mo~llzstiofl Expanse House Payment To~l Amortization Expense Automobile Expense Bad Debt Expense Business Service Expense Credit Card Fees Expense Donations lnsurarlcs Business Insurance Life Insurance Insurance - Other Total Insurance Interest Expense Licenses and Permits Medical Expense Misceliencous Office Equilxnent Expense Office Supplies Expense Payroll Expenses Medicare Expense FICA Tax Expanse FUTA Tax Expense SUTA Tax Expense Paynd! Expenses - Other Total Payroll Expenses Postage and Delivery Professional Fees Accounting Legal Fees Total Professional Fees Rent Building Rent Rent - Other Totst Rent Jan - I~c '02 -890.70 1,597.96 0.10 707.36 502,273.88 502,g81,24 258,523.52 258,828.00 244,153.24 669.50 10.80 92.50 1,58(3.g8 12,558.07 4,950.00 8,210.00 24.66 583.21 62.51 3,369.40 3,486.g0 4,886,00 11,742.30 138.55 681.50 800.47 ~ ,397.4~ 4~9.99 815,60 1,198.10 5,122.~2 491.12 510.51 1,000.00 8,322,65 172.36 3,155.00 3,~05.00 44,124.10 775.00 44,899.10 Page I O4/03/O3 Pet Degree Profit & Loss January through December 2002 Repairs Equipment Repairs Repairs - Other Total Repairs Service & Late Charges Sto~e Equipmerd Expanse Store Supplies Expense Store Usage Expense Telephone Expense Travel & Entertainment Expense Lodging Meals Travel Travel & Entertainment Expense - Other Total Travel & Ente~elnmerd Expense Utilities Expense Gas and Elechic Water Utilities Expanse - Other Total Utilities Expanse Wages Expense Total Expanse Net Ordinary Income Other Income/Expense Other Income Total Other Income Net Other Income Net Income Jan. Dec '02 1,257.07 1,959.64 3,216.71 8,462.45 1,038.22 2,986.69 80.30 2,902.57 75.56 395.05 415.44 403.50 1,289.55 5,462.84 1,915.76 2,388.37 9,766.97 82,642.74 216,984.44 27,168.80 10,970.55 10,970.55 10,970.55 38,139.36 Page 2 03~1~3 Pet Degree Profit & Loss January through December 2001 Ordinary Income/Expense Income Purchases - Discounts Discrepancies Shortages Overages Total Discrepancies Sales Sales Discounts Salse Rstums & Allowances Total Income Cost of Goods Sold Purchases Purchases * Death lose Purchases - Freight In Purchases - Store Usage Total COGS Gross Profit Expense Education Garbage Uncstegodzed Expenses Advertising Expense Automobile Expanse Bad Bal~ Expense Business Service Expanse Death Lose Expenses Donations Auto Insurance Life Insurance Total Insurance interest Expense Licenses and Permits Mndicel Expense Miscellaneous Office Equipment Expanse Office SuPldlse Expense Payroll Expenses Medicare Expanse FICA Tax Expense FUTA Tax Expense SUTA Tax Expanse Total Payroll Expenses Postage and Delivery Professional Fees Accounting Legal Fees Total Professional Fees Rent CAM Charges Rent - Other Total Rent Repairs Jan - Dec '01 180.76 -1,475.01 1,445.74 -29.27 4O8,876.55 -153.80 -19.94 196,383.48 -959.50 -892.07 194,571.81 214,282.49 1,143.25 160.51 0.00 4,275.95 7,773.81 913.49 100.00 143.58 3,243.07 1,912.60 5,299.25 8,716.10 75.00 329.00 102.86 62.94 851.29 297.01 1,269.60 156.20 92.72 1,815.53 117.26 750.00 100.00 1,9~4.09 33,865.52 35,799.61 266.62 PerJe I 03~1~3 Pet Degree Profit & Loss January through December 2001 service & Late Charges Store Equipment Expense Store Supplies Expense Sto~e U~age Expense