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1998-09-09 Resolution
Prepared by: Don Yucuis, Finance Director, 410 E. Washington St., Iowa City, IA 52240 (319) 356-5052 RESOLUTION NO. 98-287 RESOLUTION SETTING A PUBLIC HEARING FOR SEPTEMBER 22, 1998 ON AN ORDINANCE AMENDING TITLE 3 ENTITLED "CITY FINANCES, TAXATION & FEES," CHAPTER 4 ENTITLED "SCHEDULE OF FEES, RATES, CHARGES, BONDS, FINES AND PENALTIES" OF THE CITY CODE TO DECREASE THE RATES FOR LANDFILL USE FEES. WHEREAS, the City of Iowa City has developed a Landfill Master Plan; and WHEREAS, the Landfill Master Plan outlines projected costs to continue operating the Landfill for the next 33 years and to close it; and WHEREAS, based on the Plan, Landfill use fees can be decreased for the next two years; and WHEREAS, the City Code requires that notice and public hearing on proposed changes in rates for fees and charges for City utilities be provided to the public, prior to enactment of said rates for fees and charges. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, that: A public hearing is hereby set for 7:00 p.m. on September 22, 1998, to be held in the Civic Center Council Chambers, to permit public comment on the proposed rate decrease fees for Landfill use. The City Clerk is hereby authorized and directed to publish notice of said hearing in accordance with State law. Passed and approved this 9th day of ,/~ember , 1998. ~vlAYOR ATTEST: Approved by City Attorney's Office finadm\res\landfill.doc Resolution No. 98-287 Page 2 It was moved by Thornberry and seconded by adopted, and upon roll call there were: Norton AYES: NAYS: ABSENT: × X X the Resolution be Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef Prepared by: Heather Shank, Human Rights Coord., 410 E. Washington St., Iowa City, IA 52240 (319) 356-5022 RESOLUTION NO. 98-288 RESOLUTION APPROVING THE BY-LAWS OF THE IOWA CITY HUMAN RIGHTS COMMISSION. WHEREAS, the Iowa City Human Rights Commission revised and unanimously adopted by- laws and; WHEREAS, it is in the public interest to adopt by-laws which guide the procedures and actions of the commission; and WHEREAS, the proposed by-laws have been reviewed by the Council Rules Committee, and are commended for adoption. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, that: The by-laws of the Iowa City Human Rights Commission, attached hereto and incorporated by reference herein, are approved and adopted by the City Council. Passed and approved this 9th day of ATTEST:Ci~~~RK ~' September ,1998. City AttorneY' ~ ' 3%. ~ ~ It was moved by Thornberry adopted, and upon roll call there were: and seconded by AYES: NAYS: ABSENT: X X X X X X X civdght\res\bylaws.doc Norton the Resolution be Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef BY-LAWS OF THE IOWA CITY HUMAN RIGHTS COMMISSION (REVISION MAY 1998) II. III. A, A, NAME AND AUTHORITY The name of this organization is the Iowa City Human Rights Commission, referred to in these by-laws as the Commission. The Commission is authorized by the City Council of the City of Iowa City through Municipal Ordinance Number 95-3697, effective date November 15, 1995. PURPOSE As stated in Section 2-1-2 of the Human Rights Ordinance. Through the Commission, the ordinance provides for execution within the City of Iowa City, the policies of the Civil Rights Act of 1964 and the Federal Civil Rights Act. The Commission also promotes cooperation between the City of Iowa City and the State and Federal agencies enforcing these acts. Membership; Appointment; Term of Office; Vacancies: The Commission shall consist of nine (9) members, appointed by vote of the City Council. Appointees shall serve for a term of three (3) years and thereafter until a successor has been appointed. If a position becomes vacant by reason of resignation or otherwise and results in an unexpired term of six months or less, the Council may choose to fill the unexpired term in such a manner that the appointee shall continue in the position not only through the unexpired term but also through subsequent regular term. Appointments shall take into consideration men and women of the various racial, religious, cultural, social and economic groups in the City. Hutnan Rights Ordinance, Section 2-2-3. Commissioner shall attend (or have excused absences for) twelve (12) regularly scheduled monthly meetings during the calendar year. Commissioners who violate provisions of B above may be asked to resign and be replaced. 2. Excused absences are allowable for personal, work or school related emergencies. The Chairperson or Human Rights Coordinator must be notified of a planned absence in advance of any meeting. C. Commission may make recommendations by a 2/3 majority vote to the Mayor and the City Council for dismissal of any Commission member for reasons of attendance or other good cause. Commissioners shall serve without compensation. Actual and necessary expenses incurred may be reimbursed by the City Council. Orientation for Commissioners, including functions, duties and responsibilities, shall be conducted by the staff assigned to the Commission. OFFICERS The Commission shall have three (3) officers: Chairperson, Vice Chairperson and Secretary. Officers shall perform the duties set forth in these by-laws. The Chairperson must designate a Chairperson pro-tem when necessary. The Chairperson and Vice-Chairperson shall be elected from the Commission's membership at its regular January meeting for a one (1) year term. The Secretary shall be selected at the January meeting for a one (1) year term. the Secretary may, but need not be, a Commissioner. The Commission shall fill vacancies among its officers for the remainder of an unexpired term. FULL COMMISSION MEETINGS A. At least one (1) regular meeting shall be held each month. The Chairperson, Vice Chairperson, or any three (3) Commissioners may call a special meeting. At least one (1) full day's written notice of meeting place, time and agenda shall be given each Commissioner and the media. Insofar as possible, only matters included on the agenda may be discussed and formal votes taken. Care shall be taken to avoid discussion of non- agenda items. VII. VIII. A quorum shall consist of five (5) Commissioners. A majority of present and voting members shall be necessary to pass a motion. 2. The Chairperson shall vote as a member. Commission meetings shall be public except where provided in Iowa Code, §21.5. SUBCOMMITTEE AND TEAM MEETINGS Since meetings are scheduled by the consensus of the committee members, attendance is mandatory. In case of emergency, the committee chair person or team captain shall be notified in advance so the meeting can be rescheduled. CONDUCT OF COMMISSION BUSINESS Commission officers shall set the agenda provided Commissioner suggestions are considered. Each Commissioner and staff member shall be provided an agenda prior to the monthly meeting. The Commission's Secretary and/or designee shall record all activities and statements made at Commission meetings, hereafter known as minutes of the meeting. All Commission records shall be public except those excluded pursuant to Iowa Code, Chapter 22; Iowa City's Human Rights Ordinance, Section 2-2-4. PUBLIC RECORDS; EXCEPTIONS All records of the Commission shall be public, except: Complaints of discrimination, reports of investigations, statements and other documents or records obtained in investigation of any charge shall be closed records unless a public hearing is held. Human Rights Ordinance, Section 2-24 (A)(1). , The minutes of any session closed under the provision of this title shall be closed records. Human Rights Ordinance, Section 2-24 (A)(2). No member of the Commission or of its staff shall disclose the filing of a charge, the information gathered during the investigation, or the endeavors to eliminate such discriminatory or unfair practice by conference, conciliation, or persuasion, except as may be necessary to conduct an investigation of a complaint. Nothing in this provision shall prevent the Commission from releasing such information concerning alleged or acknowledged discriminatory practices to the Iowa Civil Rights Commission, the United States Civil Rights Commission, the Federal Equal Employment Opportunity Commission and other agencies or organizations whose primary purpose is the enforcement of civil rights legislation. This section does not prevent any complainant, wimess or other person from publicizing the filing of a complaint or the matter therein complained of. Violation of these provisions by a member of the Commission or its staff shall constitute grounds for removal. Human Rights Ordinance, Section 2-24 (B). The rules in the current edition of Robens Rules of Order Newly Revised shall govern the Commission in all cases to which they are applicable and in which they are not inconsistent with these .bylaws and any special rules or order the Commission may adopt. IX. SUBCOMMITTEE APPOINTMENTS Formation of subcommittees shall be by majority vote of the Commission in whatever subject area, or whatever number of committees, is deemed necessary. The committee(s) shall consist of no more than four Commission Members appointed by the Commission Chairperson. POWERS AND DUTIES OF THE COMMISSION Powers: The Commission created by Chapter 2, Section 2-2-2, of the Human Rights Ordinance, shall have the following powers: To receive, investigate and finally determine the merits of complaints alleging unfair or discriminatory practices. To investigate and study the existence, character, causes and extent of discrimination in the areas covered by this title and eliminate discrimination by education, conciliation and enforcement, where necessary. C, To issue publications and reports of the research and investigations of the Commission subject to the limitations of confidentiality. Do To prepare and transmit to the City Council, from time to time, but not less often than once each year, reports describing its proceedings, investigations, hearings conducted and the outcome thereof, decisions rendered and the other work performed by the Commission. 4 To make recommendations to the City Council for such further legislation concerning discrimination as it may deem necessary and desirable. F, To cooperate, within the limits of any appropriations made for its operation with other agencies or organizations, both public and private, whose purposes are not inconsistent with those of this title and in the planning and conducting of programs designed to eliminate racial, religious, cultural and other intergroup tensions. To adopt guidelines by which to determine whether any conduct, ,behavior, or action may properly be deemed a discriminatory practice. H, To make recommendations to the City Manager and City Council regarding the affirmative action program of the City and to offer assistance to City departments to ensure fair employment procedures and the provision of City services without bias. Seek a temporary injunction against a respondent when it appears that a complainant may suffer irreparable injury as a result of an alleged violation of the Human Rights Ordinance. Issue subpoenas and order discovery to aid in investigation of allegations of discrimination. HUMAN RIGHTS COMPLAINT PROCESS A. Filing of Complaint Within twenty (20) days of the filing of the complaint, a copy will be crossfiled with the Iowa Civil Rights Commission. Thereafter, appropriate case information will be sent upon request by the I.C.R.C. Other appropriate enforcement agencies shall be notified of the complaint and sent relevant case information if requested unless specifically prohibited by the complainant or representing attorney. The Commission's Coordinator and/or designee shall inform persons filing complaints of discrimination of: a. Appropriate Federal and State enforcement agencies; The complainant's right to file a charge of discrimination under Federal and State Civil Rights laws either instead of, or in addition to, filing under the local ordinance; the right to retain a private attorney; the Commission's duty to forward a copy of the complaint to the Iowa Civil Rights Commission. B. Initiation of complaint investigation The Investigator will establish a file for each discrimination complaint. Each file will be assigned a Human Rights case number. The Investigator shall maintain a current flow chart tracking the progress of each complaint. It will also be the responsibility of the Investigator to notify appropriate parties within twenty (20) days of filing date. The Investigator shall draft and mail a questionnaire/document request to the Respondent (and to the Complainant where appropriate). Answers and documents are to be received by the Investigator within thirty (30) days of the receipt of the request, unless an extension has been granted by the Investigator. After reviewing the materials responsive to the questionnaire/document request, the Investigator shall determine whether the complaint warrants further investigation. If the Investigator finds there is a reasonable possibility of a probable cause determination, or that the legal issues presented in the complaint need further development, the case shall be investigated by an authorized member of the Commission's staff. If the Investigator determines that a complaint does not warrant further processing, the case file shall be reviewed by the City Attorney and a Human Rights Commission team. If the Commission team determines that the complaint does not warrant further investigation, the complaint shall be administratively closed. Notice of such closure shall be promptly served upon the Complainant, and shall state the reasons for administrative closure. A Complainant may object to the administrative closure, and request review within ten (10) days of receipt of the written notice. If a Complainant makes such a timely request for review, the Investigator, City Attorney, and Human Rights Commission team shall promptly review the Complalnant's request and all relevant material. If, after review, the Human Rights Commission team determines that the complaint does not warrant further processing, the Commission shall close the file and notify the Complainant and Respondent of the final decision of administrative closure. If, after review, the Commission team determines that there is a reasonable possibility of a probable came determination or that the legal issues presented in the complaint need further development, the complaint shall be investigated. , The Investigator shall interview the complainant, respondent and witnesses. Documents relevant to the charge shall be secured and applicable case law shall be reviewed. After investigation, but before the Investigator submits a recommendation of probable cause or no probable cause to the City Attorney, the Investigator may seek a disposition through a predetermination settlement. (See Section 2-4-2(E) of Human Rights Ordinance.) The Chairperson will then appoint a conciliation team to review the recommended predetermination settlement and make a recommendation to the Commission. If a predetermined settlement is approved by the Commission, the case will be closed and all parties will be so notified by certified mail. If the conciliation team disapproves of the proposed settlement, the Investigator shall continue with the investigation. If no pre-determination settlement is sought or approved, the Investigator shall file a detailed written report to the City Attorney outlining whether there is or is not probable cause to believe the person charged in the complaint committed a discriminatory practice. C. City Attorney's Probable Cause Determination After review of the file and the investigative summary in a case, the City Attorney shall submit an independent decision, in a timely manner, as to whether there is probable cause to believe the respondent has discriminated against the complainant. The City Attorney will submit the file and probable cause decision to the Human Rights Commission within thirty (30) working days of receiving the Investigator's report and recommendation. The City Attorney can, for good cause, request from the Human Rights Chair, an extension of time to submit a probable cause determination. The extension will be granted with a showing of good cause. D. Human Rights Commission Team and Probable Cause Determination After the Investigator and City Attorney have made their determinations regarding probable cause, the Human Rights Coordinator shall promptly assign the complainant's file to a Human Rights Commission team, for an independent evaluation as to whether there is probable cause to believe discrimination occurred. The Human Rights Commission must submit a written probable cause determination within thirty (30) days following receipt of the case. The Human Rights Commission Team can, with good cause, request from the Human Rights 7 Chair, an extension of time to submit a probable cause, determination. The extension will be granted with a showing of good cause. A majority of the Team is required to make a recommendation to the Commission. After a probable cause determination has been made, the Investigator shall notify all appropriate parties by certified mail of the finding and the reasons for the finding. a, If a no probable cause determination has been reached, the Complainant will have a right to appeal the decision within 10 days of receipt of the written notice. The Complainant should be advised to present all new information and corroborating material to support the appeal at the hearing. The Human Rights Commission Team shall hear the Complainant' s evidence within thirty (30) days of the request for review. b, If it has been determined that there is probable cause to believe discrimination took place, the Human Rights Commission Team assumes the responsibility of conciliation. The team is, thereafter, referred to as the Conciliation Team. Conciliation Team responsibility The Conciliation Team shall seek to resolve a discrimination complaint through conciliation. Human Rights Ordinance, Section 2-44. If the Conciliation Team is unable to effectuate a disposition within ninety (90) days after the f'mding of probable cause the Commission may order the conciliation conference procedure to be bypassed. The Conciliation Team shall state in writing the reasons for bypassing further conciliation efforts. The statement should include a summary of the conciliation effort, the principal facts as disclosed in the investigation and other relevant reasons for the recommendation. Human Rights Ordinance, Section 2-4-4(A). If the Conciliation Team reaches a disposition agreeable to the complainant and respondent, the agreement shall be reduced to written agreement. If the Conciliation Team is unable to reach a disposition agreeable to the parties, the team shall notify the Commission of the result. The Team may recommend: a. No further action be taken and the file be closed. b. A Public Hearing will be held. F. Administrative Closure Should a complaint pending before the Commission be resolved or closed by the Iowa State Civil Rights Commission or the Equal Employment Opportunity Commission, the Commission Chairperson shall appoint a conciliation team to review the disposition. If the conciliation team finds that the complaint has been appropriately resolved, the case shall be administratively closed. All parties shall be so notified by certified mail. G. Public Hearing If it is determined that the case should go to public hearing, the Commission shall issue and cause to be served a written notice: Human Rights Ordinance, Section 2-4-6(A) a. Specifying the charges in the complaint; b, Requiring the respondent to answer the charges of the complaint at a hearing before the Commission, or a person designated by the Commission to conduct the hearing; , The hearing shall be conducted in accordance with the provisions of Chapter 17A, Code of Iowa for contested cases. The burden of proof shall be on the Commission. Human Rights Ordinance, Section 2-4-6(C). The Commission shall review the hearing officer's decision and may affkrrn, modify, or reverse the recommended findings, conclusions of law and order. The Commission's final decision shall be made in accordance with the provisions of Section 24-7 of the Ordinance. H. Subpoena powers and temporary injunctions Subpoenas may be issued and discovery ordered to aid in investigations of allegations of discrimination. Human Rights Ordinance, Section 2-2-20) The Commission may seek a temporary injunction against a respondent when it appears that a complainant may suffer irreparable injury as a result of an alleged violation of the Human Rights Ordinance. Human Rights Ordinance, Section 2-2- 2(1). 9 I. Admissible evidence in a sexual harassment case In a human rights complaint alleging sexual harassment, the parties making the probable cause determination as to whether discrimination occurred must weigh the prejudicial value and relevance of any evidence concerning the past sexual behavior of the complainant. AMENDMENTS These by-laws can be amended at any regular Commission meeting by a two-thir(ls (2/3) vote, provided that the amendment has been submitted in writing prior to the meeting at which it is to be acted upon and such amendment is not in conflict with the Human Rights Ordinance, as amended. f:\users\kcarolan\bylaw598 10 Prepared by: Jim Schoenfelder, City Architect, 410 E. Washington St., Iowa City, IA 52240 (319)354-5044 RESOLUTION NO. 98-289 RESOLUTION ACCEPTING THE WORK FOR THE IOWA CITY CIVIC CENTER FRONT ENTRANCE WHEREAS, the Engineering Division has recommended that the work for construction of the Iowa City Civic Center Front Entrance Project, as included in a contract between the City of Iowa City and MBA Concrete, Inc. of North Liberty, Iowa, dated August 26, 1997, be accepted and WHEREAS, the performance and payment bond has been filed in the City Clerk's office, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT said improvements are hereby accepted by the City of Iowa City, Iowa. Passed and approved this 9th day of ATTEST: CIT~~L~RK'~ ~' September , 1998. Approved by City Attorney's Office It was moved by Thornberry adopted, and upon roll call there were: and seconded by Norton AYES: NAYS: ABSENT: Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef the Resolution be pweng~res\civicent,doc ENGINEER'S REPORT July 8, 1998 Honorable Mayor and City Council Iowa City, Iowa Re: Civic Center Front Entrance Renovation Dear Honorable Mayor and Councilpersons: I hereby certify that the construction of the Civic Center Front Entrance Renovation Project has been completed in substantial accordance with the plans and specifications. The final contract price is $69,171.00. I recommend that the above-referenced improvements be accepted by the City of Iowa City. C~ty Architect 41(I EASI' WASHINGTON STREET , IO~'A CITY, IOWA 52240-1826 , (319) 356-5000 · FAX (319) 356-5009 Prepared by: Terry Trueblood, Parks & Rec., 410 E. Washington St., Iowa City, IA 52240 (319) 356-5110 RESOLUTION NO. RESOLUTION ACCEPTING THE WORK FOR THE REMOVAL ' AND REPLACEMENT OF THE ROOF AND INSULATION ON THE CIVIC CENTER. WHEREAS, the Engineering Division has recommended that the work for replacement of two sections of the Civic Center roof, as included in a contract between the City of Iowa City and Maintenance Associates of Marion, Iowa, dated September 9, 1997, be accepted; and WHEREAS, the performance and payment bond has been filed in the City Clerk's office. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT said improvements are hereby accepted by the City of Iowa City, Iowa. Passed and approved this day of , 19 MAYOR Approved by ATTEST: CITY CLERK It was moved by and seconded by adopted, and upon roll call there were: AYES: NAYS: ABSENT: pwengVesVoof-.cc.doc the Resolution be Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef Prepared by: Maggie Grosvenor, Hsg. Administrator, 410 E. Washington St., Iowa City, IA 52240 319-356-5407 RESOLUTION NO. 98-290 RESOLUTION APPROVING THE PUBLIC HOUSING MANAGEMENT ASSESS- MENT PROGRAM (PHMAP) CERTIFICATION OF THE IOWA CITY HOUSING AUTHORITY FOR FY98. WHEREAS, the Public Housing Management Assessment Program (PHMAP) implements Section 502(a) of the National Affordable Housing Act of 1990 (NAHA) and evaluates the performance of public housing agencies (PHAs) in major areas of management operations; and WHEREAS, the Department of Housing and Urban Development (HUD) requires approval by formal resolution of the executed Certification which is in compliance with federal regulations; and WHEREAS, it is in the best interest of the City of Iowa City to continue participation in the Public Housing Program. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, in its capacity as the City of Iowa City Housing Authority that the PHMAP Certification be approved. Passed and approved this 9th day of September ,1998. ATTEST:Ci~(~"RK-~ ~ City Attorney's Office It was moved by Thornberry and seconded by adopted, and upon roll call there were: Norton the Resolution be AYES: NAYS: ABSENT: Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef g:\data\wpdata~isasst%res~hrnapcer.doc Public Housing Management u.s. Department of Housing OMB No. 2577-0156 (exp~ 6/50/~9 and Urban Development ASSessment Program Office of Public and Indian Housing (PHMAP) Certification Public reporting burden for this collection of information Is estimated to average 4 hours per response, including the time for reviewing instructions. searchinl existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding thi burden estimate or any other aspect ol this collection of information, including suggestions for reducing this burden, to the Reports Managemen t O ~cer, P aperwor Reduction Project (2577-0156), Office of Information Technology, U.S. Department of Housing and Urban Development, Washington, D.C. 20410-36OO. Thi agency may not collect this information, and you are not required to complete this form, unless it displays a currently valid OMB control number. Do not send this form to the above address. This information Is collected to implement section 502 of the National Affordable Housing Act of f990 which established seven specific indicators and direct the Secretary to develop no more than five other factors (Indicators) deemed appropriate to assess the management performance of public housing agencie (PHAs) In all major areas of management operations. PHAs will complete the PHMAP Certification form HUD-50072 and submit it to HUD. The Information i used by HUD to assess all major areas of PHA's management operations, designate P HAs as troubled and mod-troubled. enter Into a Memorandum of Agreemet (MOA) with troubled and rood-troubled PHAs, and report annually to Congress on the status of troubled and rood-troubled PHAs. This Information is require lot HUD to fulfill statutory requirements of the 1990 Act. The information collected does not lend Itself to confidentlality. Instructions: A PHNRMC/AME's responses to this certification form must be the PHNRMC/AME's actual data; e.g., prior to any adjustment Ior modifications and/or exclusion requests to the Indicators. Round percentages to the nearest two decimal points. Indicator #1: Component #1: Item b: Tbtal number o! ACC days is obtained by multiplying the total number of units under ACC by the numbE of days In the year. This figure should be adjusted accordingly for units that are added during the fiscal year being assessed based on the dat the unit(s) reached the end of the initial operating period (EIOP). PHA/RMC/AME Name IOWA CITY HOUSING AUTHORITY 'i ProJecl name(s) I! RMC/AME For FY Ending Submission Date 6-30-98 8-27-98 The manage.ment functions for the following indicator(s) have been assumed by an RMC/AM E, and th~ RMC/AM E certification is attached (ent~ indicator numbers or N/A): Indicator #1: Vacancy Rate and Unit Turnaround Time Component # 1: Vacancy Rate a. PHA has implemented an adequate system to track the duration of vacancies (enter Yes or No) YES b. Total number of ACC days 39,055 c. Total number of non-dwelling days 1,594 d. Total number of employee occupied days 0 e. Total number of days where units were deprogrammed ( TOP ) 139 I. Total number of actual vacancy days 748 g. Total number of vacancy days ~xempted for modernization -" 251 h. Total number of vacancy days exempted for market conditions 381 i. Total number of vacancy days where units were exempted due to law or regulations 75 j. Total number of vacancy days where units were exempted for other reasons 0 ' _ k. Percentage points reduction of actual vacancies within past three years (enter percent or N/A) NA o/ Component # 2: Unit Turnaround PHA s hall respond to the questions below, even if It certifies to a grade of C or above o n the vacancy component a. PHA has implemented an adequate system to track unit turnaround, Including down time, make ready time, and lease up time (enter Yes or No) YES b. Total number of turnaround days 643 c. Total number of vacancy days exempted for modernization 251 d. Total number of vacancy days exempted for other reasons 456 e. Total number of vacant units turned around and leased in the PHA's immediate past fiscal year 37 f. Average number of calendar days units were In down time 0 g. Average number of calendar days units were in make ready time 12 18 form HUD-S0072 (4/9 ref. Handbook 7460 h. Average number of calendar days units were in lease up time Previous editions are obsolete. Page 1 ol 4 Indicator #3: Rents Uncoilected a. Dwelling rent owed by residents in possession at the beginning of the assessed fiscal year, carried forward from the' previous fiscal year b. Dwelling rents billed during FY being assessed c. Dwelling rents collected during FY being assessed Indicator #4: Work Orders a. PHA has implemented an adequate system to account for and control work orders (enter Yes or No) Component # 1: Emergency Work Orders a. Total number of emergency work orders b. Total number of emergency work orders corrected/abated within 24 hours Component # 2: Non-Emergency Work Orders a. Total number of non-emergency work orders b. Total number of calendar days it took to complete non-emergency work orders c. Average number of days PHA has reduced the time it takes to complete non-emergency work orders over the past three years (enter average number of days or N/A) ',ndicator #5: Annual Inspection of Units and Systems Component # 1: Annual Inspection of Units a. PHA has implemented an adequate inspection program that generates quality inspections and tracks both inspections and repairs (enter Yes or No) b. Total number of ACC units c. Units exempted where the PHA made 2 documented attempts to Inspect and is enforcing the lease d. Vacant units exempted for modernization e. Vacant units exempted for other reasons 1702 CAL ][ FORN ]' A - TOP f. Total numberof units Inspected using local code orHUD HQS if there is no local code orthe localcode is less stringent g. Total number of units meeting local code/HQS h. PHA completed all repairs on units where necessary for local code/HQS compliance either during the inspection, issued work orders for the repairs, or referred the deficiency to the current year's or next year's modernization program (enter Yes or No) Component # 2: Annual Inspection of Systems a. Total number of sites b. Total number of sites exempted from the inspection of systems 1702 CALIFORNIA - TOP -" c. Total number of sites where all systems were inspected in accordance to the PHA maintenance plan d. Total number of buildings e. Total number of buildings exempted lrom the inspection of systems f. Total number of buildings where all systems were Inspected In accordance to the PHA maintenance plan g. PHA~erf~rmedrequ~redma~ntenance~nbui~dingsandsi~esinacc~rdancewithspecifica~i~ns~r~~ca~/PHAs~andards~~rissuedw~rk orders for the repairs, or included the deliciencies in lhe current years or nexl year's modernizalion program fenlet Yes or No) ~dlcator #6: FInancial Management Component # 1: Cash Reserves a. Amount of cash reserves HA shall respond to the questions for either Option A or Option B, below, even if it certifies to a grade of C or hove on the cash reserves component. Component # 2: Energy Consumption a. All PHA units have tenant-paid utilities (enter Yes or No) Option A: Energy/Utility Consumption Expenses a. Total energy/utility consumplion expenses ovious editions are obsolete. Page 2 of 4 715 282,868 273,265 YES 10 10 390 3,119 8 YES 107 0 0 1 106 106 YES 107 1 106 80 1 79 YES 267,860 YES 8,185 form |-IUD-50072 (4/97) ml' Hnndhnnk 74rln ,l Option B, Energy Audit NA a. PHA has completed or updated its energy audit within the past 5 yoars (enter Yes or No) b. All of the recommendations that were cost effective were Implemented (enter Yes, No or N/A) c. PHA has an Implemenlation plan to implement all of Ihe recommendations that were cost eliactive (enter Yes, No or N/A) d. PHA is on schedule with its implementation plan, based on available funds (enter Yes, No or N/A) Indicator #7: Resident Services and Community Building NA PHAs with fewer than 250 units or with 100% elderly developments will not be assessed under this Indicator unless otherwise specified below a. Check if PHA with lewer than 250 unils or 100% etderly developmenls requests Io be assessed under Ihis indicator (enter Yes or No) Component #1: Economic Uplift and Self Improvement a. PHA requests to be assessed for all nOn-HUD funded programs implemented (enter Yes or No) b. PHA Board of Commissioners has adopted economic uplift and self-improvement programs (enter Yes or No) c. Percentage of family occupied units where a PHA can document it has implemented these programs d. PHA monitors performance and issues reports concerning progress (enter Yes or No) Component #2: Resident Organization a. PHA can document it recognizes resident councils, and has a system of communication and collaboration with and suppods resident councils (enter Yes. o.r No) b. Where no residenl council exists, PHA can document it encouraged the formation of resident councils (enter Yes or No) Component #3: Resident Involvement a. PHA Board o! Commissioners, by resolution, provides for resident representation on 1he Board and committees (enter Yes or No) b. PHA implemented measures that ensure residents have input into: (check all that are applicable) F:Ses~rity [] Screening/occupancy I"'l Maintenance [] Operating budget . Relocation [] Resident programs ["'1 Modernization and development programs Component #4: Resident Programs Management a. PHA has HUD funded special programs (enter Yes or No) b. PHA has a Resldenl Management or Tenant Opportunity Program where the PHA is the contracl administralor (enter Yes or No) c. PHA requesls to. be assessed for all non-HUD lunded programs (enter Yes or No) d. Percentage of goals the PHA can document it met under implementation plan(s) Indicator #8: Security NA PHAs with fewer than 250 units will not be assessed under this Indicator unless otherwise specified below a. Check if PHA with fewer than 250 units requests to be assessed under this indicator Component #1: Tracking and Repodlng Crime-related Problems a. PHA has Board adopted policies and Implemented procedures to frack crime and crime-related problems (enter Yes or No) b. PHA can document Ihal it has a cooperative syslem for tracking and reporting crime to local police authorilies (enter Yes or No) c. PHA can document it reports crime to local police authorities (enter Yes or No) d. Percentage of developments where PHA can document it tracks crime and crime-related problems Component #2: Screening of Applicants a. PHA has Board adopted policies and implemented screening procedures Ihat reflect the One-Strike criteria (enter Yes or No) b. PHA can document that screening procedures result In successfully denying admission to applicants who meet the One-Strike criteria (enter Yes or No) c. Screening procedures result in denying admission to applicants who meet the One-Strike criteria (enter Yes or No) Component #3: Lease Enforcement a. PHA has Board adopted policies and implemented eviction procedures thai reflecl the One-Strike criteria (enter Yes or No). b, PHA can document that eviction procedures result In appropriately evicting residents who meal One-Strike criteria (enler Yes or No) c. Eviction procedures result in the eviction of residents who meet the One-Strike criteria (enter Yes or No) form HUD-50072 (4/97 Previous editions are obsolete. Page 3 of 4 rr, f. Handbook 7460.