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HomeMy WebLinkAboutResolution #3682,. RESOLUTION NO. 3hx? A RESOLUTION REVISING THE POLICY GUIDELINES AND RECAPTURE STRATEGY STATEMENT FOR THE SECURING OF LOAN FUNDS DISBURSED BY THE CITY OF CANTON FROM THE ILLINOIS DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, FORMERLY DCCA. WHEREAS, the City of Canton has been made the recipient of several Community Development Assistance Program grants from the Illinois Department of Commerce and Economic Development, formerly Department of Commerce and Community Affairs; and, WHEREAS, the City of Canton has been directed by the Department of Commerce and Economic Development to amend current RLF Recapture Strategy to reflect the new JCAR rules; and, WHEREAS, the amended Recapture Strategy is required to be sent to and approved by the Illinois Department of Commerce and Economic Development; and WHEREAS, this amended Recapture Strategy will be in accordance with the approved JCAR changes under Section 110.230 Recapture Strategy Requirements, which increase the maximum amount of revolving loan, funds per job created or retained from $10,000 to $15,000 per job. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CANTON, FULTON COUNTY, ILLINOIS as follows: 1. That the Canton City Council hereby amends it's current Recapture Statement to reflect the changes as required by the Department of Commerce and Economic Opportunity; and, 2. That this Resolution shall be in full force and in 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, Fulton County, Illinois at a regular meeting this 17 day of February , 2004, upon a roll call vote as follows: AYES: Alderman Reed, Fillin~a~, Carl, ;Hain Saxff, West, Molleck, Hartford. NAYS: Nine. ABSENT: Tone . ATTEST: J ancy White, , City Clerk APPROVED: Je M. Bohler, ayor 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 area 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 yeaz). h. Projects of a speculative nature are ineligible for funding. 2. The geographic azea served by this fund will be within 1 % miles of the corporate limits of the City of Canton or which aze determined to principally benefit the residents of the City of Canton. 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 i • mayor or other representative of the city council, the city attorney, the. city economic development director, the RLF Program Manager and two experienced area 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 prepared 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 staff deemed 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 Community Affairs. 5. Delinquent Loans: When an RLF payment becomes 10 days past due, RLF 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. D. Assurances 1. Not more than 10 percent of the annual revenue to the RLF will be used for administration of the RLF 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 Community Affairs. ~~ ~ 3. Any changes to the recapture strategy will be submitted to the Department of Commerce and Community Affairs 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 RLF through bankruptcy court. 5. A minimum leverage ratio of $1 non-CDAP funds to $1 CDAP RLF funds must be obtained for each project. RLF 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.