HomeMy WebLinkAboutbocc.con.005.1987 �*�' .:,
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� APPLICATiON N0: Ea'�"f''�
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COMMUNITY AEVGLOPhIENT �3LOCK GRANT PROGRA�`i
APPLICATION FOR ECONOPfIC DRVELOPMT:'NT PROJ:CTS APPROVED AT .
PROJECT TITLr: RP:GION 12 R�VOLVSNG L,OAN FUND
APPLICANT: F.AGLE COONTY
CIII�F ELECTfD OFrICIAL: DICK GUSTAPSON
ADDR�SS: p_O. i3ox 537. PAGLE. C� 81631 PIIQNE: 328-7311 �`` -
PROPOS�D SUB-RECIPIi:NT: REGIpN 12 REVOLVING LOAN tUND CORPORATION �;�1....�. �
�-, '.
CONTACT PERSON: SANDY BLAHA
ADDRESS: p.p. �pX 739. FRISCO, CO 60943 PIIONTs: 668-5445
PROJECT TYPE: Single Purpose X Mul.ti Purpose .
�,'`
PROJGCT SUAI�fARY (100 WORDS OR LL'SS): �
CDBG funJs will be used to inject new capiCal into the exisCing Region 12
, RLF Corporation. AL1 o6jectives of the current contract �aith Cfie Depart- ,i.
ment of Local Affairs have been met: Thirty 1`ive jobs have been created or `r"'.
�' retained
(more then 80% of the jobs beneEiC ]ow and moderaL-e income ��`
persons); 4 out of 6 business loans are in non-resort communiti.es; The
, loans enable the provision of needed services or produce Uasi.c incone Eor
the coc�rnunity; htore than t1,5 million of private investment has been
leveraved. Nineteen complete loan applicaCi.ons have been reviewed by the
RLFC and 7 loans approved. �
,;�
Si�nificant policies of the ].oan program include: One job created for
•?o-:y every $8,000 CDBG loaned; Preference For diversifying Reeion 12 economies
1 through manufactuting, necessary service businesses and aholesale
'�� businesses; 20z equity required by the UorroHer, with the RLF participating
at 40z and banks, or other financing, at 40Z of the total project.
_=� PROJECT BUDGGT: (LIST CXPENDITURTsS WITfl SOURCES OI' FUNDS COR EACII ACTIVITY)
i';1 ACTIVITY NAT. CDBG TOTAL CDIIG OTIIER PUNDS
`,yj OJB. �L/M COSTS AMOUMT SOURCE COMPIITTEA?
_.l� � (YES/NO)
Loans L/P1 304,000 836,000 380,000 NO
Income 3II0,000 Banks YI:S-on a deal
ti� employ- deal by basis
�=;� ment 76,000 I3orrower YIiS-deal by _
deal basis
_.�
Admin. L/M 8,�00 76,643 20,000 �0
..j Income 33,035 RLFC
d employ- Income PcS
��i m e n t � "
23,608 Nt�CCOG YGS
J,�
TOTALS 912,643 400,000 512,643 -:<:;'��
�t>':
Ir FIULTIJURISDICTIONAL PRO.I�CT: Z�'�t�`
� .TURISDICTIONS AMOUNT P.F.Q[IESTGD PRIORITY�' s '���`
Y Ea�le This anPlication 1 ' �'�
::i ' x..
' Routt $400,000 3
-�'1 Pitkin " 1 F
',� Jacicson " 1 _
Grand " J
-"� Summit " 1
'���� # This relationship to all otlier CDI3G projec�s for vhich the jurisdiction
, y�� has applied or will be requesting funds in 1987.
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• �C.OPIMUNITY/FINANCTAL DA'CA FOR 1987 UNLhSS OT�ITRWI51: SPI:CTrI�D (ATTACII � f'�{���;;�',
,, SEPARATE S11rGT LISTING INFORMATION ON OT(TGR PARTICIPANTS Il' P1UI,Ti- , ;
• JURISbICTIONAL PROJECT): ��� a�' ,'
ff H s:
ASSESS�D VALUATION $ See httachmenC H1 tj'"°'-'"'`?`;;' '
OUTSTANDING D�BT -
htILL LCVY/QVERLAPPING
SALES TAX X/RCVENUP. X/$
CURRENT ANNUAL BUDGrT
POPULATION: YL�AR: ,
PROJECT Ih1PACT: .
1.DESCRISE I[OW TIiE PROJECT WILL ADDRiiSS T(IC NATIONAL OBJCCTIVii SIsLECTGD.