-~ Component #4: Grant Program Goals a. PHA has HUD funded drug prevention and/or crime reduction programs (enter Yes or No) b. PHA requests to be assessed for all non-HUD i'unded drug prevenllon and crime reduclion programs (enler Yes or No) c. PHA can document that the program goals are related to drug and crime rates (enter Yes or No) d. Percentage of goals Ihal the PHA can documenl II mel under implementation plan(s) for any and all ol these programs Adjustments for Physical Condition and/or Neighborhood Environment a. PHA claims adjustment for physical condition and/or neighborhood environment (enter Yes or No) b. Total units (not exempted for any other reason) subject to both physical conditions and neighborhood environment c. Total units (not exempted for any other reason) subject to physical conditions only d. Total units (not exempted for any other reason) subject to neighborhood environment only We hereby certify that, as of the submission date, ~e above indicators, under the Public Housing Management Assessmenl Program (PHMAP), are true and accurate for its fiscal year indicated above. The undersigned furfl~er certify that, to their present knowledge, there is no evidence to indicate seriously deficient performance that casts doubt on the PHA's capacity to preserve and protect its public housing developments and operate them in accordance with Federal law and regulations. Appropriale sanctions for intentional f~dse cerlification will be imposed, including suspension or debarment of the signatories. haltperson I Commlss leo toy' × ERNEST W. LEHMAN, ~IAYOR, CITY OF IOWA CITY X , H ]'NG AD~'NISTRATOR ~ Board Resolution approving this cerlification is required and must be attached to the executed certification. RMC/AME cerlifica- :ions shall be signed by the corresponding organization's top executive or head. fo~rn HUD-50072 (4/97) 'revious editions are obsolete. Page 4 of 4 ref. Handbook 7460,5 Prepared by: Liz Osborne, Program Asst., 410 E. Washington St., Iowa City, IA 52240 319-356-5246 RESOLUTION NO. 98-291 RESOLUTION AUTHORIZING THE MAYOR TO SIGN AND THE CITY CLERK TO ATTEST THE RELEASE OF A LIEN REGARDING A MORTGAGE FOR THE PROPERTY LOCATED AT 221 SOUTH SEVENTH AVENUE, IOWA CITY, IOWA WHEREAS, on April 15, 1996, the property owner of 221 South Seventh Avenue, executed a Mortgage through the City's Housing Rehabilitation Program; and WHEREAS, this document created a lien against the property; and WHEREAS, the balance remaining on the low-interest mortgage was $1,826.61; and WHEREAS, the loan was paid off on September 1, 1998; and WHEREAS, the lien needs to be released. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA THAT: 1. The Mayor is authorized to sign and the City Clerk to attest the attached Release of Lien for recordation, whereby the City does release the property located at 221 South Seventh Avenue, Iowa City, Iowa from the Mortgage in the form of a low- interest loan recorded June 17, 1996 in Book 2103 Page 225 through 229 of the Johnson County Recorder's Office. Passed and approved this 9th day of Septernbef- ,1998. ATTEST:Ci-i~LEf~~RK/~' ppdrehab\res~221 sTth.doc Approved by ~b"~,ttorney's Office Resolution No. 98-291 Page 2 It was moved by Thornberry and seconded by adopted, and upon roll call there were: Norton AYES: NAYS: ABSENT: X X X X X X X the Resolution be Champion Kubby Lehman , Norton ' O'Donnell Thornberry Vanderhoef STATE OF IOWA ) ) SS: JOHNSON COUNTY ) On this ~-L- day of ~,.~m~y- A.D. 19 cZ~' , before me, the under- signed, a Notary Public in and for said County, in said State, personally appeared Ernest W. Lehman and Madan K. Karr, to me personally known, who being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of said municipal corporation executing the within and foregoing instrument; that .the seal affixed thereto is the seal of said corporation, and that the instrument was signed and sealed on behalf of the corporation by authority of its City Council, as contained in Resolution No. q~- ~/, adopted by the City Council on the ~c day °4: ~tt~.~-~Z~_r- , 19 ?e~ and that the said Ernest W. owl execution of said instrument Lehman and Marian K. Karr as such officers ackn edged the to be the voluntary act and deed of said corporation, by it and by them voluntarily executed. ppdrehab\221 s7rel.doc Notary Public in and for Johnson County, Iowa Prepared by: Liz Osborne, Program Asst., 410 E. Washington St., Iowa City, IA 52240 (319)356-5246 RELEASE OF LIEN The City of Iowa City does hereby release the property at 221 South Seve'nth Avenue, Iowa City, Iowa, and legally described as follows: Commencing at a point 15 feet north of the southeast corner of Lot 3, Block 1, Morningside Addition to Iowa City, Iowa, according to the recorded plat thereof, thence north along the east line of said block, 61.5 feet, thence westerly 99 feet to the extension of the west line of Lot 4 of said Block 1, at a point 46.5 feet south of the northwest corner of said Lot 4, thence south along said extension of the west line of said Lot 4, 59.5 feet, thence easterly to the point of beginning, being part of said Lots 3 and 4 and part of the abandoned C.R.I. & P. Railroad right of way, from an obligation of the property owner, Michele M. Schworn, to the City of Iowa City in the total amount of ~3,011 represented by a Mortgage in the form of a low-interest loan recorded on June 17, 1996 in Book 2103 Page 225 through Page 229 of the Johnson County Recorder's Office. These obligations have been satisfied and the property is hereby released from any liens or clouds upon title to the above property by reason of said prior recorded documents. ATTEST: ~ CITY CLERK MAY6 " City Attorney's Office STATE OF IOWA ) ) SS: JOHNSON COUNTY ) On this ? ~L day of .2~.f,j-~,-//~- , A.D. 19 c[,~ , before me, the under- signed, a Notary Public in and for said County, in said State, personally appeared Ernest W. Lehman and Marian K. Karr, to me personally known, who being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of said municipal corporati,on executing the within and foregoing instrument; that the seal affixed thereto is the seal of said corporation, and that the instrument was signed and sealed on behalf of the corporation by authority of its City Council, as contained in Resolution No. ~-;H , adopted by the City Council on the L/~ day c~ .%' e_pJr~/~F , 19 ~)g' and that the said Ernest W. Lehman and Marjan K. Karr as such officers acknowledged the execution of said instrument to be the voluntary act and deed of said corporation, by it and by them voluntarily executed. ppdrehab\221 s7rel.doc Notary Public in and for Johnson County, Iowa Prepared by: John Yapp, Associate Planner, 410 E. Washington St., Iowa City, IA 52240; 319-356-5247 RESOLUTION NO. 98-292 RESOLUTION APPROVING THE EXTRATERRITORIAL PRELIMINARY PLAT OF PRAIRIE MEADOW PART 2, JOHNSON COUNTY, IOWA. WHEREAS, the owner, Mike Dombroski, filed with the City Clerk of Iowa City, Iowa, an application for approval of the preliminary plat of Prairie Meadow Part 2; and WHEREAS, the Department of Planning and Community Development and the Public Works Department examined the preliminary plat and recommended approval; and WHEREAS, the Planning and Zoning Commission examined the preliminary plat and, after due deliberation, recommended acceptance and approval of the plat; and WHEREAS, the preliminary plat conforms with all of the requirements of the City Ordinances of the City of Iowa City, Iowa. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA THAT: The preliminary plat of Prairie Meadow Part 2, Johnson County, Iowa, is hereby approved. The Mayor and City Clerk of the City of Iowa City, Iowa are hereby authorized and directed to certify this resolution, which shall be affixed to the plat after passage and approval by law. Passed and approved this 9th ATTEST: CiT~LER~K ~. day of Se bet , 199 8 "MAYOR ppdadm/res/praimea2.doc Resolution No. 98-292 Page 2 It was moved by Thornberry and seconded by adopted, and upon roll call there were: O'Donnell the Resolution be AYES: NAYS: ABSENT: X X X X X Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef STAFF REPORT To: Planning and Zoning Commission Item: SUB98-0018 Prairie Meadow Part 2 GENERAL INFORMATION: Applicant: Contact person: Requested action: Purpose: Location: Size: Existing land use and zoning: Surrounding land use and zoning: Comprehensive Plan: Applicable Code requirements: File date: Prepared by: John Yapp Date: August 6, 1998 Mike Dombroski 2140 Prairie Du Chien Road Iowa City, IA 52240 Tom Anthony 535 Southgate Avenue Iowa City, IA 52240 Preliminary plat approval To create a 7-lot residential subdivision The east and south side of Prairie Du Chien Road, north of its intersection with Linder Road. Approximately 16 acres Residential and open space, RS North: Suburban Residential, RS South: Suburban Residential, RS East: Suburban Residential, RS West: Suburban Residential, RS The Fringe Area Agreement permits residential development on a case-by- case basis at a density of one unit per three acres. One unit per acre is considered for rezoning if a minimum of 50% of the property is designated as open space or agriculture. This property was zoned to RS, one unit per acre, prior to the Fringe Area Agreement being enacted. Chapter 14-7, Land Subdivisions June 29, 1998 BACKGROUND INFORMATION: The applicant, Mike Dombroski, is requesting preliminary plat approval for Prairie Meadow, Part 2, a 16-acre, 7-lot residential subdivision located on the east and south side of Prairie Du Chien Road, north of it's intersection with Linden Road in Johnson County. This 16-acre subdivision is made up of Lot 1 from Prairie Meadow Part 1, plus 9.1 acres of property to the north not originally part of Prairie Meadow Part 1. The attached letter from Landmark Engineering describes the proposed subdivision. The existing right-of-way of Prairie Meadow Court is 40 feet wide. The Prairie Meadow Court right-of-way will be widened to 60 feet to meet the City rural design standards. ANALYSIS: Existing Zoning: The existing zoning is RS, Suburban Residential, which permits l-acre residential lots. While the current Fringe Area Agreement calls for residential development on a case-by-case basis at a density of one unit per three acres, or one unit per acre if 50% of the property is reserved as open space or agriculture, this property was zoned prior to the Fringe Area Agreement being enacted. Therefore, clustering and dedicating a portion of the property as open space is not required. Subdivision Layout: This 7-lot residential subdivision contains two lots with existing homesites, one lot with an existing cabin to be removed and replaced with a new residence, and three new lots with new homesites. The lots will be accessed off of Prairie Meadow Court, an existing cul-de-sac road. Prairie Meadow Court will be slightly modified and the right-of-way widened to 60 feet to meet City rural design standards. The northernmost lot, Lot 7, is reserved for future development following the realignment of Prairie Du Chien Road. To accommodate the 60-foot right-of-way for Prairie Meadow Court required by City rural design standards, lots A, B, and C are created. Lots A and C will be conveyed to the adjoining lot in exchange for Auditors Parcel 98088 being conveyed for street right-of-way. Lot B will be conveyed to lot 2 of Prairie Meadow Part 1 so the lot meets the required 40-foot setback from Prairie Meadow Court. Lot D will be conveyed to the adjoining lot because the septic system and access drive is already located on Lot D. All of the homes are located to minimize grading and disturbance to the ravines and wooded areas on the north half of this site. A letter describing the erosion and sediment control plan is attached to the staff report. Prairie Du Chien Reconstruction: County Zoning Staff has notified staff that Prairie Du Chien Road will likely be realigned in 1999. The applicant is dedicating right-of-way along the west sides of Lot 6 and Lot 7 of the proposed preliminary plat for this realignment. No setback areas or buildable portions of the subdivision should be affected. Lot 7 is shown as a lot intended for future development after Prairie Du Chien Road is realigned. No new access points are permitted onto Prairie Du Chien until it is realigned. All of the residential lots in the subdivision are accessed off of Prairie Meadow Court. Stormwater Management: No stormwater management is required. STAFF RECOMMENDATION: Staff recommends that SUB98-0018, a request for preliminary plat approval of Prairie Meadow Part 2, a 16-acre, 7-lot residential subdivision located on the east and south side of Prairie Du Chien Road, north of it's intersection with Linder Road in Johnson County, be approved. ATTACHMENTS: 2. 3. 4. Location Map. Letter of intent from Tom Anthony, Landmark Surveying and Engineering. Amended letter of intent from Tom Anthony, Landmark Surveying and Engineering. Sediment and Erosion Control narrative. Approved by: Department of Planning and Community Development F:\shared\pcd\dombroski .doc CITY OF IO~A CITY ,/~~_,i~INDER ROAn SITE LOCATION: 2140 Prairie du Chien Road RR 1 I \ EXC98-0018 '1 I [ ~ H Ji !i ! · i 111 iilii 9 / ,j 535 Southgate Avenue Iowa City, Iowa 52240 Phone (319) 354-1984 Fax (319) 354-8850 August 3, 1998 Thomas Anthony, RLS Ralph Stoffer, PE, RLS Johnson County Zoning Commission Johnson County Board of Supervisors Johnson County Administration Building 913 S. Dubuque Street Iowa City, IA 52240 Re: Prairie Meadow - Part 2, Amended Letter of Intent Dear Commissioners and Supervisors: In accordance with various County and City Staff reviews, we are submitting this amended Letter of Intent and revised Preliminary Plat. The major revisions include the following: The Outlet B ROW parcel will now be Auditor's Parcel 98088. To avoid bringing the adjoiner into the subdivision process, the County Boundary Adjustment Ordinance will be used to create and transfer this parcel to the developer. This parcel will still be exchanged to the adjoiner for Outlots A and C. = While performing the final plat survey, it was discovered that the existing home on Lot 2, Prairie Meadow, did not meet the forty foot front setback. To remedy this, and to also replace the ROW angle points with a preferred circular ROW, Outlot B will be platted and conveyed to the owner of Lot 2. Lot 7 has been re-identified as Lot E. The alphabet designation represents a non-buildable lot until conditions change to make it buildable or feasible for further development. A this time no new access points are allowed along Prairie Du Chien Road. e Existing structures and septic systems on Lots 2, 5 and 6 are more accurately drawn and dimensioned. 5. Existing utilities and proposed water service lines have been added. 6. Contour datum converted to USGS datum· Johnson County Zoning Commission Johnson County Boa~ of SupeNisors Page 2 August 3,1998 Legal description modified to exclude Lot B and better clarify existing deed sources. A new total metes and bounds description will be prepared as part of the final plat. The County Engineer has reported that the re-alignment design for Prairie Du Chien Road has not progressed sufficiently to accurately determine ROW and access requirements. At the time of final platting, we will work with the County to make the best decisions possible at that time. Even if additional ROW is acquired at a later date, it will not affect Lot 6 or Lot E. Please feelfme to callif you have any questions. Thank you. LANDMARK SURVEYING AND ENGINEERING Thomas Anthony, LLS cc: Mike Dombroski, Owner/Subdivider Mike Kennedy, Attorney R. J. Moore, County Planner Bob Miklo, Iowa City Planner Mike Gardner, County Engineer RVEYING AND ENGINEERING Thomas Anthony, RLS Ralph Stoffer, PE, RLS 535 Southgate Avenue Phone (319) 354-1984 Iowa City, Iowa 52240 Fax (319) 354-8850 July 9, 1998 Johnson County Zoning Commission Johnson County Board of Supervisors Johnson County Administration Building 913 S. Dubuque Street Iowa City, IA 52240 Re: Prairie Meadow - Part 2 Dear Commissioners and Supervisors: On behalf of Mike Dombroski, we are submitting this preliminary platting application for your review and subsequent approval. The parent parcel is Prairie Meadow, a two lot, 6.935 acre subdivision approved in 1994 combined with the 9.1 acre Elmer Lundquist property adjacent to the north. Dombroski was the original subdivider for Prairie Meadow and currently resides on the original Lot 1. The original Lot 2, Prairie Meadow was conveyed to Jeff Miller and also has an existing residence under construction. This lot will not be part of the new subdivision. Lot 1 will contain the present Dombroski home, well and septic system. Lots 2 thru 4 are new residential lots containing one acre or more. The new homes and septic systems will be placed in areas that will be the least disruptive to the existing surroundings. Lot 5 currently has a cabin type residence and septic system. The cabin will be removed and a new residence constructed closer to the street. If the health department approves the existing septic system, it will be maintained for the new residence. Lot 6 currently has the existing Lundquist home and garage. access, well and septic system. This lot has existing The existing ROW inside Prairie Meadow is 40 feet. To accommodate the required 60 foot ROW, Outlots A, B and C are being created. Lots A and C will be conveyed to the adjoiner in exchange for Lot B being conveyed for street ROW. The new street will meet City rural design standards and end at the cul-de-sac. Johnson County Zoning Commission Johnson County Board of Supervisors Page 2 July 9, 1998 Lot D will be conveyed to the adjoiner. Their access drive and septic system are already located in this area. The existing well on Lot I can easily serve Lots 1, 2 and Original Lot 2. A new well may be installed to serve Lots 3, 4 and 5. Additional ROW will be dedicated along the west boundary of Lot 6 at the direction of the County Engineer. It is unknown what the future holds for the property north of Lots 3 thru 6 and south of existing Prairie Du Chien Road. The proposed new centerline is shown on the plat and all the land lying.between the roads could be attached to the Dombroski property to make lots fronting the new road. A homeowners association will be created to maintain the street and wells. Please give this application favorable consideration. Feel free to call if you have any questions. Thank you. LANDMARK SURVEYING AND ENGINEERING Thomas Anthony, L~LS CC: Mike Dombroski, Owner Mike Kennedy, Attorney Prepared by: Scott Kugler, Associate Planner, 410 E. Washington St., Iowa City, IA 52240; 319-356-5243 RESOLUTION NO. RESOLUTION APPROVING THE PRELIMINARY PLAT OF ESTATES FIRST ADDITION, IOWA CITY, IOWA. COUNTRY CLUB % WHEREAS, the owner, S & J Development, fred with the City Clerk of Iowa City, Iowa, an application for approval of the preliminary plat of Country Club Estates First Addition; and WHEREAS, the Department of Planning and Community Development and the Public Works Department examined the preliminary plat and recommended approval; and WHEREAS, the Planning and Zoning Commission examined the preliminary plat and, after due deliberation, recommended acceptance and approval of the plat; and WHEREAS, the preliminary plat conforms with all of the requirements of the City Ordinances of the City of Iowa City, Iowa. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA THAT: The preliminary plat of Country Club Estates First Addition, Iowa City, Iowa, is hereby approved. The Mayor and City Clerk of the City of Iowa City, Iowa are hereby authorized and directed to certify this resolution, which shall be affixed to the plat after passage and approval by law. Passed and approved this day of ,1998. ATTEST: CITY CLERK ppdadmin/res/ccestate .doc MAYOR Date sent: To: From: Subject: Mon, 7 Sep 1998 14:37:51-0500 council@blue.weeg. uiowa.edu, kkubby@blue.weeg. uiowa.edu, denorton@blue.weeg. uiowa.edu Jim Ruebush <ruebush@avalon.net> Sept 9 Council Agenda To the Iowa City City Council, As a resident of Southwest Estates, I have some opinions and objections regarding the proposed Country Club Estates. I am not opposed in principle to the development. But there are some concerns that I feel strongly about. First, the road Lake Shore Drive should be one of the first things constructed. I feel it would be a danger to allow the use of Phoenix as the only means of access for construction traffic over the course of the nine or so phases of the development. I have a 9 year old son who uses our street and Phoenix as a means of reaching school, friends, and neighbors. He is one of many such children in our neighborhood who are learning to negotiate the traffic and ride their bicycles safely. To expose them to constant construction traffic would be dangerous. Second, one of the residents on Phoenix is wheelchair bound. He is able to travel around the neighborhood at this time to visit and get out of the house. He would have his freedom of movement sharply curtailed by large amounts of traffic by his house. Third, we already have a significant amount of construction traffic on Phoenix. There are many houses being built on Sante Fe and Flagstaff at this time. To add another subdivision development and more than double the traffic for several years into the future is asking too much. We should not be asked to provide the access road. Let Mr. Speer take the responsibility and build his own access road. Fourth, I feel there must be a clear plan for the neighborhood open space requirements. There is a shortage of park and recreation space for this west end of town. This development should be required to establish a large parcel of land for this purpose. Fifth, I object to the building of high density condominium and townhome units. -- 1 -- Tue, 8 Sep 1998 08:23:40 Sincerely, Jim Ruebush 74 Durango Place Iowa City, IA 52246 -- 2 -- Tue, 8 Sep 1998 08:23:40 STAFF REPORT To: Planning and Zoning Commission Prepared by: Scott Kugler Item: SUB98-0011. Country Club Estates First Addition Date: August 20, 1998 GENERAL INFORMATION: Applicant: S&J Development 1040 Bryan Court Iowa City, Iowa 52245 Phone: 358-8730 Contact person: Mike Speer Phone: 358-8730 Requested action: Preliminary plat approval Purpose: To create a 21 -lot residential subdivision. Location: At the west terminus of Phoenix Drive. Size: 10.82 acres Existing land use and zoning: Undeveloped, RS-5 and RR-1 Surrounding land use and zoning: North: East: South: West: County Care Facility, P; Residential, RS-5 and RR-1; Agricultural, undeveloped, RR- 1; Agricultural, RR-1 and A1 (County) Comprehensive Plan: Residential, 2-8 dwelling units per acre Applicable Code requirements: Chapter 14-7, Land Subdivisions File date: Completed application filed on June 11, 1998 45-day limitation period: Waived by applicant BACKGROUND INFORMATION: The applicant, S&J Development, is requesting preliminary plat approval of Country Club Estates First Addition, a 21-1ot, 10.82 acre residential subdivision located at the west 2 terminus of Phoenix Drive. The plat also contains one outlot, which is to be the site of a private recreational facility which the Board of Adjustment has already approved by special exception. More details on this facility are provided below. This plat covers a portion of a larger 111.16 acre property owned by the applicant. ANALYSIS: The proposed preliminary plat contains a few deficiencies that will have to be addressed before the Commission can approve the plat. Staff recommends deferral pending the resolution of these items, listed below under Deficiencies and Discrepancies. Upon resolution of these items, the plat will meet the technical requirements for approval. Staff has some concerns about approving a preliminary plat for one small section of this 111.16 acre property, particularly when the zoning is not in place to develop the rest of the property as shown on a concept plan submitted earlier by the applicant (attached). Decisions made now will have an impact on the development of future phases. If continued, this incremental approach may result in either the developer or the City "backing into" a poor decision that was essentially made with the platting of earlier phases. However, the zoning is in place to allow the development of the First Addition as proposed, and it would be difficult to justify a recommendation for denial of the plat due to this concern. Given that this is a relatively small portion of the overall property, staff recommends that approval be granted to this phase of the development, provided all of the technical requirements are met, but that the Commission indicate that a planned development application should be submitted and approved before any further phases of the subdivision are considered. The applicant has indicated that a planned development rezoning application is being considered for future phases of the development. Infrastructure: The proposed preliminary plat includes the extension of one existing street, Phoenix Drive, as well as the platting of three new public streets. Phoenix Drive is a 31-foot wide collector street that connects directly to Rohret Road through the Southwest Estates subdivision. It would provide the only means of access to the lots being platted in this phase of the development. Lake Shore Drive is a proposed collector street, also 31 feet in width, that is shown on the concept plan as connecting to Rohret Road to the south. Staff has some concerns about the development of this property proceeding from the north to the south toward Rohret Road rather than the other way around. Developing the property in this manner results in all of the traffic generated from the early phases of the development utilizing Phoenix Drive to the east through Southwest Estates. Staff feels that at some point a connection to Rohret Road via Lake Shore Drive should be required. This should be addressed in a conditional zoning agreement at some point as additional development approval is requested for other portions of this property. Sanitary sewer and water are available to the property. Much of the acreage to the south of the First Addition will require the installation of a lift station to provide sanitary sewer service. The details of how and where the lift station will be provided will have to be discussed as that area is considered for development. The approval of this plat does not require approval of the lift station. Water main extension fees of $395 per acre will be required for this development. In addition, sanitary sewer tap-on fees in the amount of 9737.18 per acre will be required for property to be served by gravity sewer. Future phases of the development that cannot be served by gravity sewer will be subject to tap-on/lift station elimination fees of an amount to be determined. Neighborhood Open Space: The neighborhood open space requirement for 10.82 acres in an RS-5 zone is .25 acres. Staff recommends that the open space requirement be calculated for this phase, noted in the legal papers, but reserved for use in another phase of the development, as determined by the Parks & Recreation Commission when future phases of the development are proposed. At that time it can be determined whether open space should be dedicated or fees paid in lieu of the dedication of land. Storm Water Management: The property included in the First Addition is located within the Old Man's Creek watershed, for which no storm water management is required. However, this and future phases to the south of this development will drain to a lake, to be constructed in a future phase, which will act as a detention facility. The portion of the property lying north of the First Addition will require storm water management when it is developed, as it is located within the Willow Creek watershed. Special Exception Request: As mentioned above, a special exception was granted for the location of a club on Outlot A. Clubs are permitted by special exception in the RR-1 zone. Outlot A is currently zoned RR-1, while the balance of the first phase is located in the RS-5 zone. The club is intended to be a community recreational facility with a pool and tennis courts, to be limited to members of the Country Club Estates homeowners association. The Board's approval limits the club's membership in this manner. The Board also attached a condition which grants the applicant and the City some flexibility in the precise design and location of the facility within the neighborhood, should changes be needed as a result of the subdivision review process. The club will have to remain within the RR-1 zone, but the location and configuration of Outlot A need not be limited to that shown on the site plan associated with the special exception request (attached). Staff had recommended a condition which would have required that the recreational facility be redesigned to be a more visible and integral part of the neighborhood by requiring more frontage on a street within the development. This would also have allowed some of the parking for the facility to be located on the street rather than a parking lot, and would reduce the number of back yards potentially affected by activities at the facility. However, the applicant expressed a desire to have the facility be less visible, and the Board chose not to incorporate that condition into its motion approving the facility. Design Issues, concept plan: The concept plan submitted with this application raises a number of design concerns and questions regarding existing and proposed infrastructure. These issues include the following: · The future extension of Rohret Road as an arterial street. · The timing of the extension and connection of Lake Shore Drive to Rohret Road. · The provision of adequate pedestrian connections to provide access to the recreational facility and other open spaces within the overall development. · The relationship between the proposed condominium and townhouse portions of the development and areas of single-family lots. · The design of the Rohret Road frontage, shown on the concept plan as a strip of lots (potentially commercial sites?) located along a frontage road. · A number of areas would require rezoning or approval through a planned development, and staff is concerned that incremental approval in many small phases will result in a limitation of future options regarding the zoning and development of these areas. · The layout of this concept plan with respect to the potential development of the property to the west. · Neighborhood open space issues. These issues will all have to be addressed at some point in the future, and may be recommended to be incorporated into a conditional zoning agreement attached to the approval of a development application for future phases of this development. The development of the First Addition should have little or no bearing on these decisions, but the applicant should be made aware that they will be issues to address during future phases of the development. STAFF RECOMMENDATION: Staff recommends that SUB98-0011 be deferred pending the resolution of the deficiencies and discrepancies noted below. Upon resolution of these items, staff recommends that the request for a preliminary plat of Country Club Estates First Addition, a 17.34 acre, 21-1ot residential subdivision located at the west terminus of Phoenix Drive, be approved. DEFICIENCIES AND DISCREPANCIES: 1. There are errors in the legal description. The street cross sections reference streets that are no longer included in the First Addition. Erosion control plans must be included on the plat, or on another plan submitted at this time. 4. Public Works' review of the revised plat is not yet complete. ATTACHMENTS: 1. Location map. 2. Preliminary plat. 3. Special exception site plan. 4. Concept plan for entire 111.16 acre property. Approved by: Robert Miklo, Senior Planner Department of Planning and Community Development I I I I I I I I I I I I I I I I I. RS 5 RR 1 IDRS CITY P OF IO~rA CITY RS 5 ~'E P IRVING _ _. PDH 5 RR P SITE LOCATION: Country Club Estates SUB98-0011 DESCRIPTION ~c~ / PRELIMINARY PLAT COUNTRY CLUB ESTATES FIRST ADDITION PART OF THE SOUTHEA51' 1/4 OF SECTION 13 TOWNSHIP 79 NORTH, RANCE 7 WEST OF THE 5TH PRINCIPAL MERIDIAN IN JOHNSON COUNTY, IOWA CITY, IOWA LEGEND // / / T- 15.55' SBg'05'55"E LOT I LOT 2 -4 Z,o: ;';''' ~ LOT 3 ; LOT 4 ~l LOT 5 ' ~ ,/' -'-~-,, : ~ ', ~ ~ ~ ~a ,,, LOT 10 ~ b LOT 9 I .... .... ',,, ,- .....~72!U, LOT 12 ,~, ~; ~ LOT 15 OWNER & SUBDIVIDER NOTES CJTY OF IOWA CITY, IOWA S & J DE'wEL~ENT LLP. 2231 EAST 4511~ STRET DAVENPORT, 10WA 52807 CONTACT: MIKE ~ (319) 351-3355 AI'TORNEY RON..N..D A. MAY 3538 ,ERSEY FIll)(;( ROAD DAVENPORT, 10WA 52807 (309) 359-3591 ENGINEER/SURVEYOR LANDMARK ENG~NE. ERING GROUP, INC. ~55 4~ND AVENUE EAST MOUN~ IllINOIS 61244 1 ol-96--676 .% [,andmark PRI~LSMSNAIRY BLAT' OOUNTRY OLUB FEBTA'F'~8 ./ Prepared by: Scott Kugler, Associate Planner, 410 E. Washington St., Iowa City, IA 52240; 319-356-5243 RESOLUTION NO. 98-293 RESOLUTION APPROVING FINAL PLAT OF A RESUBDIVISION OF LOT 53, WALDEN HILLS, IOWA CITY, IO. WA. WHEREAS, the owner, Robert P. Burns, filed with the City Clerk the final plat of a Resubdivision of Lot 53, Walden Hills, Iowa City, Iowa, Johnson County, Iowa; and WHEREAS, said subdivision is located on the following-described real estate in Iowa City, Johnson County, Iowa, to wit: Lot 53, Walden Hills, Iowa City, Iowa, in accordance with the plat recorded in Book 38, Page 13, of the records of the Johnson County Recorder' s Office. WHEREAS, the Department of Planning and Community Development and the Public Works Department examined the proposed final plat and subdivision, and recommended approval; and WHEREAS, the Planning and Zoning Commission examined the final plat and subdivision and recommended that said final plat and subdivision be accepted and approved; and WHEREAS, a dedication has been made to the public, and the subdivision has been made with the free consent and in accordance with the desires of the owners and proprietors; and WHEREAS, said final plat and subdivision are found to conform with Chapter 354, Code of Iowa (1997) and all other state and local requirements. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT: The said final plat and subdivision located on the above-described real estate be and the same are hereby approved. The City accepts the dedication of the easements as provided by law and specifically sets aside portions of the dedicated land, namely streets, as not being open for public access at the time of recording for public safety reasons. The Mayor and City Clerk of the City of Iowa City, Iowa, are hereby authorized and directed, upon approval by the City Attorney, to execute all legal documents relating to said subdivision, and to certify a copy of this resolution, which shall be affixed to the final plat after passage and approval by law. The City Clerk shall record the legal documents and the plat at the office of the County Recorder of Johnson County, Iowa at the expense of the owner/subdivider. 