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HomeMy WebLinkAbout2007-R-41RESOLUTION N0.2007-R- RESOLUTION APPROVING STATEMENT OF BENEFITS FOR PURPOSES OF PERSONAL PROPERTY TAX ABATEMENT WHEREAS, MKM Machine Tool Co., Inc, has petitioned the Common Council of the City of Jeffersonville, Indiana, for a deduction in personal property taxes to be assessed on a proposed expansion to be located in the City of Jeffersonville, Clark County, Indiana; and WHEREAS, MKM Machine Tool Co., Inc, has submitted a Statement of Benefits on the form prescribed by the Indiana State Board of Tax Commissioners for such purpose, which statement includes a description of the proposed redevelopment, an estimate of the number of individuals who will be employed as a result of the redevelopment, an estimate of the annual salaries of these individuals, and an estimate of the value of the redevelopment; and WHEREAS, the Common Council of the City of Jeffersonville has previously determined that the area in which the proposed redevelopment project is located in the City of Jeffersonville qualifies as an economic revitalization area pursuant to Indiana Code 6-1.1-12.1-5, et seq., and Resolution 97-R-10, and confirming Resolution 97-R-14; WHEREAS, the Common Council has reviewed the Statement of Benefits and its attachment "A" submitted herein, and attaches and incorporates the Statement of Benefits submitted herein, and attaches and incorporates the attachment "A" to this Resolution. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Jeffersonville, Indiana, that it specifically and affirmatively finds as follows: 1. That the estimate of the value of qualifying manufacturing and information technology equipment of $6,670,000 is reasonable for projects of the nature described in the Statement of Benefits submitted by the company. 2. That the estimate of the number of 52 individuals who will be additionally employed can reasonably be expected to result from the proposed described redevelopment or rehabilitation. 3. That the estimate of the annual salaries of $2,143,710 of those individuals who will be added can be reasonably expected to result from the proposed described redevelopment or rehabilitation. 4. That the purchase and installation of the qualifying manufacturing equipment must be completed within three (3) years from the date of the granted abatement. 5. That the taxes lessened from the granting of this abatement shall be used for manufacturing equipment up to the purchase price of $6,670,000. 6. That all other information requested from MKM Machine Tool Co., Inc, has been submitted, and the benefits described in such information can be reasonably expected to result from the proposed described redevelopment. 7. That the totality of benefits for said redevelopment is sufficient to justify the deduction. 8. That MKM Machine Tool Co., Inc has agreed to the payment of a fee of 10% of the annual benefit of the abatement to the Jeffersonville City Council annually as described in IC 6- l . l -12.1-14. BE IT FURTHER RESOLVED, that the Common Council of the City of Jeffersonville, Indiana, hereby approves the application for deduction presented by the Statement of Benefits filed by MKM Machine Tool Co., Inc, and that said company shall be entitled to deductions for a period of five (5) years on qualifying personal property pursuant to the provisions of IC 6-1.1-12.4 for personal property, with the timely filing and perfection thereof with the Clark County Assessor's office Passed and adopted this~_day of ~, 2007, by the Common Council of the City of Jeffersonville, Clark Coun iana. President, Common Council ATTEST: ~~~~ Peggy Wilder, Clerk-Treasurer Presented by me as Clerk-Treasurer to the Mayor of the City of Jeffersonville, Indiana, this Irl day of ~r , 2007 Peggy Wilder, Clerk-Treasurer Robert L. Waiz, Jr., Mayor ATTACHMENT "A" ATTACHMENT TO THE STATEMENT OF BENEFITS FOR MKM MACHINE TOOL CO., INC December 17, 2007 The council will grant 5-year abatement on an amount not to exceed $6,670,000 in personal property as allowed by state statute. This applies to qualifying new manufacturing equipment purchased and installed after the abatement is granted and is subject to the dollar limit specified above. This abatement will only apply to personal property purchased and installed in the first 36 months following the granting of abatement, whose purchase price does not exceed $6,670,000. The abatement period of five years will begin in the first year used for any personal property abatement and will continue for four additional years. Personal property, subject to abatement, installed in later years will receive abatement for the remaining years of the original five-year period as if it were purchased and installed at the same time as the original equipmeni purchase and instaiiaiion. The company will provide at least 52 jobs with at least $2,143,710 in salaries as specified in the Statement of Benefits and any attachment thereto. The "salaries" on the SB-1 is agreed to mean base hourly wages, without overtime or benefits, times 2050 hours per year for the number of employees as