Region 12 encompasses six counties. Many communities exzst �+hich have �':j" -
primarily residents of low and moderate income. These people live in small
towns such as Oak Creek, Minturn, P.edcliff, Phi sUur and lia den. Afost of �.'�..�'� .
PP 8 Y ,,v�:;.� _..
these low and moderate income people rely on employment from seasonal jobs '�;
fron the resort industry and/or agriculture. Ay concentrating Region 12 '•"', ,
RLFC loan policy on manafacturing, services and wholesale Uusinesses, ``'
economic diversification is achieved. New permanent jobs for low and =�'
moderate income people are created in l'hese bedroom communiti.es and in the '%• '.
co�nmunities where they drive in order L-o worlc. �`;�;' '
'.F::`.'�''
2.T0 WNAT �XTBNT tdILL PRO.IECT ACTIVITIES B�N�PIT LOW AND hiODERATE INCOME '•`'
PERSONS? :t'�i��.,
At $8,000 per job, 47.5 jobs will be created of which 38 wi11 directly -�;';"' '
�� benefit low and moderate income persons. Unemployment in thc region ranges . r�.
from 4% - 8.2%. •�
3.HOW WILL RCSULTS AND BEN�CIT TO LOIJ/MODERAT� INCOMC PERSONS RE �irASURED?
On a quarterly basis, RLF staff assesses the number of job placements as a
result of RLP loans. Loan agreements state the number oE johs Co Ue
created or retained and that 80� must be of low a�d moderate income.
Income �uidelines and job placement for the program is handled by the
Re�ion's JTPA and Job Service personnel. JTPA staff assist with having
each employee of an RLP business loan complete an employee data form which
is then submiCted to the RLF. The JTPA staff and Job Service stafE worlc
re�ularly wi[h the unemployed and low/moderate income persons and are
capable of placing these clients with RLF businesses.
4.DOES TIiE PROJGCT INVOLV� PROVIDING ASSISTANCC TO FOR-PROPIT CORPORATIONS?
% Y�S NO IF YES,
tJHAT ACTIONS HAVE BET:N TAKEM TO INVCSTIGATE TEfE COMPANY'S CREDIT
�dORTIIINESS AMD ANALYZG THE PROPOSED BUSINGSS PLAN OR JIOIJ h�ILL TIIIS BE
DONE?
Credit checks are completed on each application_ Por existing Uu�iness
expansions, 3 years of financial history is plotted on a spreadsheet Eor
analysis of strengths and weaknesses. A compl.ete loan application is
required including 2-3 years of cash flow projections. A mini.mum of 10-20X t
equity in the business is required. i'irst time entrepreneurs, or entre-
preneurs with a weak business history, are referred to entrepreneurial
training and SBAC technical assistance. Business management ability is
also thoroughly analyzed. A completed .checklist of financial information
is requested before a loan review talces place.
HOW IJAS IT DGTGRMINED OR IIOIJ IJILL IT i3� DGCIDED TNAT TH� ACTIVITY IS
"NGCESSARY OR APPROPRIATE"?
Applicants who have been denied loans by a bank or those who have not been �
offered reasonable rates and terms qualify for RLF loans. Start-up busi- � sM' .:'
nesses can not generally receive a lo�n in rural Colorado. IE a start-up 'w;'; :�.k;;'-.'
husiness proves substantial Uenefit can result from the RLF loan to a h"'.
bYr:
manufacturing, service or wholesale business, i.e., a loan that diversifies
the communit `s econom the loan is deemed necessary or nppropriate. � ,i�'-
Y Y. �'€::;• ;
Frequently, the RLr's participa[ion in a loan package at beeter rates and i; ,�: �,;;
I terms malces a bank loan "do able" which otherwise would not have been made. �'
�
See POLICIES, Attachment #2
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• �S.WILL ANY PROGRAPt INCOMfi BC Ri)ALIZED'2 (PROCRAh INCOPifs IS DE�[NGD AS ��7`��"'�r -
-AMOUNTS EARNT'D IIY A UNIT OC GGNERAL LOCAL COVIiRNMIiNT OR ITS SUURCCIPIENT �.�� �ra;,.,;,:.
� T!IAT ARR GGiJERATP.D T'RON THE USr OL' CDP,C CUN➢S, INCLUDING 1i0Tll CD13G CP.ANT r�r =�^�:';`:�;
FUNDS AND PREVIOUSLY RPCEIVCD PROGRAPI INCO�IE). _ [�•�`�„�'�e�'''
NO R YES
IP Y�S, IS IT PROPOSED TIIAT TIIC PROGRAPt INCOhIIi IJILL T3G RTiTATNF.D 13Y THE
GRANTF.E OR ITS SUBRECIPIGNT?
