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HomeMy WebLinkAboutResolution #3684RESOLUTION NO. 3684 A RESOLUTION ADDING ADDITIONS TO THE GUIDELINES AND RECAPTURE STRATEGY STATEMENT AS REQUESTED BY THE ILLINOIS DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT WHEREAS, the City of Canton adopted and submitted to the Department of Commerce and Economic Opportunity a Resolution for a Recapture Strategy Statement for the revolving loan; and, WHEREAS, the Department of Commerce and Economic Development Opportunity has requested additional guidelines to be consistent with the current Department of Commerce and Economic Development Opportunity requirements; and, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CANTON, Fulton County, Illinois as follows: 1. That the City of Canton hereby adds the following to the previously adopted Recapture Strategy Statement. 2. That the addition of #3 and #4 under Section B: Revolving Loan Fund Strategy and the addition of #7 under Section D: Assurances. 3. That the previously adopted Recapture Strategy Statement is approved with the above sited additions. 4. That this Resolution shall be in full force and effect immediately upon its passage by the City Council of the City of Canton, Fulton County, Illinois and approval by the Mayor thereof. PASSED by the City Council of the City of Canton, Illinois and approved by the Mayor thereof this ~n~ day of Ma,- h 2004. AYES: Aldermen Hartford, Nblleck, TnTest, Sarff, Ham, Carl, Fill- ing~.aan. NAYS: Nom, ABSENT: ~~~ ~d• APPROVED ....- Jerry M. Bohler, Mayor Attest: Nancy Whites, ty Clerk City of Canton Revolving Loan Fund Recapture Strategy A. Revolving Loan Fund Goals and Objectives 1. Stimulate economic growth in the City of Canton by assisting with the retention and growth of existing industrial and commercial base, providing needed equity to new start-up businesses, encouraging the development of minority and female owned businesses and providing an incentive for established businesses to relocate to Canton, Illinois. 2. Assist new or existing Canton businesses to create and retain jobs. 3. Ensure that jobs created or retained by business applicants benefit a minimum of 51 percent low-to-moderate income persons in the azea. 4. Increase the City of Canton's property tax and sales tax base. 5. Provide businesses with the opportunity to expand. 6. Encourage and leverage loans to businesses by azea private financial institutions. B. Revolving Loan Fund Strategy 1. Eligible uses of funds. a. Site development infrastructure extension costs. b. Construction of new facility or additions. c. Renovation of existing facilities. d. Leasehold improvements. e. Purchase of new or used machinery or equipment. f. Working capital. g. For every $15,000 of revolving loan funds provided, one full time equivalent (FTE) job should be created or retained. (FTE jobs are positions consisting of a minimum of 1,950 hours worked a year). h. Projects of a speculative nature aze ineligible for funding. 2. The geographic azea served by this fund will be within 1 %z miles of the corporate limits of the City of Canton or which aze determined to principally benefit the residents of the City of Canton. 3. The funds will be tazgeted to assist existing industrial and commercial base, start up businesses, female and minority owned firms and established businesses that will relocate to the City of Canton on a first come, first served basis as the City of Canton expects to receive more applicants than available annual funding will cover. Applications that demonstrate the greatest potential for job creation and meeting the goals and objectives of the fund will be given the highest priority. • 4. Applications will be generated by: a. Sending RLF information to the City's existing businesses. b. Including RLF information in the City's marketing package. c. Provide RLF information to area economic development commissions and the chamber of commerce to include in their marketing information. d. Staffparticipation in business related seminars or workshops held in the area. e. Provide RLF information to local chapter of NAACP, Urban League and other organizations representing minority groups and offer to speak at meetings periodically. f. Provide information to area women's entrepreneur associations and women's service organizations. g. Publicize approved loan projects by sending news releases to area media and holding news conferences, ribbon cuttings and ground breakings to encourage media coverage. h. Area lending institutions will be provided with information about the RLF and asked to inform potential borrowers of fund availability. C. RLF Management Plan 1. The Mayor shall appoint a RLF Program Manager to mange the daily operations of the program, including but not limited to, packaging applications collection and receipt of payments and necessary reporting to all applicable state and local entities. 