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3. Resolution 4780 - Community Development Revolving Loan Fund Program (Tabled 4/7)11. The Honorable Mayor Pamela B. Kennedy and City Council FROM: Susan Moyer, Community Development Director Chris A. Kukulski, City Manager SUBJECT: Resolution to Establish an Economic Development Revolving Loan Fund for Business Retention and Expansion MEETING DATE: April 21, 2003 BACKGROUND: Funding is available through application to Rural Development and CDBG Economic Development Block Grant sources that can create a revolving loan fund for small business retention and expansion. These funds are intended to stimulate economic development activity by assisting the private sector where a funding gap exists and alternative sources of public and private financing are not adequate. The City of Kalispell and the Community Development Department, if approved by Council, will be to assist businesses by making appropriate long-term, fixed rate financing available at reasonable interest rates by providing improvements in support of Economic Development activities. Additionally, the Community Development Department will be eligible to receive administrative grant funds to implement and run this program; thus ensuring the continued financial self- sufficiency of the department. RECOMMENDATION: City Council approves the resolution before them this evening and appoints the steering committee members as permanent appointees to a newly created Economic Development Loan Review Committee. The initial appointments shall be for two members having a two year term and three members having a three- year term. Upon expiration of any term or withdrawal of any committee member prior to the expiration of the term, the Committee shall develop and submit, for each opening, a list of up to three nominees to the Mayor who shall then, with the approval of Council, either make the appointment from that list to fill the seat on the Committee or call upon the Committee to develop and submit a new list of up to three nominees to fill the vacant seat. FISCAL IMPACT: Up to $1,150,000 can be applied for from the two funding sources as soon as projects have been identified. Repayment of principal and interest on loans will then be recycled back into the community for new development. Additional applications may be submitted when the initial funds are expended. ALTERNATIVES: Respectfully submitted, Chris A. Kukulski, City Manager As suggested by Council. Susan Moyer, Director Community Development RESOLUTION NO. 4780 A RESOLUTION TO ESTABLISH AN ECONOMIC DEVELOPMENT REVOLVING LOAN FUND FOR BUSINESS RETENTION AND EXPANSION AND TO CREATE AN ECONOMIC DEVELOPMENT LOAN REVIEW COMMITTEE. WHEREAS, Rural Development and CDBG Economic Development Block Grant sources have funding available for the creation of revolving loan funds for small business retention and expansion which may stimulate economic development activity by assisting the private sector where a funding gap exists and alternative sources of public and private financing are not adequate; and WHEREAS, the Kalispell City Community Development Department will be able, through the use of such an economic development revolving loan fund and with funding from these grant sources, to assist businesses by making appropriate long-term, reasonable fixed rate financing to small businesses to stimulate economic development activity; and WHEREAS, a Steering Committee of local business and banking professionals have developed a set of policies and procedures for the management of an Economic Development Revolving Loan Fund which will effectively direct a Loan Review Committee in the management of the Fund; and WHEREAS, a Loan Review Committee should be established and appointments made to that Committee to monitor and direct the Economic Development Revolving Loan Fund. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION I. An Economic Development Revolving Loan Fund (RLF) shall be established within the budget of the City of Kalispell, which shall be funded solely from the Rural Development and CDBG Economic Development Block Grant sources. Loans from this fund shall be used to continue the activities from which the program income is being derived; 1) specifically to create and retain employment opportunities, and to 2) assist in preventing or eliminating blight, to revitalize, upgrade or improve the commercial/business area of the Kalispell community, and to 3) contribute partial funding as a match for Community Development projects funded with State and Federal Funds. To this end the use of the RLF shall be governed by the City of Kalispell Economic Development Revolving Loan Funds Policy and Procedures manual attached hereto in incorporated fully herein by this reference. SECTION II. The five person steering committee which authored the Policy and Procedures established above in Section I shall be and is hereby appointed to serve as the Loan Review Committee. The first term for Peggy Young and A.J. King shall be for a period of two years and the first term for Dave Hanson, Rick Hart and Donna Bolander shall be for three years. All terms thereafter shall be for a period of three years. Upon the expiration of any term or withdrawal of any committee member prior to the expiration of the term, the Committee shall develop and submit, for each opening, a list of up to three nominees to the Mayor who shall then, with the approval of Council, either make the appointment from that list to fill the seat on the Committee or call upon the Committee to develop and submit a new list of up to three nominees to fill the vacant seat. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 21 ST DAY OF APRIL, 2003. Pamela B. Kennedy Mayor ATTEST: Theresa White City Clerk