(A) Eligible uses of funds.
(1) Site development/infrastructure extension costs.
(2) Construction of new facility or additions.
(3) Renovation of existing facilities.
(4) Leasehold improvements.
(5) Purchase of new or used machinery or equipment.
(6) Working capital.
(7) For every $15,000 of revolving loan funds provided, one full time equivalent (FTE) job should be created or retained. One FTE job is a position consisting of a minimum of 1,950 hours worked a year. The Revolving Loan Fund participation will be limited to $15,000 per job created or retained, but in no case will exceed 50% of the total project cost. Jobs created/retained as a result of Revolving Loan Fund investment are required to be in place within 24 months from the date the loan is closed.
(B) Ineligible uses of funds.
(1) Refinancing of existing private debts.
(2) Financing for speculative activities or purposes (such as commercial/retail development without lease agreements).
(3) Expenses incidental to general marketing activities.
(4) Expenses to prepare a CDAP grant application.
(5) Except for relocations due to expansion, relocations from within the State of Illinois are ineligible for revolving loan fund participation, unless approved by the Illinois Department of Commerce and Economic Opportunity.
(6) Forgivable loans are prohibited.
(C) Geographic area. Revolving Loan Funds will be expended for projects which are located within one and one-half miles of the corporate limits of the city or which are determined to principally benefit residents of the city.
(D) Targets and priorities. The funds will be targeted to assist existing industrial and commercial firms, start-up businesses, female and minority owned firms and businesses that will relocate from an out-of-state location on a first come, first served basis, subject to available funding. Applications that demonstrate the greatest potential for job creation/retention and meeting the goals and objectives of the fund will be given the highest priority.
(E) Marketing of loan funds. Economic development organizations within Mattoon will coordinate outreach and marketing endeavors to generate loan applications. Coles Together, the countywide economic development corporation, will be the primary contact for marketing loans to the primary job creation sector and "big box retailers." The Chamber of Commerce will be the primary contact for marketing loans to the small business retail and service sectors. Representative outreach and marketing endeavors may include, but will not be limited to:
(1) Sending Revolving Loan Fund information to existing businesses within the city
(2) Including Revolving Loan Fund information in the city's public relations and marketing endeavors;
(3) Participation in business-related seminars or workshops held in the area;
(4) Providing Revolving Loan Fund information to any local organizations that may represent chapters of the organizations representing minority groups and offering to periodically speak at meetings of such organizations;
(5) Providing information to area women's entrepreneur associations and women's service organizations;
(6) Publicizing approved loan projects by sending news releases to area media and holding news conferences, ribbon cuttings and groundbreakings to encourage media coverage;
(7) Area lending institution will be provided with information about the Revolving Loan Fund and asked to inform potential borrowers of fund availability.
(F) Management plan.
(1) The Revolving Loan Fund shall have an administrative organizational structure sufficient to carry out responsibilities and assurances made to the State of Illinois for the day to day operations of the Revolving Loan Fund.
(2) If an employee of the city is not assigned responsibilities for administration of the Revolving Loan Fund, a written third-party agreement may be authorized by the City Council for the administration and coordination of the Fund by an RLF Fund Coordinator. Minimum terms that shall be included in the agreement are:
(a) A scope of work (with a work description and budget, such as a breakdown of all fees and costs);
(b) Requirements for the maintenance of records and reports;
(c) Requirements for the management of the Revolving Loan Fund;
(d) Applicability of other program requirements;
(e) Provisions for an annual audit of the Revolving Loan Fund;
(f) Provisions for suspension and termination of the agreement;
(g) Terms that final authority for approving any loans made through the Revolving Loan Fund shall remain with the City Council.
(3) Eligible administrative costs of the Revolving Loan Fund include salaries, supplies, utilities and similar expenses necessary for managing the loan portfolio and implementing a revolving loan project. Administrative costs paid from the Fund shall not exceed 10% of the income received each fiscal year (loan repayments, interest earned on invested funds).
