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3. Bank interest earned on recaptured funds may be <br /> reserved for administration of the loan fund. No <br /> part of the recaptured principal or repayment <br /> interest may be utilized for adminstration but must <br /> be reserved to capitalize the revolving loan fund. <br /> B. When a loan application is submitted. the mayor shall <br /> appoint a review committee comprised of a certified <br /> public accountant, legal advisor. and other financial <br /> related person(s) to review the application and <br /> determine loan feasibility. The committee shall make <br /> recommendations to the city council and a council <br /> resolution shall be required as final approval of loan <br /> applications. <br /> C. An interest bearing checking account will be established <br /> at a local bank. The account shall maintain a balance <br /> of at least $500.00. and Certificates of Deposit will be <br /> purchased periodically and managed to the city's best <br /> interest. That is. if it is apparent a loan application <br /> is likely to receive final approval within a short <br /> period of time following the maturity date of a CD or <br /> CD's, the proposed loan amount shall be transferred to <br /> the checking account to avoid loss of interest due to <br /> cashing renewed CD's prematurely. <br /> D. Applications for loans will be accepted at any time <br /> there are adequate funds available in the revolving loan <br /> account to meet the loan request. <br /> E. The mayor's office. or such person as the mayor shall <br /> appoint, shall prepare on an annual basis, an operating <br /> budget to be approved by resolution of the city <br /> council. If, during the year, major budget revisions <br /> become necessary. the council must approve such <br /> revisions by resolution. The operating budget should <br /> reflect those anticipated actual costs for loan account <br /> management and accounting procedures (including budget <br /> preparation and AIDC reporting) . The project audit <br /> costs would be reflected in the budget. <br /> F. An annual audit shall be performed beginning one year <br /> after establishment of the revolving loan fund account. <br /> The city will select a private auditor in accordance <br /> with Attachment 0 of OMB Circular A-102. A reasonable <br /> contract shall be negotiated with the auditor on an <br /> annual basis. The city may choose to have the audit <br /> performed in conjunction with the annual city audit; <br /> however it shall be a program or fund audit to insure <br /> the accounting is separate and discrete from an audit of <br /> the City. <br /> r. <br />