NO (PROGRAbI IP1COi1i. IJILL Bi: PAID TO T11E STAT�).
X YES IP' YFS, I{OW WILL TIIG R�TAINED PROGRAM INCOM� liE USED?
X TO CONTINUE TIiC ACTIVITY PROM WIfIC❑ SUCII PROGRAAI INCOME 1��A5 DERIVED :
(E.G., TO F'ORTHGR ASSIST TlIE FOR-PP.OFIT BUSINTiSS WIiICII RRC1iIVf•.D TIIE
ASSIST'ANCE, OR TO PERrORPt ADDITIONAL REIiAi3ILITATION IJORK ON Tllii PROP�RTY
WHIC11 IJAS R�IIABILITATisD).
-;i-�,;i�:i:�:.
X TO CARRY OUT AN ACTIVITY OTII�R TIfAN TIIE ONC FROM 1J11IC11 SUCII PROGRAPI }'�'i "'."
INCOME AS DERIVED (E.G., TO ASSIST OTIIGR COR-PROCIT T3USINCSSES OR TO �;��;'� .
RENABILITATE OTHCR PROPERTI�S). � <�'�°'; �
-;���
S.HOIJ IS TIlF. PROJECT CONSIST�NT WITII OTIIER COMMUNITY GrPORTS AND LONG RANGE :i�-
PLANNING ACTIVITIES? �`
Each count and/or town within the Re�ion 12 lannin area has an economic f
Y o P S f'�'`!
development committee. Each committee has identified its needs to
stren Lhen its econom throu h rivate or ublic ro ecLS. �'' '
8' Y 6 P P P J �,.i�.�',.
X;�.�
•.�_;::�,.
Because banks avoid financing risky start-up businesses, it is imperative ��`.i`�:
that additional financing sources are available. The RLI"s abiliL'y to do
'r,
outreach and aorlc deals one-on-one, allo�rs it to effectively identify and • ��''�r
assist projects that diversify the region's economy.
Economic Development Directors have been hired in Routt and Eagle counties
which will presumably drive up the demand for RLF monies.
6.lJIIAT ASSESSPIBNT Or SPECIFIC CCONOt4IC DEVELOPMENT NECDS !IAS TAKrN PLACc
AND H01J WAS THG PROJECT DCSIGNED TO ADDRESS TIi�SF N6TiDS?
Each economic development committee in the region is represented on the r
loan committee. Cconomic development priorit9.es are submitted L-o the RLP
so that there is consistency bet�aeen loans macle and identifiecl needed w
business projects.
Meetings with 80Z of the region's bankers resulted in owareness that few
bankers have knowledge or expertise of public loan programs.
Bankers have identified the need for loan guarantees from the RI.F.
7.IF TfIE PROJECT INVOLVES CONSTRUCTION, AN IDENTIPI�D FACILITY OR TARGET
ARE SMALLER TfIAN MUNICIPAL OR COUNTY IIOUNDARIES, ATTACII A P1AP ILLUSTRATING
THE SITE. (Ir POSSIBLE, USE A MAP IJIIICFI SHOIJS TI{E SIT� RGLATIV@ TO FLOOD
F[AZARD AREAS). i
N/A
r �
PUIILIC AND PRIVATE COMPtITM�NTS:
5
1. IJHY CAN'T Tff� PP.O.IECT BE FUNDCD LOCALLY? tJIfAT ALTERNATIVES TO CDBG
rUNDING I�AVG IIESN EXPLOR�D?
RLF, SBA 504, the QIC program and the Statev�ide Development Corporation are -
the only available alternative fundin� sources. There is not a source for �
raising capital for the RLr loan program. Because of the lacic of public ��x -'
personnel available to work with banks and entrepreneurs, public loan v�;, ;:�!i;;;:;
programs are not well understood, appreciated or utilized. RLr staff can '�!,i� �,`.`
assist in this function. � � ,
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2. IF TIIE PROJECT IS FUNDED, WFIAT OWGOING OPERATIONAL OBLIGATIONS WILL IIE - ?� '� �;:
INCURR�D? lJ]{AT IS TtIE APPLICANT'S PLAN FOR ADDRESSING TIIGSB ADDITIONAL = x
COSTS? �
IJith the project budget attached and full administrative funciing, the loan
program will cover il•s obligations and expenses. Loan rates and fees are
just beloa prime rate in order to provide sufficient operating Eunds.