(4) Loan applications will be generated by designated marketing representatives of Coles Together and the Chamber of Commerce (the Economic Development Person). The Economic Development Person will generally be the single point of contact with the applicant. The Economic Development Person will meet with the applicant, visit the project site, meet with a representative of the applicant's participating lending institution, package the application and forward it for review by the RLF Fund Coordinator and City Administrator. A team consisting of the Economic Development Person, the RLF Fund Coordinator and the City Administrator will formulate proposed loan terms: the interest rate, the length of the loan, the security and such other conditions necessary to insure compliance with the program goals and objectives as well as consistency with other sources and uses of programs of financial assistance that may be utilized for the project. After consensus is reached among the team members as to proposed loan terms, the Economic Development Person will forward the proposed loan agreement to the applicant for review and approval. If the loan terms are not acceptable to the applicant, the Economic Development Person will attempt to broker the loan terms with the RLF Fund Coordinator and the City Administrator in a fashion that will be mutually acceptable to the parties.
(5) If the terms are acceptable to the loan applicant, the RLF Fund Coordinator will prepare a report, schedule and give public notice of a meeting of the Revolving Loan Advisory Committee to consider the application. The RLF Fund Coordinator's report shall include a description of the project, project costs, sources and uses of funds, the security required, special conditions and a recommendation for approval or denial. All other information submitted pertaining to the loan application shall be confidential. The Revolving Loan Fund Committee will formally approve or deny the application.
(6) If the Revolving Loan Fund Committee denies the application, the loan application procedures shall terminate subject only to an appeal of the Committee's decision to the City Council.
(7) If the Committee approves the application, the RLF Fund Coordinator shall forward a report containing the recommendation along with a special ordinance that would authorize the loan for consideration at the next regularly scheduled meeting of the City Council. The City Council will formally approve or deny the application.
(8) Loan documents, including commitment agreements, liens, title policies, security obtained, recordings, transfer tax declarations, amortization schedules and security releases, shall be completed and maintained by the RLF Coordinator. The RLF Coordinator shall also monitor repayments of the loan, job creation and/or retention reports required to be provided semi-annually until the commitment is met and monitors other special conditions required by the loan.
(9) The City Clerk records payments received on loans made from the Revolving Loan Fund and files semi-annual reports on principal and interest recaptured to the Illinois Department of Economic Opportunity. The City Clerk gives notices to the RLF Coordinator, if a payment becomes more than ten days past due.
(10) Upon notice from the City Clerk of a non-performing loan, the RLF Coordinator will place a telephone call to the borrower and request payment. At 30 days past due, the City Administrator will send a formal letter requesting payment. Should the payment become 45 days past due, the account receivable will be referred to the City Attorney for collection. All legal rights will be exercised by the city to reclaim funds. Legal counsel will be consulted during foreclosure and liquidation proceedings if events warrant.
(G) Assurances. Incidental to the approval of this Revolving Loan Fund Strategy, the City Council has provided these assurances to the Illinois Department of Commerce and Economic Opportunity.
(1) No more than 10% of the annual revenue to the Revolving Loan Fund will be used for administration of the Fund. Administrative expenses will be documented via receipts, bills, invoices, and the like.
(2) Assistance provided from the Revolving Loan Fund will result in at least 51% benefit to low-to-moderate income persons and these benefits will be documented by utilizing Job Training Service providers, Illinois Employment and Training Centers or the employee certification forms found in the Revolving Loan Fund Handbook.
(3) The city agrees to report semi-annually on the status of the Revolving Loan Fund to the Department of Commerce and Economic Opportunity.
(4) Any changes to this Revolving Loan Fund Strategy will be submitted to the Department of Commerce and Economic Opportunity for approval.
(5) The city shall agree to pursue legal remedy to recover delinquent loans. Legal action shall include that authorized by federal and state law, including, but not limited to, efforts to collect and pursue the interests of the Revolving Loan Fund through bankruptcy court.
(6) A minimum leverage ratio of $1 non-CDAP funds to $1 CDAP Revolving Loan Funds must be obtained for each project. Revolving Loan Funds may not comprise more than 50% of the financing for any project.
(7) The city shall assure that environmental reviews will be completed for each project funded as well as prevailing wages paid if applicable.
(Ord. 2003-5163, passed 6-17-2003)