(A) Establishment of Revolving Loan Fund Board.
(1) The City Commission will establish a Revolving Loan Fund Board, composed of five members. The RLF Board will be selected to include members representative of a cross section of area leaders with experience and expertise in business finance and economic development. Members will be appointed by the Mayor with approval by the City Commission. Removal of members is by the recommendation of the Mayor and approval of the City Commission. One member of the Board is to consist of a member of the City Commission, and one member of the Board shall consist of a member of the Franklin-Simpson Industrial Board.
(2) The RLF Board will establish, evaluate and carry out policy, establish loan conditions and recommend disposition of loans under the RLF.
(3) The Mayor shall serve as Loan Fund Manager and will act liaison between potential borrowers and the RLF Board of Directors. The Mayor may delegate his or her Authority or request assistance as is needed.
(4) In addition, three members of the Board will serve as a Loan Review Committee. This Loan Review Committee will, with the assistance of the RLF Manager, review all loan requests and make recommendations to the full Board regarding the various requests.
(B) Processing fees. A fee of $250 shall be charged to cover the cost of processing an application. This fee shall be levied only on those applicants desiring to submit an application for consideration. No charge shall be made for initial contact or preliminary discussions required for the development of a possible application.
(C) Technical and Managerial Assistance. Due to their involvement and knowledge of other sources of financing, the Barren River Area Development District shall provide technical and managerial assistance and secretarial support to the RLF Board and potential applicants. Technical assistance shall consist of: working with applicants and other loan participants to develop a feasible project,; seeking additional loan sources which may be available,; and reviewing proposals and advising the RLF Board and Manager of merits of the loan.
(D) Servicing of loans. The City Revolving Loan Fund will not directly engage in the servicing of its portfolio. The Board will negotiate with outside sources, preferably the first lender, who possess the necessary skills to service the loans.
(E) Monitoring of loans. The RLF Manager will conduct a monitoring visit of each project at least twice a year to determine if there are any problems that jeopardize the loan. The RLF and Servicing Agency will keep each other informed about problems they encounter. If they so desire, the Board may request periodic financial reports from the company as a condition of loan approval.
(F) Solicitation of loans. The City Revolving Loan Fund will recruit potential borrowers through several methods. The RLF Manager will actively solicit participation through private lenders, referrals from the State Development Finance Authority, Community Development Block Grant program, Barren River Area Development District Council, and other sources as appropriate. These development agencies will be in a position of making RLF program information available to various enterprises which they have contact.
(Res. passed 12-27-1993)