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3., WHAT ECCORTS IIAVE IIEIsN MADL� TO INVOt,VE TIIG BUSIP�ESS COMMUNITY AYD •
• PRIVATG LENDING INSTITUTIONS IN PROJECT DFSIGN? 110ld IJILL Ttt�i PRIVATE r`=-%'"
SECTOR BE INVOLV�D IN PROJECT IMPL�M�NTATION? '`�*'��•�•
:;�':=:.;s:,:.:
Except Eor the NiJCCOG Executive Director, each person on the RLI'C I3oard of
Directors is a private businessperson. One banker also si.ts on the board.
One-on-one visits and inCerviews wilh 80Z of the lencling instiCUl•ions have
taken place. SBA 504 and QIC loan programs have also been explained to
each bank. Fach loan a�so requires a meeti.ng with the borrower's lender oE
choice. RLP administrative staff worlc regularly with economic development
committees in the region to determine needs and concerns in regard to the
RLr.
4. DESCRIDB IN-KIND CONTRIBUTIONS TO THG PROJECT WITH ESTIMATF,D DOLLAR "'���
VALUBS. :�?`.;;;`,;..
See AtCachment H3 ,��;;:'�._'
���i..
:;�:':'-`.
The RLF administrator occupies an office in the NIJCCOG whi.ch i.s valued at
$21,400. The NfJCCOG Executive Ditector also donates time to the project. '���
Cash matches consist of program income from loans made by the RLP. `�
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AtANAGEPiCNT CAPABILITY: �`�`•
.�;,`'
1. DESCRIBE TII� MANAGEMGNT STRUCTUP,� POP. TIISS PROJECT USINC AN ������'
ORGANIZATIONAL CFIART AND COMMCNTS AS N�CPSSARY: �':'
::i::�.,
Region 12 RLFC �; ;
;, Management Structure
i.
NWCCOG Executive Director /RLFC Doard of
Larry Pearson / Directors
Responsible Administrator
John Hess - .I7 f.t.e.
Loan Administrator Assistant
Sandy Blaha - 1 f.t.e. — Joyce Vos - .24 f.t.e, .
4
2. PROVIDE A TIML� TABL�/SCHEDUL� FOR CRITICAL PROJECT ACCOMPLISIIM�NTS AND _,
REGULATORY COMPLIANCE BENCHMARKS RL�LATIVE TO THE PRO.TECT PCRIOD.
See Attachment 84
3. IDENTIFY TfiE P�RSONS 1JH0 WILL SERVE IN THE POSITIONS ZD�NTIFICD BELOIJ,
THE GRANT-R�LAT�D TASKS FOR WIIICH T11EY WILL BE RESPORSIBLG AND TH�
PERCGR'TAGG OF' THEIR TIP1G WHIC�I WILL BIs DCVOTED TO CDBG-ASSISTED AC'fIVITIES.
PROJECT MANACER (P.GSPONSIBLE FOR OVCRALL ADMINISTRATION OP GRANT)� °
. �
NAP1E: John lless PHONE: 668-5445/573-7611
PGRTIN��dT EXPERICNCG: NDC-ED 101 training, responsible aclmini.strator of
current CDBG grant, technical assistant to all Region 1Z economic �
development committees. Planner/Economic Development Specialisl Eor the
past nine years.
RlSPONSIBILITIES: RLF Pnlicy development and review; liaison with Region
12 governments and economic developmenC committees; field representative to
locn2 banks, communiti.es and business; reviews and approves all financial , '<:.
and administrative actions of the RLr. �- "
� �<, `
P RO,IECT COORDINATOR: (RESPONSiBLE i'OR AAY-TO-AAY OPBRATTONS)• �"'.:
- �}}�r
1 �.4 `���:
, NAPtE: Sandy 131aha PIIONE: 668-5445/573-7611 � � _�.
PGRTINENT EXPGRIENCE: Previous Executive Director of Lake County economic _
development and administrator of Lake County P.LF. Completing development
finance certification through the National Development Council.
Planning/Gconomic Development specialist Eor six years.
RESPONSIBILITIES: Administration, publicity, program design and
implementation, eligihility review, pacicages and presents loans to RLrC �
loan committee, works with banks on deal by deal basis, meets with loan
clients, closes loans, supervises budoet planning.