indicated in Section 3 of the SB- 1. It is the expectation of the Council that the company will reach the number of employees and average wages specified within three years of the date of the granting of the abatement. The company, MKM Machine Tool Co., Inc, understands that this abatement is being offered based upon those jobs and wages promised by the company. If the company fails to reach those numbers or fails to maintain those numbers over the life of the abatements, the company agrees and understands that the Council will, unless prohibited by Indiana law, rescind these abatements and require the company to pay back, at a pro-rata rate the real and personal property taxes that have been abated. The company agrees to make available any and all information the council deems necessary to verify compliance. The company agrees to pay an annual fee of 10% of the amount of real property taxes abated during each year of the abatement as described in Indiana Code 6-1.1-12.1-14. ( ~ . Representative, MKM Machine Tool Co., Inc Manufacturing Metal & Plastic Components NIT~I 100 Technology Way P.O. Box 2307 Jeffersonville, IN 47130 (812)282-6627 FAX (812) 284-5709 Internet mkmmachine.com December 12, 2007 Dear Common Council of the City of Jeffersonville, MKM Machine Tool Co., Inc greatly appreciated the assistance from the council with the tax-free bond issuance. This funding allowed MKM Machine Tool Co., Inc to grow therefore adding jobs for local residents and increasing the property tax base. We are using the equipment purchased with the bond issuance to build automotive components for ThysseniLUpp with nnai assembly on Ford and Volkswagen automobiles. Diversification is critical for the success of MKM Machine Tool Co., Ina We come now to request incentives through tax abatements for additional equipment that will allow MKM to continue to grow. This equipment is in addition to the 7.1 million dollars invested during the summer and fall of 2007. We seek to remain in the Jeffersonville city limits and help the economy continue to grow. Respectfully, Q ~ r ACT . Lisa D. Beauchemin, Controller MKM Machine Tool Co., Inc ISO 9002 QS-9000 REGLSTFR~ ~E~f~T~Ts ~.;; ~ , "z; STATEMENT OF BENEFIT `<~ 'i PERSONAL PROPERTY ,, ~ ~„ State Form 51764 (R l 1-06) ~.:;a,e-/ Prescribed by the Department of Local Government Finance FORM SB-1 1 PP PRIVACY NOTICE The cost and any specific individual's salary information is confidential; the balance of the filing is public record per IC 6-1.1-12.1-5.1 (c) and (d). This statement must be submitted to the bod 5'doesignating the Economic Revitalization Area prior to the public hearing if the designating body reg1987 INSTRUCTIONS: n about whether to designate an Economic Revitalizationd A e o ~ent egtu pment,tand/or log stical dist~butio~ 1 licant in making its de , information from the app to the designating body BEFORE a person installs the new manufacturing equipment and/or research an e uipment and/or Information technology equipe a STATEMENT OF BENEFITSS (IC t 6!11 ~Z d~ ction. "Projects" pla on of the new ma~ ufactturing 1 equipment q and areas designated after July 1, 1987, regw e ui merit, BEFORE a deduction may royal of the designating body (City Council, Town Board, County Council, etc.) must be obtained prior to insta a and/or research and development equlpment and/or logistical distribution equipment and/or information technology q 2. APP be approved 3. To obtain a deduction, a person must file a certoifred deb uction schedule with the person s personalu roperty return on a certified deduction schedule must wnshi where the property is situated. The 103-ER ~mrusa b~/fi~eod~istical di ~ but on equipment and/oe 103-ERA) with the township assessor of the assessment year in which new manufacturing equipment and/or research and development eq p information technology equipment is installed and fully functional, unless a filing extension has been obtained. A person who obtains a filing extenslon file the form between March 1 and the extended due date of that year. Pro erty owners whose Statement of Benefits was approved after June 30, 1991, must submit Form CF-1 / PP annually to show compliance with t e 4 P Statement of Benefits. (IC 6-1.1-12.1-5.6) a 1 to equipment installed after March 1, 2001. For equipment installed prior to March , 5. The schedules established under IC 6-1.1-12.1-4.5(d) and (e} pP Y I IC 6 1 1.12 1-4 5(t) and (g)) 2001, the schedules and statutes in effect at the time shall continue to app y ( , .t Name of taxpayer MKM Machine Tool Co., InCare andzlPcode) Address of taxpayer (number and street, cif , 100 Technology WaY, Jeffersonville, IN 47130 Name of contact person I Lisa D. Beauchemin -Controller Name of designating body Location of property 100 Technology WaY, Jeffersonville, IN 47130 Description of manufacturing equipment and/or research and development and/or logistical distribution equipment and/or information technology equtF ruse additional sheets if necessary) 3 - Okuma LT-200MY Turning Centers 1 - Okuma LU-300M-600 ~ Other equipment to be specified. it ~ ~ ~ • Salaries Number retained ,Current number 