TAXPAYERS RESEARCH COUNCIL Y OUR T AX A DVOCATE S INCE 1937

N EWS AND N OTES

April 11, 2012

L OCAL T AXPAYER C OST

The Taxpayers Research Council has evaluated the development agreement between Sioux City and Delta Airlines, which recently announced the closing their Sioux City call center facility by September 1, 2012. This review is focused only on the use of local taxdollars used in the agreement. The City of Sioux City was leasing the property for ten years to Delta at an annual cost of $208,000 per year. However, the City of Sioux City would provide rent abatement of $100,000 per year. The City of Sioux City would also provide 250 parking spots in the Discovery Parking Ramp at no additional cost to Delta. The City of Sioux City also used $4,216,668 in Tax Increment Financing for construction and remodeling costs for the property. Delta agreed to pay the annual property taxes on the property with a minimum assessed value of $4.8 million. The evaluation of this information shows local taxpayers have spent about $3,771,668 for the operation of the Delta call center for five years.

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D ELTA C ALL C ENTER

$500,000 $675,000 $4,216,668 $5,391,668 $540,000 $1,080,000 $1,620,000 $3,771,668 $540,000 $1,080,000 $1,620,000

CityofSiouxCityPackage $100,000RentAbatementPerYearfor5Years 250ParkingSpacesinPublicRampfor5Years Remodel&ConstructionCostsforOfficeSpace TotalCost Delta'sPaidExpensestoSiouxCity RentCollectedover5Years TaxesCollectedon$4,800,000valuefor5Years* TotalRevenues *Taxesaresplitbetweencity,countyandschool 5YearTotalCosttoLocalTaxpayers RemainingFiveYearsofRent Remaining5yearsofTaxes Total

Depending on possible agreements between the City of Sioux City and Delta, Delta may have to continue to pay property taxes and rent for the remaining five years of the TotalCosttoLocalTaxpayersifRemainingRentand lease. This would mean the local taxpayers would have TaxesareCollected $2,151,668 spent $2,151,668 for the operation of the Delta call center. Another variable is the agreed number of full time employees at the Delta call center. Delta was to have 130 full time employees by the end of the first year. Delta was to have 230 full time employees at the end of the second year and 252 full time employees at the end of the third year. In the event these numbers were not met, Delta would be required to pay additional money to the city. The Taxpayers Research Council does not have the detailed employment numbers and can not speculate on the costs at this time. Thank You For Your Membership! Houlihan & Associates Alan Wicks Soo Tractor Sweeprake Electronic Engineering

James Van Bruggen Executive Director james@siouxlandtrc.org www.siouxlandtrc.org 712-252-4063