000066 Resolution No. 98-293 Page 2. Passed and approved this 9th CORPORATE SEAL It was moved by Vande~'hoef adopted, and upon roll call there were: day of September ,1998, IV~YoR : and seconded by Norton the Resolution be AYES: NAYS: ABSENT: X X × X X X X Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef ppdadminVesMot53.doc 000067 STAFF REPORT To: Planning and Zoning Commission Item: SUB98-0019. Resubdivision of Lot 53, Walden Hills GENERAL INFORMATION: Applicant: Contact person: Requested action: Purpose: Location: Size: Existing land use and zoning: Surrounding land use and zoning: Applicable Code requirements: File date: 45-day limitation period: 60-day limitation period: Prepared by: Scott Kugler Date: August 20, 1998 Robert P. Burns 319 E. Washington Street PO Box 1226 Iowa City, Iowa 52240 Phone: 338-7600 MMS Consultants 1917 S. Gilbert St. Iowa City, IA 52240 Phone: 351-8282 Preliminary and final plat approval Four-lot subdivision of Lot 53, Walden Hills Northwest corner of Rohret Road and Shannon Drive 8.66 acres Vacant, OSA-8 North: East: South: West: Vacant, OSA-8; Residential, OSA-8; Highway 218 right of way; Highway 218 right of way. Chapter 14-7, Land Subdivisions July 16, 1998 August 30, 1998 September 14, 1998 2 BACKGROUND INFORMATION: The applicant, Robert P. Burns, is requesting a preliminary and final plat of a Resubdivision of Lot 53, Walden Hills, an 8.66 acre, four-lot subdivision located at the northwest corner of Shannon Drive and Rohret Road. This property was rezoned in 1997 as part of the 40.7 acre Walden Hills development, at which time density was transferred from other portions of the property to allow up to 120 dwelling units to be established on Lot 53. The applicant later gained approval of a preliminary development plan which included four 30-unit buildings served by a shared drive and parking areas. Final approval of this plan has been requested, and it is being reviewed concurrently with this plat. The final plan is an administrative review that does not come before the Commission. The applicant is now requesting that this property be split into four lots, each containing one of the proposed buildings. Although this would allow each lot to be transferred to and developed by other individuals, the development would have to substantially conform to the approved plan or another rezoning for the revised plan will be necessary. ANALYSIS: The proposed preliminary and final plat appears to be in general conformance with the City's subdivision regulations. The plat does contain a few deficiencies that will need to be addressed prior to the Commission's vote on this application. Staff recommends deferral pending resolution of these items. Legal papers will have to be approved prior to City Council consideration of the plat. As mentioned above, a preliminary sensitive areas development plan has been approved for this property, and it appears that the proposed subdivision is based on this plan. The final sensitive areas development plan has been submitted, illustrating how the proposed lot configuration relates to the development plan (attached). Each lot contains one of the four 30-unit buildings approved for this parcel, and must also contain adequate parking to allow each to be developed independently. Regardless of how the future ownership of the property is planned to be handled, because the property is being subdivided each lot will have to stand on its own in terms of meeting zoning requirements. The current lot configuration does not result in each lot meeting the parking requirements for a 30-unit building. It appears that an adjustment to the lot lines is needed to correct this situation. Staff has requested that the applicant adjust the lot lines as needed, and it is anticipated that this can be accomplished prior to the August 20th meeting. If the applicant chooses not to address this problem the plat can still be approved. However, a Board of Adjustment action may be needed for two of the lots in the future to either reduce the required parking on the lots or to allow required parking on a separate lot. The plat contains a public sanitary sewer line that is to be located on Lot 1, and therefore construction drawings will be required for that improvement. Construction drawings must be approved prior to Council consideration of the final plat. Other easements that are needed as a result of the layout of the proposed development are illustrated on the plat, with the exception of one access easement. The plat illustrates a 24-foot wide access easement leading from Shannon Drive at Jacque Street, one of the two approved curb cuts for this property, which would provide access to lots 2 and 4 through lot 3. The easement follows the access drive shown on the development plan in this location. However, the development plan included a looped access drive that connected to a second curb cut along Shannon Drive across from Irving Avenue. The access easement shown on the plat does not include this portion of the access drive. Given that the full access drive was intended to serve the whole development, and is necessary to provide adequate emergency vehicle access to the development, staff feels that the access easement should cover the access drive to both curb cuts. This should be addressed prior to consideration of the plat by the Commission, or included as a condition on the approval of the plat. The development plan approved for Walden Hills and the development plan approved for Lot 53 both indicated that evergreen trees would be planted along the south and west property lines of Lot 53. These trees were to have been installed along with other public improvements on the overall Walden Hills property. Public Works and building officials have been working with Southgate Development, the developer of Walden Hills, to ensure that the required trees are planted. Southgate has contracted with a landscaping firm to install the trees this fall when conditions are appropriate. Although a sensitive areas development plan was previously approved for the Walden Hills development and amended for this property when the 120 unit development plan was approved, there are no sensitive features present on lot 53. Therefore, this plat does not need to be reviewed under the Sensitive Areas Ordinance. Neighborhood open space requirements were satisfied with the initial platting of Walden Hills, as well as water main extension fees and sanitary sewer tap-on fees. These items do not need to be addressed in the legal papers associated with this plat. There will be an eight-foot wide sidewalk along Shannon Drive in front of this property. The City will contribute the oversize costs for this sidewalk, but maintenance will be the responsibility of the property owner. STAFF RECOMMENDATION: Staff recommends that SUB98-0019 be deferred pending resolution of the deficiencies and discrepancies listed below. Upon resolution of these items, staff recommends that the request for a preliminary and final plat of a Resubdivision of Lot 53, Walden Hills, an 8.66 acre, four-lot residential subdivision located at the northwest corner of Shannon Drive and Rohret Road, be approved, subject to the approval of legal papers and construction drawings prior to City Council approval of the plat. DEFICIENCIES AND DISCREPANCIES: 1. The full access drive should be shown as a common access easement, not just the southern half. 2. The public sanitary sewer on Lot 1 should be public only to the first manhole, at which point it should become a private service line. The label OWNERS/SUBDIVIDERS should not be plural. Public Works' review of the revised plat is not yet complete. ATTACHMENTS: 1. 2. 3. Location map. Proposed preliminary and final plat. Proposed final sensitive areas development plan for Lot 53, Walden Hills (for reference only). Approved by: Robert Miklo, Senior Planner Department of Planning and Community Development CITY OF IO~A DUCK I CREEK )W 5 // CITY OF IOWA CITY CORPORATE LIMITS RS 8 :~DH ' ' ROHRET R,9 I RAINIER DR ~ RAINIER RR 1 RUSHMORE , __ ~,RS~'~/ ABBEY SITE LOCATION: Shannon Drive SUB98-0019 Preliminary and Final Plat for the Resubdivision of L0 T 5 3, WALDEN HILLS Iowa City, pr.lf Plf~c.Xln'n BY: I CONBrj'Ur4N'rS INC. 1217 8olj"rH Girl.lilt'Ill· ~'r. Iowa 3lg E. TASItlNCi"ON St. PO BOX 1228 IOTA cl'rf, lOll'A. 522,14 R. BRUCE F. AI.T~Elrr 222 floE'rE IOTA Cl"ff, IOlk 52244 LEGEND AND NOTES _,- -:--'::=-~i------:--"-i~-~~j~,~ t-If LOT1 I,Ii· %~ I certify that during the month of February, 1998, at the direction of Bums and Bums Architects, a survey was mode under my supervision of Lot 53 Walden H~lls, Iowa City, Johnson County. Iowa. the boundaries of which ore described as follows= Lot 53, Walden Hils, Iowa City, Iowa, in accordance with the plat recorded in book 38, page 13, of the records of the Jdnnson County Recorder's Office, I hereby certify that this plat prepared by me or under my direct per'jonal supentslon, Is a correct representation of the survey made wlth all cotnero marked as indicated, and that I am o duly licensed L~nd Surveyor under the laws of the Sb3te of Iowa, Clan D. Malenet P.E. ac LS. IA. Uc Na` 8165 My BIennial Ucense expires December ,]1, 1999. S*~3ne~ before me ~is _day of Notary Public, h ac for the State of Iowa, _ ,1998. City of Iowa City J~ -',. ;~ ' i ' .,.:.~.'.;',..... ,', ,',.,~ "7'-: :,;, .,, .,.,:,'L'::"-~.., "'t,.',:.]'::? '. ~'.',~ :~ F. ~"'~ .... ~ ~,., ,. ':"ia':'.'~ . ~_.l., · . .~ .,,,.. / / / /- /- /' ,~ / / ,© Prepared by: Robert Miklo, Senior Planner, 410 E. Washington St., Iowa City, IA 52240 (319) 356-5240 RESOLUTION NO. 98-294 RESOLUTION ADOPTING A SCHEDULE OF FEES FOR PLANNING AND ZONING AND BOARD OF ADJUSTMENT APPLICATIONS. WHEREAS, fees for Planning and Zoning and Board of Adjustment applications have remained unchanged since August 15, 1990; and WHEREAS, a fee increase is necessary to offset additional costs associated with expanded notification to area property owners; and WHEREAS, to keep pace with inflation, application fees should increase annually, based on the standard cost of living index. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT: The fees for Planning and Zoning and Board of Adjustment applications noted on the attached schedule, Exhibit "A", are hereby adopted and shall be in effect January 1, 1999 and shall be adjusted January 1 of each year thereafter based on the standard cost of living index. Said Exhibit "A" is incorporated in this Resolution as if set forth in its entirety herein. Passed and approved this 9th day of September- · 1998. ~~: ~~ ppdadmin\res\fees.doc pprovoa by . Resolution No. 98-294 Page 2 It was moved by Vanderhoef and seconded by adopted, and upon roll call there were: Thornbetray the Resolution be AYES: NAYS: ABSENT: X X X X X X Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef Exhibit A FEES FOR REVIEW OF PLANNING AND ZONING AND BOARD OF ADJUSTMENT Subdivision Minor Major Final Combination Planned Area Development (OPDH) Preliminary Final Administrative Review Combination - preliminary/final Combination - OPDH and Subdivision Preliminary Final Combination - preliminary/final Rezoning Voluntary Annexation Street or Alley Vacation Variance Special Exception Other BOA actions Combination BOA Actions APPLICATIONS Current Fee New Fee 1/1/99 ~490 ~515 ~490 + $15/lot ~515 + 15/lot ~490 ~515 ~540 + $15/lot $565 + 15/lot ~490 + $15/lot $515 + 15/lot ~65 ~90 ~540 + ~15/Iot $565+ 15/Iot $490 + ~15/Iot $515 +15/Iot ~490 $515 $540 + $15/Iot $565 +15/Iot ~330 ~355 ~330 ~355 $120 ~145 ~275 ~300 $275 ~300 ~275 $300 ~325 ~350 Shared/pcd/newres.doc Resolution No. Page 2 Exhibit A FEES FOR REVIEW OF PLANNING AND ZONING AND BOARD ~' APPLICATIONS Subdivisi~oo, Current Fee \, Minor \\'-\ 9490 Major \ 9490 + 9' /lot Final \ 9490 Combination 9540 5/lot ADJUSTMENT New Fee 1/1/99 9515 9515 + 15/lot 9515 9565 + 15/lot Planned Area Develo~ (OPDH) Preliminary Final Administrative Review Combination - preliminary/final + 915/lot 951 5 + 15/lot 965 990 9540 + 915/Iot 9565+ 15/Iot Combination - OPDH and Subdi~ Preliminary Final Combination - Rezoning Voluntary Street or Alley Variance Special 90 + 915/Iot 9515+ 15/Iot 94 9515 9540 915/lot 9565 + 15/lot 9330 9355 9330 9355 9120 9155 9275 9300 ,0 Other actions 9275 9300 Combination BOA Actions 9325 9350 Shared/pcdlnewres.doc Prepared by: Karin Franklin, Director, PCD, 410 E. Washington St., Iowa City, IA 52240 (319) 356-5232 RESOLUTION NO. RESOLUTION REPEALING RESOLUTION NO. 96-264 AND ESTABLISHING THE DESIGN REVIEW COMMITTEE AS A STAFF COMMITTEE. WHEREAS, the Design Review Committee was established in 1974 to assist the City Council in the review of design elements in urban renewal projects; and WHEREAS, urban renewal is nearly complete with the exception of one project; and WHEREAS, the responsibilities and authority of the Design Review Committee have been somewhat limited in recent years; and WHEREAS, the City Council wishes to continue to review the design of buildings and projects as outlined in the pertinent sections of the Iowa City Code; and WHEREAS, recruitment of members to the Design Review Committee has been difficult and attaining a quorum at meetings has been problematic. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT: 1. The Design Review Committee, as an appointed citizen committee, is hereby dissolved and City Council Resolution No. 96-264, which established said citizen committee, is hereby repealed. 2. The City Manager is directed to appoint a staff committee to serve the functions of the Design Review Committee outlined in the Iowa City Code and City Council Resolution No. 97-303 approving Design Review Committee Procedures and Guidelines for Projecting Signs. This committee will include the City Architect, at least two members of the Department of Planning and Community Development, one member of the Department of Housing and Inspection Services, and one other person. Passed and approved this day of ,1998. ATTEST: CITY CLERK ppddir/res/designrv.doc MAYOR roved by City Attorney's Office Prepared by: David Schoon, PCD, 410 E. Washington St., Iowa City, IA 52240 (319) 356-5236 RESOLUTION NO. 98-295 A RESOLUTION APPROVING APPLICATION OF NATIONAL COMPUTER SYSTEMS FOR THE PURPOSE OF RECEIVING BENEFITS UNDER CHAPTER 15o PART 13, ENTITLED "NEW JOBS AND INCOME ACT," OF THE CODE OF IOWA, FOR IMPROVEMENTS IN THE CITY IOWA CITY, JOHNSON COUNTY, IOWA WHEREAS, the City of Iowa City, Iowa has received a request by National Computer Systems to approve and submit an application to the State of Iowa under Chapter 15, Part 13, entitled "New Jobs and Income Act"; and WHEREAS, Chapter 15, Part 13 of the Code of Iowa was established to promote economic development in the State of Iowa; and WHEREAS, the City Council supports activities which promote and facilitate economic development within the City; and WHEREAS, one of the benefits provided under the New Jobs and Income Act is the commitment by a city to exempt from taxation all or a portion of the actual value added by improvements to real property directly related to new job creation by the location of an eligible business under the program with those new jobs being directly involved in the operations of the eligible business at that location; and WHEREAS, the City of Iowa City will allow for a period of ten (10) years partial exemption from taxation on the actual value added by improvements to real property associated with the National Computer Systems project, The amount of the partial exemption is equal to a percent of the actual value added by the improvements, determined as follows: a) For the first year, eighty percent, b) For the second year, seventy percent, c) For the third year, sixty percent, d) For the fourth year, fifty percent, e) For the fifth year, forty percent, f) For the sixth year, forty percent, g) For the seventh year, thirty percent, h) For the eighth year, thirty percent, i) For the ninth year, twenty percent, j) For the tenth year, twenty percent; and WHEREAS, National Computer Systems estimates that this project will involve capital expenditures of approximately $10.4 million, including $2.3 million in a 31,500 square foot building addition, over an anticipated five (5) year period; and Resolution No. 98-295 Page 2 2 WHEREAS, National Computer Systems has indicated they will: 1. Provide coverage options where they will pay at least 80 percent of the cost of a standard medical and dental insurance plan for all full-time employees working at the facility, 2. Pay a median wage for new full-time hourly non-management production jobs (includes compensation in the form of hourly wages, salaries, bonuses, commissions, and overtime pay) of at least ~16.70 per hour, 3. Create at least 69 full-time hourly non-management production jobs for a period of not less than five years, , 4. Offer a pension or profit-sharing plan to full-time employees, 5. Provide high quality, value-added services in the computer related services industry, and 6. Annually invest no less than 1 percent of pretax profits from the facility located in Iowa or expanded under the program in research and development in Iowa; and WHEREAS, the City of Iowa City has determined that the median hourly wage rate of $16.70 meets the intent of the New Jobs and Income Program and is reflective of 130 percent of the average wage in Johnson County, and the City has determined that National Computer Systems is an eligible business and it is the City's intention to exempt from taxation the value added by improvements to real property as a result of the project. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT THE NEW JOBS AND INCOME APPLICATION FOR NATIONAL COMPUTERS SYSTEMS BE APPROVED. Passed and approved this 9th ATTEST: CiT~CL~~RK ~. It was moved by Thornberry adopted, and upon roll call there were: day of SeptemhPr , 1998. and seconded.by n rove ' Vanderhoef the Resolution be AYES: NAYS: X X X X X X ecodev\res\ncs 15 .doc ABSENT: Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef Pre t: David Schoon, PCD, 410 E. Washington St., Iowa City, IA (319) 356-5236 RESOLUTION NO. A RESOLUTION 'ROVING APPLICATION OF NATION, COMPUTER SYSTEMS FOR THE PURPOSE OF BENEFITS UNDER CHAPTE 15, PART 13, ENTITLED "NEW JOBS AND INCOME OF THE CODE OF IOWA, )R IMPROVEMENTS IN THE CITY IOWA CITY, JOHNSON IUNTY, IOWA WHEREAS, the City of City, Iowa has re Systems to approve and an application t, 13, entitled "New Jobs and Inc Act"; and a request by National Computer he State'of Iowa under Chapter 15, Part WHEREAS, Chapter 15, Part 13 development in the State of Iowa; ar Iowa was established to promote economic WHEREAS, the City Council support: development within the City; and ;tivities which promote and facilitate economic WHEREAS, one of the benefits Jed ;r the New Jobs and Income Act is the commitment by a city to exem ~m taxation or a portion of the actual value added by improvements to real propert' nlirectly related to ew job creation by the location of an eligible business under the ram with those jobs being directly involved in the operations of the eligible b~ at that location; WHEREAS, the City of City will allow for a period from taxation on the value added by improvements the National Com Systems project. The amount of the percent of the actual value added by the improvements, determi~ a) For the fir~/year, eighty percent, b) For the s~cond year, seventy percent, c) For the _~'hird year, sixty percent, d) For th~Z fourth year, fifty percent, e) For t~e f) Fo/r/the g) Fl~r the h) .t~or the / i)/" For the .~ For the fifth year, forty percent, sixth year, forty percent, seventh year, thirty percent, eighth year, thirty percent, ninth year, twenty percent, tenth year, twenty percent; and ~n (10) years partial exemption 'eal property associated with ial exemption is equal to a d as follows: WHEREAS, National Computer Systems estimates that this project will involve ca ital expenditures of approximately $11.3 million, including $2.3 million in a 31,500 square ,t building addition, over an anticipated five (5) year period; and City of Iowa City MEMORANDUM Date: September 4, 1998 To: City Manager From: David Schoon, Economic Development CoordinatoK~Z~'.~3''''' Re: Financial Incentives for National Computer Systems National Computer Systems (NCS) requests that the City submit an application to the State for the purpose of receiving benefits under the New Jobs & Income Program (NJIP). National Computer Systems is looking to expand its Iowa City facility, and its decision to expand here will be influenced by the financial assistance offered through NJIP. Prior to outlining the proposed NCS project, a brief description of the NJIP program is provided. New Jobs & Income Program The Iowa New Jobs & Income Program (NJIP) provides a package of tax credits and exemptions to businesses that make a large capital investment and create jobs meeting wage and benefit targets. The program's benefits are only eligible to companies meeting all of the following criteria: 1. Create at least 50 new full-time non-management production jobs for at least 5 years. 2. Pay a median wage for new full-time non-management production jobs of at least ~ 11.42 per hour or 130% of the average county wage for new jobs, whichever is higher. 3. Make a capital investment of at least $10.38 million. 4. Provide at least 80% of the cost of a standard medical and dental insurance plan for all full-time employees at the new facility. 5. For existing Iowa companies to be eligible, they may not close or significantly reduce operations elsewhere in Iowa, and relocate the operation to the proposed community. In addition to meeting these five criteria, a company must demonstrate that it meets at least three of the following criteria (though a company may meet more than three, it only needs to demonstrate that it meets three): Offer a pension or profit sharing plan. · Produce/manufacture high value-added goods or services or be in one the State's "target" business segments. · Make day care service available to employees · Annually invest no less than 1% of pretax profits from the new Iowa facility in research & development in Iowa. · Have a productivity and safety improvement program in place. · Annually invest no less than 1% of pretax profits from the new Iowa facility in worker training and skills enhancement. · Occupy an existing vacant facility of at least 20,000 square feet. All of the above are criteria required by the State of Iowa in order for the business to receive the following incentives: State Incentives: a) A 3% withholding tax credit which shall than be applied to the business' job training fund. b) An investment tax credit of up to 10% will be granted to be used against the business' Iowa corporate tax liability. This tax credit applies to machinery, equipment, buildings and improvements. c) A 13% research and development activity corporate tax credit. d) A refund may be paid to the eligible business for any Iowa sales, service or use taxes paid to contractors or subcontractors during the construction phase of the project. Local Incentive: a) As part of the NJIP program, the City is required to exempt from property tax all or a portion of the value added by improvements to real property for a period not to exceed 20 years. (Note: Most Iowa communities that have participated in the program have granted ten years or less in property tax exemption). The Project National Computer Systems proposed project includes expanding its Measurement Services Division, which is the nation's largest commercial processor of student assessment tests for kindergarten through college-entry level students. The following highlights how the NCS project meets the NJIP criteria: Total Capital Investment over Five Years 811.3 million (includes machinery & equipment and a 82.3 million - 31,500 square foot building addition) New Qualifying Jobs over the Next 2-3 Years 69 full-time positions with a median wage of 816.70/hr · 12 software developers at 826.95/hr (median) · 6 programmer aides/production clerks at 81 0.78/hr · 15 project directors at 821.00/hr · 15 project coordinators at 813.05/hr · 21 Associate Professional Scoring Specialists/Customer Service Representatives at 821.49/hr Additional NJIP Criteria the Company Meets · Provides 80% of the cost of a standard medical and dental insurance plan for all full-time employees at the new facility. · Provides several retirement plans/options and provides an employee stock ownership plan. · Provides high-quality, value-added services in the computer-related services industry. Annually invests no less than 1% of pretax profits from the new Iowa facility in research & development in Iowa. Attached you will find the company's application for funding, which provides further information on the project. Public Financial Incentives As previously stated, National Computer Systems will receive various forms of tax relief from the State as part of the New Jobs & Income Program (NJIP). As part of the NJIP application, the local community is required to provide some form of property tax exemption on the actual value added by improvements to real property associated with the project. The resolution approving the application states that it is the City's intent to allow for a period of ten years partial exemption from taxation. The amount of the partial exemption is equal to a percent of the actual value added by the improvements, determined as follows: a) For the first year, eighty percent, b) For the second year, seventy percent c) For the third year, sixty percent d) For the fourth year, fifty percent, and e) For the fifth year, forty percent. f) For the sixth year, forty percent g) For the seventh year, thirty percent h) For the eighth year, thirty percent i) For the ninth year, twenty percent j) For the tenth year, twenty percent Based on a $2.3 million building addition and current tax rates, NCS would save approximately ~320,000 over the ten year period. Over this same ten year period NCS will pay approximately ~406,000 in property taxes (all taxing districts). Financial Assistance Guidelines Attached you will find a copy of the City's financial assistance guidelines with statements indicating how the characteristics of the National Computer Systems project compare with these guidelines. Based on this comparison, staff concludes that the characteristics of the NCS project rank high within the City's guidelines, except for falling short of the federal poverty wage rate guideline. However, based on the other guidelines used when reviewing an application for financial assistance, the NCS project ranks high. Staff recommends that the Council adopt the resolution authorizing the submission of the New Jobs & Income Program application. CC: Gary Mainor, Dick Schwab, & Nancy Koehler, NCS Marty Kelly, ICAD F:\prospect\ncs\cmmemo .doc FINANCIAL ASSISTANCE GUIDELINES NATIONAL COMPUTER SYSTEMS PRIVATE FINANCIAL CONTRIBUTION AS COMPARED TO PUBLIC ASSISTANCE REQUESTED A greater percentage of contribution by the assisted business; The City's contribution to the project in the form of property tax exemption is approximately 3% of the project's total capital investment. A shorter payback period or expiration for financial assistance; The business will save approximately 8320,000 in property tax exemption. The partial property tax exemption is for a period of 10 years. Beyond the ten year period, the business will pay its full property tax obligation. A lower amount of financial assistance per job The application indicates the creation of 69 full-time jobs. Based on this job creation number, the City's financial assistance per job equals approximately 84,600. CONSISTENCY WITH COMPREHENSIVE PLAN/CAPITAL IMPROVEMENTS PROGRAM/ECONOMIC DEVELOPMENT POLICY · Projects not requiring new public capital improvements; The proposed project requires no new public capital improvements. · A greater contribution by the developer for public infrastructure improvements; NA. The proposed project requires no new public capital improvements. Jobs within industry/technology groups on opportunity list; The proposed project falls within the categories of educational services and computer software development/computer simulations of complex systems. · Start-up companies and expansions of existing local operations; The proposed project is an expansion of an existing local operation. A greater amount of property tax base expansion. The proposed project consists of the construction of a 82.3 million building addition. Even with partial property tax exemption, during the first 10 years NCS will pay approximately 8406,000 in property taxes (all taxing districts). After ten years, NCS will pay approximately 872,500 per year in property taxes. National Computer Systems 1 September 1998 QUALITY OF JOBS TO BE CREATED Higher wage rates; The application indicates an average hourly wage for the new jobs being created is ~15.35. The average hourly wage for existing jobs is ~12.95 (regular full-time jobs at $17.74/hr. and temporary part-time jobs at ~7.00 hr.). The average hourly wages for all industries (including government) in Johnson County is ~12.55, for private businesses is ~10.00, and for service firms is 89.65. Full-time, long-term, non-seasonal positions; The new jobs would be full-time, long-term, non-seasonal positions. NCS does employee a significant number of temporary full-time and part-time positions. Based on a 12 month average and including the new jobs, NCS' workforce consists of approximately 43% temporary positions. The applicant has stated that many of these positions are full-time positions with two-week to two-month appointments. Many of the individuals filling these positions prefer temporary positions for many different reasons and often come back from year to year to fill the same positions. Other individuals fill the temporary positions with the goal of gaining experience to fill a regular full-time position. Commitment to a safe workplace; NCS has a Safety Committee comprised of employees from throughout the organization. Their mission is to "Maintain NCS as a safe place to work," by developing, administering, and monitoring the safety program; continuously striving to reduce accident frequency and severity, and ensuring that NCS equipment, facilities, and methods of operations are fully compliant with OSHA, lOSHA, NFPA, UBN, NEC standards. This team is charged with overseeing issues relating to workers' compensation injuries, ergonomics, and emergency procedures. Contribution to health insurance benefits; Business provides 80% of the cost of a standard medical and dental insurance plan for full-time employees. Provision of fringe benefits (e.g. vacation, sick leave, retirement plans). In addition to health and dental insurance, regular full-time employees receive a benefit package, including but not limited to life insurance (self and family), 401 (k), stock ownership plan, stock purchase plan, accidental death and dismemberment insurance, short term disability, long term disability, and educational reimbursement. Details on vacation, holiday, and others are coming). NCS has a myriad of employee professional growth opportunities, training options, social events, special celebrations, clothing purchases, movie ticket discounts, Gold Dollar programs, financial planning seminars, and other special interest activities, National Computer Systems 2 September 1998 COMMUNITY INVOLVEMENT Businesses that have a history of contributing to their communities through volunteer work, financial contributions or other means. The application states that NCS has a long-standing tradition of supporting Iowa City and the surrounding communities through financial contributions and volunteer efforts by its employees. NCS has been involved in the community in the following ways: For over 15 years, NCS has provided in-kind and volunteer services to the Iowa City Hospice Road Race and is recognized as a Gold-Plus Sponsor. NCS also sponsors a team of employees who gather pledges and then participate in this annual event. NCS has provided a similar in-kind service to the Johnson County Big Brothers/Big Sisters organization for their annual fund-raising Bowl for Kids Sake event. NCS also sponsors bowling teams for this event and is frequently a top fundraiser. NCS is a major supporter of United Way. Over 60% of NCS' employees contributed more than 855,000 in 1997. Additionally, NCS' corporate offices contribute to the Johnson County United Way Campaign through a 20% match of employee contributions. NCS also funds a number of community organizations through its Contribution Committee, which has an annual budget of between ~15,000 and ~20,O00. The following represents a cross-section of community organizations that NCS has financially contributed to in 1998: · American Heart Association · Grant Wood Area Chapter/American Red Cross · City High Science Club · Domestic Violence Intervention Program · Emergency Housing Project · Hancher Center for the Arts · Iowa Arts Festival · Iowa City Community School District Foundation · Iowa City Community Theatre · Iowa City Police Association Shop With a Cop Program · Iowa Special Olympics · KHAK Radiothon for the Children's Miracle Network NCS is also a long-standing, active member of the Iowa City Chamber of Commerce and provides financial support for many of their activities throughout the year. One of NCS division vice presidents has served on the Chamber board for the last four years and currently serves as Chairman of the Chamber. · Additionally, a great number of NCS employees are active in various civic and charitable organizations throughout Johnson County. National Computer Systems 3 September 1998 ECONOMIC IMPACT Contribution to diversification of Johnson County economy; NCS is a global information services company providing computer software, services, and systems for the collection, management, and interpretation of data to large segments of the education, testing, assessment, and complex data management markets. No one else in the State of Iowa provides these types of services to the education market, thus NCS' expansion provides diversification to the state and local economy. (Note: Application states that ACT could be considered a competitor to NCS in some very small (less than 1 percent) portion of NCS' market. The business expansion will have no impact on ACT's business. In fact, the expansion may even enhance the quality of work NCS does for ACT). Potential for future growth of industry; The applicant indicates that this project could provide up to a total of 1 O0 jobs (including the 69 jobs that are part of this application) over the next five years. Builds on the resources, materials, and work force of the local community. The company indicates that approximately 35% of the company's total operating expenditures are spent within the State of Iowa. The company also estimates that approximately 20% (910 million) of the company's total operating expenditures for raw materials, supportive services, machinery, and equipment are spent within the Johnson County/eastern Iowa area. Of a total 1997 payroll of just over 945 million for the combined Iowa City-based divisions, approximately 88% was paid to Iowa City-based employees. ENVIRONMENTAL IMPACT The more environmentally sound the company's operation Energy Efficiency. NCS is currently in year three of a five year program to replace inefficient building systems. Improvements to date include: · Lighting replacement program to install energy-efficient T-8 ballast in florescent light fixtures. · Replacement of chillers with high-efficiency chillers. · Conversion of existing heating and ventilation system to variable air volume (VAV) system. · Installing automatic lighting controls to program setbacks and automatic shut-off of area lighting to conserve lighting energy. Planned for the remainder of 1998 and into 1999 is the installation of a computer-based Building Automation system. This system will allow NCS to more efficiently operate building systems during periods of low occupancy. This will significantly reduce operating energy costs. Recycling. In excess of 200 tons of material is recycled per month on average. The Iowa City facility currently recycles 91% of the waste generated. The recycled materials mainly consist of boxes, cardboard, and various types of paper. What is not recycled is picked up by commercial waste haulers and taken to approved landfill sites. National Computer Systerns 4 September 1998 The more environmentally sound the company's products/services. Currently NCS uses corrugated boxes made from recycled materials. The company also purchases large amounts of continuous form paper made from recycled materials for printing reports; this is the company's "stock form of choice." GENERAL REQUIREMENTS 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 the 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. Also see "Quality of Jobs to be Created" section. Approximately 28% of NCS' workforce makes less than the federal poverty wage rate for Iowa City ($7.73/hr). It should be noted that the average wage for all NCS positions is $12.96/hr. This average wage is approximately $3.30 (34%) higher than the average for all Johnson County service businesses; $2.96 (30%) higher than the average for all private businesses; and just slightly higher than the average for all employers (including government). These numbers show that NCS average wages exceed the average wages for not only its own industry segment but also all private businesses in Johnson County. Nearly all of the positions making less than the federal poverty wage rate fall within the temporary employee group. The applicant has indicated that one in two of the permanent positions are filled by temporary part-time employees. Applicant must have a consistent pattern of compliance with the law and the spirit of the law, including environmental regulations, occupational safety and health laws, fair labor standards, the National Labor Relations Act, and the Americans with Disabilities Act, in order to eligible for financial assistance. Based on the applicant's response to the NJIP application and staff's review of various public information sources (Westlaw database, DNR, lOSHA) National Computer Systems appears to have a consistent pattern of compliance with the law and the spirit of the law. Applicant must demonstrate the following in order to eligible for financial assistance: the feasibility of the business venture. Project appears feasible the reliability of the job creation and financial estimates. Estimates appear reliable. ~ the credit worthiness of the business. Credit worthiness appears high. Project would not occur without financial assistance. The application states: While we are continuing to look at other locations for expanding our business in the future, adding on to our existing Iowa City campus is our favored choice at this point. Should Iowa City decide against providing a financial incentive, we would have to revisit our position. We may still choose to expand our facility without Iowa City's support. National Computer Systems 5 September 1998 A contract will be executed for any financial assistance awarded. Applicant will be required to repay all, or a prorated share, of the amount of the financial assistance awarded if the applicant does not fulfill the obligations of the contract. The company is willing to enter into an agreement that contains a repayment clause. f:\prospect\ncs\njipncs.doc National Computer Systems 6 September 1998 ~cks, contact the company's her related activities }val by the IDED Board and ject may not proceed, until Red with the Business, IDED ing approval. APPLICATION FOR THE NEW JOBS AND INCOME PROGRAM FISCAL YEAR 1997 - 98 IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT DIVISION OF BUSINESS DEVELOPMENT 200 EAST GRAND AVENUE DES MOINES, IOWA 50309 515/242-4707 Applicant Information Business Name National Computer Systems Contact Name and Title Gary A. Mainor, Vice President Address 2510 North Dod.