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HomeMy WebLinkAbout1989-08-01-R qW RESOLUTION NO. 0 —S I RE USE PLAN CITY OF BATESVILLE I. GOALS AND OBJECTIVES OF REUSE PLAN The objective of the Re-Use Plan is to stiaulate industrial development with job creation the primary goal. The recaptured funds will be distributed to private enterprise through a revolving loan fund. The recaptured funds shall be held in an interest bearing account separate from other city funds. The funds shall be available as loans to approved private industry and businesses for start-up. expansion or relocation within a one mile extension of the city. II. STRUCTURE OF THE REVOLVING LOAN FUND The recaptured grant funds shall be reserved to capitalize a revolving loan fund. A. Any private enterprise may submit an application for a revolving loan. B. Specific requirements of the revolving loan program are: 1. The potential business must relocate within a one-mile extension of the city limits. 2. The loan amount will be determined on a case-by-case basis at a term and conditions to be set by the city council at the time the loan is made. subject to the following limitations: a. The minimum interest rate shall be negotiated with a spread of two to six points below the prime lending rate. The lower interest rates will be considered for a high job-creation ratio and/or short-term first mortgage loan. b. The term of the loan shall not exceed five (5) years. 3. The loan may not exceed 25% of the total project (W cost. t' 4. Loans will require a ratio of one job created for each $10.000 loaned. Borrower must document efforts (W to hire all employees from Independence or adjoining counties. 5. Acceptable collateral will be determined on a case by case basis. 6. Repayment of all or part of the loan may be waived if an excess of jobs are created. This determination shall be made by the City Council. 7. The borrower will not assign. sublet. mortgage. or otherwise convey in any shape. form. substance or manner any interest in the contract to any other person(s). firm(s). or corporation(s) without the written consent of the City of Batesville being first obtained. In the event that consent is granted. and unless expressly waived in writing. such consent shall not relieve borrower of its obligations herein. and consent to one such transfer shall not be deemed consent to any subsequent transfer or transfers. B. The construction contractor with whom the borrower shall contract shall provide 100% performance and payment bonds approved by the City. 9. Failure on the part of the borrower to comply with any or all of these requirements will be considered grounds to terminate the contract and principal and interest accrued to date shall become due and payable. III. ADMINISTRATION A. The mayor's office will be responsible for the administration of the Re-Use Plan. and the city clerk will be utilized to manage the revolving loan funds. 1. The administrative duties will consist of: re-payment monitoring. setting up accounting. supervising the bank account. disseminating information pertaining to the loan fund. advertising for and accepting loan applications. assuring loan conditions are met. preparing budgets, and submitting reports to AIDC; which are. annual audits and any such reports as AIDC shall from time to time require. Z. Loan packages will be available at the city hall and their availability will be advertised through the Chamber of Commerce, local radio stations. and the (W local newspaper. 3. Bank interest earned on recaptured funds may be reserved for administration of the loan fund. No part of the recaptured principal or repayment interest may be utilized for adminstration but must be reserved to capitalize the revolving loan fund. B. When a loan application is submitted. the mayor shall appoint a review committee comprised of a certified public accountant, legal advisor. and other financial related person(s) to review the application and determine loan feasibility. The committee shall make recommendations to the city council and a council resolution shall be required as final approval of loan applications. C. An interest bearing checking account will be established at a local bank. The account shall maintain a balance of at least $500.00. and Certificates of Deposit will be purchased periodically and managed to the city's best interest. That is. if it is apparent a loan application is likely to receive final approval within a short period of time following the maturity date of a CD or CD's, the proposed loan amount shall be transferred to the checking account to avoid loss of interest due to cashing renewed CD's prematurely. D. Applications for loans will be accepted at any time there are adequate funds available in the revolving loan account to meet the loan request. E. The mayor's office. or such person as the mayor shall appoint, shall prepare on an annual basis, an operating budget to be approved by resolution of the city council. If, during the year, major budget revisions become necessary. the council must approve such revisions by resolution. The operating budget should reflect those anticipated actual costs for loan account management and accounting procedures (including budget preparation and AIDC reporting) . The project audit costs would be reflected in the budget. F. An annual audit shall be performed beginning one year after establishment of the revolving loan fund account. The city will select a private auditor in accordance with Attachment 0 of OMB Circular A-102. A reasonable contract shall be negotiated with the auditor on an annual basis. The city may choose to have the audit performed in conjunction with the annual city audit; however it shall be a program or fund audit to insure the accounting is separate and discrete from an audit of the City. r. G. , The city clerk shall submit to the city council an annual loan activity report which includes a status of projects and how funds were used for the interval that the annual audit is submitted. Council -mutes shall reflect acceptance (or requested correlation) of such reports. and after council approval. the reports and audit shall be submitted to AIDC. H. Any changes or amendments to this plan will require a minimum of one adertized public meeting. a resolution adopted by the city council. and written approval from AIDC. I. Any income received prior to March 7. 1986 must be expended in accordance with Title I requirements of the Housing and Community Development Act of 1974. as amended. Income received after that date is subject only to the terms of this re-use plan. IV. CERTIFICATION The City of Batesville shall abide by the regulations set forth by the Arkansas Industrial Development Commission in the adminstration of this Re-Use Plan. The amended plan herein presented is approved and becomes effective this 2z Nr> day of A U GU s T 1989. . 1 g - 22 - g9 Date yor 21a-� City Clerk M y