HomeMy WebLinkAboutResolution 3488 Revised CDBG economic development guidelines
COMMISSION RESOLUTION NO. 3488
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA. REVISING GUIDELINES FOR THE COMMUNITY DEVELOPMENT
BLOCK GRANT ECONOMIC DEVELOPMENT REVOLVING LOAN FUND. AND
SUPERSEDING COMMISSION RESOLUTION NO. 3200.
WHEREAS, the City of Bozeman has received six economic development grants, totaling
$1,098,000, from the Community Development Block Grant program administered by
the State
of Montana Department of Commerce to fund specific loan requests; and
WHEREAS, the City of Bozeman is now beginning to receive payments on these loans,
with said payments going into the Community Development Block Grant Revolving Loan
Fund; and
WHEREAS, the City Commission did, on the 9th day of December 1991, establish
guidelines for the Community Development Block Grant Revolving Loan Fund, by adopting
Commission Resolution No. 2852; and
WHEREAS. the City Commission did, on the 15th day of September 1997, revise the
guidelines by adopting Commission Resolution No. 3200; and
WHEREAS, the City Commission has determined that additional revisions of the guidelines
for the Community Development Block Grant Revolving Loan Fund are needed.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman,
Montana, that the revised guidelines for the Community Development Block Grant
Revolving Loan
Fund, attached hereto as Exhibit" A", and by this reference made a part hereof,
are hereby
adopted.
PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, at
a regular session thereof held on the
22nd day of
October 2001.
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ATTEST:
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Clerk of the Commission
EXHIBIT "A"
CITY OF BOZEMAN
ECONOMIC DEVELOPMENT REVOLVING LOAN FUND
GUIDELINES
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INTRODUCTION
The City of Bozeman has received several grants from the
Montana Community
Development Block Grant Economic Development Program.
During the period from 1 987 to +99Z :11~~\I, the City received five $jx Economic
Development Grants, and with those funds awarded loans to Schnees Boot Works, ILX
Lightwave
Corporation, Lattice Materials Corporation (two loans), 3nd CVR Oak Designs ~qtJ:';:']I@!j~qt~
ror~Q~Qpt{qQ::fl!q9~$$ID9.
Payments from these loans have been deposited into an interest-bearing Economic
Development Revolving Loan Fund, hereinafter referred to as "Fund". Interest earnings
and income
generated from these investments have been reinvested into the Fund and these funds
are loaned
to local businesses for the purpose of furthering economic development in the Bozeman
jurisdictional area.
By Resolution of the City Commission, an Economic Development Loan Review Committee,
hereinafter referred to as "Committee", was formed to evaluate the feasibility
and investment
potential of proposed economic development projects.
Committee members include:
A. Director of Planning or designee;
B. Director of Operations or designee;
C. A representative of the Gallatin Development Corporation;
D. A representative of a local commercial lender organization;
E. A representative of H.R.D.C.;
F. A representative of the Capital Opportunities Board of Directors; and
G. A principle owner/partner of a business which has previously received an economic
development loan from the City or County.
The members will be appointed by the City Commission and will serve two-year terms.
Members may serve more than one two.year term, if re-appointed by the City Commission.
Any
organization which provides contract administration of the Fund shall waive its
representation on
the Committee for the period of the administrative contract.
The Committee will serve in an advisory role in recommending attractive economic
development investment projects to the Bozeman City Commission. The City Attorney
shall serve
as legal counsel to the Committee.
The City shall, at a minimum, maintain the following records regarding the Fund:
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~~ sources of program income, including interest earned;
~~ a schedule of anticipated program income receipts (e.g. a loan amortization schedule
for each outstanding loan);
-- designated person(s) or entity(ies) responsible for tracking loan payments and
servicing the loan(s);
h policies and procedures for determining how the program income funds will be
expended and for what activities;
-- names of the person(s) or board(s) responsible for ensuring compliance with
applicable requirements;
-- dates and amounts of program income deposits and disbursements; and
-- the activities funded with program income.
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ADMINISTRA TION
The Fund will be administered by the City Manager, or by a consultant or contractor working
under the supervision of the City Manager.
