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HomeMy WebLinkAboutResolution No. 4221, Closing the Bozeman Blast Clean-up Loan fund.pdf Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Finance Director Chris Kukulski, City Manager SUBJECT: RESOLUTION NO. 4221 - A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, CLOSING THE BOZEMAN BLAST CLEAN-UP LOAN FUND, RETURNING MONIES TO THEIR ORIGINAL FUNDING SOURCES, AND ALLOCATING INTERST EARNINGS TO PROSPERA BUSINESS NETWORK FOR ADMINISTRATION OF THE FUND. MEETING DATE: November 16, 2009 AGENDA ITEM TYPE: Consent RECOMMENDATION: Approve Resolution No. 4221 - Closing the Blast Loan Fund. BACKGROUND: On May 18, 2009 the City Commission created the Bozeman Blast Clean- up Loan Fund. The Fund was created with a total of $300,000 from the following sources. 1. $50,000 from the City General Fund. 2. $50,000 from the NorthWestern Energy Loan Fund contribution. 3. $110,000 from the City's Housing Revolving Loan Funds. 4. $90,000 from the City's Economic Development Revolving Loan Fund. The City entered into an agreement with Prospera Business Network to administer the fund. Because they also administer the City's Economic Development Revolving Loan Fund, they would transfer the money from that source into the Blast Fund at the time it was needed. In exchange for their assistance, Prospera would be allowed to retain a 2% loan closing and administration fee at the time any loan disbursements were made. On October 13, 2009, Prospera informed the City that the blast site had been cleared of the “existing debris.” No monies had been disbursed from the Fund, that approximately $100 of interest earnings had accrued on the account through August 2009. Seeing no need to keep the fund open, they requested the loan monies be returned to their original funding sources. 105 The attached resolution closes the fund, returns the money to its original funding sources, and allows Prospera to retain the small amount of interest earnings on the bank account (estimated to be approximately $125.00.) Since the concept for this fund was initially discussed, Prospera has been an instrumental partner in bringing about its creation. They have assisted us greatly over the past months, even-though a single loan was never closed. For that reason, we recommend allowing Prospera to retain the accumulated interest on the account. FISCAL EFFECTS: Closing the Blast Clean Up Fund will return $50,000 to the City's General Fund. It will also return $110,000 to the City's Housing Revolving Loan Fund, and $90,000 to the City's Economic Development Revolving Loan Fund, allowing those programs to move forward with loans for Housing and Economic Development projects. The City will receive NorthWestern Energy's $50,000 from Prospera and will disburse that according to the Agreement in effect for those dollars, at the time of receipt. ALTERNATIVES: As suggested by the City Commission. Attachments: Prospera Letter, dated Oct 13, 2009 Blast Fund Bank Statement Dated Sept 1, 2009 Report compiled on: November 10, 2009 106 COMMISSION RESOLUTION NO. 4221 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, CLOSING THE BOZEMAN BLAST CLEAN-UP LOAN FUND AND RETURNING MONEYS TO THEIR ORIGINAL SOURCES. Page 1 of 3 COMMISSION RESOLUTION NO. 4221 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, CLOSING THE BOZEMAN BLAST CLEAN-UP LOAN FUND, RETURNING MONIES TO THEIR ORIGINAL FUNDING SOURCES, AND ALLOCATING INTERST EARNINGS TO PROSPERA BUSINESS NETWORK FOR ADMINISTRATION OF THE FUND. WHEREAS, on May 18, 2009 the Commission adopted Resolution No. 4168 CREATING, CAPITALIZING, AND ESTBLISHING THE GUIDELINES FOR THE BOZEMAN BLAST CLEAN-UP LOAN FUND (“the Fund), and WHEREAS, the Fund consisted of $90,000 of money recycled from the City’s Economic Development Revolving Loan Fund, $110,000 of money from the City’s Housing Revolving Loan Fund, $50,000 from the City’s general fund; and $50,000 from Northwestern Energy pursuant to the Bozeman Downtown Recovery Fund Participation Agreement, approved by the City Commission for signature by the City Manger on May 18, 2009; and WHEREAS, on May 26, 2009 the Commission entered into an Memorandum of Understanding for Administration of the Fund with Prospera Business Network that required Prosper to “Determine when eligible activities are complete and no more loan funds will be available to Borrowers and when unused portions of the Fund may be returned to their original sources”, and WHEREAS, on October 13, 2009 the City received notice from Prospera Business Network that the blast site had been cleared of the “existing debris,” that no monies had been 107 COMMISSION RESOLUTION NO. 4221 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, CLOSING THE BOZEMAN BLAST CLEAN-UP LOAN FUND AND RETURNING MONEYS TO THEIR ORIGINAL SOURCES. Page 2 of 3 disbursed from the Fund, that approximately $100 of interest earnings had accrued on the account through August 2009, and that they request the loan monies be returned to their original funding sources. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana: Section 1 - Fund Closure The Bozeman Blast Clean-Up Loan Fund is hereby closed. Section 2 – Return of Funding Sources The following amounts will be returned to their original funding sources: i. $50,000 to the City General Fund. ii. $50,000 to NorthWestern Energy. iii. $110,000 to the City's Housing Revolving Loan Funds. iv. $90,000 to the City's Economic Development Revolving Loan Fund. Section 3 – Accumulated Interest Earnings As compensation for fund administration services, Prospera will retain the interest earnings that have accumulated on the Fund from its creation to its closure, estimated to be approximately $125.00. PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 16th day of November 2009. ___________________________________ KAAREN JACOBSON Mayor ATTEST: 108 COMMISSION RESOLUTION NO. 4221 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, CLOSING THE BOZEMAN BLAST CLEAN-UP LOAN FUND AND RETURNING MONEYS TO THEIR ORIGINAL SOURCES. Page 3 of 3 _____________________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 109 110 111