Telephone Expense Travel & Entartalnment Expense Meals Travel Travel & Entertainment Expense - Other Total Travel & Entertainment Expense Utilities Expense Gas end Electric Water Utilities Expense o Other Total Uti#tiea Expense Wages Expense Total Expense Nat Ordinary Income Other Income~Expense Other Income Other Income Total Other Income Nat Other Income Net Income Jan - D~: '01 3,820.g5 197.89 4,870.41 830.33 3,506.92 638.54 71.20 834.00 1,543.74 716.50 1,766.04 7,123.67 9,606.21 74,310.69 1~8,339.11 2,650.87 2,650.87 2,650.87 Pa~e 2 03~1~3 Pet Degree Profit & Loss January through December 2000 Ordinary Income/Expense Income Discrepancies Shortages Overages Total Discrepancies Sales Sales Discounts Sales Returns & Allowances Total Income Cost of Goods Sold Purchases Purchases - Death Lose Purchases - FreigM In Purchases - Rntums& Allowaflces Total COGS Gross Profit Expanse Garbage Uncetegorized Expanses Advertising Expense Automobile Expense Business Service Expense Death Lose Expenses Insurance Business Insurance Life Insurance Insurance - Other Interest Expense Loan Interest Interest Expense - Other Total Interest Expense Licenses and Permits Medical Expense Office Equipment Expense Office Supplies Expense Payroll Expenses Medicare Expense FICA Tax Expense FUTA Tax Expense SUTA Tax Expense Payroll Expanses - Other To,al Payroll Expenses Postage and Delivery Professional Fees Legal Fees ProfeselonM Fees - Other Total Professional Fees Rent Building Rent CAM Charges Rent - Other Total Rent Jan - Dec '00 -1,742.41 1,947.96 205.55 413,996.16 --528.71 413,606.44 213,166.33 -123,12 0.00 -6,765.48 206,277.73 207,328.71 195.98 0.00 7,348.75 5,571.79 1,427.82 123.12 2,100.00 2,884.27 2,345.19 7,885.84 10,884.15 11,333.09 130.50 519.88 506.16 0.00 0.00 0.00 0.00 0.00 0~00 161.74 0.00 3,319.17 3,904.90 49,263.24 56,487.3t Page 1 Pet Degree Profit & Loss January through December 2000 Repairs Building Repairs Equipment Repairs Repairs - Other Total Repairs Service & Late Charges Store Equipment Expanse Store Supplies Expense Store Usage Expense Telephone Expense Travel & Entertainment Expense Entertainment Meals Travel Travel & Entertainment Expense - Other Total Travel & Ente~inment Expense Utilities Expense Gas end Electdc Water Utilities Expense - Other Total Utilities Expense Wages Expense Total Expense Net Ordinary Income Other Income/Expense Other Income Other Income Total Other Income Net Other Income Net Income 261 .~9 -1.05 329.09 4,801.10 365.15 2,389,33 24.82 3,131.19 195.00 232.02 414.14 937.74 3,149.27 2,920.01 5,563.58 11,632.86 197,575.15 9,753.56 3,964.10 3,9~4.10 3,964.10 13,717.88 P~e2 03~1~3 Pet Degree Profit & Loss Budget Overview January through December 2003 Jan '03 Feb '03 Mar '03 Apr '03 May '03 Ordinary Income/Expense Income Sales 553,000.00 0.00 0.00 Total Income 553,000.00 0.00 0.00 Cost of Goods Sold Purchases 264,7~.00 Total COGS 284,790.00 Gross Profit 268,210.00 0.00 0.00 Expense Uncategorized Expenses 181,800.00 Total Expense 181,800,00 Net Ordinary Income 86,410.00 0.00 0.00 Ne( Income 86,,410.00 0.00 0.00 Page I Pet Degree Profit & Loss Budget Overview January through December 2004 Ordinary Income/Expense Income Sales