~e Street City and State Iowa City, Iowa Zip Code 52245 Telephone 319/339-6902 Fax 319/339-6990 City/County contact where project is to be located: City/County Contact Name Stephen Atkins and/or David Schoon City/County Organization Name City of Iowa City Address 410 East Washin.qton Street City Iowa City Zip Code 52240 Telephone 319/356-5236 Fax 319/356-5009 Is the city/county a certified participant under Iowa code Section 15.308 (community builder program) or has it established a comprehensive plan approved by the IDED? YES X NO CERTIFICATION AND RELEASE OF INFORMATION I, the undersigned, on behalf of the Business identified above, hereby submit the following application under the New Jobs and Income Program (NJIP). I certify that the Business is or will be a corporation duly organized and validly existing under the laws of the state of incorporation and is in good standing, and has complied or will upon receipt of approval by the IDED Board, with all applicable laws of the State of Iowa to conduct business within the State. Further, all action on the Business' part, such as appropriate resolution of its Board of Directors for the execution and delivery of this NJIP Application, including signatory authorization naming the undersigned officer of the Business to execute this NJIP Application and, if approved, the NJIP Agreement, has been effectively taken. I certify that all information, representations, or statements provided to the Iowa Department of Economic Development (IDED) in connection with this application are true and correct in all material respects. the City of Iowa City /vith the City in 1994. Narded funds from ? CERTIFICATE OF AUTHORITY °eshold : will meet the ution the start-up, ~se of receiving ~ce or resolution). -~d its operation in same operation to a business from operations of a tially reduced. plain. e Board of Directors of National Computer Systems, Inc. duly apolis, MN on the 4th day of March, 1996, at which a quorum it was VOTED, that the Bylaws, as amended and restated, be ws provide that the officers of National Computer Systems, gnations and powers and shall perform such duties as of Directors or by the Chief Executive Officer; and ;hief Executive Officer has authorized and empowered officers ~al Computer Systems, Inc. to make, enter into, sign, seal and half of this Corporation; and A. Mainor is a Vice President of National Computer Systems, 9rized and empowered to make, enter into, sign, seal and :orporation an Iowa New Jobs and Income Program (NJIP) Ihorization of Gary A. Mainor to sign, seal and deliver on behalf JIP Agreement, if approved. that the above is a true and correct recital of the record, that zation have not been amended or repealed and are in full force A. Mainor is a Vice President of this Corporation. ent of the cost of a ull-time employees 3ccurred. Please e of comprehensive 3nth, NCS pays t9.3%. The ;es is to pay 80% of ompany portion for ~nually. See attached 98 .~W.' entgn "~r ~ ,~__,,ieFtary - 'lLre~surer I hereby give permission to IDED to make credit checks, contact the company's financial institution(s), insurance carrier(s), and perform other related activities necessary for reasonable evaluation of this application. I understand this application is subject to final approval by the IDED Board and am aware that NJIP benefits are not available, and the project may not proceed, until final Board approval is secured and an agreement is executed with the Business, IDED and the Community, within a reasonable time period following approval. Gary A. Mainor, Vice President September 1, 1998 1. Project Information and Description Please state the product or service that will be produced in general, and indicate whether it is an expansion or new operation to Iowa, and the market expected to be served by this new or expanded operation. Please include a brief description of all relevant elements of the project. Also, please discuss how the proposed project fits into the company's overall future strategic direction. This application must also be accompanied by a description of the site(s) proposed to become an NJIP economiC: development area. This description must, at a minimum, include a legal description of the site; the size in acres of the proposed economic development area and a detailed map showing the boundaries of the proposed economic development area. NCS is a global information services company providing computer software, services, and systems for the collection, management, and interpretation of data to large segments of the education, testing, assessment, and complex data management markets. The Iowa City-based Measurement Services Division is the nation's largest commercial processor of student assessment tests for kindergarten through college-entry level students. We are currently planning an expansion of our Iowa City campus. This expansion involves the addition of 31,500 square feet of space to one of our two existing buildings and conforms to a Master Plan filed with the City of Iowa City in 1994. The building addition is intended to ease current overcrowding in our existing facility and allow for hiring an additional 69-100 employees over the next two-to-three years. In addition to the actual construction of the 31,500 square feet of space, this project includes some renovation to the existing building, i.e., refurbishing existing space to accommodate newly-hired employees. The purchase of all associated hardware and software for use by new hires and upgrades to existing hardware and other peripheral equipment to support our planned business growth is also part of this project. A major site description, including a legal description of the site, is attached to this application. Please indicate the current status of the project's development. If initiated, please describe what activities have occurred. The project is currently in the planning stage. At this point, design activities have commenced and a general contractor has been selected, although no contracts have yet been signed. We are also working with the City of Iowa City to gain approval of the addition to a Master Site Plan filed with the City in 1994. Has any portion of the project described above been awarded funds from the Community Economic Betterment Account (CEBA)? Yes No X Mandatory Requirements Please provide documentation of the following NJIP threshold requirements. Please state how your proposed project will meet the mandatory six elements for eligibility as listed below. The community has approved by ordinance or resolution the start-up, location, or expansion of the business for the purpose of receiving program benefits (please attach community ordinance or resolution). See attached resolution. The business has not closed or substantially reduced its operation in one area of the state and relocated substantially the same operation to the community. This requirement does not prohibit a business from expanding its operation in the community if existing operations of a similar nature in the state are not closed or substantially reduced. Yes X No Please explain. Cm The business must provide and pay at least 80 percent of the cost of a standard medical and dental insurance plan for all full-time employees working at the facility in which the new investment occurred. Please explain. NCS offers all of its regular full-time employees a choice of comprehensive medical and dental plans. Of the total premiums per month, NCS pays 80.7% of the cost and the employee is responsible for 19.3%. The company's intention in planning benefits for its employees is to pay 80% of the total cost. While costs plan-to-plan may vary, the company portion for these medical and dental plans is a minimum of 80% annually. See attached copies of plans. The business must agree to pay a median wage for new full-time hourly non-management production jobs of at least $11 per hour indexed to 1993 dollars, based on the gross national product implicit price deflator published by the Bureau of Economic Analysis of the United States Department of Commerce (currently $11.42) or 130 percent of the average wage in the county in which the community is located, whichever is higher. The business shall compute the median wage for all new full-time employees to include compensation in the form of hourly wages, salaries, bonuses, commissions, and overtime'pay. The threshold wage for each county will be provided by the Department of Economic Development. Please certify in the resolution or ordinance passed by the city or county that the median wage levels documented for this project are considered to be consistent with required wage levels for the county. As part of the expansion activity, NCS expects to hire between 69 and 100 new positions to support test scoring activity in its Measurement Services Division. The median hourly wage for those new non-management positions, which have already been identified or are extremely likely to be added in anticipation of a facility expansion, is $16.70. Those positions (identified and likely) combined currently number 69. It is anticipated there will be others over the period of the New Jobs and Income Program. In all cases, the positions are expected to be regular full-time positions. In addition, there are likely to be a minimum of two management positions added as well. The business must make a capital investment of at least $10,000,000 indexed to 1993 dollars based on the gross national product implicit price deflator published by the Bureau of Economic Analysis of the United States Department of Commerce (currently $10,380,000). If the community requests and receives a waiver of program qualification requirements, at least $3 million in capital investment must be made by the business. If the business is occupying a vacant building suitable for industrial use, the fair market value of the building will be counted toward the capital investment threshold. Please explain how the company will meet this requirement. NCS has historically invested monies into this business. With the rapidly changing enhancements to all forms of information technology, NCS has been more aggressive in their investments in the business. We certainly do not anticipate a slowdown of computer-related enhancements and, therefore, are committed to continue our investments in the future to meet our customers' needs. These investments will range from the addition of space to our Iowa City facility, to upgrading our mainframe computer, to adding PCs for use by new employees, replacing PCs every two-to-three years to maintain our state-of-the-art capabilities, to adding and upgrading existing scanners to meet our business demands. Specifically, over the next five years, we anticipate our capital spending, at a minimum, to include: 2,300,000 1,000,000 1,500,000 1,500,000 1,500,000 1,000,000 1,100,000 500,000 Building addition of 31,500 square feet Additional scanners and upgrades CPU (mainframe) upgrades CPU memory (DASD) and tapes Software and software upgrades Additional and replacement PCs Miscellaneous office technology upgrades Equipment surrounding Annapolis R&D project $10,400,000 The business must create at least 50 full-time positions at a facility located or expanded in Iowa under the NJIP for a specified period of time, which will be negotiated with the department and the community, but which must extend for a minimum of five years. If the community requests and receives a waiver of program qualification requirements, at least 15 full-time positions must be created by the business. The jobs must be created within five years of the application approval date and the jobs must be maintained for a period of at least five years from the date the business first meets its job creation obligation. Please state number of jobs and wage rates in each job category. Non-mana.qement positions Median Ranfie Software Developers (12) Programmer Aides/Production Clerks (6) Project Directors non- management positions) (15) Project Coordinators (15) Assoc. Professional Scoring Specialists/Customer Service Representatives (non-sales, technical representatives)(21 ) $26.95 $30,700-81,400 10.78 8.80-12.75 hourly 21.00 26,500- 60,900 13.05 9.20-16.90 hourly $21.49 28,500-60,900 You will find the median hourly wage to be the $16.70 noted above. All positions listed are expected to be created over the period of the next 18 months, and will be ongoing based on current projections. 3. Additional Requirements Please describe how the business will meet the requirements of Rule 58.7(2), see the NJIP administrative rules in the addendum. The application must meet at least three or more of the following to be eligible. Please provide documentation on the three items the business will meet. a. Offer a pension or profit-sharing plan to full-time employees. NCS offers several retirement plans/options for all regular full-time employees. The Employee Savings Plan, an approved 401 (k), offers employees the option to save pre-tax earnings while the company matches according to a schedule. In addition, NCS provides a fully funded Employee Stock Ownership Plan; the company purchases shares of stock in the employees' names awarding those shares on a vesting schedule. Plan descriptions for both plans are attached. b. Produce or manufacture high value-added goods or services or be in one of the industries listed below: 1) Value-added agricultural products. 2) Insurance and financial services. 3) Plastics. 4) Metals. 5) Printing paper or packaging products. 6) Drugs and pharmaceuticals. 7) Software development. 8) Instruments and measuring devices and medical instruments. 9) Recycling and waste management. 10) Telecommunications. Please explain. NCS is the nation's largest commercial processor of student assessment tests for the kindergarten through college-entrance market. We are a provider of computer-related services to the education marketplace. As such, we must continue to produce high-quality, value-added services to our customers. To this end, 20 percent of our employee population are highly-skilled software developers who are solely responsible for producing the programs that generate test results to students and educators throughout the country. A copy of our most recent Annual Report is included with this package. c. Make day care services available to its employees. Please explain. Not applicable. Invest annually no less than 1 percent of pretax profits from the facility located in Iowa or expanded under the program in research and development in Iowa. Please explain. In order to maintain our place in the education market, we must continually reinvest in our business. Our research and development projects are far- reaching, ranging from projects to enhance our current processes and procedures (scanning, printing, etc.) to developing new services for our customers (Internet transmission of data, distributed scoring from throughout the Midwest). During the past three years (1996 through 1998) we have averaged an R&D investment equal to 8.9% of our pre-tax profits. Our projected three- year R&D spending varies from 10-12% of pre-tax profits. Invest annually no less than I percent of pretax profits from the facility located to Iowa City or expanded under the program in worker training and skills enhancement. Please explain. Not applicable. Have an active productivity and safety improvement program involving the management and worker participation and cooperation with benchmarks for gauging compliance. Please explain. Not applicable. Occupy an existing facility at least one of the buildings of which shall be vacant and shall contain at least 20,000 square feet. Please explain. Not applicable. Further Considerations (to be evaluated in addition to the threshold requirements) Please describe the quality of the jobs to be created, including wage scale, turnover rate, type of job (full or part time, career-type), health insurance benefits, and other factors impacting the quality of jobs to be created by the project. Of the jobs listed above, the Software Developers, Project Directors, Scoring Specialists, and Customer Service Representative positions are all exempt level professional positions. The Programmer Aides/Production Clerks, and Project Coordinators are non-exempt hourly positions. The Software Developers are technical in nature; the labor market is very tight for these positions and a premium is presently being paid by NCS for these positions. Project Directors each manage state department of education scoring programs, including project management and customer relations. Scoring Specialists possess unique skills in a specific curriculum area, such as writing, math, or sciences, and they provide subject matter expertise in the scoring of subjective student responses. A Customer Service Representative will provide customer support and project management to customers who have performance items on their student tests. The non-exempt positions provide specific support to the exempt roles described as well as to management as needed. All are full-time and, due to NCS business activity, there are significant career opportunities for all positions described. In addition, a robust educational reimbursement program and CBT (Computer Based Training) training provided internally offer career opportunities where additional education or training is essential. Ample lateral transfer opportunities exist and are popular among the NCS population. NCS Measurement Services Division has enjoyed modest single digit turnover among our full-time employees in most job families over the last five years. There is some increase noted this year in turnover in technical positions due, it is believed, to the extremely tight labor market and a decline in colleges' enrollment into computer science curricula. All full-time employees receive the same benefits package, including but not limited to a medical plan selection, dental plan, life insurance (self and family), 401 (k), stock ownership plan, stock purchase plan, accidental death and dismemberment insurance, short term disability, long term disability, and educational reimbursement. Full-time employees also have ten (10) paid holidays per year and a vacation plan commensurate with years of service. NCS has a myriad of employee professional growth opportunities, training options, social events (summer picnic, holiday party, children's holiday party), special celebrations, clothing purchases, movie ticket discounts, Gold Dollar programs, financial planning seminars, and other special interest activities. In addition, an array of meal choices is offered by local vendors on the weekdays, so employees have a wide selection over the course of a week. Recently, water filter machines and ice machines were added to the employee comfort stations throughout the building. NCS CEO, Russ Gullotti coined "NCS - A g, reat place to work" in a video he produces for all employees on a quarterly basis. This has become a tag line when we plan employee activities and as policy and practice creation is conducted. b. Please list all business competitors within Iowa, especially those that will be affected by the proposed business expansion. Please explain. ACT, Inc. in Iowa City could be considered a competitor to NCS in some very small (less than 1 percent) portion of our marketplace. ACT is the only company within the State of Iowa that may remotely be considered a competitor to NCS. They are, however, one of our largest customers. Our business expansion will have absolutely no impact on their business. In fact, our expansion may even enhance the quality of work we do for them. Please describe the impact in Iowa from the project that is consistent with the State Strategic Plan and the diversification of the Iowa economy in particular showing the job growth potential of the project. Consistency with the State Strategic Plan may include any or all of the following: 1 ) A business with a greater percentage of sales out-of-state, or import substitution. Approximately 98.5% of NCS/Iowa City's sales are to customers located outside the State of Iowa. Products are shipped to all 50 states, with primary customers located in San Antonio and Austin, Texas; Chicago, Illinois; and Princeton, New Jersey. 2) A business with a higher proportion of in-state suppliers. Approximately 35% of the Iowa City operations' total operating expenditures are within the State of Iowa. 10 3) A project which would provide greater diversification of the state economy. NCS/Iowa City is unique in the type of service we provide. No one else in the State of Iowa provides these types of services to the education market, thus providing a diversification in the state economy. 4) A business with fewer in-state competitors. As stated previously, NCS/Iowa City has no competitors within the State of Iowa with the exception of ACT, Inc. who only competes minimally. 5) A potential for future job growth. This project will provide for an additional 69-1 O0 jobs over the next five years. 6) A project which is not a retail operation. NCS is not a retail business, thus this project would not involve a retail operation. Has the business acquired or merged with an Iowa corporation or company in the last three (3) years? Yes No X If yes, please state the efforts made to hire the workers of the acquired or merged company. Is the business applying for NJIP benefits owned by nonresident aliens and is the business owned by nonresident aliens planning to acquire more than 320 acres in Iowa? Yes No X If yes, the business must follow the requirements of rule 58.7(1 ) and Rule 58.4(8); see the NJIP administrative rules in the addendum. 1! 5. Compliance Please indicate whether all known environmental permits have been issued and regulations met. If there are pending permit applications, state the time frame within which the permits will be issued and the regulations will be satisfied. Please include a documentation of issued permits and efforts to obtain all necessary permits not yet obtained. The NCS Iowa City campus currently meets or exceeds all environmental regulations. We are a low quantity generator as defined by the Environmental Protection Agency. As such, we are not required to hold any permits. 6. Hiring Preference Please state whether the business will have a preference for hiring residents of Iowa or specifically, of the economic development area in which the project is located. It is typical for NCS Iowa City to hire from within Iowa and from the Midwest. Nearly all recruitment activities start out locally or regionally, expanding only when a candidate pool cannot be identified through initial efforts. Although technical personnel are sought regionally, most college recruitment resources target the Iowa regents universities and Iowa's private colleges and universities. It is found that Iowa City appeals to a range of Iowans a well as former U of I graduates. This suggests strong Iowa roots, but we are also cognizant that a blend of backgrounds, ethnic diversity, and a variety of life experiences profits NCS' education business. 7. Violations Please list any violations of law in the preceding three years (five years for environmental), such as violations of Federal or State environmental protection statutes, and worker safety statutes, rules and regulations. Include a record of any legal action taken, fines and an explanation of any mitigating circumstances. If the applicant business has a record of violations, the Department may request copies of materials documenting the type of violations. NCS/Iowa City has not been guilty of any violations of law in the preceding three years, nor environmental laws in the preceding five years. 12 I jenniferm I P:\PROjECTS\198292-0\dwg\C1-01-FED.DWGIScole = 1:1 I OATE: 09/02/199BITline: 13:39[ ORP PARCEL CH-1 PARCEL '7 PLAZA ADDItiON 30, 9 75 SF (GROSS) BUILD/fiG FIN. FLR. 106. 50 113, 709 SF (GROSS) |\ I I/ i/ \,~ I / ~ i/ X I \ , -- CENTER BUILD/NO FIN. FLR. 121. O0 160,000 SF (GROSS) 0 150 500 600 SCALE IN FEET SHIVE 'HATTERY Cedar Rapids, IA, Iowa City, IA, Des Moines, IA Moline, IL, Bloomington, IL , Chicago, IL TITLE NATIONAL COMPUTER SYSTEM8 BUILDING ADDITION DATE 9/2/98 SCALE 1"= 300' DRAWN JMM FIELD BOOK APPROVED REVISION PROJECT NO. 198292-0 SHEET NO. 1 I jenniferm I P:\PROjECTS\198292-0\dwg\C1-01-FED.DWG ] Scale = 1:1 ]DATE: 09/02/1998 [ Time: 13:39 LEGAL DESCRIPTION ORP PARCEL All that part of the West Half of the Southwest Quarter of Section ,36, Township 80 North, Range 6 West of the 5th Principle Meridian, Iowa City, Johnson County, Iowa, more particularly described as follows: Beginning at the Northwest Corner of the Southwest Quarter of Section ,36, Township 80 North, Range 6 West of the 5th Principal Meridian, Iowa City, Johnson County, Iowa; thence South 0'02'2T' East 1,985.21 feet along the West line of the Southwest Quarter of said Section ,36 to a point of intersection with the Northerly right-of-way line of Primary Road No. 1-80, said point also being 110.0 feet Northwesterly from the Northwesterly edge of slab of ramp "C" of said Primary Road (this is an assumed bearing for purposes of this description only); thence North 81',37'02" East 1,30.26 feet along the Northerly right-of-way line of said Primary Rood to a point; said point bein9 80.0 feet Northwesterly from the Northwesterly edge of slab of ramp of "C" at Highway Ramp Station ,302,3+15.4; thence North 64'58'54" East 747.60 feet along the Northwesterly right-of-way line of said Primary Road to a point, said point being 80.0 feet Northwesterly from the Northwesterly edge of slab of said ramp "C" at Highway Ramp Station 30,30+6,3.0; thence North 46',34'5T' East 216.8,3 feet along the Northwesterly right-of-way line of said Primary Road to a point; thence North 21'56',31" East along said Northwesterly right-of-way line 46.,35 feet to a point; thence North 47'59'54" East along said Northwesterly right-of- way line 64.86 feet to a point; thence North 6Y26',30" East along said Northwesterly right-of-way line 61.11 feet to a point; thence North 46'00'19" East along said Northwesterly right-of-way line 27.17 feet to a point; thence North 28'36',39" East along said Northwesterly right-of-way line 73.96 feet to a point; thence North 08'05'50" East along said Northwesterly right-of-way line 5,3.49 feet to o point; thence North 34'18'32" East along said Northwesterly right-of-way line 150.75 feet to a point; thence North 37',34'23" East along said Northwesterly right-of-way line 99.07 feet to a point; thence North 24',35'51" East along said Northwesterly right-of-way line 70.27 feet to a point of intersection with the East line of the Northwest Quarter of the Southwest Quarter of said Section ,36, said point being 80.0 feet Northwesterly from the center line of Iowa Highway No. 1; thence North O'08'00" East 967.,30 feet along the East line of the Northwest Quarter of the Southwest Quarter of said Section ,36 to the Northeast Corner of the Northwest Quarter of the Southwest Quarter of said Section thence North 89'17',39" West 1,324.89 feet along the North line of the Southwest Quarter of said Section ,36 to the point of beginning. Said parcel heroin described contains 49.84 acres more or less, subject to easements of record, and excluding public right-of-way. And CH-1 PARCEL Also, that part of the Northeast Quarter of the Southwest Quarter of Section 36. Township 80 North, Range 6 West of the 5th Principal Meridian more particularly described as follows: Commencing as a point of reference at the Northwest Corner of the Southwest Quarter of said Section 36; thence South 89'1T39" East along the Northerly line of the West half of the Southwest Quarter of said Section ,36 1,324.89 feet to the point of beginning; (for purposes of description the Northerly line of the West half of the Southwest Quarter of said Section 36 is an assumed bearing); thence South 0"07'42" West along the West line of the Northeast Quarter of the Southwest Quarter of said Section ,36, 281.24 feet to a point; thence North 89'5T05" East 282.59 feet to a point on the Westerly right-of-way line of Iowa Highway No. 1 (formerly designated as Iowa Highway No. 261); thence South 90'00'00" East 128.18 feet to a point on the centerline of Iowa Highway No. 1 at Highway Station 86-1-66.2; thence Northeasterly along a 2,865.00-foot chord bearing North 29'5T20" East) and along the centerline of said Iowa Highway No. 1 to a point of intersection with the Northerly line of the Northeast Quarter of the Southeast Quarter of said Section ,36, said point being at Highway Station 89+8,3.5; thence North 89'22',32" West along said Northerly line 170.28 feet to a point on the Westerly right-of-way line of said Iowa Highway No. 1; thence continuing North 89'22',32" West along said Northerly line ,398.27 feet to the point of beginning. Said parcel herein described contains ,3.11 acres more or less, subject to easements of record, and excluding public right-of-way. SHFVE 'HATTERY Cedar Rapids, IA, Iowa City, IA , Des Moines, IA Moline. IL, Bloomington, IL , Chicago, IL TITLE NATIONAL COMPUTER SYSTEMS BUILDING ADDITION DATE 9/2/98 SCALE DRAWN JMM FIELD BOOK APPROVED REVISION PROJECT NO. 198292-0 SHEET NO. 2 RETIREMENT SAVINGS NCS offers two ways for employees to save for their retirement. We offer an Employee Savings Plan (ESP) and an Employee Stock Ownership Plan (ESOP) Employee Savings Plan (ESP) The NCS ESP is an employer-sponsored 401 (k) program, which means it has special tax status, and is administered by Norwest Employee Benefits Services · You are eligible to participate upon you hire date or anytime thereafter · You must be at least 21 years old to padicipate · Employees earning more than $80,000 may have cedain restrictions based upon IRS regulations Please complete and retum the 401 (k) Employee Savings Plan (ESP)/Employee Stock Ownership Plan (ESOP) Beneficiary Designation form in the front pocket of your binder, even if you do not sign up for the 401(k) plan · You will be mailed an enrollment packet and PIN (Personal Identification Number) from Norwest shortly after your first paycheck · The enrollment packet will include information on how to enroll over the phone using the Norwest Benefits Helpline · Contributions will be withheld from your paycheck starting with the next available payroll after you enroll over the Norwest Benefits Helpline · You may have from 1% to 15% of your pay deducted on a before-tax basis to save for your retirement NCS will match (based on profits) up to 50% on the first 7% you contribute to the plan, for a potential match of 3.5%. NCS matches ESP contributions once a year on January 31 · NCS offers immediate vesting or ownership of the amount you contribute to your account, as well as the amount NCS matches into your account · The ESP is designed for long-term retirement savings and is subject to IRS regulations. You may not take the money out whenever you want · There are currently six investment options: NCS Stock Fund, S & P 500 Index Fund, Equity Fund, International Fund, Balanced Fund and Income Fund · You may split your investments between the six funds in 1% increments · You may rejoin the plan, change your investment allocations or contribution percentages daily if you wish by accessing the NCS Benefits Helpline at 888-319- 9451 (see Appendix A for detailed information) You may stop contributing to the ESP at anytime Loans are permitted from the ESP: You may borrow up to 50% of your vested ESP balance with a maximum of $50,000 Loans must be for a minimum of $1,000 Interest rate you are charged on the loan is the Prime Rate plus 1% Maximum repayment period is five years (can be set up for shorter period) You are permitted one discretionary loan (for any reason) per year To take out a loan, call the NCS Benefits Helpline You may continue to contribute to the ESP after taking out a loan · Withdrawals are permitted from the ESP: 0 IRS regulations restrict withdrawals before you are age 59 1/2 0 Withdrawals are permitted under certain financial hardships conditions such as to pay uninsured medical expenses, post secondary education expenses, to purchase a primary residence or to prevent foreclosure or eviction from a primary residence 0 Withdrawals are subject to penalties and taxes IRS regulations require you take out a loan from your ESP and try any alternate savings sources prior to making a withdrawal O If you withdraw money from your ESP account, you will be suspended from contributing to the ESP for one year O To make a withdrawal from your ESP account, call the NCS Benefits Helpline · Rollover Provisions: 0 You may rollover contributions made to other qualified retirement plans, depending on the type of plan 0 Rollover forms are available from your Benefits Orientation presenter Employee Stock Ownership Plan (ESOP) · NCS contributes shares of NCS stock to employees' accounts. The num, ber of shares of stock is based on NCS' profitability and occurs each January 31 · You will automatically become an ESOP participant when you are: at least 21 years old have been employed by NCS for at least 12 consecutive months have worked at least 1,000 hours within the 12-month period · Hours worked as a temporary apply towards the 1,000 hours and vesting schedule · Previous years in which you worked at least 1,000 hours as a temporary will count toward the vesting schedule · Only your regular earnings are considered when calculating the contribution amount · Under the ESOP, you will receive stock ownership rights such as voting rights, dividends (which are paid directly into the your account) and shareholder communications · Quarterly statements are mailed to your home to reflect dividends that are paid into your account quarterly · You will become vested in your ESOP funds as follows: Vesting Schedule Years of Service * 2 3 4 5 6 Vested Percentage 20% 40% 60% 80% 100% * Years of service with NCS, not years of participation in the ESOP EMPLOYEE STOCK PURCHASE PLAN To participate in the Employee Stock Purchase Plan, please complete the election form in the back pocket of your binder · This plan allows you to purchase NCS Common Stock through payroll deduction · You are eligible to participate upon your hire date or anytime thereafter · You may deduct from 2% to 10% of your pay on a post-tax basis to purchase NCS stock · Stock is purchased quarterly. The stock price you will pay is either 85% of the market value at beginning or end of the quarter, whichever is lower · Stock certificates will be mailed to your home address The primary advantages of the stock plan are that you can purchase NCS stock at a reduced price, and you do not have to pay stockbroker's commission to purchase the stock · If you elect to sell .your stock at a later time, you will need to pay a stockbroker's commission While you are in the plan, if you change your contribution percentage or discontinue participation, you will not be able to make further changes or rejoin the plan for six months National Computer Systems Benefits in Brief 1998 Iowa City and Cedar Rapids Employees NCS Benefits in Brief NCS Benefits in Brief This brochure provides an overview of NCS benefits for regular full-time United States employees. In all cases, if there is a discrepancy between this brochure and the official plan documents, the plan documents will control. , NCS Benefits Philosophy At National Computer Systems, Inc., we recognize that our employees are our most valuable asset. The work you do is vital to our ability to provide the high-quality products and services our customers expect and deserve. National Computer Systems offers a comprehensive benefit package for its regular full-time employees. These benefits provide protection for today and a base on which to build financial security for the future. Many benefits are paid for by the company while employees share a portion of the cost for