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$1 million for jobs

SWCC enters industrial job training agreements with two Union County businesses

ZFS Creston was one of two businesses that entered an Industrial New Job Training agreement with Southwestern Community College at their regular board meeting Feb. 12. This program is responsible for creating over 7,700 jobs in the area since its creation in 1983. The agreement made between ZFS Creston and the college is for $950,000, which will be paid back by withholding tax within the next ten years.
ZFS Creston was one of two businesses that entered an Industrial New Job Training agreement with Southwestern Community College at their regular board meeting Feb. 12. This program is responsible for creating over 7,700 jobs in the area since its creation in 1983. The agreement made between ZFS Creston and the college is for $950,000, which will be paid back by withholding tax within the next ten years.

Since the Industrial New Jobs Training program began in 1983, SWCC has established multiple contracts with local businesses to provide training to workers. On Feb. 12, during the regular board of trustees meeting, the board approved two separate motions to enter these agreements with ZFS Creston in the amount of $950,000 and with Weaver Meats of Afton in the amount of $110,000.

“Iowa has a unique incentive program offered at community colleges across the state,” said SWCC Vice President of Economic Employment Tom Lesan. “If a company is increasing its base employment by 10% or more, or if it is a brand new company to the area, it qualifies for that program.”

The program is eligible to companies located in or relocating to Iowa that are engaged in interstate or intrastate commerce for the purpose of manufacturing, processing, assembling products, warehousing, wholesaling or conducting research and development. In turn, the school provides a bond to the companies that covers the costs of training for the new positions created.

“It’s what I like to call ‘reverse bonding,’” said Lesan. “You take the amount of withholding that is going to be paid on an annual basis, you calculate how much that will generate over a ten year period of time, you bond for it today and you get the money from the company at start-up.”

To qualify for the training services, employees must be employed in newly created positions, must occupy positions that did not exist six months prior to the date that the business and community college agreed to pursue a training project and the employee must pay Iowa withholding tax.

Lesan said the withholding tax pays off the bond within the 10 years of the contract.

“We bond for that amount of money with that company and their withholding over 10 years pays it off,” said Lesan. “They get the benefits of the proceeds today when they need it. When we’re out, we’re out. It’s to pay off that training cost when people are first hired.”

The mutual benefit provided by the agreement makes the decision a worthwhile one, said Lesan.

“It’s a great benefit for the company because it helps cut down the start-up cost,” said Lesan. “And it’s a great thing for us because it gets us in the door, we have money, we help with training and they normal call us later when they need training.”

With the additions of more jobs and more training courses, the benefit extends beyond just those in the agreements.

“It’s thousands of jobs and millions of dollars that have come in just in our little corner of the state,” said Lesan. “It benefits everybody in the state and it isn’t a state pool of money everybody competes against. You generate this pool from the number of jobs you have.”

Due to the unique nature of the program, Lesan notes the importance in areas such as Union County. Since the programs’ conception, 13 companies have benefitted from the Industrial New Jobs Training Agreements in the SWCC area.  Over 7,700 new jobs have been created, with a total issuance of over $30,000,000.

“It’s big for all of Iowa, but in my opinion, it’s even bigger for rural Iowa,” said Lesan. “Des Moines has a lot of different people and money they can pull from to lure companies into their service area. You get to rural Iowa and that’s not really available. So this is one thing that it doesn’t matter if you’re in Des Moines, Cedar Rapids or Iowa City, your benefits are going to be the same because it’s what you generate. It helps level that playing field a bit.”

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