2. The City of Canton shall appoint members as needed to the Business Loan Review Committee. The committee shall consist of, but not limited to the mayor or other representative of the city council, the city attorney, the city economic development director, the RLF Program Manager and two experienced azea financial institution commercial lenders. The committee shall review all applications to the revolving loan fund after the RLF Program Manager has packaged the application and it is referred to the Canton City Council. The committee will meet with the applicant, meet with the representative of the participating lending institution, visit the site if necessary, negotiate terms, length, security of loans and ensure compliance with the RLF goals and objectives. A recommendation will be prepazed for the Canton City Council's review for approval or denial which will include a description of the project, project costs, source of funds, security required, special conditions, and reasons for approval or denial. All other application information is kept confidential. The Canton City Council will formally . approve or deny the application. 3. The RLF will be staffed by the RLF Program Manager, the City's economic development director, the City's finance director, the City Attorney and any other city staffdeemed appropriate by the Mayor. 4. The loan documents, including commitment agreements, liens, title policies, security recordings, transfer tax declarations, amortization schedules and • ' security releases, shall be obtained and completed by the City Attorney. The RLF Program Manager shall monitor repayments of the loan, job creation and/or retention reports required to be provided semi-annually until the commitment is met, monitor other special conditions required by the loan and submit semi-annual reports on the status of the RLF to the Department of Commerce and Economic Opportunity. 5. Delinquent Loans: When an RLF payment becomes 10 days past due, RL,F Program Manager will contact the borrower to request payment. At 30 days past due the RLF Program Manager, in conjunction with the City's Finance Director shall send a formal letter requesting payment. Should the. payment become 45 days past due the matter will be turned over to the Canton City Attorney to pursue. All legal rights will be exercised by the City to reclaim funds. Legal counsel will be consulted during foreclosure and liquidation proceedings if events warrant. ll• Assurances 1. Not more than 10 percent of the annual revenue to the RLF will be used for administration of the ItL,F fund. Administrative expenses will be documented via receipts, bills, invoices, etc. 2. The City of Canton agrees to report semi-annually on the status of the RLF to the Department of Commerce and Economic Opportunity. 3. Any changes to the recapture strategy will be submitted to the Department of Commerce and Economic Opportunity for approval. 4. The City of Canton agrees to pursue legal remedy to recover delinquent loans. Legal action shall include that authorized by federal and state law, including, but not limited to, efforts to collect and pursue the interests of the RL,F through bankruptcy court. 5. A minimum leverage ratio of $1 non-CDAP funds to $1 CDAP RLF funds must be obtained for each project. IZI.F funds may not comprise more than 50% of the total financing for a project. 6. The grantee shall assure that environmental reviews will be completed for each project funded, as well as prevailing wages paid if applicable. 7. Assistance provided from the 1tLF will result in at least 51 percent benefit to low-to-moderate income persons and these benefits will be documented by utilizing Job Training Partnership Act (JTPA) service providers, Illinois Employment and Training Centers or the employee certification forms found in the RLF handbook. Linda Caudle, Public Relations Coordinator 2 North Main Street Canton, IL 61520 309.647.1288 IN9EM0 P u lilii w ~el ations-_ TO: Mayor Jerry Bohler, Ron Weber, David Byerly, Aldermen FROM: Linda Caudle Re: Recapture Strategy Date: 2/27/04 The Recapture Strategy that was approved by Resolution last month was sent to the Department of Commerce and Economic Opportunity as they requested. The recapture strategy was taken from the sample sent out by DCEO. Since that time they have made some additions that they require to be in the Revolving Loan Recapture Strategy before theyy yviJ~ ~~provQ,it an,~ bl~fore we can make any loans from those~funds. The changes are the addition of #3 and #4 under " B Revolving Loan Fund Strategy", and the addition of #7 under "D Assurances".