FISCAL AD1•tIPlISTRATOR/COORDINATOR:
NAPIE: Joyce Vos PF[ONE: 668-5445/573-7G]]
PERTINCNT EXPGRIENCE: Currently keepins books for RLF, campleting a
bookkeeping certification throu�h CPiC, four years ex�erience with accounts
poyable, t�ao years rel•ail store management, computer operati.ons knowledge,
assistant to Crystal Lehnhardt, NI�JCCOG's fiscal ofticer.
RESPONSIIIILITIES: RLF clerical and Li�tnncial duties.
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� $. PROVIDE A DE'fAIL�U EXPLANATION OP 'ffi� PROPOSL'A AllPIINI5TRr1TI0N DIIDGET {1�`�.�r}�t' .��
INCLUDING STAT'C SALARIGS, L�GAL EXPCNSCS, OVrRHEAD, INSURANCE, ETC. WITI( AN ��k`a* ' '
�°wi�":I�"•�:.
� EXPLANATIOiV 0� IIOW THESL� GSTIt4ATG5 WERE DERIVIiD (INCLUD� ALL COSTS tt�..�,;;.;;,
, RCGARDLESS OT' RGVGNUE S011RCE).
See Attachment ry3
5. WILL T(IE PROJGCT INVOLVE PAYMENT OC DAVIS-3ACOA1 IJAGGS AND WERC TIfEY
REPLECTED IN BUDGET GSTIP1ATE5?
N/A Loans made to Uusinesses exclude tri.ggering of Davis-Qacon wages.
A Davis-Bacon checiclist is completed for each loan. '
6. WI�AT ARE TIfE POTENTIAL �NVIRONMCNTAL IMPACTS WHIC11 MIGIIT REQUIRE
MITIGATIOH (�.G., PROJECT IS SN AN FIISTORIC IIUILDING, PT.00DPLAIN OR SIT� ':' �
NEAR HAZARDOUS MATERIALS)? .���t'' '
There has been a complete environmental revie�a record completed t _
establishing the procedure for environmental review. Each loan is revie�oed �
and exempted or mitigated before loan funds are disbursed. ic�',,.;.. •
7. IF ENGINisCRING, ARCIfITECTURAL OR CONSULTING SERVICES ARr TO I3E IISGD, tiAS _
T[!E FIRM IIGi:N SELTsCTED? II' YES, LIST T[IE PIRM. IF t70, IIOW IJILL T}I�
� SERVICES BE OBTAI�lED?
N/A
8. IF AN ADVISORY COMMITT�E IS PROPOSED, D'c'SCRIBr TIIB COMPOSITION AND '?:ti��:' .
FUNCTION Or TFIE COMMITTCE A:VD IT$ RL�'LATIONSI[IP TO Tllh' OVE^ATION Ol� TIIE G'i;.'. �-�
PROJECT. ; ;;''
The RLPC 3oard acts as the loan commiltee. One representative from each �; f'•'"
T county and an alternate is appointed by Khe "fl�'CCOG. Each person is
selected for their business icnowledge and ability to develop and implenent -
policy. •
An overall balance of expertise is achieved. ror example, a banker,
mortgage broker, business owner, business consultanl•, industriol site
selector, realtor and NWCCOG Director sit on the board. Alternate members
� include a planner, appraiser and business manager for public service.
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TO Tf1E BGST OT' MY KNOWLL'DG� AND B�LI�r, STATEMENTS AND DATA IN THIS C��;':'"zi.�,�
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- APPLICATION ARP TRUG AND CORR�CT AND ITS SUii�tISSIOM iJITII ATTACllGD STATE�tENT !;c%��,;t','«'r
OF ASSURANC�S AND C�RTI('ICATIONS IiAS BCEN DULY AUTIIORIZCD 13Y TIIG GOVERNING ''^r:�''`"`
DODY OT' TIIG APPLICANT/LEAD JURISDICTION AND OTIIER PARTICIPATING
JURISDICTIONS.
SIGNATURC, CIfIEF ELECT�D OFP'ICIAL SIGNATURE, CIIIEF ELECTPD OPFICIAL
NAM� (TYP�D OR PRINTED) NAME (TYP�D OR PRINTIiD) -::":'r;;` �-
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TITLG/JURISDICTION TITLP/JURISDICTION �
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DATE DATT S
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SIGNATURE, CHI�F ELCCTED OFFICIAL SIGNATURG, CI{IEF °LECTIiD OFFICIAL � y
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� ''• NAME (TYPED OR PRINT�D) NAMG (TYPED OR PRINTTiD) � .