others. Some benefits are available to the employee's eligible dependents, while others are solely for the employee. Information on specific plan costs has been listed at the end of this brochure. Employee Responsibility It is your responsibility as a consumer of NCS employee benefits to be familiar with the provisions of the plans. For example, some specific actions you may need to take include: · Promptly notifying (within 31 calendar days of the event) your Human Resources Representative of a family status change; · Calling to pre-certify a hospital stay or mental health visits, and · Obtaining the appropriate HMO physician referrals. Please refer to your Human Resources Department, insurance information, or insurance Customer Service Representative for further information. Ask questions of your health care provider if you don't understand diagnoses, therapies, or billings. Medical Coverage When Coverage Can Begin m The first of the month coinciding with or following your date of hire. Who Is Covered · Employee, spouse and unmantied dependent children to age 19 or up to age 24, if full- time students. Medical Plans · NCS Health Care Plans are comprehensive, fee-for-service plans through which you may select any doctor or facility for services. S/ng/e Employee + 1 Family (3 or more poop/e) Regular Plan Catasb-ophic Plan Annual Deductible Annual Deductible $250 $500 $500 $1,000 $750 $1,500 · After the deductible is met, NCS pays 80% of the next $4,000 of covered medical expenses and 100% of covered medical expenses thereafter up to plan maximums. · Special Provisions · Pre-admission certification is required for all inpatient hospital services and outpatient surgery. · Physical exams are covered at 100% and not subject to the deductible (i.e. Limit of $200 every calendar year). Includes well baby care. · Mental health and chemical dependency treatment are subject to certain restrictions. · Maximum lifetime benefits per person are $1,000,000; $75,000 for mental health and chemical dependency. · Reasonable and customary costs and Coordination of Benefits apply. · Aita Rx Prescription Drug Card · After a separate $25 per person annual deductible ($75 family maximum), brand name drugs are reimbursed at 80% and generic drugs are reimbursed at 90%. Claims will be processed on-line at the pharmacy. You must use a partidpating pharmacy. · Affordable Preferred Provider Organization (PPO) The Affordable Hospital PPO network is a contracted group of hospitals who have agreed to provide plan participants with all necessary hospital services at a negotiated reduced rate. These negotiated reduced rates apply to all covered eligible expenses under the NCS Health Care Plan. A non-emergency admission to a non-PPO hospital will incur an additional $250 deductible over and above your medical plan deductible. Health Maintenance Organizations (HMOs) Employees in certain locations may also choose coverage through an HMO. HMOs provide medical services through a selected group of doctors and facilities. As long as HMO services are used or consulted, most expenses are 100% covered. Employee CoCt Employees and NCS share the cost of medical coverage. You may choose to pay your portion of plan costs on a pro-tax basis. Complete copies of the Medical Plan are available in the Economic Development Division. Dental Coverage When Coverage Can Begin · The first of the month coinciding with or following your date of hire. Who is Covered · Employee, spouse and unmarried dependent children to age 19 or up to age 25 if full -time students. ' Benefits · The Dental Plan covers the following expenses: · Preventative Care 100% for one periodic checkup/cleaning every six months · After a $50 annual deductible: · Basic Care 80% for expenses such as fillings. · Major Care 50% for crowns or dentures. · Orthodontic Care 50% for appliances such as braces and retainers. Maximum Benefits · $1,000 per person per year · $1,000 lifetime maximum for orthodontic care. Employee Cost · Employees and NCS share the cost of dental coverage. As with medical coverage, you may choose to pay your portion of plan costs on a pre-tax basis. Complete copies of the Dental Plan are available in the Economic Development Division. Flexible Spending Accounts Health Care Expense Account When Participation Can Begin · First of the month coinciding with or following your hire date. How the Plan Works · You may defer up to $2,000 of your Salary annually on a pre-tax basis to pay for eligible health care expenses. After you incur health care expenses, you may request reimbursement from your account. Examples of eligible expenses include: Deductible and co-payments under a health care plan, dental or orthodontic care, eye glasses and contact lenses (including exams). and hearing aids. Benefits · You are reimbursed for qualified health care expenses with tax-free dollars, thus lowering your health care expenses. Dependent Care Expense Account When Participation Can Begin · First of the month coinciding with or following your hire date. How the Plan Works · You may defer up to $5000 annually on a pre-tax basis to use for dependent care expenses. Covered expenses include care provided by someone other than a family member for your dependents so that you may work outside of the home. The care can be provided for any of your dependents under age 13 and/or any other dependent, or spouse, who is physically or mentally incapable of cadn9 for him or herself. After you incur expenses you may request reimbursement from your account. Benefits · You are reimbursed for qualified dependent care expenses with tax-free dollars, thus lowering your cost of dependent care. Retirement Plans 401(k) EMPLOYEE SAVINGS PLAN When Participation Can Begin · You are eligible to participate in the 401 (k) from your date of hire. Employees earning over $80,000 may have certain restrictions based upon IRS regulations. See your HR Representative for details. · Contact the Norwest Benefits Helpline at (888) 319-9451 for your 401(k) questions Benefits · Saving for retirement is important to ensure your future financial security. 401(k) makes saving easier by offering special tax treatments and a matching company contribution in profitable years. Employee Contributions · You may save 1% to 15% of your pay on a tax-deferred basis. You are always 100% vested (have total ownership) in your account. Company Match · In profitable years, NCS may match up to 1/2 of the first 7% of pay you contribute. You are always 100% vested in your company match account. Investment Options · You may choose to invest your account in these funds: · NCS Stock Fund: Comprised of NCS common stock · International Stock Fund: Invested in stocks of companies headquartered outside the the United States · Equity Fund: Invested pdmadly in stocks of growth odented companies · Balanced Fund: Invested in a combination of equity (stocks) and fixed income securities (bonds) · Income Fund: Invested in fixed income securities issued by the U.S. Government Special Plan Provisions · Withdrawals · Due to the plan's special tax advantages, withdrawals from your vested 401 (k) account are permitted only under certain financial hardships with the approval of the Retirement Committee and are subject to a 10% withdrawal penalty. · Loans You may borrow up to 50% (to a maximum of $50,000) of your vested 401 (k) account for any reason. One loan is allowed per plan year. EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) When Participation Can Begin · You automatically become a plan participant after you work at least 1000 hours in a consecutive 12-month period, and are at least age 21. · Participants are eligible to receive a plan contribution if they are employees on January 31 of the plan year, have worked for 12 consecutive months and worked at least 1000 hours within that plan year. Benefits I Through the plan, NCS contributes shares of NCS stock to participants' accounts based on the company's profitability and plan provisions. Participants receive shareholder fights including dividends and voting rights. After two years, you become vested in your account at the rate of 20% a year, owning your entire account after 6 years of service. Illness/Disability Coverage When Coverage Begins · Short term disability coverage begins automatically upon hire date. Long- term disability coverage, if elected. is effective the first of the month coinciding with or following your hire date. Who Is Covered · Employees only. Benefit · Financial support is automatically provided to employees when they are unable to work for a limited time due to an accident or illness that is not job-related. Employees may also elect long-term coverage. Short Term Disability Plan · Eligible upon date of hire. · Under this plan, employees continue to receive full pay for up to their first four weeks of illness or disability. If the disability continues for more than four weeks, employees receive 75% of base pay for up to 22 additional weeks. Employee Cost · NCS pays the entire cost of the short-term disability plan. Long Term · Disability Plan Employees may elect long term disability insurance that provides benefits after six consecutive months of disability. Plan benefits provide you with 60% of your basic monthly eamings (including commissions for sales employees). Long term disability benefits continue for up to two years if you are disabled from the job you had before the disability, or up to age 65 if you become totally disabled and cannot work any job. Employee Cost · Employees and NCS share the cost of long term disability coverage. Life Insurance Plans When Coverage Begins · Basic life insurance coverage begins on your hire date. · Supplemental life insurance, if chosen, begins the first of the month following your hire date. Who is Covered · Employee, spouse and children older than 14 days, up to age 19 or up to ag~ 25 if full- time students. Benefits · Basic Life Insurance · Employee: In the case of your death, two times your annual base pay will be paid to your beneficiary ~, Spouse/Children: If your spouse or child dies, a benefit of $5,000 will be paid to you. Supplemental Life Insurance ~, Employee: You may purchase life insurance totaling one, two, or three times your annual base pay to be paid to your beneficiary if you die. ~, Spouse: You may purchase life insurance totaling $10,000, $20,000, $30,000 $40,000 * or $50,000 * to be paid to you if your spouse dies. (*requires evidence of insurability) Employee Cost · NCS pays the entire cost for basic life insurance coverage. For supplemental life insurance, you pay a premium based on your age or spouse's age, and the amount of coverage you choose. Accident Insurance Accidental Death and Dismemberment (AD&D) Insurance When Coverage Begins · Upon your hire date. Who is Covered · Employee only. Benefits · In the case that you have an accident which results in permanent dismemberment or death, you will receive benefits according to a schedule for dismemberment or, in the case of your death, an amount equal to your NCS basic life insurance benefit. Employee Cost · NCS pays the entire cost of AD&D coverage. Business Travel Accident Insurance When Coverage Begins · Upon your hire date. Who is Covered · Employee only. Benefits · If you have an accident while on company business, benefits will be payable to a maximum of $1 00, O00in the case of your death. Other benefits may apply in the case of disability or dismemberment. Employee Cost · NCS pays the entire cost of business travel accident coverage. Employee Stock Purchase Plan When Participation Can Begin · Upon your hire date. Benefits · To encourage employee stock ownership, this plan offers employees special purchasing advantages ,~ You can contribute 2% to 10% of your pay on an after-tax basis to pu;'chase NCS stock. + NCS stock is purchased at the end of each fiscal quarter. 4, Price of stock - the lesser of · the market value on the last business day of the quarter, or · 90% of the stock's market value on the first business day at the beginning of the quarter. * Stock certificates are issued to participants after the end of each quarter Employee Programs Educational Reimbursement · NCS encourages employees to improve their educational qualifications in subjects or fields of study which relate to their current jobs or likely future jobs. The Company will reimburse tuition, books, and fees for successfully completed, pre-approved courses. Scholarship Program · NCS sponsors a post-secondary scholarship program that gives financial aic[ and recognition to dependent children of employees. Application requests are available from your Human Resources department shortly after the beginning of each year. Matching Gift Program · NCS will match, within certain limits, charitable contributions that employees make to eligible post-secondary education and public broadcasting institutions. Matching gift brochures outlining this plan are available from your Human Resources department. Automatic Paycheck Deposit · Your paycheck may be directly deposited into a checking and/or savings account(s) at the bank(s) of your choice. Direct deposit is accurate, safe, and convenient. Your pay is immediately available even when you are away from home. Direct deposit forms are available from your Human Resources department. Military Leave · Regular full-time employees who are inducted into the US. military or who have orders to report for mandatory or voluntary training are eligible for military leave. NCS will pay the difference between your normal NCS pay and your military base pay while you are on leave to attend Annual Training (AT) or other special training. The leave should normally not exceed two weeks per year. You will continue to accrue NCS service credit and all benefits remain in effect during the leave. If you are inducted into active duty in any of the US. Military Forces for 30 days or longer, you will not receive wages or salary from NCS while on Military Leave. You will continue to accrue service credit if you return to NCS employment within 90 days after your active duty ends. This also applies to Military Reservists who are ordered to or volunteer for active duty for pedods of 30 days or longer. Funeral Leave · Regular full-time and part-time employees are eligible for funeral leave. NCS will pay your normal base pay for up to three days funeral leave if needed due to a death in your immediate family. The immediate family is defined to include your natural or step- parent, brother, sister, child, spouse, mother-, father-, son- or daughter-in-law, grandparent, or grandchild. Jury Duty · All regular employees will be given time off for jury duty when called. Base salary and benefits will continue unless extenuating circumstances exist. Employees who receive payment for jury duty may retain such moneys to help offset expenses incurred in the conduct of the jury duty obligation, Holidays and Vacation Holidays NCS establishes an annual holiday schedule each calendar year, subject to customs and business practices at our different locations and how holidays fall within each year. Nine scheduled holidays and one personal floating holiday are recognized each year. Vacation · New Employee Schedule Hire Date February-May June-September October-January Vacation Days* 5 days after 6 months of service 10 days the following year 8 days the following year 5 days the following year * You are credited with vacation days as of each February 1. Vacation can be taken after you have six months of service. · On-Going Schedule Service Vacation as of February 1 ** 1-4 years 2 weeks 5-14 years 3 weeks 15-24 years 4 weeks 25 or more 5 weeks "Vacation is eamed as of the February I following your anniversary date, with the exception that upon your 5, 15, or 25 year service anniversary, you are immediately eligible for your additional week of vacation. When Benefits End Termination or Amendment of a Plan Although NCS intends to maintain the plans outlined in this brochure indefinitely, it may amend the provisions of the plans or terminate the plans. If either of these actions is taken, you will be notified. No amendment or termination will reduce the vested percentages of your present accounts in the Employee Stock Ownership Plan (ESOP), or the 401(k) Employee Savings Plan. In fact, you will be fully (100%) vested in the account(s) if, while you are still employed, one or more of the plans is terminated or partially terminated (affecting you) or NCS contributions are permanently discontinued. If a plan is terminated or partially terminated, NCS may decide to pay the vested accounts in such plans as the ESOP, and the 401(k) to the affected participants on any date after the termination date or to follow normal payment rules. When Your Benefits End · Your coverage will cease on the eadiest date below: ,, The date you cease to be eligible for coverage The last day on which you made any required contributions for the coverage The date the plan is canceled Dependent coverage will cease on the earliest date below: The date your coverage ceases ,, The end of the month in which your dependent ceases to be eligible for coverage The last day for which you have made any required contributions for coverage ,, The date dependent coverage is canceled Benefits When You Leave NCS The following list identifies when specific coverages end when your employment with NCS terminates. Medical and Dental coverages end the last day of the calendar month in which your employment ends, unless you choose to extend your benefits. · Short-Term Disability coverage ends the day your employment ends. · Long-Term Disability coverage ends the day your employment ends. Employee Stock Ownership Plan contributions cease when your employment ends. You can maintain your account subject to the rules of the plan. 401 (k) contributions cease when your employment ends. Contributions will continue to be deducted from your final paycheck, unless you call the Norwest Benefits Helpline in a timely manner to stop your contribution. You can maintain your accounts and investments subject to the rules of the plan. Dependent Care and Health Care Expense Account contributions cease when your employment ends. You can only request reimbursements for health care expenses incurred while you were employed at NCS (unless you elect continuation of contributions). You can request reimbursements until March 31 of the following year. Life and Supplemental Life Insurance coverage ends the last day of the calendar month in which your employment ends, unless you choose to extend your benefits. · Accidental Death and Dismemberment coverage ends the day your employment ends. · Business Travel Accident Insurance coverage ends the day your employment ends. Time-off benefits end the day your employment ends. You will be paid for earned unused vacation days for the current plan year. Employee Stock Purchase contributions cease the day your employment ends. Contributions will continue to be deducted from your final paycheck, unless you complete paperwork in a timely manner to stop your contribution. COBRA Continuation of Medical, Dental, and Life Insurance Coverage NCS offers its employees and their dependents the opportunity to temporarily extend their medical, dental, and life insurance coverage, at group rates, in certain instances where coverage under a plan would otherwise end. This provision is in compliance with a federal law referred to as COBRA. You do not have to prove insurability to continue coverage. Participation Employee If you lose your NCS group coverage because of a reduction in your hours or termination of employment (for reasons other that gross misconduct), you have the right to choose to continue your medical, dental, and/or life insurance plan coverage. Spouse or Dependent Child If you are a spouse or dependent child covered by one of the NCS health or dental plans, you have the right to continue coverage if you lose coverage for any of the following reasons: Spouse I · The death of your spouse Termination of your spouse's employment (for reasons other than gross misconduct) or reduction in your spouse's hours Divorce or legal separation from your spouse Spouse's eligibility for Medicare Dependent · · Child The death of a covered parent The termination of a parent's employment (for reasons other than gross misconduct) or a reduction in the parent's hours Parents' divorce or legal separation Parent is eligible for Medicare The dependent ceases to qualift/as a dependent child When Coverage Can Begin Medical, dental, and life insurance coverages end the last day of the calendar month in which your employment terminates. If you elect to continue coverage, your extended coverage is effective on the first of the following month after your coverage ends. COBRA How Continuation of Coverage Works You and your family members are responsible for informing your Human Resources department within 60 days of a divorce, legal separation, or a child's loss of dependent status. In turn, NCS will notify you within 14 days that you have the right to continue coverage. You have 60 days from the date you would lose coverage to inform NCS whether you want to continue coverage. If you choose to continue coverage, NCS will provide the opportunity for you to buy the co~,erage that you had prior to losing coverage. The law requires that you be given the opportunity to continue coverage for 18 months if your employment ceased or your hours were reduced or up to 29 months if your employment ceased due to a disability. Dependent coverage may be extended for up to three years in many cases. However, the law also provides that your continuation of coverage may be shorter for any of the following reasons: · If the premium for your continuation is not paid on a timely basis · If you become an employee eligible for another group health plan · If you become entitled to Medicare · If you are a divorce'/divorcee or widow/widower of a covered spouse and remarry, and your new spouse's group health plan covers you · If NCS were no longer to provide coverage to any of its employees Plan Costs You must pay the full premium plus 2% administration fee for coverage. Dudng the last 180 days of the continuation of coverage period, you will be given the option to convert to an individual plan. Cost of Benefits NCS strives to carefully manage costs while providing quality benefits. Although NCS pays many costs completely, we believe that employees should share in the costs of some benefits. Information about specific plan costs is available in this brochure. We encourage you to maintain your health and carefully plan your future financial needs. NCS pays 1 · · · · · · · · · · · · 00% of the costs for the following benefits: Short-Term Disability 401 (k) Company Match and Administrative Expenses ESOP Basic Life Insurance (two times base annual salary) Basic Spouse/Children Life Insurance Accidental Death and Dismemberment (AD&D) Insurance Business Travel Accident Insurance Holidays (10 per year) Vacation Tuition Reimbursement Scholarship Program Matching Gift Program Employees · · · · · · · · and NCS share the cost for the following benefits: Medical Coverage Dental Coverage Supplemental Life Insurance Supplemental Spouse Life Insurance Long-Term Disability Employee Stock Purchase Plan Dependent Care Expense Account Health Care Expense Account Payment of Premium - Pre-Tax/Post-Tax Option The IRS allows employees to have their medical and/or dental premiums deducted from their pay on a pre-tax or post-tax basis. Pre-tax means that federal, FICA, and in most cases state income taxes are not paid on the deducted premiums. Post-tax means that federal, FICA, and state income taxes are paid on the deducted premiums. If you choose pre-tax payment, IRS regulations restrict when you may make changes to your medical/dental plan. VV~th the pre*tax payment option, changes may be made during Annual Enrollment or during the year if you have a family status change. If you choose post-tax payment, you may drop your coverage, drop a dependent from your coverage, or make a change due to a family status change at any time. Cost of Benefits Monthly costs effective through 12/3'1/98 Single Medical: Regular $ 26.00 Catastrophic $ 8.00 Dental $ 9.50 Employee +1 Family $ 75.00 $ 94.00 $ 22.00 $ 34.00 $-15.00 $ 28.00 LTD $. 11 per $100 of pay Employee Supplemental Life Insurance Your costs for each $1,000 of Supplemental Life Insurance varies according to your age as follows: Your Age Your Monthly Cost Per $1,000 of Insurance Under 30 $ .08 30-34 .11 35-39 .12 40-44 .19 45-49 .30 50-54 .48 55-59 .91 60-69 1.17 For example, if an employee age 35 with annual base pay of $25,000 elects insurance equal to two times pay ($50,000), the monthly cost would be $6.00 (50 x .12). Spouse Supplemental Life Insurance You may also elect additional life insurance for your spouse equal to $10,000, $20,000, $30,000, $40,000 * or $50,000 * (* will require evidence of insurability). The amount of coverage can not exceed employee's amount of basic life insurance. Your cost for coverage will vary according to your spouse's age and the amount of coverage that you elect: Your Monthly Cost Per Plan Spouse Age $10,000 $20,000 $30,000 $40,000 $50,000 Under 30 .80 1.60 2.40 3.20 4.00 30-34 1.10 2.20 3.30 4.40 5.50 35-39 1.20 2.40 3.60 4.80 6.00 40-44 1.90 3.80 5.70 7.60 9.50 45-49 3.00 6.00 9.00 12.00 15.00 50-54 4.80 9.60 14.40 t 9.20 24.00 55-59 9.10 18.20 27.30 36.40 45.50 60-69 11.70 23.40 35.10 46.80 58.50 Joint Application for Financial Assistance State of Iowa New Jobs & Income Program City of Iowa City Property Tax Exemption Business Requesting Financial Assistance: Business Name: National Computer Systems Name of Authorized Person to Obligate the Business: Business Address: 2510 North Dodge Business Contact Person: Gary A. Mainor Telephone: 319/339-6902 Business Federal ID#: 41-0850527 Gary A. Mainor, Vice President Street, Iowa City, IA 52245 Title: Vice President Fax: 319/339-6990 Date of Application Submittal: September 3, 1998 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 representations, 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 wdting for the purpose of procuring economic development assistance from a state agency or political subdivision. SIGNATURE OF COMPANY OFFICER AUTHORIZED TO OBLIGATE BUSINESS: N~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. ecodev/ap~tax.doc Joint Application for Financial Assistance State of Iowa New Jobs & Income Program City of Iowa City Property Tax Exemption What will be the average hourly wage for new jobs, existing jobs, both new and existing jobs at the Iowa City facility? Regular Full- Temporary Time Positions Positions* Total Existing 871 ($17.74) 725 ($7.20) 1,596 ($12.95) New 69 ($15.35) --- 69 ($15.35) Total 940 ($17.42) 725 (7.20~' 1,665 ($12.96) (Numbers shown in parentheses are average salaries.) Based on a 12-month average of temporary headcount. m For all existing jobs and jobs to be created, please provide a list of positions, hourly wage rates for each job classification, and number of positions for each job classification. An attachment is included listing the positions currently held at NCS. Positions to be added, associated with the addition, are listed below. Non-mana.qement positions Median Range Software Developers (12) $26.95 Programmer Aides/Clerical (6) 10.78 Project Directors (15) 21.00 Project Coordinators (15) 13.05 Assoc. Professional Scoring Specialists/ Customer Service Rep (21) $21.49 $30,700-81,400 annual 8.80-12.75 hourly 26,500-60,900 annual 9.20-16.90 hourly 28,500-60,900 annual Of the 725 temporary positions, approximately 462 are compensated at a level less than $7.73. For full-time employees, only the minimum of two salary grades are less than $7.73 per hour. Both of these ranges increase to more than $10 per hour. In addition to pension or profit-sharing plans, please describe fringe benefits provided to employees. All exempt and non-exempt employees receive the same benefits package, including a medical plan selection, dental plan, life insurance (self and family), 401 (k), stock ownership plan, stock purchase plan, accidental death and dismemberment insurance, short term disability, long term disability, and educational reimbursement. NCS also has a myriad of employee professional growth opportunities, training options, social events (summer picnic, holiday party, children's holiday party), special celebrations, clothing purchases, movie ticket discounts, Gold Dollar programs, financial planning seminars, and other special interest activities. (Benefits in Brief attached. ) Please document how much of your operating expenditures (raw materials, supportive services, machinery, equipment, and labor) will be spent within Johnson County and the eastern Iowa area. As feasible, we prefer to purchase raw materials, suppodive services, machinery, and equipment from local businesses. During 1997, approximately $10 million, or 20%, of our operating expenditures were within Johnson County and Eastern Iowa. Some of our major local vendors include Bawden Brothers Printing, First National Bank, Mid-American Energy, U.S. Postal Service, Communications Engineering, Hawkeye Material Handling, Linn Litho, Southgate Development, and Gordon Sivic Trucking Company. Of a total 1997 payroll of just over $45 million for the combined Iowa City-based divisions, approximately 88% was paid to Iowa City- based employees. Please describe the energy and resource efficiency programs, waste reduction, waste exchange, and recycling programs at your Iowa City operation. NCS has systematically replaced inefficient motors, chillers, and lighting ballasts. We are currently in year three of a five-year program to replace inefficient building systems. Improvements to date include: · Lighting replacement program to install energy-efficient T-8 ballasts in florescent light fixtures. · Replacement of chillers with high-efficiency chillers. · Conversion of existing heating and ventilation system to variable air volume (VAV) system. · Automatic lighting controls to program setbacks and automatic shut-off of area lighting to conserve lighting energy. Planned for the remainder of 1998 and into 1999 is the installation of a computer- based Building Automation System (BAS). This BAS will allow us to more efficiently operate building systems and allow for programmable shut down of systems during periods of low occupancy. This will significantly reduce operating energy costs. NCS/Iowa City does produce some non-hazardous waste which is picked up by commercial waste haulers and taken to approved landfill sites. We are, however, committed to recycling all possible materials that result from our business activities. To this end, all testing documents that are not returned to our customers are salvaged through City Cadon in Iowa City and Cedar Rapids, where the paper is sold to recycling companies. All boxes and other cardboard that are not reusable by NCS are baled and salvaged through City Carton. In addition, paper required to operate our business that is generated within the company is recycled. Types of paper that are recycled include white ledger, colored paper, white regular, newsprint, lazer/electrocopy, plastic window envelopes, file stock, and computer cards. In excess of 200 tons of material is recycled per month on average. The Iowa City facility currently recycles 91 percent of waste generated. Not only does NCS receive financial return for recycling unusable material, but we have also reduced the amount of materials sent to the Johnson County landfill. m 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. Yes. We currently use corrugated boxes made from recycled materials. We also purchase large amounts of continuous form computer paper made from recycled materials for printing reports; this, in fact, is our "stock form of choice." Will the Iowa City operation develop renewable energy resources or products that conserve energy? If so, please describe. No. 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 describe commitment to becoming involved in the community. NCS has a long-standing tradition of supporting Iowa City and the surrounding communities through financial contributions and volunteer efforts by our employees. For over 15 years, NCS has provided in-kind and volunteer services to the Iowa City Hospice Road Race event by key entering all pledge sheets, running reports, and producing and mailing invoices for collection of pledges. NCS is recognized as a Gold-Plus Sponsor. Each year, 25-30 of our employees volunteer their time and effort to accomplish this. NCS also sponsors a team of employees who gather pledges and then participate in this annual event, either by running, walking, or swimming. Likewise, for the last few years, we have provided similar in-kind services to the Johnson County Big Brothers/Big Sisters organization in their annual fund-raising Bowl For Kids Sake event. NCS also sponsors bowling teams of employees who gather pledges and participate in this event. NCS is frequently one of the top fundraisers for this event. NCS is a major supporter of United Way. Each year a team is assembled to conduct our local employee fund drive, finding fun ways to encourage our employees to participate, either through direct donations or through payroll deduction. Over 60% of our employees contributed more than $55,000 in 1997. Additionally, our Corporate offices contribute to the Johnson County United Way Campaign through a 20% match of employee contributions. NCS also funds a Contributions Committee with an annual budget of between $15,000 and $20,000. This Committee is charged with responding to requests received throughout the year from various organizations throughout Johnson County and the surrounding areas. Examples of our financial contributions for 1998 include, but are certainly not limited to: · American Diabetes Association · American Heart Association · Grant Wood Area Chapter/American Red Cross · Cedar Rapids Freedom Festival · City High Science Club · Domestic Violence Intervention Program · Emergency Housing Project · Eulenspiegel Puppet Theatre · Festival of Trees · Family Service Agency · Hancher Center for the Arts · Iowa Arts Festival · Iowa City Community School District Foundation · Iowa City Community Theatre · Iowa City Police Association Shop With a Cop Program · Junior Achievement · KHAK Radiothon for the Childrens Miracle Network · March of Dimes Walk America · Solon Dollars for Scholars Program · Iowa Special Olympics NCS is also a long-standing, active member of the Iowa City Chamber of Commerce and provides financial support for many of their activities throughout the year. One of our division vice presidents has served on the Chamber Board for the last four years and currently is serving as Chairman of the Chamber. Several of our employees also serve on the various sub-committees sponsored by the Chamber. Additionally, a great number of our employees are active in various civic and charitable organizations throughout Johnson County. Financial assistance from the City of Iowa City requires a repayment clause in the property tax exemption 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? Yes. 10. If the City did not provide a financial incentive, would the project proceed? While we are continuing to look at other locations for expanding our business in the future, adding on to our existing Iowa City campus is our favored choice at this point. Should Iowa City decide against providing a financial incentive, we would have to revisit our position. We may still choose to expand our facility without Iowa City's support. 11. Please attach 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. These documents are attached. 