A maximum of ten percent of the fund balance may
be used for administrative costs, including, but not limited to:
A. Personal Services (salaries, benefits, etc.)
B. Office Costs (supplies, postage, telephone, printing)
C. Consulting
D. Legal assistance
E. Financial planning and loan packaging technical assistance
F. Travel and Training
G. Project Monitoring
All costs shall be itemized, including time, and only the documented costs will be eligible
as administrative costs.
All program income received by the City after close-out of a CDBG Economic Development
project is subject to the provisions of Title I (all CDBG requirements that applied
during the project)
until all CDBG grants received by the City are closed out by the Department of
Commerce. Annual
reports explaining the activities of the fund shall be made to the Montana Department
of
Commerce, Economic Development Division.
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ELIGIBLE ACTIVITIES
Priority will be given to businesses engaged in basic economic activities (50% or more of
the gross revenues are derived from outside Gallatin County) that provide quality
jobs. Quality jobs
are defined as those where the combination of wages, benefits and workplace environment
contribute to a productive and satisfying work experience for employees.
The cost per job to be
created or retained must not exceed $20,000 per job.
Loans that assist for-profit entities must be determined to be "appropriate" as defined in,
and determined by following the procedures contained in the current Montana CDBG
Application
Guidelines and current HUD policy. The City shall retain records to document compliance
with this
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requirement including the financial analysis conducted to determine whether the
financial assistance
to the for-profit business was "appropriate".
Typical eligible activities include: land acquisition; public facilities and other improvements,
such as water and sewer lines, and access roads, specific to the project; loans
for acquisition,
construction, rehabilitation, expansion, or installation of commercial and industrial
buildings,
facilities, equipment, or working capital; and employee training. The funds also
may be used as
a match to other funding sources, as long as they are contingent upon approval
of the other
funding source.
IV.
ELIGIBLE APPLICANTS
Eligible applicants are businesses located within the Bozeman City-County Master Plan Area.
Applicants who do not meet eligibility criteria for the Fund will be referred to
appropriate financing
sources.
V.
APPLlCA TION PROCEDURES
All applicants should discuss their project with the staff prior to submittal of an application.
The applicant shall provide all information as requested in the application form,
which includes a
business plan, financial information, employment projections, and the source, use,
and terms of
all funds.
VI.
LOAN TERMS
The maximum loan amount granted to anyone project from the City's Fund shall generally
not exceed $1 00,000.00f4PQiQQP. The Revolving Loan Fund amount must be matched
on a 1: 1
basis from another source, i.e., private funds, bank loan, SBA, other grants, etc.
The term, interest rate, and repayment of the loan shall be determined after review of the
application and shall be based on the project needs. In no case will the minimum
allowable interest
rate be less than 5%.
All loans must be secured with a personal guarantee, and any other
reasonable source of available collateral.
VII.
APPLlCA TION REVIEW
These Funds will be open for application on a continuous basis. Applications will be
reviewed by the Economic Development Loan Review Committee within 30 days of the
receipt of
a complete application (See Appendix!. Within 15 days of completing its review
of the application,
the Committee will then provide a written report of their recommendation for determining
project
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eligibility to the Bozeman City Commission.
If the recommendation is supportive of a loan, the
Committee will suggest the term and interest rate of the loan. The report will
be made at a regular
meeting of the City Commission, with a notice of the City's scheduled review of
the application
published in a newspaper of general circulation in the Bozeman area not less than
seven (7) days
prior to the regular meeting. However, confidential information such as financial
data, will not be
made available for public review.
The objective of the Fund is to aid in the provision of quality employment opportunities for
all qualified persons, including those who currently have low incomes.
Applications will be reviewed on the following criteria:
-- The
need for Fund
assistance and the feasibility
of the project, as
demonstrated by the Business Plan.
-- Experience and qualifications of the management team.
-- The company's growth potential and resultant community impact.
-- Degree of leverage with other investment including public and private
sources.
-- Commitment to provide quality jobs.
-- The cost per job created or retained.
-- Increased tax base.
The Bozeman City Commission will make the final determination on all applications.
If there is not an adequate balance in the fund to finance an application, the Commission
may conditionally commit the available funds to a project, as well as enough future
funds to
adequately support the project.
VIII.
ADOPTION/AMENDMENT OF THESE GUIDELINES
These Guidelines have been reviewed at a public meeting of the Bozeman City Commission
and have been adopted by Commission Resolution No. 3486 dated
.