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' TITLE/JURISDICTION TITLE/JURISDICTION
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'' DATE DATP: �
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�� SIGNATUP.E, CIIIEF ELECT�D OFFICIAL SIGNATUR�, C[II�F ELECTED Oi'FICIAL
`�
"j NAME (TYPED OR PRINTED) NAhi� (TYPED OR PRINT�D)
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TITLE JURISDICTION TITLE/JURISDICTION
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�� DATE DAT� ;
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Attachment $2 i�s�''�k'�'��"�
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� REGIO� 12 REVOLVING LOAN FUND POLICIES
The policies oE this business assistance �orporation are y;°xs�.,_..
presented in four parts. First are the eligibility :t�
requirements any firm must meet in its organization and in
its proposal to be considered for a loan. The second part j3
is the criteria to be used when deciding to make a loan or ���''" •
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not to make a loan fpr an eligible proposal. The third part
is policies referring to how business will be conducted by �`�
� the RLF Corporation and last, once a decision has been made �
n`;
to make a loan, a system to help standardize term, interest •:�` -�
rate and fees is presented. F:�;.�'
�_`;,=';:, ''
I. ELIGIBILITY REQUTRFMENTS '���.,`•:;.
�:�._��,-
_, A. The Firm �°,' �,
� �. .
Any private, for-profit business located in any of
the six counties of State Planning Management
Region 12 is eligible for business assistance if
the firm's proposal meets the other eligibility
requirements listed below. Region 12 consist of:
. Eagle, Grand, Jackson, Pitkin, Routt and Summit
Counties. "
B. Proposal Eligibility
1. General. The Region 12 Revolving Loan Fund
Corporation may make financing business
assistance available within Region 12
� a. Eligible uses of RLF funds
Firms receiving financial assistance are
i not restricted to specific sizes of
! business. The Region 12 Revolving Loan
Fund Corporation may provide financial
business assistance to projects that
diversify the local economy by providing
a product or service not adequately t
provided in a Region 12 conmunity or to +:�
pro�ects that diversify the local "
economy by providing a product or ;
service outside the Region 12 area, when
the revenues of the outside product ot
service are returned to the Region 12 ;, ;:: .'
economy. The business' a6ility to '�t '
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stabilize the local economy will be
considered in a loan decision.
High priority is given to the following
types of business projects:
manufacCuring, whalesale and ,
necessary service industries.
Low priority will be given to the
following types of business projects.
food establishments, restaurants and
bars, realty offices, ski shops, `s:�?;;.-.•.
con>truction projects and retail '��r.:,
projects, unless the retail project '
has 6een identified as a necessary
taroeted business by a local
economic development committee. ` '
, Specific uses include the following:
1) Working capital - �
- inventory
- salaries
2) Fixed assets - ��'-�''
- equipment ��'; �
" - purchase of existing buildings F:;z -
{�•:.'.
-i. � - real estate (when part of a j�< �.
"�� business project) �'
;j - renovation of interiors and
�! exteriors of commercial buildings '
�
b. Maximum Revolving Loan Fund business `
-; assistance will be $100,000. Minimum k '
,`,;'� Revolving Loan Fund business assistance �i
+ will be $5,000. -
c. The following guidelines will be adhered �
i� to when reviewing each proposal:
1) At least 70 percent of all new
.�� employees hired due to the RLF
program must meet State developed
;,� low and moderate income criteria ;;
for each county in the region; °.
;� 2) At least 51 percent of jobs created `�
or retained must be filled by low `
,;:� and moderate income persons. �
''' 3) At least one job must be generated
;� or saved for each $8,000 of ��
�' Revolving Loan Fund funds in a �
business assistance package. For
the purposes of these policies, a
fob is defined as a direct full
time positian. A seasonal position
_ of six (6) months is one-half a
full time equivalent (FTE) and, it
therefore, one-half job.
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4) Financial business assistance will �'�r��� ���
be made available in participation
with existing lenders.
5) Patticipation in a project is
tar�eted as follows:
Borrower Equity (at Ieast)20Z
Borrower Equity, Bank or
Other Financing 40�
Revolving Loan Fund 40%
d. Necessary or Appropriate Business `���.`•';' �
�.:_:•
Assistance �.a;:.