12. Does the company have a safety plan/program? Please describe. NCS has a Safety Committee comprised of employees throughout the organization. Their mission is to "Maintain NCS as a safe place to work," by developing, administering, and monitoring the safety program; continuously striving to reduce accident frequency and severity, and ensuring that our equipment, facilities, and methods of operations are fully compliant with OSHA, lOSHA, NFPA, UBN, NEC standards. This team is charged with overseeing issues relating to workers' compensation injuries, ergonomics, and emergency procedures. The Committee is also responsible for ensuring that first aid boxes, located throughout the buildings, are restocked on a regular basis. They are also charged with conducting frequent fire and tornado drills for all facilities and ensuring that employees respond as appropriate. SALAHY GRADE 13 13 14 14 14L 14 14L 14 14 15 15 15 15 15 15 15 155 15 16 16 16T 16 16 16 16 16 16 16 16 16T 16L 16 165 16 165 16L 16 17 17 17 17 17 17L 17T 17 17 17 17 17L 17T 17 18 18 18L 18 18 19 CODE 657957 655008 104003 655987 658169 655009 658314 258005 258315 655981 654834 257569 755020 654814 655013 755018 807524 254880 105030 755038 758308 255032 655993 657950 655015 655017 655012 255029 258324 255075 257985 655014 657511 257516 257980 808338 805026 258327 805069 557585 458321 257570 258170 257571 254818 755910 805930 255027 258166 254808 257975 104005 808004 808337 654825 654872 108011 EE~J CODE 53 53 53 53 53 53 53 53 53 53 53 53 31 53 53 53 31 52 53 31 31 53 53 53 53 53 52 52 52 52 53 53 53 53 31 31 53 53 53' 53 53 53 53 53 53 52 52 52 52 31 31 53 53 53 FY'1998 NON-EXEMPT POSITION SCHEDULE CENSUS JOB CODE 363 363 337 385 385 385 335 313 313 363 363 348 363 363 363 329 215 315 337 308 308 345 385 363 363 363 363 319 319 319 319 364 364 319 319 215 215 379 217 315 328 348 348 348 389 347 363 313 313 313 315 337 215 215 347 363 337 wIc CODE 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 5191 8810 8810 8810 5191 8810 8810 5191 5191 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 5191 5191 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 5191 5191 8810 8810 8810 JOB TITLE MAIL CLERK I PRODUCTION CLERK ACCOUNTING COORDINATOR I DATA ANALYSIS/ENTRY CLERK DATA ANALYSIS/ENTRY CLERK-KS DATA ENTRY OPERATOR DOCUMENT CONVERSION CLERK GENERAL CLERK-G&NM&S GENERAL CLERK-PROD EDIPMS ANCILLARY CLERK HEADER CHECK CLERK INFORMATION SPECIALIST I INPUT/OUTPUT CLERK POST-EDIT NO-GO CLERK QA CLERK TAPE LIBRARIAN UTILITY MAINTENANCE TECHNICIAN - TX WORD PROCESSING OPERATOR I ACCOUNTING COORDINATOR II COMPUTER OPERATOR, JUNIOR COMPUTER OPERATOR-JUNIORI11 HR COPY MACHINE OPERATOR DATA PROCESSING CLERK LEAD IMAGE PROCESSING SPECIALIST MATERIAL HANDLER MACHINE OPERATOR QUEUE CONTROL CLERK RECEPTIONIST SECRETARY/RECEPTIONIST SECRETARY/RECEPTIONIST - DC SECRETARY/RECEPTIONIST - KS SHIPPING CLERK SHIPPING CLERK - TX SWITCHBOARD OPERATOR/RECEPTIONIST SWITCHBOARD/RECEPTIONIST - TX UTILITY MAINTENANCE TECHNICIAN- KS UTILITY MAINTENANCE TECHNICIAN ADMINISTRATIVE CLERK FORMS DESIGNER GRAPHIC ARTS SPECIALIST II HUMAN RESOURCES AIDE INFORMATION SPECIALIST II INFORMATION SPECIALIST II - KS INFORMATION SPECIALIST II - DC PRODUCT LINE AIDE PROGRAMMER AIDE QUALITY AUDITOR SENIOR SECRETARY SENIOR SECRETARY SENIOR - KS SECRETARY SENIOR - DC WORD PROCESSING OPERATOR II ACCOUNTING COORDINATOR III MAINTENANCE TECHNICIAN I MAINTNENACE TECHNICIAN I - KS MICROFILM TECHNICIAN PACKAGING MACHINE TECHNICIAN ACCOUNTING ~;OORDINATOR SENIOR 4/9/98 1998 SALAHYHANGE MINIMUM-MIDPOINT-MAXIMUM $7.25- $8.70 -$10.15 13L: $7.20- $8.55- $9.85 $7.65- $9.20- $10.70 14L: $7.50- $8.95-$10.45 $8.10- $9.70 - $11.30 15L: $7.80- $9.45- $11.10 155: see grade 16 $8.50 - $10.25 - $11.95 16L: $8.15 - $9.95 - $11.75 165: see grade 17 16T: see grade 19 $8.80 - $10.80 - $12.75 17L: $8.45 ' $t0.50 - $12.55 17T: see grade 20 $9.30- $11.40-$13.45 18L: $8.80-$11.00-$13.20 $9.80- $12.00-$14.20 FY1998 NON-EXEMPT POSITION SCHEDULE SALARY JUB EEU CENSUS W/C GRADE CODE CODE JOBCODE CODE 19 258034 51 313 8810 19 755050 31 308 5191 19T 758309 31 308 5191 19 807525 53 363 8810 19 805051 53 217 8810 19 557981 53 188 8810 19 455924 53 328 8810 19L 458303 53 328 8810 19 658024 53 8810 19 257560 53 348 8810 19L 258342 53 348 8810 19T 257572 53 348 8810 19 655054 53 327 8810 19 658322 53 363 8810 19 655996 53 8810 19 658015 53 363 8810 19 755053 53 347 8810 19 258012 53 363 8810 195 258017 53 363 8810 19 255953 53 184 8810 19 807584 53 363 8810 19 754870 31 213 5191 20 257587 51 313 8810 JOB TITLE ADMINISTRATIVE SERVICES COORDINATOR COMPUTER OPERATOR-MF COMPUTER OPERATOR/11 HR CONTINUOUS IMPROVEMENT COORD. FORMS DESIGNER II GRAPHIC ARTS SPECIALIST III HUMAN RESOURCES ASSISTANT HUMAN RESOURCES ASSISTANT-KS IMAGE TEAM LEADER INFORMATION SPECIALIST III INFORMATION SPECIALIS T III - KS INFORMATION SPECIALIST III - DC INVENTORY MATERIALS COORDINATOR LEAD MACHINE OPERATOR PROCESSING TEAM LEADER PRODUCTION CONTROL COORDINATOR PROGRAMMER AIDE SENIOR PROJECT COORDINATOR I PROJECT COORDINATOR I - TX PROPOSAL COORDINATOR QUALITY CONTROL AUDIT COORDINATOR TELECOMMUNICATIONS TECHNICIAN, JR ADMINISTRATIVE ASSISTANT 21 257514 53 326 8810 DOCUMENTATION COORDINATOR 21T 258020 53 326 8810 DOCUMENTATION COORDINATOR - DC 21 304839 53 217 8810 FORMS DESIGNER SENIOR 21 458153 53 027 8810 HUMAN RESOURCES ADMINISTRATOR 21 805049 31 215 5191 MAINTENANCE TECHNICIAN II 21 655044 53 363 8810 MATERIAL HANDLER SENIOR 21S 655096 53 363 8810 MATERIAL HANDLER SENIOR - TX 21 655039 53 363 8810 PROCESSING COORDINATOR SENIOR 21L 658168 53 363 8810 PROCESSING COORDINATOR SENIOR - KS 21 258013 53 363 8810 PROJECT COORDINATOR II 21 655045 53 364 8810 SHIPPING COORDINATOR 21 458329 53 27 8810 TRAINING COORDINATOR 22 755062 31 308 5191 COMPUTER OPERATOR SENIOR - MF 22T 758310 31 308 5191 COMPUTER OPERATOR-SENIOR/11 HR 22 655060 31 363 5191 MACHINE COORDINATOR SENIOR 22 805065 31 215 5191 MAINTENANCE TECHNICIAN SENIOR 22 258014 53 363 8810 PROJECT COORDINATOR Ill 22 255063 52 313 8810 SECRETARY EXECUTIVE 23 755O66 31 213 5191 TELECOMMUNICATIONS TECHNICIAN 24 755068 31 308 5191 COMPUTER OPERATOR LEAD Ir 24 257562 53 327 8810 TECHNICAL SUPPORT COORD. - FORMS ITALICS INDICATE CHANG~,~ ~iN~ LAST DISTRIBU~'ION OF ~'HIS SCHED~JL~.' ' ' ' 4/9/98 1998 SALAHY RAN(,jE MINIMUM-MIDPOINT-MAXIMUM 19L: $9.20 - $11,50 - $13.85 19S: see grade 20 19T: see grade 22 $10.35 - $12.65 - $15.00 20L: $9.65 - $12.20 - $14.75 $10.70 - $13.35 - $16.05 21L: $10.35 - $13.05 - $15,70 21 S: see grade 22 21T: see grade 24 $11,30- $14.10- $16,90 22L: $11.05-$13.90-$16.75 22T: $13.25-$16,55-$19.85 $11.90-$14.85- $17.85 23L: $11.80-$14.90-$18.00 $12.55- $15.70- $18.85 24L: $12.55- $15.90-$19.30 L - THE LETTER L (LAWRENCE) SUFFIX INDICATES THE SALARY RANGE FOR THE POSITIONS LOCATED IN LAWRENCE. S - THE LETTER S (SINGLE) SUFFIX INDICATES THAT, DUE TO LABOR MARKET CONDITIONS, THE SALARY RANGE USED FOR THE JOB IS ONE SALARY GRADE HIGHER THAN THE JOB EVALUATION WOULD INDICATE. T - THE LETTER T (TRIPLE) SUFFIX INDICATES THAT, DUE TO EITHER LABOR MARKET CONDITIONS OR CALCULATION OF OVERTIME, THE '~ALARY RANGE USED FOR THE JOB IS THREE PAY GRADES HIGHER THAN THE JOB EVALUATION WOULD INDICATE. FY'1998 PROFESSIONAL POSITION SCHEDULE CSD, GSD MSD l SALARy GRADE 21 22 21 21T 21 21 21 21T 21 21 21 21T 21 22 22T 22 22 22 22S 22D 22T 22 22D 22'F 23 23 23 23 23 23 23 23 23 23 23T 23 23 23 24 24 24 24 24 24 24 24D 24 24T 24D 24T JOB 'CODE 108006 104903 154905 458042 458343 808326 557983 204847 105983 207580 807513 808010 754901 204901 207954 104903 558328 205971 207967 757529 208333 805908 757534 757969 108007 456096 555982 207951 207971 207978 654902 204852 659001 807596 808018 455978 654842 754363 108008 155081 754921 104829 555991 654918 105999 757530 757595 208334 757535 758001 JOBTITLE ACCOUNTANTI FINANCIALANALYSTASSOC. BUYER ASSOCIATE HUMAN RESOURCESADMINISTRATOR-D.C. HUMAN RESOURCES REP ASSOC. 8810 INTERIORS PLANNER MARKETING RESEARCH ANALYST AS~OC. '" POLICY A~ALYST ASSOCIATE - DC PRICING ASSOCIATE PROJECT ADMINISTRATOR A~SOCIATE TECHNICAL WRITER ASSOCIATE TECHNICAL WRITER ASSOCIATE - DC ' USER SUPPORT ANALYST ASSOCIATE CUSTOMER SERVICE REPRESENTATIVE I CUSTOMER SERVICE REP I - DC FINANCIAL ANALYST ASSOC. GRAPHIC ARTIST I PROJECT DIRECTOR ASSOCIATE PROJECT DIRECTOR ASSOCIATE - TX EEO CENSUS WIC CODE JOBCODE CODE 21 023 8810 21 023 8810 21 029 8810 21 027 8810 21 027 8810 21 185 21 256 8810 21 065 8810 21 025 8810 21 213 8810 21 184 8810 21 184 8810 21 065 8810 21 013 8810 21 013 8810 21 023 8810 21 188 8810 21 013 8810 21 013 8810 22 064 8810 SOFTWARE DEVELOPER 21 013 8810 SYSTEM REQUIREMENTS ANALYST I - DC 21 065 8810 TECHNICAL ADMINISTRATOR 22 064 8~10 TECHNICAL SUPPORT I 22 064 8810 TECHNICAL SUPPORT I - DC 21 023 8810 ACCOUNTANT II 21 027 8810 HUMAN RESOURCES REPRESENTATIVE 21 166 8810 MARKETING REP ASSOCIATE 21 013 8810 PERF. ASSESSIlENT SCORING CTR. REP. I 21 166 8810 PERF. ASSESSMENT SPECIALIST I 21 363 8810 PRODUCTION ANALYST 21 363 8810 PRODUCTION CONTROL REPRESENTATIVE 21 013 8810 PROJECT ADMINISTRATOR I 21 065 8810 TEAM LEAD 21 184 8810 TECHNICAL WRITER I 21 184 8810 TECHNICAL WRITER I - DC 21 027 8810 TRAINING & DEVELOPMENT SPECIALIST - DC 21 373 8810 TRANSPORTATION REPRESENTATIVE 21 065 8810 USER SUPPORT ANALYST 21 023 8810 ACCOUNTANT 21 029 8810 BUYER 21 308 8810 COMPUTER OPERATIONS REPRESENTATIVE 21 023 8810 FINANCIAL PLANNING ANALYST 21 188 8810 GRAPHIC ARTIST II 21 065 8810 OPERATIONS REPRESENTATIVE 21 025 8810 PRICING A~IALYST 22 064 8810 SOFTWARE DEVELOPER II 21 065 8810 SYSTEMS ADMINISTRATOR 21 013 8810 SYSTEM REQUIREMENTS ANALYST II - DC 22 064 8810 TECHNICAL SUPPORT 22 064 8810 TECHNICAL SUPPORT II - DC 4/g/g8 1998 SALARY RANGE MINIMUM-MIDPOINT-MAXIMUM $24.700 - $32,100 - $39,500 21T: see grade 24 $26.500 - $34,500 - $42.400 22D: see grade 24 22S: see grade 23 22T: see grade 25 $28,500 - $37,100 - $45.600 23T: see grade 26 $30.700- $39,900- $49,000 24D:see grade 26 24T:see grade 27 FY'1998 PROFESSIONAL POSITION SCHEDULE CSD, GSD MSD 4/9/98 SALARY JOB EE{.) CENSUS WIC GRADE CODE CODE JOB CODE CODE 25 104835 21 033 8810 25 204910 21 013 8810 25T 205088 21 013 8810 25 808330 21 185 8810 .... S"""Zs 96 "21 25T 21 065 25T 208312 21 027 25 557987 21 166 25T 558319 21 166 25 207961 21 013 25 207972 21 166 25 204853 21 013 25 205972 21 013 25T 208021 21 013 25S 207966 21 013 25T 205950 21 065 25 808027 21 213 · 25 807574 21 184 25T 808019 21 184 25 754914 21 065 26 155079 21 029 26 208346 21 064 26D 208350 21 064 26 306123 22 055 26 105077 21 023 26 208045 21 064 26 655078 21 363 26D 757531 22 26T 208332 21 26 205986 21 26D 7~7536 22 26T 758391 22 26 654923 21 27 204947 21 27T 208048 21 27 104955 21 27 205973 21 27S 207968 21 27T 207527 21 27 807597 21 27T 807970 21 27 757959 21 064 013 064 064 064 373 013 013 025 013 013 013 184 , 184 065 JOB TITLE CONTRACTS ADMINISTRATOR CUSTOMER SERVICE REPRESENTATIVE II CUSTOMER SERVICE REP. II - DC FACILITIES SPECIALIST 1998 SALARY RANGE MINIMUM-MIDPOINT-MAXIMUM $33,000 - $42,800 - $52,700 25S: see grade 26 25T: see grade 28 8810 INFORMATION ANALYST - DC 8810 INSTRUCTIONAL DESIGN SPECIALIST-DC 8810 MARKETING REPRESENTATIVE 8810 MARKETING REPRESENTATIVE - DC 8810 PROFESSIONAL SCORING CENTER REP. II 8810 PERFORMANCE ASSESSMENT SPECIALIST II 8810 PROJECT ADMINISTRATOR II 8810 PROJECT DIRECTOR 8810 PROJECT DIRECTOR - DC 8810 PROJECT DIRECTOR - TX 8810 REQUIREMENTS ANALYST/ED~' - DC 8810 SR. TELECOMMUNICATIONS S~RVICES REP. 8810 TECHNICAL WRITER II 8810 TECHNICAL WRITER II - DC 8~10 USER SUPPORT ~,NALYST SENIOR 8810 BUYER SENIOR 8810 CMM PROCESS ENGINEER 8810 CMM PROCESS ENGINEER (TECHNICAL) 8810 ENGINEER II 8810 FINANCIAL PLANNING ANALYST SENIOR 8810 PHASE REVIEW SYSTEM SPECIALIST 8810 PRODUCTION CONTROL REP. SR. 8810 SOFTWARE DEVELOPER I11 8810 SYSTEM REQUIREMENTS ANALYST III 8810 TEAM PROJECT MANAGEMENT SPECIALIST 8810 TECHNICAL SUPPORT 8810 TECHNICAL SUPPORT III - DC 8810 TRANSPORTATION REP SENIOR 8810 CUSTOMER SERVICE REP SENIOR 8810 CUSTOMER SERVICE REP SENIOR - DC 8810 PRICING ANALYST SENIOR 8810 PROJECT DIRECTOR SENIOR 8810 PROJECT DIRECTOR SR - TX 8810 PROJECT DIRECTOR SENIOR - DC 8810 TECHNICAL WRITER, SENIOR 8810 TECHNICAL WRITER SENIOR - DC 8810 USER SUPPORT ANALYST ADVISORY $35,400 - $46,100 - $56,700 26D: see grade 28 26T: see grade 29 $38,100 - $49,500- $60,900 27S: see grade 28 27T: see grade 30 SALARY JOB EEU GRADE CODE CODE 28 104957 21 28 208347 21 28D 209000 21 28 304954 21 28 554939 21 28T 208003 21 28 208305 21 28D 757532 22 28D 757537 22 29 208044 21 29D 757533 22 29T 758026 22 29D 757538 22 30 306308 22 30D 757590 22 30D 757539 22 FYt998 PROFESSIONAL POSITION SCHEDULE CSD, GSD MSD J CODE 033 064 064 055 256 013 063 064 064 166 8810 064 8810 064 8810 064 8810 - 064 8810 064 8810 064 8810 4/9/98 1998 SALARY RANGE JOB TITLE MINIMUM-MIDPOINT-MAXIMUM 8810 CONTRACT ADMINISTRATOR SENIOR $40,900 - $53,200 - $65,500 8810 CMM PROCESS ENGINEER, SR. 28D: see grade 30 8810 CMM PROCESS ENGINEER, SR. (TECHNICAL) 28T: $50,900 - $66,100 - $81,400 8810 ENGINEER 111 8810 MARKETING REPRESENTATIVE SENIOR 8810 PROJECT MASON - DC 8810 SR PHASE REVIEW SPECIALIST 8810 SOFTWARE DEVELOPER IV 8810 TECHNICAL SUPPORT IV ADVISORY PERFORMANCE ASSESSMENT SPEC. $44,000 - $57,200 - $70,400 SOFTWARE DEVELOPER V SOFTWARE DEVELOPER V - D.C. TECHNICAL SUPPORT V ENGINEER IV SOFTWARE DEVELOPER VI TECHNICAL SUPPORT VI 29D: $50,900 - $66,100 - $81,400 29T: $54,700 - $71,100 - $87,500 $47,300 - $61,500 - $75,700 30D: $54,700 - $71,100 - $87,500 *THE LETTER T (TRIPLE) SUFFIX INDICA'I~S THAT, DUE TO LABOR MARKET CONDITIONS, THE SALARY RANGE USED FOR THE JOB IS THREE SALARY GRADES HIGHER THAN THE JOB EVALUATION WOULD INDICATE. *THE LETTER S (SINGLE) SUFFIX INDICATES THAT, DUE TO LABOR MARKET CONDITIONS, THE SALARY RANGE USED FOR THE JOB IS ON SALARY GRADE HIGHER THAN THE JOB EVALUATION WOULD INDICATE. *ITALICS INDICATE CHANGES SINCE LAST DISTRIBUTION OF THIS SCHEDULE I I I I FY1998 MANAGER POSITION SCHEDULE CSD, GSD MSD 4/9198 SALARY JOB EEO CENSUS WIC GRADE CODE CODE JOB CODE CODE 28 254926 11 022 8810 28 754929 11 022 8810 28 657956 11 166 8810 28 208325 11 022 8810 28 207521 11 022 8810 28 655946 11 022 8810 28 654832 11 022 8810 28 207564 11 022 8810 28T 208022 11 022 8810 28 757979 11 022 8810 28 658311 11 022 8810 28 658344 11 022 8810 28 654878 11 022 8810 28 654931 11 022 8810 28 654927 11 022 8810 28 254942 11 022 8810 28 658349 11 022 8810 28 658318 11 022 8810 28 207955 11 022 8810 28 807999 11 022 8810 28T 208316 11 022 8810 28 458302 11 008 8810 28 208049 11 022 8810 28 654932 11 022 8810 29 205916 11 013 8810 29T 205925 11 013 8810 29 558029 11 013 8810 29T 205919 11 022 8810 29 557505 11 013 8810 29 208037 11 022 8810 29 T 208339 11 022 8810 29 155906 11 009 8810 29T 207563 11 022 8810 29 204950 11 022 8810 30 208331 11 022 8810 30 108047 11 007 8810 30 207509 11 022 8810 30 754981 11 022 8810 30 107594 11 033 8810 30 208339 11 022 8810 30 105976 11 007 8810 3OT 204937 11 008 8810 30 457986 11 008 8810 30 208218 11 022 8810 30 10804 1 11 022 8810 30 208038 11 022 8810 30 654952 11 022 8810 30 207510 11 022 8810 30T 308033 11 022 8810 JOB TITLE MANAGER ADMINISTRATIVE SERVICES MANAGER COMPUTER OPERATIONS SHIFT MANAGER CPS PRODUCTION MANAGER CPS QUALITY MANAGER CUSTOMER SERVICE MANAGER DATA INPUT/EDITING MANAGER DATA PREPARATION/RECEIPT MANAGER DEPUTY PROJECT MANAGER DEPUTY PROJECT - DC MANAGER IMAGE PROCESSING MANAGER INSERTING MANAGER MANUAL FULLFILLMENT MANAGER MES PROCESSING MANAGER OUTPUT PROCESSING MANAGER PACKAGING MANAGER PLANT SERVICES MANAGER PRINTING MANAGER PROCESSING MANAGER PROJECT ADMINISTRATION MANAGER PROPOSAL MANAGER SYSTEM REQUIREMENTS MANAGER TRAINING MANAGER USER SERVICES MANAGER WAREHOUSE & TRAFFIC MANAGER BUSINESS DEVELOPMENT I MANAGER BUSINESS DEVELOPMENT I - DC MANAGER CREATIVE SERVICES MANAGER FINANCIAL AID PROJECTS - DC MANAGER MARKETING SUPPORT MANAGER PROJECT MANAGER PROJECT - DC MANAGER PURCHASING MANAGER SPECIAL PROJECTS - DC MANAGER TAAS PROJECT MANAGER BUSINESS DEVELOPMENT MANAGER CAS COMPLIANCE MANAGER CERTIFICATION AND LICENSING MANAGER COMPUTER OPERATIONS MANAGER CONTRACT ADMIN. MANAGER CUSTOMER SERVICE If MANAGER GENERAL ACCOUNTING MANAGER HUMAN RESOURCES & ADMIN. - DC MANAGER HUMAN RESOURCES & ADMIN. - KS MANAGER MDE PROJECT MANAGER PLANNING AND ANALYSIS MANAGER PRODUCT MANAGER PRO~'UCTION CONTROL MANAGER PROJECT MANAGER PROJECT - D.C. 1998 SALARY RANGE MINIMUM-M1DPOINT-MAXIMUM $40,900 - $53,200 - $65,500 28T: see grade 31 $44,000 - $57,200 - $70,400 29T: see grade 32 $47,300 - :$61,500 - $75,700 30D: see grade 32 30T: see grade 33 FY1998 MANAGER POSITION SCHEDULE CSD, GSD MSD 4/9/98 SALARY JOB EEO CENSUS GRADE CODE CODE JOB CODE 30D 757964 13 022 30 207996 11 022 30 207523 11 022 30D 757992 13 022 30 708~01 21 31 208036 11 022 31 204985 11 022 31 207550 11 013 31 304978 13 022 31 658043 11 022 31 758035 13 022 31 208323 11 022 31T 209002 11 022 31 804979 11 022 31D 757990 13 022 31D 757989 13 022 31D 757993 13 022 31 204857 11 022 31 208030 11 022 31 208307 11 022 32 208039 11 022 32 758317 11 022 32T 558320 11 013 32 758304 11 022 32 457013 11 008 32 258046 tl 022 32 208040 11 022 32D 757991 13 022 32D 757994 13 022 33 108335 11 007 33 204985 11 022 33 204844 11 022 33 754991 11 022 3~""~i990 11 022 34 208345 1t 022 34 757546 13 022 34 105005 11 007 34 207547 11 004 34 207591 11 022 35 657545 11 022 35 457598 11 008 WIC CODE 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 8810 JOB TITLE MANAGER SOFTWARE DEVELOPMENT I MANAGER SPECIAL PROJECTS MANAGER STATE AND FEDERAL SERVICES MANAGER TECHNICAL SUPPORT I SALES MANAGER ACCOUNT EXECUTIVE MANAGER ASSESSMENT SERVICES MANAGER BUSINESS DEVELOPMENT II MANAGER CES SCANNING ENG. SERVICES MANAGER OPERATIONS ADMIN MANAGER MIS MANAGER PROJECT MANAGER PROJECT - DC 8810 MANAGER QUALITY RESOURCES 8810 MANAGER SOFTWARE DEVELOPMENT II 8810 MANAGER SOFTWARE QUALITY ASSURANCE 8810 MANAGER TECHNICAL SUPPORT II 8810 MANAGER TITLE IV WAN PROJECT 8810 MANAGER PRODUCT PSC SERVICES 8810 PROGRAM MANAGER, CENSUS 8810 DIRECTOR PRODUCT MANAGEMENT 8810 DIRECTOR TECHNOLOGY COORDINATION 8810 MANAGER BUSINESS DEVELOPMENT DC 8810 MANAGER CROSS PROJECT SERVICES 8810 MANAGER HUMAN RESOURCES 8810 MANAGER ITD & MSD FACILITIES 8810 MANAGER PSYCHOMETRICS 8810 MANAGER SOFTWARE DEVELOPMENT III 8810 MANAGER TECHNICAL SUPPORT III 8810 CONTROLLER 8810 MANAGER ASSESSMENT SERVICES 8810 MANAGER CPS PROJECT 8810 MANAGER DATA CENTER 88~" BA'EA'GER'PR'O"CESSING OPERATIONS 8810 'blR, PERF ASSESSEMENT SCORING CN[R 8810 DIRECTOR, SOFTWARE DEVELOPMENT 8810 SENIOR CONTROLLER 8810 VICE PRESIDENT ASSESSMENTS 8810 VICE PRESIDENT BUSINESS UNIT 8810 DIRECTOR OPERATIONS 8810 DIRECTOR HUMAN RESOURCES AND ADMIN. 1998 SALARY RANGE MINIMUM-MIDPOINT-MAX!MUM $47,300 - $61,500 - $75,700 30D: see grade 32 30T: see grade 33 $50,900 - $66,100 - $61,400 31D: see grade 33 31T: see grade 34 $54,700 - $71,100 - $67,500 32D: see grade 34 32T: see grade 35 $58,800-$76,400-$94,000 $63,200 - $82,1 O0 - $101,000 $67,900 - $68,300 - $108,700 *THE LETTER D (DOUBLE) SUFFIX INDICATES THAT, DUE TO LABOR MARKET CONDITIONS, THE SALARY RANGE USED FOR THE JOB IS TWO SALARY GRADES HIGHER THAN THE JOB EVALUATION WOULD INDICATE. *THE LETTER T (TRIPLE) SUFFIX INDICATES THAT, DUE TO LABOR MARKET CONDITIONS, THE SALARY RANGE USED FOR THE JOB IS THREE SALARY GRADES HIGHER THAN THE JOB EVALUATION WOULD INDICATE. *THE LETTER S (SINGLE) SUFFIX INDICATES THAT, DUE TO LABOR MARKET CONDITIONS, THE SALARY RANGE USED FOR THE JOBS IS ONE SALARY GRADE HIGHER THAN THE JOB EVALUATION WOULD INDICATE. ITALICS INDICATE CHANGES SINCE LAST DISTRIBUTION OF THIS SCHEDULE. Financial Hi;hli;hts $331,i59 Along with our acquisitions, we invested in several new services required by our Education customers. As an example, the PIano, Texas school district awarded us an $8 mil- lion, five-year outsourcing contract to implement and manage the ongoing operation of NCS software. We are also enjoying exceptional growth in our network design and implementation services for schools (some 70-80 percent of all computers in schools are not yet networked!). Cities, counties, and states all over America and, increasingly, around the world look to NCS to deliver technology to improve the process of education. The result: Education revenues grew nearly 30 percent last year! Leverage Expertise in Data Management In Data Management, NCS' other large marketplace, we continue to deliver impressive results to customers using many of the same core skills we use in Education. Revenue growth in this sector was near 10 percent. Here we solve customer problems associated with quality measurement, product warranty registrations, order entry, and other complex data collection needs that may require value-added collection, reporting, or interpretation services. Examples of success in this sector include the impressive wins we enjoyed in Mexico where we process and verify the ballots associated with that country's Equal Access telephone initiative. Additionally, we were awarded a major role in conducting the US Census in 2000. Hopefully you can appreciate the similarities that exist between processing a large-scale test for a state school system and the processing of millions of census forms. Both require high accuracy, the ability to manage complex reporting and Iogistics, and exceptional responsiveness to customers. To support our rapid expansion, we continue to invest in the infrastructure of our Company with improved information systems, state-of-the-art software development methodologies, and company-wide training in program management skills. To support our growth, we have just completed new facilities in Cedar Rapids, Iowa; Lawrence, Kansas; and Melbourne, Australia. We will more than double the size of our Mesa, Arizona, location during fiscal year 1998. There are so many people who deserve recognition for our success that it is impossible to identify them in this brief letter I do, however, want to thank our fine Board of Directors for their excellence in guiding, governing, and protecting the interests of our constituencies. I particularly want to express our gratitude to Charles W. Oswald, our past Chairman and Chief Executive, and General John W. Vessey, former Chairman of the Joint Chiefs of Staff, for their outstanding contribution to our Company as directors. Both of these gentlemen will retire from our Board this May. We will miss them both. As we head into 1998, our momentum is intact. However, I assure you that no one at NCS plans to relax. We will continue to listen to what our customers say, and we will do all that we can to make NCS a truly great place to work in order to retain and attract the people we need to effectively compete in our markets. What has all of this meant to you, our shareholders?Your share price was up 40 percent during fiscal 1997 and has increased approximately 300 percent in less than four years. You have our firm commitment that all of us at NCS will continue to work as hard as we possibly can to meet the needs of our cus- tomers, our employees, and, of course, you, our shareholders. Thank you for your continuing confidence in NCS. Russell A. Gullotti Chairman, President and Chief Executive Officer April 13, 1998 At A Glance NCS 1997 Annual Report 3 Large Scale Data Management The Business of Education More schools are choosin8 NCS for inteBrated enterprise applications, Sen, d_ces: Technology-Led School Reform NCS and schools join forces for technology-led school reform. Accountability in Education NCS, a leader in testing and assessmerit products an~j serwces, Curriculum Iris Large Scale Data Management: Information-The New Currency NCS is helping companies succeed in the information- driven marketplace, Census 2000 Management's Discussion and Analysis of Results of Operations and Financial Condition The fiscal years referenced herein are as follows: Fiscal Year Year Ended 1997 January 31,1998 1996 January 31,1997 1995 January 31, 1996 Income and Expense Items as a Percentage of Revenues Fiscal Year 1997 1996 1995 Revenues Information serv,ces 48.2% 47.6% 43.4% Product sales 39.9 40.5 43.4 Maintenance and support 11.9 11.9 13,2 Total revenues 100.0 100,0 1000 Costs of Revenues Cost of information services 76.7 78.5 77,0 Cost of product sales 42.0 46.3 46.9 Cost of maintenance and support 69.5 67.4 69.0 Total gross profit 38.0 35.9 37.1 Operating Expenses Sales and marketing 14.0 12.5 128 Research and development 2.1 3.0 28 General and administrative 11.3 100 11.3 Acquisition re~ated charges - 2.4 Income from operations 10.6 8.0 10.2 Income from continuing operations before income taxes 10.3 8.0 9.2 income from continuing operations 6.2% 4.]% 5.5% ~As a percentage of the respective revePue cap:loP National Computer Systems, Inc. (the Company or NCS) is an information services company, providing software, services and systems for the collection, management and interpretation of data. The Company markets these products and services predominantly ~n education, but also to business, government and other markets through its various operating units. Recap of 1997 Results Total revenues increased 22,6% in fiscal 1997 to $406.0 million compared to last year's $331,2 million, with approximately half of the ~ncrease attributable to acquisitions. Refer also to Note 2 of Notes to Consolidated Financial Statements for further discussion of acquisitions, The Company's overall gross margin on revenues increased $35.7 million to 38.0% as a percentage of total revenues, versus last year's gross margin percentage of 35.9%. Operating expenses, however, increased to 274% of revenues in fiscal 1997, compared to 25.5% of revenues in fiscal 1996, before acquisition related charges. These year-to year margin and expense ~ncreases were partially caused by the acquired businesses, as they are predominantly intellectual property businesses (software and assessment products) with higher gross margins and higher operating expenses. relative to the remainder of the Company, Nonetheless, overall operating margins increased to 10,6% of revenue in fiscal 1997 from 10.4% in fiscal 1996 and operating income ~n dollars increased 24.6% to $43.0 million. ~ncome tax rates were consistent with the prior year before the effects of the special items described below. Income from continuing operations in fiscal 1997 totaled $25.2 million or $0.80 per diluted share outstanding. This compares to a fiscal 1996 pro forran income from continuing operations of $20.7 million and $0.67 per diluted share. In fiscal 1996, the reported net income of $1.59 included a s~gnificant one-time net gain on the disposition of the Company's Financial Systems business and a special charge related to the acquisition of Macro Educational Systems, Inc. (Macro). A reconciliation of diluted earnings per share follows: Earnings per share, as reported Less gain on disposition and o iscontin ued operations Continuing operations Plus acquisition related charges Pro forma earnings per share 1997 1996 1995 $,80 $1.59 $ .71 (1.15) (18) .80 44 .53 .23 $.80 $ .67 $.53 14 NCS 1997 Annual Report During fiscal 1996, the Company sold its Financial Systems business. See Note 3 of Notes to Consolidated Financial Statements for further discussion on the sale, the gain on disposition and discontinued operations. The following discussion relates to continuing operations only. Revenues Fiscal 1997 versus Fiscal 1996. Total revenues for fiscal 1997 were up 22.6% to $406.0 million from $331.2 million in fiscal 1996, with approximately half of the year on-year revenue growth due to acqui- sitions. The exact annual growth in revenues attributable to acquisi- tions is impracticable to determine due to the total integration of many of these operations into existing Company operations, the elimination of duplicate or overrapping product lines, and the packaging of existing and acquired offerings into new offerings not previously possible. By revenue category, fiscal 1997 compares to fiscal 1996 as follows: Information services + 24.3% Product sales + 207% Maintenance and support - 22.1% The growth in information services came from several sources, both internal and acquired. but most significantly from the Company's international business, where acquisitions in Australia and Canada, as well as significant internal growth in Mexico, contributed approximately one-third of the total growth. Testing and assessment services and services related to the Company's education software also contributed significant year- on-year revenue growth. The growth in product sales, as well as the related support revenues, were due primarily to growth in licensing of the Company's enterprise software for schools, which realized 150% year on-year growth. Products and technologies acquired during the past two years made large contributions to this growth. Sales of assessment instruments also contributed to the growth in product sales, as a result of the acquisition of the London House product line. By market. the Company's revenues from the Education market grew approximately 29% in fiscal 1997, and account for over 70% of total revenue. Large Scale Data Management (non-education) grew just under 10% year on-year. Fiscal 1996 versus Fiscal 1995. Total revenues for fiscaJ 1996 were up ]0.1% to $331.2 million from $300.9 million in fiscal 1995. By revenue category, fiscal 1996 compares to fiscal 1995 as follows: Information serwces + 208% Product sales + 2.7% Maintenance and support 0.8% The growth in information services revenues is predominantly the result of significantly higher volumes of educational assessment services and international service business. During fiscal 1996, the Company invested in two small international businesses, principally service ~n nature, and NCS was awarded a new long-term serwce contract in Mexico. These transactions fueled the Company's growth in the international service business. Overall, international revenues were up 42. ]% from fiscal 1995. Product sales increases were essentially due to higher education administrative software and scannable forms revenues. These improvements, however, were somewhat offset by lower proprietary hardware revenues. Maintenance and support revenues were down 0.8% due to lower third-party hardware maintenance revenues, partially offset by higher software support revenues. Cost of Revenues and Gross Profits Fiscal 1997 versus Fiscal 1996. The Company's overall gross margin as a percentage of revenue improved to 38.0% in fiscal 1997 compared to 35.9% in fiscal 1996. The most impactive factor in this fiscal 1997 ~mprovement is the greater volumes and higher margins of education software products, and, to a lesser extent, the increase in sales and margins of assessment instruments. In both instances. the gross margin on incremental sates is quite favorable. Gross margins on information services also improved slightly in fiscal 1997 due to a number of contributing factors. Gross margins on maintenance and support declined slightly in fiscal 1997, due to a greater complement of software support, carrying a lower margin compared to hardware maintenance. Fiscal 1996 versus Fiscal 1995. The Company's overall gross profit dollars increased $~0 million or 6.3% with the largest increases being in state educational assessments, international services and education administrative software. As a percent of rev- enue, overall gross profit declined to 35.9% of total revenues from 371% in fiscal 1995, principally reflecting the Company's revenue NCS 1997 Annual Report 15 growth in information services revenues. Gross profit changes by revenue category were largely offsetting, however the gross profit on information services revenues did decline due to lower first year margins on multi-year federal student financial aid contracts. Operating Expenses Fiscal 1997 versus Fiscal 1996. The overall growth in operating expenses in fiscal 1997 over fiscal 1996 is heavily impacted by the Company's 1997 acquisitions. Beyond the increase m operating expenses due simply to added volume, these businesses by their nature (intellectual property licensing and sales, mainly software and assessment instruments) carry higher gross margins and higher operating expense percentages compared to the rest of the Company. Therefore, sales and marketing and general and administrative expenses increased not only in dollars, but as a percentage of revenues in fiscal 1997: Research and development expenses declined nominally in 1997 as certain of the acquisitions offset the need for internal research and development spending and allowed faster time to market. Fiscal 1996 versus Fiscal 1995, Sales and marketing expenses increased by $2.7 million or 7:0% in fiscal 1996 from the prior year The year-to-year increase is primarily the result of additional expen- ditures in introducing and selling new image processing systems to the marketplace. Research and development expenses increased $1.4 million in fiscal 1996 over fiscal 1995. This increase relates principally to enhancements to the Company's scanning and imaging technology and school administrative software. General and administrative expenses decreased by $.9 million or 2.7% in fiscal 1996 from the prior year As a percent of revenues, these expenses declined by 1.3 percentage points, to 10.0% of totar revenues. The decrease reflects specific emphasis on reducing general and administrative expenses, and is net of a $1.0 mirlion ancrease in expenses to upgrade the Company's internal infor- mation systems. Impact of Year 2000 Some of the older software ~n use today was written using two digits rather than four to define the applicable year. As a result, those computer programs have date-sensitive software that recognize a date using "00" as the year 1900 rather than the year 2000. This could cause a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions or engage in similar normal business activities. The Company has substantially completed an assessment of both its product software and internal business systems and will have to modify or replace portions of that software so that it will function properly with respect to dates in the year 2000 and there- after. The Company spent approximately $1.5 million in fiscal 1997 on assessment and modification of this software. It expects to spend approximately $11.5 mirlion toward this end in fiscal 1998, which should allow the Company to complete the majority of the estimated effort. Approximately $4.0 million of this amount is incre- mental expenditure and the remainder represents the redirection of existing resources. The Company expects fiscal 1999 expen- ditures to be significantly reduced from that of fiscal 1998. All amounts are being expensed currently, and are included in the Company's future operating plans and expectations. The Company has also made, and will continue to make, significant capital invest- ments in its internal administrative and service delivery systems and infrastructure (see Capital Resources and Liquidity below), though these investments are not driven principally by year 2000 considerations. The Company has also completed an assessment of its customers, suppliers and other vendor relationships to identify year 2000 exposures and will be working with these entities to mit igate or eliminate them. The costs and timing of the project are based on management's best estimates, which were derived utilizing numerous assumptions of future events; as a result, there can be no guarantee that these estimates will be achieved. While the Company believes it can address the year 2000 issues under its control in time to prevent any material impact on its operations, there can be no guarantee that the Company's customers and suppliers can do likewise, which in turn could have an adverse impact on the Company. Contingency plans will be developed, where necessary, so that the Company's operations wilt not be materially affected by the year 2000. Other Significant Transactions During fiscal 1996, in conjunction with the acquisition of Macro, NCS recorded one-time charges totaling $7:9 million, including $5.6 million of purchased research and development plus $2.3 million of acquisition related costs. Interest Expense interest expense decreased slightly in fiscal 1997 from fiscal 1996 due to slightly lower average borrowing levels. Interest expense decreased by $1.6 million in fiscal 1996 from fiscal 1995, also the result of lower borrowing levels. See Capital Resources and Liquidity below for further discussion of cash flow and debt. 16 NCS 1997 Annual Report Other Income and Expense Other income in fiscal 1997 decreased due to lower invested cash barances as $48.8 million was used to fund the aforemen- tioned acquisitions. Other income in fiscal 1996 includes interest income of $2.8 million principally from investment of the proceeds from the sale of the Company's Financial Systems business, and also from internally generated cash flows. Other income and expense for 1995 included no large or unusual items. Income Taxes The effective income tax rate was 40.0%, 48.5% and 40.3% for fiscal 1997, 1996 and 1995, respectively. See Note 6 of Notes to Consolidated Financial Statements for a reconciliation to the statutory rate. The effective income tax rate for fiscal 1996 was higher than the statutory rate primarily as a result of the one time write off of non-deductible purchased research and development. Capital Resources and Liquidity The Company began fiscal 1997 with $58.1 million of cash and cash equivalents, due largely to the 1996 divestiture of its Financial Systems business. During fiscal 1997, the Company further generated $49.5 million of cash from operating activities. Cash was used for acquisitions of $48.8 million, including $13.6 million to repurchase shares in the open market to offset shares issued to effect the acqui- sition of Virtual UniversiLy Enterprises. Further, $25.2 million was used for property, plant ancJ equipment acquisitions including a new Company-owned facility in Melbourne, Australia and the outfitting of new leased facilities in Cedar Rapids, Iowa and Lawrence, Kansas. Investments totaling $~1 million were made in internal administra- tive and service delivery systems during fiscal 1997` Debt repayments were nominal and the Company paid its normal dividends of $5.5 million. At January 31. 