Total Income Cost of Goods Sold Purchases Total COGS Gross Profit Expense Uncetegorized Expenses Total Expense Net Ordinary income Jan '04 Feb '04 Mar '04 Apr '04 May '04 608,300.00 608,300.00 313,280.00 313,280.00 295,020,00 181,800.00 181,800.00 113,220.00 115,220.00 Page 1 O4/O4/O3 Pet Degree Balance Sheet Budget Overview As of December 31, 2003 Dec 31, '05 5.00 1,500.00 1,655.00 3,865.00 6,010.00 755.00 0.00 70,191.00 1,080.00 78,036.00 83,556.00 ASSETS Current Assets Checking/Savings Checking- Hills Savings Wells Fargo Checking - Wells Fargo Total Checking/Savings Accounts Receivable Accounts Receivable Total Accounts Rcceivable O~er Curre~ Asses Salestsx Bond Rent Depostt Employee Loans Receivable Inventery - Merchandise Utility Deposits Total Other Current Assets Total Currmtt Assets Fixed Assets Building Computer Equipment Equip., Furniture, & Fixtures Original Cost Equip.. Furniture. & Fixtures - Other Total Equip., Furniture, & Fixtures Total Fixed Assets Other Assets Goodwill Total Other Assets UABIUTIES & EQUITY Liabilities Current Liabilities Accounts Payable Accounts Payable Total Accounts Payable Other Current Llebllities Payroll Liabilities Sales Tax Payable Total Other Currant Liabilities Total Cur~.t Liabilities Long Term Liabilities Business Loan - Phil Business Loan - Shells Total Long Term Liabilities Total Liabilities Equity Donald Morrison, Capital Donald Mordson, Drawing Donald Morrlson, Capitai - OUler Total Donald Merflson, Capltbl 1,600.00 .36,813.71 '36,813.71 7,500.00 7,500.00 11,061,00 124,617.00, 78,621.77 78,621.77 5,400,00 2,319.00 7,719.00 78,757.91 -1,737.82 -80,000.00 -22,342.15 -102,342.15 Page I O4/O4/03 Pet Degree Balance Sheet Budget Overview As of December 3t, 2003 Opening Bal Equity Re~ained Earnings Total Equity TOTAL LIABIUllES & EQUITY Dec 31, '03 6'2,596.29 -38,743.86 124A17.00 Page 2 04/0~/03 Pet Degree Balance Sheet Budget Overview As of December 3t, 2004 Dec $1, '04 2~0.00 5.00 1,300.00 4,250.00 4,250.00 6,010.00 755.00 74,000.00 1,080.00 81,845.00 87,650.00 1,600.00 6,000~00 7,600.00 30,000.00 75,000.00 75,000.00 5,800.00 2,800.00 8,600.00 78,757.91 -1,737.82 77,020.09 160,62009 -22,342.15 -107,342.15 1,000.00 70,972.06 -35,370.09 126,26g.08 ASSETS Current Assets Checking/Savings Checking- Hills Savings Wells Fargo Chccklng - Wells Fargo Total Checking/Savings Accounts Receivable Accounts Receivable Total Accounts Receivable Other Curreflt Asseta Salestes Bond Rent Deposit Inventory - Merchandise Total Other CurTent Assets Total Currant Assets Fixed Assets Building Equip., Furniture, & Fixtures Total Fixed Assets Other Assets Goodwill Total Other Assets TOTAL ASSETS LIABILITIES & EQUITY Liabilities Current Uekilittes Accounts Payable Accounts Payable Total Accounts Payable Other Current Liabil#ies Payroll Liabilities Sales Tax Payable Total Other Current Liabilities Total Cun'ent Liabilities Long Term Liabilities Business Loan - Phil Business Loan - Sheila Total Long Term Liabilities Total Liabilities Equ~y Donald Morrtson, Capital Donald Mofltson, Drawing Donald Morrison, Capital - Other Total Donald Morrtson, Capital Opening Bal Equity Retained Earnings Total Equity TOTAL MABIUTIES & EQUITY Page