�.:
s'? ,
Each time a loan, suarantee, equity `,','c�
in ection, loan artici ation, loan "%'�' ;
J P P rr- �. ,
purchase, or interest buy down, is i���
provided to a for-profit organization, a
certification will be made that the
financial business assistance has been
determined to be necessary or
appropriate. A determination that one ,"�:;:`� '
of the national objectives is met, y
defined as follows: �:'1,�
:� 1) The for-profit company's need for ; r..;
CDBG assistance;
' 2) The public benefit to be derived in
relation to the amount of ,
assistance; and,
3) The benefit to low and moderate
income persons.
In addition, the Region 12 Revolving
! Loan Fund will not provide financial ;
assistance to any proposal when
financing is available from conventionel
sources at reasonable terms, rates and
I conditions unless it is found to he
i necessary to further the economic
( development objectives of Region 12 or
i its communities.
I f. Six types of business assistance are
i available from this program. Each type
of assistance will be used under the
• following circumstances:
�
1) Under most circumstances loans will !'”
be made to applicants.
2) Loan guarantees will be made when a
guarantee is a11 that is necessary -
to motivate the lending institution �.; �"�
to make the remainder of the loan
and when in the event of `
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foreclosure, [he cal2ateral is
assigned to the Revolving Loan Pun.d
and the collateral is liquid and
adequate to provide reimbursement
of the loan guarantee.
3) Equity positions may be taken when 1 �
the Loan Committee finds that the
number of new jobs offsets the .
potential risk of lass o£ funds to ','•'�1:'•._.-'
what will usually be a very small ' �`'?
or new business when the equity �� `
injection is necessary to improve �
the cash status of the firm in such " '
�,�r... �.•.
a way that the primary lending ,$�,'"
institution will make a loan for . '"<•`�
the majority of the project.
4) Participations will be used when �,;.',.
collateral is adequate to satisfy
the primary lender and R-12 RLFC � '
and when the borrower and primary t
}, lender are willing to comply with � :.`'
federal, state and R-12 RLFC � r''•`
' requirements.
5) Loan purchases will be made when a �
loan purchase is all that is
necessary to motivate the lending
. institution to make the remainder -
, of the loan, and when the leader
, prefers to originate the RLF loan
and the private sector loan. +
i
,; 6) Loan buy-downs will be made when a
j loan buy-down motivates the lending
� institution to make the remainder
i of the Ioan, and when cash flow of
the RLF is adequate, as determined
by the loan committee, to maintain
''j operation of the loan fund.
: All of the above types of financial bvsiness assistance are
j subject to compliance with the HUD-CDBG Enabling Act in any
a given specific project.
d
g. Conditions of Financial Business
' Assistance Approval.
The Loan Committee may make the
' following conditions in any loan
commitment, hut is not limited to, this ;� ;i.;i::_. '
� list of conditions.
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1) The Loan Committee may require
.:;'-::
certain manasement practices as a
condiCion for receipC of financial
6usiness assistance to ensure
, repayment oE the financial business
assistance.
2) The Loan Committee may require a
firm to hire expert help for the �
term of the business assistance. '
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3) The Loan Committee may provide ".� a
•�;;;,;:,..:.
business assistance on the q �i.�" '
condition [hat the loan ��}-�`-'.:-_"
� administrator be a business advisor ��';`.:;_`
� to the firm that receives
assistance from the Revolving Loan �
Fund. The loan administrator may ,.�_.,
� visit a firm to review company ,.
records for a tera of tfiree years >� ''`
'� after close of the Sta[e-Eagle r,'{:;'�. '
County contract, to identify i
"�^ business problems and review S
� employee conformance vith state and �
_r federal requirements. Upon a ��r' .
" finding of business problems, the �
' loan administrator may be �
authorized by loan agreement to i.
�;� require other remedial business
� practices in addition to any �
,?� originally specified as a condition
of the loan.
,�� j .
Examples of remedial actions which may �
be required:
�:�7 - cancellation o£ club membership paid
with revolving loan tund proceeds;
- paying bills on a timely basis;
- using appropriate accounting methods.
L
Typical remedial requirements that may
not be imposed by the loan
administrator:
- - hiring an additional pe;son to meet
the reqnizements (e.g., bookkeeper,
�� salesman);
+�'�� - spending business assistance proceeds '
;� for purposes other than the stated
purpose of the business assistance.