1998 the Company had $23.3 million ir~ cash and cash equivalents. During fiscal 1996, NCS generated $38.5 million of cash from operating activities and $64.1 milllot% net, from the sale of its Financial Systems business. The Company invested $14.9 million in property. plant and equipment and $11.2 million in acquisitions consisting of Macro and three additional smaller entities. The Company also repurchased 724,000 shares of Common Stock during fiscal 1996, using $8.1 million of cash. Other financing acLivities included the early repayment of the $15.0 million. 9.88% Secured Notes and $:ZO million of convertible debentures issued in connection with the Macro acquisition. The Company had long-term debt balances, including current maturities, of $18.8 million, $20.1 million and $27`0 million at January 31, 1998, 1997. and 1996, respectively. The items causing the changes in debt balances are described above. At January 31, 1998, the Company's debt to total capital ratio was 89% compared to 10.6% a year earlier and 17.4% two years earlieE The Company believes that the current debt to total capital ratio is at a level which will allow the Company significant flexibility to fund future growth initiatives. Accounts receivable, goodwill, accounts payable, accrued expenses and deferred income were impacted by the acquisitions made in 1997 and by the increased level of operations during the year. Looking toward fiscal 1998, the Company maintains a $50.0 million revolving credit facility, all of which was available at January 31. 1998. The Company expects its cash flows from operations, the revolving credit facility and cash on hand to be adequate to meet foreseeable cash requirements, including internal growth and potential acquisitions. New Accounting Standards Certain accounting standards have been issued which the Company is not yet required to adopt. See Notes to Consolidated Financial Statements for a discussion of the applicable standards. The statements which are not historical or current facts or are "goals" or "expectations" contained in this annual report constitute 'forward looking' statements, as defined in the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties that could cause actual results to differ materially. The cautionary statements filed by the Company as Exhibit 99 to a filing made with the SEC on Form IO-K for the fiscal year ended January 31, 1998, are incorporated herein by reference and investors are specifically referred to such cautionary statements for a discussion of factors which could affect the Company's operations and forward-looking statements contained herein. NCS 1997 Annual Report 17 CsOsqlidgled GalaGee Sheets Consolidated Balance Sheets CoJisQtidated Statements of Incafne Consolidated Statements of Changes In gtdckholders' Equity Co~sblidated Statements of Cash Flows Notes to Consolidated Financial Statements. (Dollars in thousands, except 3er share data) Note 1 -Accounting Policies The fiscal years referenced herein are as folrows: FiscalYear Year Ended 1997 January 31,1998 1996 January 31,1997 1995 January 31,1996 Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter- company accounts and transactions between consolidated entities have been eliminated. Certain reclassifications have been made to prior year presentations to conform to current year presentation. Use of Estimates The consolidated financial statements have been prepared in accordance with the generally accepted accounting principles which require management to make certain estimates and assumptions that affect the amounts reported in Lhe financial statements and accompanying notes. Those assumptions and esti- mates are subject to constant revision, and actual results could differ from those estimates. Cash and Equivalents All investments purchased with an original maturity of three months or less are considered to be cash equiva- lents. Cash equivalents are available for sale, are carried at cost which approximates fair market value and consist principally of corporate commercial papen Inventories Inventories are stated at the lower of first-in, first-out cost or market. Components of inventory as of January 31. are summarized as follows: Property, Plant and Equipment Property, plant and equipment is stated at cost and depreciated over the estimated useful lives of the assets, ranging from two to forty years, using principally the straight-line method for financial reporting purposes and acceF erated methods for income tax purposes. Significant improve- ments are capitalized to property, plant and equipment accounts, while maintenance and repairs are expensed currently. Rental income from equipment held for lease is recognized as earned using the operating method of accounting for such leases. Acquired and Internally Developed Software Products Acquired software product amounts originate from the allocation of purchase prices of acquired companses and direct acquisition of software, or rights to software. These products are generally large, complex, mission-critical application software packages with established market positions. Products in this category are generally assigned lives of five to ten years. Internally developed software products represent costs capitalized in accordance with Statement of Financial Accounting Standards (SFAS) No. 86. Accordingly, software production costs incurred subsequent to establishing technological feasibility, as defined. are capitalized. Amortization of these products is computed on a product by product basis ratably as a percentage of estimated revenue, subject to minimum straight-line amortization over the products' estimated useful lives of five years or less. Expected revenues and useful lives are estimates which are subject to changes in technology and market- place requirements and are, therefore, subject to revision. The Company periodically evaluates its software products for impair- ment by comparison of the carrysng value of the product against Finishe<: goods Scoring services and work in process Raw materiaPs and purchased parts 1998 1997 $ 5,166 $ 4,765 8,218 9,221 2.855 4,190 $16,239 $18,176 NCS 1997 Annual Report 23 anticipated product margins. The carrying value is adjusted, if necessary. A summary of software activity is as follows: Internally Accumulated Acquired Developed Amortization Total Balance, January 3], 1995 $10,475 $18,520 $(11,580) $17,415 Additions - 320 320 Product Discontinuation (151) (308) 459 - Amortization - (6,068) (6,068) Balance, January 31, ]996 10,324 18,532 (17,189) 11,667 Add itions 13,000 13,000 Write-downs and dispositions - (6,539) 4,517 (2,022) Amortization - (5,067) (5,067) Balance, January 31, 1997 23,324 11,993 (17,739) 17,578 Additions 1,010 - 1,010 Amortization (3,62T) (3,621) Balance, January 31, 1998 24,334 11,993 Accumulated Amortization (10,768) (10,592) $(21,360) Net Balance, January 31, 1998 $13,566 $ 1,401 $t4,967 Assessment Instruments These amounts originate from the alloca- tion of purchase prices of acquired companies and direct acquisi- tion of assessment instruments. These products gain prominence over time and generally have relatively long market lives once established. Products in this category are assigned amortizable lives of ten years or less. Expected revenues and amortizable lives are subject to revision and balances are periodically evaluated for possible impairment. Accumulated amortization at January 31, 1998 and 1997 was $3,849 and $2,754, respectively. Goodwill Goodwill arising from business acquisitions is amortized on a straight-line basis over periods ranging from five to twenty years, generally ten years. Amortization expense was $3,047, $703 and $624 in fiscal 1997, 1996 and 1995, respectively. Accumulated amortization was $7,130 and $3,843 as of January 31.1998 and 1997, respectively. The Company periodically evaluates its goodwill for impairment by comparison of the carrying value against antici- pated business performance. Accrued Expenses Major components of accrued expenses consisted of the following as of January 31: Employee compensation Taxes other than income Royalties Other 1998 1997 $17,604 $13,376 3,558 2,875 2,630 2,065 12,445 10,516 $36,237 $28,832 Revenue Recognition Revenue from product sales and software licensing is recognized at the time of shipment, except in instances where material fulfillment obligations exist beyond shipment. In such cases, revenue is not recognized until such obligations are substantially fulfilled or is recognized in accordance with specific contract terms. Revenue from information services is recognized when such service is performed. Hardware maintenance and software support revenues are recognized ratably over the contractual period. In October 1997, the American Institute of Certified Public Accountants issued Statement of Position (SOP) 97-2, Software Revenue Recognition, which requires that each element of a software ]icensing arrangement be separately identified and accounted for based on the relative fair values of each element. The SOP is effective for transactions that the Company will enter into beginning February 1, 1998 and, based upon current revenue recognition policies, management believes that the effect of the adoption will not be material. Per Share Data In 199Z the Financial Accounting Standards Board (FASB) issued SFAS No. 128, Earnings per Share. SFAS 128 replaced the previously reported primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options, warrants, and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. All earnings per share amounts for all periods have been presented, and where necessary, restated to conform to the SFAS 128 requirements. 24 NCS 1,997 Annual Report The following table is a reconciliation of the earnings numerator and the weighted-average shares denominator used in the calculations of basic and diluted earnings per share for the last three fiscal years: Earnings: Income from Continuing Operations - Basic earnings per share Adjustments for dilutive securities: Interest expense on convertible debentures,net of tax Adjusted ~ncome for diluted earnings per share Weighted Average Shares: Basic weighted-average shares Adjustments for dilutive securities: Employee stock options, ,net of tax proceeds Contingent stock awards, net of tax proceeds Convertible debentures Dilutive potential common shares Diluted weighted-average shares Basic earnings per share Diluted earnings per share 1997 1996 1995 $25,175 $13,666 $16,580 256 7 $25,431 $13.673 $16,580 30,391 30,257 30.565 620 402 382 270 394 372 583 16 - 1,473 812 754 31,864 31,069 31,319 $ 0.83 $ 0.45 $ 0.54 $ 0.80 $ 0.44 $ 0.53 Impairment of Long-Lived Assets The Company evaluates its long- lived assets for impairment losses when indicators of impairment are present by comparing the undiscounted cash flows to the assets' carrying amount. An ~mpairment loss is recorded if necessary. Stock-Based Compensation In October, 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based Compensation. The statement requires adoption of the new standard or footnote disclo- sure for all transactions entered into during the fiscal year ending January 31, 1996 and thereafter. As permitted by the statement, the Company has elected to continue to account for stock options and awards to employees under the provisions of Accounting Principles Board (APB) Opinion No. 25 and disclose the impact of SFAS No. 123. as if adopted, in Note Z Segment Disclosures In June 199Z the FASB issued SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information, which requires disclosure of certain information of a company's internal operating segments. This Statement is effective for the Company's fiscal 1998 yearend, and will have no effect on its basic financial statements, but will require additional disclosures. Common Stock Split On March 3. 1998, the Board of Directors declared a two-for-one stock split of the Company's Common Stock. The stock split is in the form of a 100 percent stock dividend payable March 26, 1998 to shareholders of record on March 16, 1998.The number of shares issued and outstanding at January 31, 1998, after giving retroactive effect to the split was 30.846,000. All share and per share information, including stock option, stock purchase and stock ownership plan information, has been restated for all years presented to reflect the split. Note 2-Acquisitions During fiscal 1997, the Company made several individually small acquisitions. In April ]99Z the Company acquired all of the common and preferred stock of Virtual University Enterprises (VUE), an elec tron~c course registration and training administration company. The purchase price was approximately $14,6 million and consisted of stock of the Company (1,085,264 shares at $12.50 per share) and cash. In accordance with SFAS No. 109, Accounting for Income Taxes, the purchase price has been adjusted by $1.7 million to reflect deferred taxes on the intangible assets, whose amortization will be nondeductible. The excess purchase price, as adjusted for deferred taxes. over book vaJue of the net assets acquired was $16.4 million, of all of which was allocated to goodwill and is being amortized over 20 years. In July 1997, the Company acquired the assets of two businesses from The McGraw-Hill Companies for $29.5 million in cash. The acquisition included London House, a pro-employment assessment business, and McGraw Hill School Systems, a school administrative software business. The purchase price was allocated primarily to goodwill, $20.4 million, and assessment instruments, $9.1 million, which are being amortized over 10 years. NCS 1997 Annual Report 25 The Company made two additional acquisitions in fiscal 1997 whose acquisition prices totaled $5.0 million, of which $4.2 million was allocated to goodwill. All of the fiscal 1997 acquisitions described above were accounted for as purchases and, accordingly, operating results of these businesses subsequent to the date of acquisition were included in the Company's consolidated financial statements. The following ~s a summary of proforma operating results as if the acquisitions had taken place at the beginning of fiscal 1996: Fiscal Year (unaudited) 1997 1996 Total revenues $420,843 $384,923 Income from continuing operations before income taxes 39,497 $ 18,158 Income from continuing operations 23,698 8,641 Basic earnings per share $ 0.78 $ 0.29 Diluted earnings per share $ 0.75 $ 0.28 The pro forran information is provided for informational purposes only. It is based on historical information and does not purport to be indicative of the results that would have occurred had the acctuis~- tions been made at the beginning of fiscal 1996, or of future results, as significant changes to their operations, products and cost and expense structures have taken place since acquisition. On January 21, 1997, the Company acquired all of the common stock of Macro Educational Systems, Inc. (Macro), a California based developer of administrative software for the K-12 educational market, for approximately $13.9 million, through the issuance of $70 million of convertible debentures and cash. Additional payments up to $6.0 million may be earned between 1998 and 2001, subject to achieving certain earnings levels. The acquisition was accounted for as a purchase and, accord- ingly, operating results of this business subsequent to the date of acquisition were included in the Company's consolidated financial statements. In accordance with SFAS No. 109, Accounting for IncomeTaxes, the purchase price has been adjusted by $6.0 million to reflect deferred taxes on the intangible assets, whose amortization will be nondeductible. The excess purchase price, as adjusted for deferred taxes, over book value of the net assets acquired was $22.4 million, of which $13.0 million was allocated to acquired software, $5.6 million to purchased in-process research and development and $3.8 million to goodwill and other intangible assets. The purchased ~n-process research and development was charged to operations upon acquisition, and the goodwill and other intangible assets are being amortized over 10 years. In connection with the acquisition, the Company recorded a $2.3 million pre-tax charge related to impairments and redundan- cies in the Company's existing administrative software business. This included a $1.0 million non-cash charge to write-down software assets and $1.3 million to cover other costs directly related to the merger of the two operations. The Company made three additional acquisitions in fiscal 1996, whose acquisition prices totaled $5.1 million, of which $1.9 million was allocated to goodwill. Note 3-Discontinued Operations The Company sold its Financial Systems segment on July 10, 1996 to SunGard Data Systems, Inc. for $95.0 million in cash. The gain on the sale, recorded in the second quarter 1996, was $38.1 million net of tax. The results of the Financial Systems segment up to disposition have been classified as discontinued operations in the accompanying financial statements. The segment's 1996 revenues through the date of sale were $1Z1 million and revenues for fiscal 1995 were $58.1 million. Note 4-Leases The Company leases office facilities under noncancelaPle operating leases which expire in various years through 2003. Rental expense for all operating leases was $9,167 in fiscal 1997, $8,544 in fiscal 1996, and $7,987 in fiscal 1995. Future minimum rental expense as of January 31, 1998, for noncancelable operating leases with initial or remaining terms in excess of one year is $17,262 and is payable as follows:fiscal 1998 - $5,979; fiscal 1999 - $4,327; fiscal 2000 * $3,315; fiscal 2001 - $2,530; fiscal 2002 $1,040 and $71 beyond. In August 1997, the Company entered into a five-year operating lease agreement for a facility in Cedar Rapids, Iowa. The total cost of the assets covered by the lease as of January 31, 1998 was $11,751. The lease provides for a substantial residual value guarantee by the Company at the end of the initial term and includes purchase and renewal options at fair market values. The amounts of future minimum operating lease payments listed above excludes any payment related to the residual value guarantee which is due upon termination of the lease. The Company has the right to exercise a purchase option with respect to the leased building or the building can be sold to a third party. The Company expects the fair market value of the building, subject to the purchase 26 NCS 1997 Annual Report option or sale to a third party, to substantially reduce or eliminate the Company's payment under the residual value guarantee. The Company is obligated to pay the difference between the maximum amount of the residual value guarantee and the fair market value of the building at the termination of the lease. At January 31, 1998 the maximum amount of the residual value guarantee relative to the assets under lease at January 31, 1998 is approximately $9,871. Note 5-Long-Term Debt and Credit Arrangements Long-term debt at January 31, consisted of the following: 1998 1997 Revolving credit borrowing $ $ Convertible debentures 7,000 7.000 Unsecured note 5,228 6,535 ESOP borrowing 2,000 3,000 Other borrowings, principally foreign 4,616 3,613 18,844 20,148 Less current maturities (6,448) (3,819) Long term debt $12,396 $16,329 Revolving Credit Borrowings The Company has a $50,000 unsecured revolving credit facility that terminates November ], 2002. Interest on debt outstanding under this facility is computed, at the Company's discretion, based on the prime rate or the London Interbank Offered Rate (LIBOR). The Company pays a fee at an annual rate of .15% on the facility amount. The credit facility contains covenants with which the Company is in compliance. Convertible Debentures In January 1997, the Company issued $7,000 of ConvertibJe Debentures as partial consideration for the stock purchase of Macro, see Note 2. These debentures are due in five equal annual installments. with the first instalJment due on February 21, 1998. These debentures carry an interest rate of 6.1%, and are convertible into common stock at $]2.00 per share. Unsecured Note This unsecured term note is due in April 2001. The note 13as annual principal payments of $1,307, and bears interest at .95% over LIBOR. ESOP Borrowing The ESOP loan, secured by unallocated shares of Common Stock and guaranteed by the Company, is due in May 1999. The loan has annuar payments of $1,000, with an inter est rate of .75% over LIBOR. Scheduled Maturities The aggregate principal amounts of long- term debt scheduled for repayment in each of the five fiscal years 1998 through 2002 are $6,448, $4,611, $2,991, $2,789, and $0, respectively, with $2,005 due thereafter In each fiscal year, interest paid approximates interest expense. Note 6 - Income Taxes The components of the provision for income taxes from continuing operations are as follows: Current FiscalYear Federal State Foreign Deferred Total 1997 $14,540 $2,806 $1,300 $(1,846) $16,800 1996 15,197 1.320 864 (5,514) 12,867 1995 10.079 1.465 70 (434) 11,180 The provision for income taxes from discontinued operations is $27,671 and $3,570 in fiscal years 1996 and 1995, respectively. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and riabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities as of January 31, are as follows: 1998 1997 Deferred tax assets: Reserves for uncollectibles $ 2,561 $ 2,801 Foreign operating loss carryforwards 2,826 2,778 Accrued vacation pay 1,792 1.511 Rotable service parts amortization 980 1,260 rntangible amortization 1,453 1,198 Deferred expenses 783 689 Other 602 1,431 Valuation allowance (2,626) (2.778) Total deferred tax assets 8,171 8.890 Deferred tax liabilities: Acquired intangible amortization 7,688 6.592 Accelerated depreciation 4,542 5,197 Net capitalized software 1,921 1,929 Other 410 557 Tota~ deferred tax liabilities 14,561 14,275 Net deferred tax liabilities $ 6,390 $ 5,385 NCS 1997 Annual Report 27 A reconciliation of the Company's statutory and effective tax rate from continuing operations is presented below: 1997 1996 1995 Statutory rate 35.0% 35.0% 35.0% State income taxes. net of federal benefit 4.4 3.2 3.1 Intangible amortization 1.0 17 1.0 Foreign sales corporation (0.2) (0.5) (0.1) Research and development cred its (0.1) (0.6) (0.3) Affordable housing credit (0.6) (1.0) (1.0) Foreign operating losses 1.1 3.2 3.2 Purchased research and development 7.4 - Other (0.6) O. 1 (0.6) Effective rate 40.0% 48.5% 40.3% The Company made income tax payments of $18,991, $47,693 and $10,335 in the fiscal years 1997, 1996, and 1995, respectively. Note 7-Stockholders' Equity The Company has 10,000,000 shares of $.01 par value Preferred Stock authorized and issuable in one or more series as the Board of Directors may determine; none is outstanding. 100,000,000 shares of $.03 par value Common Stock are authorized (post split). There are no restrictions on retained earnings. In accordance with SFAS No. 123. Accounting for Stock-Based Compensation, the Company continues to elect to utilize APB Opinion No. 25 and related interpretations in accounting for its stock option plans. restricted stock plans and its employee stock purchase plan. If the Company had elected to recognize compensation cost based on the fair value of the options granted, restricted shares awarded and shares sold pursuant to the purchase plan as prescribed by SFAS No. 123, net income and earnings per share would have been reduced to the pro forma amounts indicated ~n the table below for the fiscal years 1997, 1996 and 1995: 1997 1996 1995 Net ~ncome - as reported $25,t75 $49,580 $22,259 Net income - pro forma 23,988 49,069 21,925 Earnings per share - as reported: Basic $ 0.83 $ 1.64 $ 0.73 Diluted 0.80 1.59 0.71 Earnings per share pro forma: Basic $ 0.79 $ 1.62 $ 0.72 Diluted 0.76 1.58 0.70 SFAS No. 123 is applicable only to options granted after December 31, 1994; as a result. its pro forma effect will not be fully impacted until these options become fully exercisable. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing modeJ with the following assumptions for the fiscal years shown: 1997 1996 1995 Expected dividend yield .58% .78% .78% Expected stock price volatility 30% 45% 45% Risk-free interest rate 6.23% 6.18% 6.18% Expected life of options 5 years 5 years 5 years The weighted-average fair value of the options granted during fiscal years 1997, 1996 and 1995 were $4.40, $5.16 and $4.20, respectively. The Company has five Employee Stock Option Plans (1984, 1986, 1990, 1995 and 1997). Options to purchase Common Stock of the Company are granted to employees at ]00% of fair market value on the date of grant and are exercisable over a 60 or 63 month period. Shares available for grant under the Plans totaled 669.700, 454,000 and 760,500 at January 31, 1998, 1997 and 1996, respectively. Outstanding options under all plans, including non-qualified options discussed below, are summarized as follows: Weghted Average Price Shares Per Share Balance, January 31. 1995 1,895.000 $ 6.85 G ranted 459,500 9.26 Cancelled (131,900) 7.57 Exercised (328,700) 5.62 Balance, January 31, 1996 1,893,900 7.60 Granted 451,700 11.37 Cancelled (188,900) 8.27 Exercised (462,580) 7.43 Balance, January 31, 1997 1,694,120 8.57 Granted 862,148 13.13 Cancelled (92,908) 9.51 Exercised (309,246) 7.57 Balance, January 31, 1998 2,154,114 $10.50 28 NCS 1997 Annual Report Options for 679,182; 627,140 and 746,500 shares were exercisable at January 31, 1998, 1997 and 1996, with weighted average exercise prices of $8.07, $743 and $Z24, respectively. Exercise prices for options outstanding as of January 31. 1998 are summarized as follows: Options Outstanding Options Exercisable Weighted Weighted Average Weighted Range of Number Average Remaining Number Average Exerose Prices of Shares Exercise Price Contractual Life of Shares Exercise Price $ 4.02- 800 647.334 $ 6.72 1.7 years 437,828 $ 6.78 8.38-12.00 664.580 10.44 3.4 years 198,654 10.14 12.25-18.75 842.200 13.52 5.1 years 42,700 12.99 2.154.114 $10.50 679,182 $ 8.07 The Company has two Long-Term Incentive Plans (L-TIP) approved by the shareholders (1990 and 1997). During fiscal ]990, pursuant to the 1990 L-TIP, 342,800 shares were issued to participants on a restricted basis. At January 31, 1998, 30,690 shares remained restricted, 83,210 shares distributed and the balance having been forfeited. The shares distributed and the remaining restricted shares which vest on January 31, 1999, contin- gent on continued employment, were earned by participants during fiscal 1996. During fiscal 1995 and 1996, pursuant to the 1990 L-TIP, 199,800 shares were issued to participants on a restricted basis; 129,828 shares have been earned and distributed with the balance having been forfeited. During fiscal 199:~ pursuant to the 1990 L-TIP, 150,000 shares were issued on a restricted basis. At January 31, 1998, 93,750 shares remain restricted with the balance having been earned and distributed. The restricted shares are earned upon attainment of specified Common Stock market prices and are contingent on continued employment. During fiscal 1997, pursuant to the 1997 L-TIP, non-qualified options to purchase 336,000 shares of Common Stock of the Company were granted to participants at ]00% of fair market value on date of grant and are exercisable over 67 to 72 month periods. Vesting can be accelerated to January 3], 2000 on achievement of specified cumulative earnings per share amounts during the three fiscal years then ended. At January 31, 1998, there were 336,000 options shares outstanding at a weighted average exercise price per share of $12.54. The Company has an Employee Stock Purchase Plan. There were 57,784 shares available for purchase under the Plan at January 3t, 1998. Note 8-Employee Benefit Plans Employee Savings Plan The Company has a qualified 401(k) Employee Savings Plan covering substantially all employees. Company contributions are discretionary. The Company's contribu- tions to the Plan, representing 401(k) matching contributions only, were $2,195, $1,638 and $1,900 in fiscal years 1997, 1996 and 1995, respectively. Employee Stock Ownership Plan The Company has an Employee Stock Ownership Plan (ESOP) covering substantially all employees. Benefits, to the extent vested, become available upon retirement or termination of employment. During 1989, the ESOPTrust bor- rowed $10,000 to purchase 1.584,000 shares of Common Stock. Each year, the Company makes contributions to the ESOP which are charged to compensation expense, and used by the ESOP Trust to make loan interest and principal payments. With each principal payment, a portion of the Common Stock is allocated to participating employees. In fiscal 1997, the Company's contri- bution to the Plan was $1,000 plus interest of $61, which is net of dividends on unallocated shares of $87 The Company's contri- bution to the Plan was $1,000 in fiscal 1996 and fiscal 1995, and interest, which was totally offset by dividends on unallocated shares, was $77 in fiscal 1996 and $63 in fisca~ 1995. There were 316,800 and 475,200 unallocated shares at January 31, 1998 and 1997, respectively. The ESOPTrust borrowing, which is guaranteed by the Company, is reflected in long-term debt, and the Company's obligation to make future contributions to the ESOP for debt repayment is reflected as a reduction of Stockholders' Equity in the consolidated financial statements. NCS 1997 Annual Report 29 Note 9-Contingency Certain claims asserted against the Company by a former customer and discussed in prior years were reduced to a formal complaint served on the Company on April 30, 1997:The lawsuit alleges certain claims against the Company in connection with three loan processing and servicing agreements; the claims are for expenses, an undisclosed amount of lost profits and damages associated with loan defaults. The Company has tendered the defense of this claim to its insurer, and the insurer accepted the defense subject to a reservation of rights. The Company has filed an answer to the complaint denying the claims and the Company will vigorously defend this litigation. In addition, the Company has filed a counterclaim against the former customer and its' corporate affiliate seeking compensatory damages in an amount to be deter- mined at trial. The Company does not believe the outcome of this litigation would result in a materia~ adverse effect on the Company's financial position or results of operations. Note lO-Business Segment Information The Company operates in a single business segment, providing software, services and systems for the collection, management and interpretation of data. The Company markets these products and services to the education, commercial and government markets, through its various units. The Company's foreign operations and export sales are individ- ually less than 10% of total revenues. Sales to all government agencies for the fiscal years ended January 31, 1998, 1997 and 1996 were $185,186, $180,993 and $148,313 of which $63,005, $62,278, and $42,664, respectively, were to U.S. government agencies, principally the U.S. Department of Education, with the remainder to state and iocar government agencies, predominantly school districts and state departments of education. The Company considers its credit risk in trade receivables to be minimal with regard to the governmental customers described above. With regard to the Company's non-governmental customers, credit investigations are performed to mimmize credit losses, which historically have been insignificant. Report of Independent Auditors We have audited the accompanying consolidated balance sheets of National Computer Systems, Inc. and subsidiaries as of January 31, 1998 and 1997, and the related consoridated statements of income, changes in stockholders' equity and cash flows for each of the three years in the period ended January 31. 1998. These financia~ statements are the responsi- bility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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 finan- cial statements. An audit arso includes assessing the accounting principles used and significant estimates made by manage- ment, as well as evaluating the overall financial statement pre- sentation. 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 consolidated financial position of National Computer Systems, Inc. and subsidiaries at January 31, 1998 and 1997, and the consolidated results of their operations and their cash flows for each of the three years in the period ended January 31, 1998, in conformity with generally accepted accounting principles. Minneapolis, Minnesota March 2, 1998 30 NCS 1997 Annual Report Five Year Finai~cial Data ............... Quarterly Oesel o gf Operations (iraaudited) .. , ....: .'.';,.".:: :=;.::: .. Board of Directors and Corporate Officers Board of Directors David C. Cox President and Chief Executive Officer Cowles Media Company D i re cto r sin ce 1983 Russell A. Gullotti Chairman, President and Chief Executive Officer National Computer Systems, Inc. Director since 1994 Moses S. Joseph President and Chief Executive Officer B-Tree Systems, Inc. Director since 1997 lean B. Keffeler Business and Management Consultant Director since 1993 Charles W. Oswald Private Investor and Retired Chairman of the Board National Computer Systems, Inc. Director since 1970 Stephen G. Shank President and Chief Executive Officer Learning Ventures International, Inc. Director since 1985 John E. Steuri Chairman Advanced Thermal Technologies, LLC Director since 1991 John W. Vessey Management Consultant and Retired Chairman Joint Chiefs of Staff U.S. Department of Defense Director since 1986 Board Committees Compensation Committee David C. Cox, Chair Jean B. Keffeler John E. Steuri Nominating/Governance Committee John E. Steuri, Chair David C. Cox Charles W Oswald Audit Committee John W. Vessey, Chair Moses S. Joseph Stephen G. Shank Corporate Officers Russell A. Gullotti Chairman, President and Chief Executive Officer Robert C. Bowen SeniorVice President President, Education Software and Services Michael C. Brewer Vice President and General Counsel Jay V. Clark Vice President President, Data Collection Systems John W. Fenton, Jr. Secretary and Treasurer Clive M. Hay-Smith Vice President President, International Robert C, Hickcox Vice President and Chief Information Officer Gary L. Martini Vice President, Human Resources Michael A. Morache Vice President President, NCS Services David W. Smith Vice President President, Assessments and Testing Services Jeffrey W. Taylor Vice President and Chief Financial Officer Adrienne Teissier Tietz Vice President, Corporate Development 32 NCS 1997 Annual Report Corporate and Shareholder Information Corporate Headquarters National Computer Systems, Inc. 11000 Prairie Lakes Drive Minneapolis, Minnesota 55344 (612) 829-3000 Transfer Agent and Registrar Shareholder inquiries relating to shareholder records, stock transfer, change of ownership or change of address should be directed to the Company's transfer agent and registrar: Norwest Bank Minnesota, N.A. ]61 North Concord Exchange South St. Paul, MN 55075-0738 (612) 450-4064 or (800) 468-9716 Annual Meeting The Annual Meeting of Stockholders will be held at 3:30 p.m. on Thursday, May 2], 1998 at Radisson Hote~ South, 7800 Normandale Boulevard, Bloomington, Minnesota. Stockholders of record on March 26, 1998 will be entitled to vote at this meeting. Investor Relations Security analysts, portfolio managers and others in the investment community seeking information about NCS should contact Investor Relations at (612) 829-3203. Form IO-K Copies of the Company's Form IO-K as filed with the Securities and Exchange Commission, may be obtained without charge by calling or writing the Investor Relations Department at the address and phone number shown above. Stock Exchange Listing Common Stock of Nationa~ Computer Systems, Inc. trades on the Nasdaq Stock MarketI~ under the symbol "NLCS" and is listed in the newspaper stock tables as NtCptr or NtlCptrSys. Quarterly Market Data NCS had approximately 2,000 and 1,900 Common Stockholders of record as of January 31, 1998 and 1997, respectively. Fiscal Year 1997 Three Months Ended Year Ended January 3], 1998 April 30 July 31 October 31 January 31 High $13.37 $14.75 $19.75 $19.50 Low 11.37 12.50 13.75 15.50 Close 12.56 13.75 19.00 t7.12 Dividends per share 0,045 0.045 0.045 0.045 Fiscal Year 1996 Three Months Ended Year Ended January 31, 1997 April 30 July 31 October 31 January 31 H~gh $11.81 $12.62 $11.62 $13.25 Low 9.00 9.62 9.69 10.00 Close 10.87 10.12 10.75 12.22 Dividends per share 0.045 0.045 0.045 0.045 Corporate headquarters (612) 829-3000 Investor Relations (612) 829-3203 National Computer Systems, Inc. 11000 Prairie Lakes Drive Minneapolis, MN 55344 To order financial publications fax name, address, phone number and requested information to (612) 829-3020 Visit NCS' web site on the Internet for information about NCS and an archive of press releases. www.ncsocom NCS is committed to employing a diverse work- force. We are an equal opportunity employer, MMPI-2 is a trademark of the University of Minnesota. Million is a trademark of Dicandrien, Inc. Campbell is a trademark of David Campbell, PhD. SRA is a trademark of McGraw-Hill Companies, Inc. NCS 1997 Annual Report 33 NATIONAL COMPOTER SYSTEMS 11000 Prairie Lakes Olive Minneapolis, Minnesota 55344 Prepared by: Jim Schoenfelder, Public Works, 410 E. Washington St., Iowa City, IA 52240 (319) 356-5044 RESOLUTION NO. RESOLUTION AUTHORIZING ARCHITECTURAL CONTRACT AND AUTHORIZING MAYOR TO SIGN AND CITY CLERK TO ATTEST CONTRACT FOR ARCHITECTURAL SERVICES FOR THE IOWA CITY LANDFILL SCALE HOUSE AND RECYCLE CENTER WHEREAS, the City of Iowa City seeks to have a new landfill scale house and computerized scale system operational by June 29, 1999, to expand the landfill site to include a recycling center and household hazardous waste drop site, to revise the landfill entrance from Melrose Avenue to the entrance gate to improve traffic flow, to integrate all work with H.R. Green study and master plan for future expansion; and WHEREAS, these facilities shall improve and expand upon solid waste collection, separation, recycling, and landfilling functions already existing; and WHEREAS, the City wishes to proceed with architectural services with the architectural firm of Wehner Pattschull and P~ffner, PC of Iowa City. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, that the Mayor is hereby authorized to sign and the City Clerk to attest to a professional services contract for the above project, a copy of which is attached, with the architectural firm of Wehner Pattschull and Pfiffner, PC of Iowa City, Iowa. Passed and approved this day of ,1998. ATTEST: CITY CLERK It was moved by adopted, and upon roll call there were: AYES: MAYOR and seconded by NAYS: ~orney's O°"'v~cqe the Resolution be ABSENT: Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef pwer~/redscalehou.doc CONSULTANT AGREEMENT for the Iowa City Landfill and Recycle Center Project THIS AGREEMENT, made and entered into this 26 day of August, 1998, by and between the CITY of Iowa City, ~i municipal corporation, hereina~er referred to as the CITY and Wehner, Pattschull and Pfiffner, PC of Iowa City, Iowa, hereina~er referred to as the CONSULTANT. WHEREAS, and CITY of Iowa City seeks to have a new Landfill scale house and computerized scale system operational by June 29, 1999; to expand the Landfill site to include a recycling center and household hazardous waste drop site; to revise the Landfill entrance from Melrose Avenue to the entrance gate to improve traffic flow; to integrate all work with the H.R. Green study and master plan for future expansion, hereinafter referred to as the PROJECT and WHEREAS, these facilities shall be designed for ease of maintenance and long term use and WHEREAS, these facilities shall improve and expand upon solid waste collection, separation, recycling and landfilling functions already existing. NOW, THEREFORE, it is agreed by and between the parties hereto that the CITY does now contract with the CONSULTANT to provide services for the PROJECT as set forth herein. 1. SCOPE OF SERVICES The work to be performed by the CONSULTANT under the Scope of Services shall encompass and include all detail work, services, materials, equipment and supplies necessary to prepare and deliver preliminary plans and contract documents for the PROJECT. The Scope of Services is further defined in "Attachment A" which is included herein and is an integral part of this SCOPE OF SERVICES. The CONSULTANT also agrees to perform the following: 1 .t Pre Desiqn 1.1.1 Meet with CITY personnel. Refine scope of Project. Assemble use and programming information required to establish platform for masterplanning schematic design phase. Review and evaluate project program, schedule and budget. NE fee $9,330 1.2 Master Plan 1.2.1 1.2.2 1.2.3 Develop design cdteda program. Define site requirements and demands. Prepare no fewer than three alternative concepts which satisfy program requirements of overall CITY operation, public and commercial use. Prepare drawings and other documents depicting alternate concepts. Make recommendations to the CITY to most appropriate design and/or ranking NE fee $8,300 1.3 A/E fee '1.4 A/E fee -2- Schematic Desiqn Phase 1.3.1 The CONSULTANT shall review and provide a preliminary evaluation of the PROJECT program, schedule, and budget. 1.3.2 The CONSULTANT shall prepare drawings and other documents integrating masterplan and building design which depict several alternative concepts which satisfy program, schedule and budget requirements and make a recommendation to the CITY as to the most appropriate and/or ranking of the alternatives. CONSULTANT shall rigid mount one set of drawings fo,r public presentation. 1.3.3 The CONSULTANT shall prepare a preliminary estimate of construction cost in sufficient detail to identify PROJECT phasing requirements, contingencies, design costs through construction administration, depadmental subdivisions, and any add or deduct altemates recommended. 1.3.4 The CONSULTANT shall obtain CITY approval prior to proceeding to the next phase of design. $14,460 Desiqn Development Phase 1.4.1 The CONSULTANT shall prepare drawings and other documents which describe the PROJECT'S size, structural system, extedor appearance, colors, and materials, mechanical and electrical systems, floor to floor relationships, site relationships, and other appropriate elements. 1.4.2 CONSULTANT shall dgid mount one set of drawings for public presentation. 1.4.3 CONSULTANT shall update the schematic design preliminary construction cost estimate. 1.4.4 The CONSULTANT shall obtain CITY approval prior to proceeding to the next phase of design. $27,760 Construction Document Phase 1.5.1 Based on the Design Development documents prepared by .the CONSULTANT appreved by the CITY, the CONSULTANT shall prepare for approval by the CITY, Construction Documents consisting of drawings and specifications setting fodh in complete detail the requirements for the construction of the PROJECT. 1.5.2 Drawings shall be completed in electronic format AutoCAD 14 or compatible program approved by the CITY. All electronic data shall be transferred to the CITY on disks. In addition plots of all drawings shall be given to the CITY. 1.5.3 A hard copy master set of specifications shall be given to the CITY. 1.5.4 The CONSULTANT shall prepare a final construction cost estimate. -3- 1.5.5 1.5.6 The CONSULTANT shall assist the CITY in preparing and filing of approval documents required of government agencies with authority over the PROJECT. CONSULTANT shall provide one rigid mounted set (24" x 36") of colored, with shades and shadows, building elevations for presentation to the CITY Council. NE fee $44,160 Biddincl or Ne~lotiation Phase 1.6.1 The CONSULTANT shall assist the CITY in obtaining bids or negoliated proposals for the PROJECT which includes but is not limited to holding a prebid conference, preparation and distribution of addenda, responding to contractor inquiries, documentation of plan holders, distribution of plan sets, approval of substitutions, conducting bid opening, providing bid analysis, and providing a recommendation of contract award. 1.6.2 The CONSULTANT shall assist the CITY in preparing and awarding the contracts for construction. NE fee $5,690 1.7 Construction Contract Administration Phase 1.7.1 1.7.2 1.7.3 1.7.4 The CONSULTANTS construction review and inspection responsibilities begin with the City Council award of contract and ends with the final payment 30 days after formal City Council acceptance of work. The CONSULTANT shall visit the site at intervals necessary to become familiar with the progress and quality of work and to determine in general if the work is being performed in a manner indicating that work, when complete, will be in accordance with the contract documents, From the beginning of footing and foundation construction through the "Certificate of Substantial Completion: site visits shall be at intervals appropriate to the stage of construction, and in addition, upon reasonable request of the CITY. The CONSULTANT shall not be required to be continuously on site. The CONSULTANT shall as necessary but no less than monthly keep the CITY informed on the progress and quality of work and endeavor to guard the CITY against defects and deficiencies in the work. 1.7.5 1.7.6 1.7.7 The CONSULTANT shall at all times have access to the work in progress, unless specifically denied in writing by the CITY. The CONSULTANT shall review the Contractor's "Application for Payments" and make recommendations on the amount to be paid. The CONSULTANT shall have authority to reject work that does not conform to the contract documents and with mutual consent of the CITY may require additional tests and inspections be conducted to insure contract document compliance of questionable components. -4- 1.7.8 1.7.9 The CONSULTANT shall prepare and process all required "Field Instructions" and "Change Orders" and review and approve or take other appropriate action on Contractor submittals in a timely manner (ten (10) working days or less) so as not to delay construction, but such review and approval shall be for the limiled purpose of checking for conformance with the information provided and the design concept expressed in the signed documents. The CONSULTANT shall prepare electronic media "record set" at the completion of construction and deliver disks tot he CITY at the time of final construction payment. , NE fee $20,250 1.8 Entrance Road A/E fee 1.8.1 Re-establish R.O.W along Hebl Road from Melrose Avenue to the landfill entrance. The Iowa City Landfill property boundary will be located along the North and West limits of the site to ensure that all proposed roads and development will be within the owner's property. The R.O.W. survey will be platted and filed with the proper governing authorities. $5,700 1.8.2 Preliminary Entrance Road Cost Estimating: Provide budgetary construction costs for relocation and re-construction of Hebl Road from Melmse Avenue to the landfill entrance. Estimated costs will be provided for different pavement materials including pcc, asphalt, and seal cot. These costs will be based on a given cross-section. NE fee $1,650 NE fee 1.8.3 Topographic Survey of Entrance Road: The Engineer will provide 'topographic mapping of Hebl Road from Melrose to the landfill entrance to be used in the redevelopment of the entrance road. $4,200 1.8.4 Entrance Road Design: The Engineer will provide drawings detailing the centerline alignment, cross-sections, material specifications, and estimated construction costs, NE fee $7,000 NE fee 1.8.5 Bidding Phase for the Entrance Road: The Engineer will provide services in the form of addendure submittals, responding to contractor inquires, approval of substitutions, and attending a prebid conference with respect to the site construction portion of the project. $1,600 1.8.6 Construction Observation and Administration for the entrance road: The Engineer will provide construction staking, construction observation, and construction administration for the relocating and re-construction of Hebl Road form Melrose to the landfill entrance. -4a- NE fee $13,400 1.8.7 Landscaping at entrance mad. NE fee $600 t .9 Attachment A EnerQv Conservation and Recycle Component 1.9.1 Incorporate scope of services, design parame for energy, conservation, recycle and reuse as put forth in attachment A. 1.9.2 Research availability of energy conservation and recycling related grants on both state and national levels. Assist in preparation of grant applications. NE fee $10,100 Total NE fee $174,200 t.10 Services or Expenses Which Shall Be Provided by the CITY 1.10.1 The CITY shall provide information regarding special equipment and system requirements for the PROJECT. 1.10.2 The CITY shall provide an updated budget including construction cost, CITY costs, and contingencies. 1.10.3 The CITY hall designate a staff representative as the pdmary contact for the CONSULTANT to coordinate any CITY response required of inquiries by the CONSULTANT. CITY decisions and responses will be rendered in a timely manner. 1.10.4 The CITY shall furnish all test, Inspections, and reports required by law or the contract documents. 1.10.5 The CITY shall respond in wdting if information, surveys, and reports given to the CONSULTANT have questionable reliability, beyond those disclaimers given In such information, surveys, and rapotis. 1.10.6 The CITY shall promptly in writing inform the CONSULTANT of any PROJECT deficiencies discovered by the CITY dudng its normal review of the progress of work. -5- 2.2 2.3 2.4 2.5 2.6 2.7 ;to. 7 If the CITY requires certification of any portion of the PROJECT work by the CONSULTANT, the language of such certification shall be submitted to the CONSULTANT for review and mutual approval at least 14 days prior to execution. GENERAL TERMS The CONSULTANT shall not commit any of the following employment practices and agrees to prohibit the following practices in any subcontracts.. 2.1.1 To discharge or refuse to hire any individual because of their race, color, religion, sex, national origin, disability, age, marital status, sexual orientation or gender identity. 2.1.2 To discriminate against any individual in terms, conditions, or privileges of employment because of their race, color, religion, sex, national origin, disability, age, marital status, sexual orientation or gender identity. Should the CITY terminate this Agreement, the CONSULTANT shall be paid for all work and services performed up to the time of termination. ttowever, such sums shall not be greater than the "lump sum" amounts listed in Section 4. The CITY may terminate this Agreement upon seven (7) calendar days' written notice to the CONSULTANT. This Agreement shall be binding upon the successors and assigns of tile parties hereto, provided that no assignment shall be without the written consent of all Parties to said Agreement. It is understood and agreed that the retention of the CONSULTANT by tile CITY for the purpose of the PROJECT shall be as an independent contractor and shall be exclusive, 'but the CONSULTANT shall have the right to employ such assistance as may be required for the performance of the PROJECT. It is agreed by the CITY that all records and files pertaining to information needed by the CONSULTANT for the PROJECT shall be available by said CITY upon reasonable request to the CONSULTANT. The CITY agrees to furnish all reasonable assistance in the use of these records and files. It is further agreed that no Party to this Agreement shall perform contrary to any state, federal, or local law or any of the ordinances of the CITY of Iowa CITY, Iowa. At the request of the CITY, the CONSULTANT shall attend such meetings of the CITY Council relative to the work set forth in this Agreement. Any requests -6- 2.8 2.9 2.10 2.11 2.12 2.13 2.14 made by the CITY shall be given with reasonable notice to the CONSULTANT to assure attendance. The CONSULTANT agrees to furnish, upon termination of this Agreement and upon demand by the CITY, copi6s of all basic notes and sketches, charts, computations, and any other data prepared or obtained by the CONSULTANT pursuant to this Agreement without cost, and without restrictions or limitation as to the use relative to specific PROJECTs covered under this Agreement. In such event, the CONSULTANT shall not be liable for the CITY'S use of such documents on other PROJECTs. The CONSULTANT agrees to furnish all completed reports, specifications, and drawings, with the seal of a professional engineer affixed thereto or such seal as required by Iowa law. The CITY agrees to tender the CONSULTANT all fees in a timely manner, excepting, however, that failure of the CONSULTANT to satisfactorily perform in accordance with this Agreement shall constitute grounds for the CITY to withhold payment of the amount sufficient to properly complete the PROJECT in accordance with this Agreement. Should any section of this Agreement be found invalid, it is agreed that the remaining portion shall be deemed severable from the invalid portion and continue in full force and effect. Original contract drawings shall become the property of the CITY. The CONSULTANT shall be allowed to keep mylar reproducible copies and/or comptiter disk for the CONSULTANTs own use. Fees paid for securing approval of authorities having jurisdiction over the PROJECT will be paid by the CITY. Upon signing this agreement, CONSULTANT acknowledged that Section 362.5 of the Iowa Code prohibits a CITY officer or employee from having an interest in a contract with the CITY, and certifies that no employee or officer of the CITY, which includes members of the CITY Council and CITY boards and commissions, has an interest, either direct or indirect, in this agreement, that does not fall within the exceptions to said statutory prohibition enumerated in Section 362.5. -7- 3. SCHEDULE 3.1 Time of Completion The CONSULTANT shall complete the following phases of the PROJECT in accordance with the schedule shown. The work will commence within one week of receipt of wdtten notice to proceed. Schematic design complete - October 5, 1998 Design development complete - November 5, 1998 Construction documents complete - December 22, 1998 Bidding and negotiations - January 25, 1999 · 4. COMPENSATION FOR SERVICES 4.1 Method of Payment CITY shall pay CONSULTANT for services rendered under Section 1 - Scope of Services the Lump Sum of $174,200.00. Based on the preliminary PROJECT construction budget estimate of nine hundred thousand dollars ($900,000). Should the CITY agree in wdting to substantially increase or decrease the budget for the project (by 15%), this lump sum fee may be renegotiated. 4.2 Payment Schedule 4.2.1 Stipulated sum. The stipulated sum shall be paid In partial amounts equal to the percentage of progress of work dudng each design phase. Payments will be made no more than once monthly according to the CITY's schedule of check release and paperwork deadline, dates, allowing time for CITY staff review of payment applications. 4.2.2 If the CITY fails to make monthly payments due CONSULTANT, CONSULTANT may, after giving seven (7) days written notice to CITY, suspend services under the Agreement until CITY has paid in full all amounts due. 4.2.3 CONSULTANT shall provide working drawidgs and other documentation deemed necessary to the CITY at meetings held periodically during the design phase and reach mutual agreement that work has been performed in accordance with the attached schedule. -8- 4.3 Reimbursables The following shall be considered the only reimbursable expenses allowed when directly incurred for work on this PROJECT (payments shall be made on scheduled check release dates as per above as sums accumulate): 4.3.1 Reproductions of drawings and specifications provided during the bidding process. The number and cost of Bid Documents shall be n!~reed to in writing. 4.3.2 Postage and handling of documents during the bidding process. 4.4 Additional Services Additional services are those CONSULTANT services beyond those described in the scope of services and agreed to in writing by both parties. Payments for additional services, if any, shall be made as incurred and as per CITY's scheduled check release dates as noted above. Computation of additional CONSULTANT services shall be calculated as follows: as c, Principals' time at $ 70.00 per hour. Employees' time per the schedule of hourly rates provided for the personnel involved, as provided in Attachment "B". SUBCONSULTANTS at 1.1 times amounts billed the CONSULTANT. 4.4.1 The CONSULTANT's records for the preparation of fees pertaining to the PROJECT shall be available to the CITY or CITY's authorized representative at mutually convenient times. 5. MISCELLANEOUS 5.1 Insurance Requirements 5.1.1 Certificate of Insurance, Cancellation or Modification Before commencing work, the CONSULTANT shall submit to the CITY, for approval, a Certificate of Insurance meeting the requirements specified herein, to be in effect for the full contract period. The CONSULTANT shall notify the CITY in writing at least thirty (30) calendar days prior to any change or cancellation of said policy of policies. -9- Cancellation or modification of said policy or policies shall be considered just cause for the CITY to immediately cancel the Agreement and/or halt work on the PROJECT, and to withhold payment for any work performed on the contract. 5.1.2 Minimum Coverage Any policies of insurance purchased by the CONSULTANT to satisfy its responsibilities under this Agreement shall include contractual liability coverage, and shall be in the following type and minimum amounts: % Comprehensive General Liability (!) Bodily Injury (2) Property Damage Each Occuffence Aggregate $250,000.00 $500,000.00 $100,000.00 it. Motor Vehicle Liability and Property Damage Insurance (I) Bodily Injury (2) Property Damage Per Person $250,000.00 Per Accident $500,000.00 $I00,000.00 111. Workers' Compensation insurance as required by Chapter 85, Code of Iowa. It is further agreed that there are no other considerations or monies contingent upon or resulting from the execution of this Agreement, that it is the entire Agreement, and that no other monies or considerations have been solicited. FOR THE CITY By: By: FOR THE CONSULTANT Title: Title: Date: 'Date: /' f/ ATTEST: Approved by: CITY Attorney's Office Date Attachment A Page t of 7 Iowa City Landfill and Recycling Center Project Scope of Services Design through Construction Contract Administration for new scale house. Scale house, new scales. and computer system must be operational by June 29, 1999. Design through Design Development of new entrance and traffic flow pattern. Includes new road from Melrose-I.W.V., new gate and signage. Traffic flow must be Integrated with several landfill operations Including commercial haulers, household waste, household hazardous waste drop site, waste recycling and exchange center (tires, plastics, paper, wood, aluminum, steel, copper, cardboard), commercial and residential compostlng, appliance drop off, and potential retail of value added salvage. Design through Design Development of facilities for recycling services. Possible services Include: A. Salvage material exchange B. Packaged compost, pelletized fuel, finger Jointed lumber retailing C. Bulk collection and shipping or plastics, paper, cardboard, glass, metal D. Hazardous waste drop off and shipping Incorporate "sustainable" design. See attached. Incorporate public education In waste management. Design should accommodate tours and provide a visual demonstration of recycle and reuse techniques. Master plan. integrate plans with the long-term expansion plans projected by HR Green study. Grant assistance. The City will apply for grants from the iowa Department of Natural Resources for energy and waste management demonstration funds. The architect will assist In the preparation of applications with graphic and narrative descriptions of their design work. Attachment A Page 2 of 7 Design Parameters for Energy Alternative Energy Energy Efficiency 1. Photovoltaic:* 1. Super insulation* A. Electric power 2. Shower water heat recovery B. Battery recharge 3. Exhaust air heat recovery*, 2. Wind:* ' 4. T-8fluorescents~ A. Electric power 5. Compact fluorescents* B. Pumping 6. Electronic ballasts* 3. Passive solar:* 7. Daylighting and control A. Heating 8. Sealed combustion' B. Ventilation 9. Radiant heating 4. Active solar 10. Waste heat recovery 5. Ground source heat pump '1 'I. Photo cell light control* 6. Waste wood 12. Occupancy sensors* 7. Waste oll '13. LED exit signs' 8. Landfill methane '14. Variable frequency drive 15. Automatic thermostats* 16. HPS area llghting · 17. Energy management system 18. Tankless water heater *Items which must be Included in the design. All other items must be evaluated and Incorporated If feasible. en®cgylener~y.doc Attachment A Page 3 of 7 Design Parameters for RecyclelReuse Construction Materials 1. Forest Stewardship Council* 2. Recycled content materials' 3. Faswall 4. OSB panels* 5. Straw or wheat board 6. Cotton waste Insulation 7. Rock wool Insulation 8. Milk paint 9. Recycled paint* 10. Finger Jointed lumber 11. Linoleum 12. Flyash concrete* 13. Autoclave concrete 14. Engineered lumber 15. Low V.O.C. and biocide paint* 16. Solvent-free adhesives and paints 17. CFC & HCFC free rigid board Insulation 18. Foam core structural panels *Items which must be included in the incorporated if feasible. Water 1. Composting toilet 2. Sink to toilet 3. Gray water 4, Rain water 5. Low flow toilet 6. Low flow shower design. All other Items Solid Waste 1. Job-site recycling* must be evaluated and Attachment A Page 4 of 7 To: Chuck Schmadeke From: Dave Elias "'-~f. Date: July 30, 1998 Re: MEMORANDUM Landfill Facilities repair and Future services IIowa City Wastewater and Landfill DIvisions We have selected a consultant to design a permanent replacement building for the landfill scale house, after the windstorm demolished the trailer on June 29. We have also just completed a study of the long term technical and financial operation of the Impdrill. It seems clear the City's intention is to continue to provide solid waste disposal services into ~e foreseeable, for the community. Considering the changing nature of solid waste disposal regulation, legislation, and even the public's expectation, it seems it would be an appropriate time to consider a ~ignificant addition to routine solid waste disposal services offered by the City of iowa City. We feel we should incorporate a '1lousehold llazardous Waste" (HHW) collection and exchange facility into the plans currently being developed for the landfill site. The public demand for the collection of ltHW has been growing. This is evident by the great participation in our annual HHW Clean Up days, in the mount of this material being deposited at the "de facto" ItttW/waste oil drop off site, and in the amber of phone requests for assistance in disposing of obviously toxic materials from the public. Since June, we have already had calls from households holding such things as elemental mercury, lead arsenate, banned weed killer, and fiuorescent bulbs (contain mercury). The community is highly educated and motivated to recycle and safely dispose of hazardous materials. Many express disappointment in not having an effective disposal option when their need arises, and often express a willingness to pay "reasonable" fees for such a service. The community would benefit by establishing an HHW center in a couple ways. First, homes would contain fewer toxic/health hazards by the regular removal of unusable or unwanted products. Secondly, the landfill area it self would have less of these materials actually being "buried", reducing the potential impact on groundwater and on the wastewater treatment plant, where leachate is treated. We have envisioned attaching an HlIW center to the scale house operation, in order to utilize present staff in monitoring and instructing the public in HttW plocedures. The project would also re-organize the site layout and access roads to more efficiently accept the various "salvage" and recycle materials presently handled on site. We would like to see the entire facility developed in ways that would highlight recycled, renewable resource products, and energy conservation products, in order to further educate the public on solid waste problems. in order to proceed with the permanent scale house and these other concepts, we would like to give the architectural and engineering designers a scope for ~eir work, as soon as possible. Please let me know if you are in agreement with this approach. Dan Scott, Brad Netsmann, Jim Schoenfelder 0:~1 Landliffit,Fmdmin\lll!W LF service.doe Attachment A Page 5 or 7 To: From: Chuck Schmadeke Dave Elias'~'~L MEMORANDUM Date: 07/30/98 Re: June 1998 Paint and Battery Day - summary llowa CIty Wastewater and Landfill BidsIons On June 6, 1998, the Landfill Division and Brad in Solid Waste Planning, conducted a tlousehold Waste Collection Day, advertised to handle only paint and household batteries. Approximately 300 appointments were made for drop offs from the public. Twenty-one City employees were used to staff the event. Overtime was paid to the hourly workers, estimated at 7 hours each, at an avg. of $ 14/hr x 1.5. Labor cost~ were approximately $2600. Outside disposal service~ will be about $4200. Landfill costs will equal about $300, for the day. The following materials were collected for disposal: Paint- approx. 15,840 Ib. collected (7.9 tons)- over 1650 gal. 875 gal. Latex - dried and disposed of at Landfill* 350 gal. Latex retained for exchange, back to the public 50 gal. Latex exchanged on the collection day 350 gal. Oil base bulked into barrels for shipping* 300 Ib., aerosol cans, filled two barrels 100 Ib. "lead powder" for paint make-up Batteries - Household alkaline batteries - 1560 Ib., 2 % barrels, 'disposed at file landfill RecharSeable and "button" batteries -(heavy metals) 90 Ibs, two 5-gal. buckets Garbage generated - approx. ! 1,820 Ibs of garbage was dispossd of at the landfill at the end of the event, including: 970 Ib. empty paint cans, * 7700 Ib. dried latex paint with 2650 Ib. "floor dry", 500 Ib. trash -- boxes and bags brought in by the public with material, plastic sheet ground cloth, used tyvek suits, etc. * I gal. empty paint can = .g Ib., i gal. latex paint = 8.8 Ib., i gal. oil base paint = I0.0 Ib. Attachment A Page 6 or 7 To Chuck Schmadeke Brad Neumann From Dave Elias Date. May II, 1998 MEMORANDUM Iowa CIty Wastewster and Landfill DIvisions Re: Household Waste received at Oil drop station Our "Waste Oil Drop Station" on Riverside drive has signs posted describing the acceptable and unacceptable materials to be deposited there. However, the public has not been able to comply with the posted limits, leaving a wide variety of hazardous material and garbage at the site. The following list of materials roughly describes what has been colicred by ladfill personnel at the drop station in the last I0 months or so. Keep in mind that much material left at ~e station is actually picked up and removed by other members of the public, if they perceive it still useful. We have collected only what remains. Household cleaning products - 50 bottles Automotive maintenance products - 20 containers Garden products - 60 bags, bottles, or boxes Paint latex - 600 gal. Oil base - 100 gal. Spray cans - 40 containers Flammable liquid - 60 gal. Batteries - automotive--70 household- lO00's Waste oil - 18,1300 gal. Antifreeze - 300 gal. Other known materials - pool supplies - 500 Ib. 4- (fall) muratic acid - several gal. suituric acid - severafgal. furniture stripper - several gal. ammonia - several gal. Unknown, unlabeled, questionable identity - lgal/week Tires - 3-5/week Appliances - 2-3/week Yardwaste- 1-2 cu. Yd./week Trash - 300 ib./week This represents only the material from people who are bold enough, ignorant enough, or impatient enough to dispose of their hazardous waste without proper approval. We receive numerous calls each week at the landfill, wastewater plant, refuse division, and solid waste planning office, from people requesting information on how, when, and where to dispose of their hazardous wastes. We tell them to wait for our "once per year" collection day, or describe appropriate actions they could take. Many people try to comply but many are also frustrated. TO: Chuck Sd~madeke FROM: Dave Elias Attachment A Page 7 or 7 DATE: February. I I. 1998 RE: Household llazardous Waste Collection Center iowa City Wastewater and t:andnll Oiv=:'7. l lime Landfdl Division is anxious to get an effective program starled to coiled household h,'u:trdous waste (IHtW) matedMs. Such a progrnm should eventtmlly reduce contaminanLs in leachate, lowering the risk for groundwater prublems, and nlso reductng the load of contandnantS at the wastewater treatment plant. , We feel the landflU site would be the preferred Iocadon for an HIfW fadlily. The following points outline the reasons: I. Space is avalhble on the site, and would not be Impaded by future fill areas for 25 yems or more. 2. The site is isohted flora population concentn~tlons, reducing the dsk from acddental chemical releases at such a facility. 3. The landed[ is staffed 57 hours per week (9. ~ hrs, 6 days) Indudlng Saturday. 4. Tnlned personal are on staff already. Four technicians (MWIIs), and one supentisor (Sr. MW) are avnilab[e. Four staff menben kavc aftended trntning hi "Moderate Risk H~n-dous Matedal llandling". These employees have been dig with the public and their various, unusual waste produds for some time. Two derks (scalehduse openton) are available for accepting appointments, answering telephone questions, and monitoring public access to the fadltty. These clerks presently answer public questions regaling offier landed[ activities. Cash business is already conduded at the site, and could Include charges for new services. ' The landed[ is currently Imndling other "recycling" activities on site, such as yard waste, tires, scrap mel~l, wasle oil and appliances. ~ personnel handle the bulk recyclIng bins, as well Including newsprint, plastic, glass, and cans. (cardboard coRedion sites will be ~dded in the spring) Unlmown materials are dropped off frequently at the untoarmed oH drop die In towxt The staff has effectively dealt with gasoline, antifreeze, car batteries, ~:trps, and household waste produds. The Inyout of the a possible IHtW coiledion center has been sketched out by Dan Scott, and is presently being reviewed by landfill staff and the solid waste planner. It Is fdt the faculty could be built as economically at the land!ill as anywhen sInce land and s'lnff are available. The fadlily nl the landed[ would complement other prugnms In place. DNR grant funds of up to $100,000 may be avMInhle for a "county wide" HHW center. ff anthorlzn~on to proceed Is given, it is felt the facility could be completed and In operation wtlhin ~1 years time. Wehner Pattschull Pfiffner PC Architects 201 Dey Building Interior Designers Iowa City, Iowa 52240 (319) 338-9715 Fax (319) 338-2038 Roland C. Wehner, AIA Richard W Paftschull, AIA John F. Pfitfnef, AIA John F. Shaw, AIA 1998 HOURLY BILLING RATES WEHNER, PATTSCHULL & PFIFFNER, PC - ARCHITECTS SCHEDULE B Sr. Principal Architect Principal Architect Architect I Architect II Technician I Technician II Technician III Technician IV Technician V Office Manager Secretary $75.00 $70.00 $48.13 $47.64 $39.88 $35.75 $34.38 $27.50 $26.13 $46.06 $22.00 Prepared by: Sylvia Mejia, Human Relations, 410 E. Washington St., Iowa City, IA 52240 RESOLUTION NO. 98-296 RESOLUTION AMENDING THE BUDGETED WASTEWATER TREATMENT DIVISION OF DEPARTMENT AND THE AFSCME PAY PLAN POSITIONS IN , THE THE PUBLIC WORKS WHEREAS, Resolution No. 98-95, adopted by the City Council on March 10, 1998, authorized permanent positions in the Wastewater Treatment Division for FY99; and WHEREAS, Resolution No. 96-147, adopted by the City Council on May 21, 1996, established a classification/compensation plan for AFSCME employees; and WHEREAS, the AFSCME Classification Review Committee has reviewed the changes in the position of Senior Treatment Plant Operator - Wastewater and determined that this position performs duties equivalent to those of positions in a higher grade; and WHEREAS, the AFSCME Classification Review Committee has recommended that the budgeted positions in the Wastewater Treatment Division be amended by reclassifying the position of Senior Treatment Plant Operator- Wastewater, from grade 12 to grade 14. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA THAT: The budgeted positions in the Wastewater Treatment Division be amended by reclassifying the position of Senior Treatment Plant Operator - Wastewater, from grade 12 to grade 14. The AFSCME pay plan be amended by moving the position of Senior Treatment Plant Operator - Wastewater from grade 12 to grade 14. Passed and approved this 9th ATTEST:C~ ~. humanrelVes\STPO.doc day of SentemhPr ,1998. Resolution No. 98-296 Page 2 It was moved by Kubb.y and seconded by adopted, and upon roll call there were: Vander'hoef the Resolution be AYES: NAYS: ABSENT: Champion Kubby Lehman Norton O'Donnell Thornberry Vanderhoef