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Auxiliary Account

Program Authorization: Act 18 of 1997

PROGRAM DESCRIPTION

The Auxiliary Account consists of the Directory of Louisiana Manufacturers activity, the Alliance Compressors (Trane Company) activity, and the Joint Special Marketing activity.

The Directory of Louisiana Manufacturers and related business service directories are the premiere source of information for companies and individuals seeking to do business with Louisiana manufacturers. The directory will be using self generated funds from the sale of directories. Activities include sales, marketing the directories by mail, conducting database searches for customers, and promoting the directories at trade shows and through advertisement in economic development journals. The directory is jointly produced with Harris InfoSouce International, which updates the data with DED assistance. Harris prints, publishes, and markets the annual publication on a national basis. The department receives a flat fee and royalty on all products sold by Harris, 50 directories and a Selectory for in-house use.

The Alliance Compressors activity provides interim and permanent financing of the Alliance Compressor Plant in Natchitoches. Alliance Compressors is a joint venture of the Trane Company and Lennox.

The Joint Special Marketing activity consists of monies used for promotion/marketing events, including trade show participation, receptions for business executives, transportation for site selection teams and associated expenses, interpreters for overseas missions involving senior state officials, economic development events involving the Governor and/or his designee, etc. The expenditures are directly associated with Office of Commerce and Industry's Business Recruitment and Retention programs.

OBJECTIVES AND PERFORMANCE INDICATORS

1. The Auxiliary Account, through the directory of Louisiana Manufacturers activity, will increase annual revenue from product sales by 20% in FY 1998-99.

1 A new contract went into effect on May 15, 1997. The new agreement provides a flat fee of $25,000 per year. Additional royalties of 15% may be earned for all sales over $56,000.

2. The Auxiliary Account, through the Alliance Compressor Plant activity, will provide a loan guarantee with respect to interim and permanent financing of the Alliance Compressor Plant in Natchitoches in FY 1998-99.

The first addition of 800,000 square feet is complete. Currently completing the second addition of 800,000 square feet. Company presently has 25 employees. Training sessions proceeding in classes of 20. Projection is for 500 employees to be trained. Will be in operation by January 1998.

3. The Auxiliary Account, through the joint special marketing activity, will provide support for the Office of Commerce and Industry's business recruitment and retention programs in FY 1998-99.

RESOURCE ALLOCATION FOR THE PROGRAM

SOURCE OF FUNDING

This account is funded from Fees and Self-generated Revenues. Fees are derived from Directory and Selectory (data base) sales and are used to maintain an annual publishing program. Additionally, fees are also assessed in association with trade missions, Department sponsored workshops, receptions and other special marketing activities for all Department of Economic Development agencies. Also, a loan guarantee with respect to financing was provided for the Alliance Compressor plant in Natchitoches. In the event the loan guarantee is required from the state, funds from the sale of assets of the Alliance Compressor Plant would be collected under this account.

ANALYSIS OF RECOMMENDATION

GENERAL FUND

TOTAL

T.O.

 

DESCRIPTION

 

 

 

 

 

$0

$2,094,961

0

 

ACT 18 FISCAL YEAR 1997-1998

 

 

 

 

 

 

 

 

 

BA-7 TRANSACTIONS:

$0

$0

0

 

None

 

 

 

 

 

$0

$2,094,961

0

 

EXISTING OPERATING BUDGET - December 10, 1997

 

 

 

 

 

$0

$9,927

0

 

Additional Support Service requirements

 

 

 

 

 

$0

$2,104,888

0

 

TOTAL RECOMMENDED

 

 

 

 

 

$0

$9,927

0

 

DIFFERENCE (TOTAL RECOMMENDATION AND EXISTING OPERATING BUDGET)

The total means of financing for this account is recommended at 100.4% of the existing operating budget. It represents 100.4% of the total request ($ 2,095,890) for this program.

PROFESSIONAL CHARGES

This account does not have funding for Professional Services for Fiscal Year 1998-1999.

OTHER CHARGES

$44,807

 

Joint Special Marketing - Trade Missions, Department sponsored workshops, receptions and other special activities

$2,000,000

 

Alliance Compressors - For a loan guarantee with respect to interium and permanent financing of the Alliance Compressor Plant in Natchitoches

$7,440

 

Purchase of the Directory of LA Manufacturers for resale from the publishing company that handles the Directory

$52,641

 

For salaries and support expenses to promote the LA Directory of Manufacturers statewide (Including 1 position)

 

 

 

$2,104,888

 

TOTAL OTHER CHARGES

ACQUISITIONS AND MAJOR REPAIRS

This account does not have funding for Acquisitions and Major Repairs for Fiscal Year 1998-1999.

05 DEPARTMENT OF ECONOMIC DEVELOPMENT


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