140 ~ 200 6,473,805.00 - _ • NOTE: Pursuant to IC 6-1.1-12.1-5.1 (d) (2) the COST of the property is confidential. Current values Plus estimated values of proposed project Less values of any property being replaced Net estimated values upon completion of pi .,.a ~~ra ,~,asrP converted (pounds) Other benefits: • - SigliatuLe of authorized~epresent ~- , Telephone number (812)282-6627 Resolution number (s) DLGF taxing district number County Clark ESTIMATED rt START DATE COMPLETION DATE Manufacturing Equipment 12/31/2007 12/3112009 R & D Equipment Logist Dist Equipment LOGIST DIST R & D EQUIPMENT EQUIPMENT ASSESSED COST ASSESSED VALUE IT Equipment Salaries Number additional 5193,760.00 52 ounds Estimated hazardous waste converted (p Salaries 2,143,710.00 IT EQUIPMENT COST ASSESSED VALUE 270,000.00 270,000.00 270,000.00 270,000.00 I hereby certify that thefrepresentations in this stagent are true. Date signed (month, day,,, y~ar) r Ttle -(. .. i .. MANUFACTURING COST I ASSESSED VALUE COST VALUE 20,757,957.00 5,696,tiuu.uu 6,400,000.00 6,400,000.00 27,427,957.00 113, 369,600.00 We have reviewed our prior actions relating to the designation of this economic revitalization area and find that the applicant meets the general standards adopted in the resolution previously approved by this body. Said resolution, passed under IC 6-1.1-12.1-2.5, provides for the following limitations as authorized under IC 6-1.1-12.1-2. A .The designated area has been limited to a period of time not to exceed calendar years * (see below). The date this designation expires is B .The type of deduction that is allowed in the designated area is limited to: 1. Installation of new manufacturing equipment; ^ Ye s ^ N o 2. Installation of new research and development equipment; ^ Ye s ~ N o 3. Installation of new logistical distribution equipment. ^ Ye s ^ N o 4. Installation of new information technology equipment; ^ Ye s ~ N o C. The amount of deduction applicable to new manufacturing equipment is limited to $ $ cost with an assessed value of D. The amount of deduction applicable to new research and development equipment is limited to $ with an assessed value of $ E .The amount of deduction applicable to new logistical distribution equipment is limited to $ F. The amount of deduction applicable to new information technology equipment is limited to $ G. Other limitations or conditions (specify) cost cost with an assessed value of cost with an assessed value of H. The deduction for new manufacturing equipment and/or new research and development equipment and/or new logistical distribution equipment and/or new information technology equipment installed and first claimed eligible for deduction on or after July 1, 2000, is allowed for: ^ 1 year ^ 6 years *' For ERA's established prior to July 1, 2000, only a ^ 2 years ^ 7 years 5 or 10 year schedule may be deducted. ^3 years ^8 years ^4 years ^ 9 years ^ 5 years `* ^ 10 years ** Also we have reviewed the information contained in the statement of benefits and find that the estimates and expectations are reasonable and have determined that the totality of benefits is sufficient to justify the deduction described above. Approved Telephone number Designated body Date signed (month, day, year) * If the designating body limits the time period during which an area is an economic revitalization area, it does not limit the length of time a taxpayer is entitled to receive a deduction to a number of years designated under IC 6-1.1-12.1-4.5 ,,~'-~Y~°~~~ City of Jeffersonville Tax Abatement Worksheet f.~, .~,~ ~~ Firm ~1til~Il\lacti~inerv ,: 4 ~ tt,~ t`~'~, ~~, Tertns: ;~ ticar pcr~onal piopcrtv"- ~+R'St Taxing District Jeffersoncilly City,7efferson~~ille"'Towziship ~Ol~~~' (009.) TEN YEAR REAL PROPERTY FIVE YEAR PERSONAL PROPERTY Cost ':$ - Pool 3.9 to I?~~~~-`'" Life AV @ 80% $0 IC 6-4.1-12.1 Tax Rate ~ - ~:: ~ O.U_'~)71 ~ Cost ~~G'G?u;(~OJ):OQ Total % Abated Year 1 ~ ' -_ 7 ~il`,o SPRTC Rate -_~ 2006 SPRTC Rate h °- ' F,~~ RE and Other PP ~~,3?~,;~, Business PP ~~ U 1 Sbb6y Year 2 ~ ~" S(~' ,~ ,~ Year 3 ;;~~,~ ~` ,:F;' `, ,,6(P'-' Net Rate 0.020013963 NET RATE 0.024995944 Year4 ~'~a ,,.;,,""`;;r 4C1P«, Year's Tax $ - Year 5 -_ ~~?0"''0 Wages Per Jo New Jobs Added Payroll W/O OT Average Hourly Rate ~?~: ,'~ ~-" " ':2;1~3,71r)--~'- ~ 41,225 $20.11 Current Yr TTV from Form 103 Assessed Value Taxes Paid Taxes Abated Schedule A or TTV Taxes Paid Taxes Abated Year 1 $ - $ - 40 $2,668,000 $0 $66,689 Year 2 $ - $ - 60 $4,002,000 $20,007 $80,027 Year 3 $ - $ - 55 $3,668,500 $36,679 $55,019 Year4 $ - $ - 45 $3,001,500 $45,015 $30,010 Year 5 $ - $ - 37 $2,467,900 $49,350 $12,337 Year 6 $ - $ - Year 7 $ - $ - Year 8 $ - $ - Year 9 $ - $ - Year 10 $ - $ - $ - $ - $151,051 $244,082 Fee Table ° ai o Total Investment Base City Council $ - 15% $ 500,001.00 12% $ 1,000,001.00 10% $ 10,000,001.00 7.5% $ 50,000,001.00 5% Total Fee Paid otal Taxes Abated Abatement Per Job Total Investment Fee % to Council Fee per year $244,082 $4,694 $6,670,000 10% $24,408 $4,882 Real Property Personal Property CAGIT EDIT Ten Years Yearly Thereafter $0 $401,135 $214,371 $53,593 $669,099 $50,017