2001. The Guidelines may be amended after review at a regular meeting by a majority
vote of the
Bozeman City Commission, a notice of which shall be published in a newspaper of
general
circulation in the Bozeman area, not less than seven days prior to the meeting.
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APPENDIX "A"
CITY OF BOZEMAN
ECONOMIC DEVELOPMENT REVOLVING LOAN FUND
APPLlCA TION FORM
NAME OF APPLICANT:
NAME OF BUSINESS:
ADDRESS:
CONTACT PERSON:
TELEPHONE NO:
A.
GENERAL BUSINESS INFORMATION
1.
Type of business/business description:
2.
Number of years in business:
3.
Form of Business Organization: Sole Proprietorship
Partnership Corporation
Other
Names of Proprietor/Partners/Officers:
5.
Number of current employees:
Full Time Employees
Part Time Employees
~
EXPLANA TION OF NEED FOR LOAN
1. Provide a complete Business Plan. which includes business description and products/
services offered; discussion of present or proposed market. including future projections.
with
explanation of how the information was developed (market surveys. etc). Document
all
identified potential markets with contracts. letters. etc.
2.
Provide a complete budget of project. including the source. use. terms and payback of
all funds for the entire project;
3.
Provide the following Financial Exhibits for the last three years:
- Balance Sheet
- Profit and Loss Statement
- Cash Flow Statement
~ Reconciliation of Net Worth
- Aging of Accounts Receivable and Payable
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The above documents must be compiled or reviewed by an independent CPA, with full
disclosure notes.
All financial information must be signed by a responsible officer of the
business.
4.
Provide the following earnings projections for 3 years:
~ Balance Sheet
~ Profit and Loss Statement
~ Cash Flow Statement
There must be no time period gaps between the historical statements and the projected
statements.
The financial statements must not be dated more than 90 days prior to the
date of application.
Earnings projections must include a projected monthly cash flow
analysis for at least one year and until the break even point is projected to be
reached. A
businesses that experiences regular or occasional cyclical variations in cash flow,
must
provide a narrative explanation of the reason(s) for the occurrence of the cycles
and the
effects, if any, on the business' ability to meet its debt obligations.
5.
Provide descriptions of all existing and projected debts and lenders, annual debt service
amount, and any related loan requirements.
6.
Provide information on working capital needs and verify through cash flow projections,
explaining changes in inventory and receivables.
7.
Provide current personal balance sheets for each individual with 10%
or more
ownership in the project, as well as a release from principal owners of the business
allowing
a personal credit history check by the City as part of the application review.
b
HIRING AND TRAINING PLAN/lNFORMATION
The City of Bozeman, Human Resource Development Council, and the Bozeman Branch
of
the Montana Job Service will coordinate the development and implementation of Hiring
and
Training
Plans for businesses seeking Economic Development Revolving
Loan Fund
assistance from the City of Bozeman.
It is required that businesses agree to comply with
and follow their final Hiring and Training Plan.
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NOTICE OF INTENTION TO ADOPT
REVISED GUIDELINES FOR THE COMMUNITY DEVELOPMENT
BLOCK GRANT (CDBG) ECONOMIC DEVELOPMENT REVOLVING LOAN FUND
NOTICE IS HEREBY GIVEN that the City Commission of the City of Bozeman intends
to consider adoption of Commission Resolution No. 3488, revising guidelines for
the
Community Development Block Grant (CDBG) Economic Development Revolving Loan Fund,
superseding Commission Resolution No. 3200, at its regular meeting to be held at
6:00 p.m.
on Monday, October 22, 2001. Copies of the revised guidelines are on file with
the Clerk
of the Commission of the City of Bozeman for inspection by the public.
Any and all interested persons are invited to attend and to state their support
of or
opposition to the adoption of the revised guidelines for the Community Development
Block
Grant Economic Development Revolving Loan Fund.
For additional information, please contact Robin Sullivan, Clerk of the Commission,
at
411 East Main Street, Bozeman, Montana, or telephone 582-2320.
If you have a disability that requires assistance, please contact the City of Bozeman's
ADA Coordinator, Ron Brey, at 582-2305 (TOO 582-2301).
DATED this 10th day of October 2001.
ROBIN L. SULLIVAN
Clerk of the Commission
Legal Ad
Publish:
Sunday, October 14,2001