- A clause will be included in each loan agreement indicating
" that any condition or remedial requirement imposed upon the
_ business by the Loan Committee or Loan Administrator will in
� no way discharge the borrower from any obligations under the �. i:`
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loan asreemenC, and that neither the Loan Committee nor the
Loan Adninistrator shall noC incur any liabflity on account
of conditions or requirements imposed.
h. I1pon Approval
1 1) Upon approval, a letter of
commitment is sent to the company
for acceptance. The letter of .
commitment, if not accepted by the ;�•,;:?t:�- '
company, expires thirty days aEter ' t��-;•
the date of the letter of �".'�"`�; >
,.'� -'
commitment. •��:,- '
2) Loans will be due and payable upon "4�!l�,'-`
sale of tartgible oz intangible :�`: -
assets or transfer of the business. •_�':._ ,
No assignment will be made unless ' 'y��'. _
prior written approval has been t��'�
given by the State of Colorado and `���
the Region 12 RLFC. � `
��u l.
2. Citizen Participation ��'; ;
7.
a. Copies of all public records associated
with the Revolving Loan Fund will be !` •:
available to the general public upon
request. Public records include: , "
1) Public notice and minutes from the
Community Development Block Grant
pre-application hearing.
; �
i 2) Application, grant contract, '
� environmental review record.
�
'i 3) Copies of written responses to
j citizen inquiries.
!
i 4) File of written communication
between Eagle County and Region 12
Revolving Loan Fund Corporation.
i
' b. Confidentiality
All writings involvin� the expenditure t
of public funds are public records,
including all loan agreements and other � �
documents entered into as part of the
commitment of funds. Commercial and
private financial information provided
on the loan application and during .\';?,
review of the request by the Loan ..S � .�` `'
Committee and staff is considered �+ _ s..,
� s_. ''��;'
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v�._'..
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conEidential (see, Section 24-72-204,
CRS).
3. Environmental Concerns
Business projects requesting assistance from •
the Region 12 Revolving Loan Fund will be
required to avoid or mitigate significant
environmental impacts. The environmental _`� �
compliance officer will reviev each proposal '<��.`•`i;
prior to loan committee review to ensure that r=�^_,:
�'• . .
all proposals comply with national � `'
�;i:,.._..
Environmental Policy Act requirements and ":�� .':c -
other applicable state and federal �'�`` ��,
environmental laws, rules and esecutive '+;`'
orders. :�
�f:
All loans are subject to finding no ��"
significant environmental impact or to �,,;. `
mitigation of significant environmental �Iri;'�. •
im acts. ��`�-'
P �4;,:}.,.
� a
Writter. documentation about the environmental :-c•.`
a review will be maintained on each project. �':
4. Civil Rights .
No person or group will be denied project j;;
benefits of employment, training, business
contracting, or housing opportunities on the
• basis of race, national origin, religion,
color, ses, age or handicap. r•
Actions will be taken to affirmatively
further fair housing by the Region 12
Revolving Loan Fund Corporation. -
Information will be maintained on the
ethnicity, handicapped status, income level,
female head of household status and sex of
� all persons newly hired and retained by
i � assisted businesses.
5. Labor Standards
f
' a. All monies involved in a project,
whether state, federal or private funds, y, '.
are subject to the federal and state
laws governing the wages and working
conditions of laborers and mechanics
employed under construction contracts if
state CDBG funds are used for some part • t `�
of a construction project.
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b. A complete copy of the Federal Labor
Standards will be attached to each
business assistance agreement.
c. A specific list of activities, For which
funds will be used, will be a part of �
each business assistance a�reement. A
distznction between construction and
non-construction activities will be ;`^,;_���,-
made. `�'"'
`ry.'.
j'.:�?•;_:;.:..
d. Each business assistance agreement will -
clearly indicate that the business
cannot pay employees to perform
construction work without triggering the -
requirement to pay prevailing wages,
e. All business assistance agreements will .
require assisted businesses to establish
;± an accounting system that segregates `��<'�
:� funds so that all expenditures can be
traced to a specific revenue source and �� -.
'� private funds can be used for ;.��';
construction activities without �
[riggering Davis-Bacon Act reqvirements. �'
i f. The Revolving Loan Fund program will R,
- offer to enter into an aoreement with �
the J.T.P.A. and Job 5ervice Center �j
office in the area to provide potential �
,�g employees, their incor�e level, ;
ethnicity, and other civil rights
information required for reporting to �
;� the state. �
:� g. Projects requiring construction of any
type wi].1 receive low priority when
`.�� compared to non-construction projects } -
"'� due to the extra costs required to meet , i
statewide labor rates.
,+� 6. Displacement Policies �
::+ a. The relocation process will be fair and �,
equitable to all involved parties and i'�,
grievances will be heard by the Loan �
Committee for impacted individuals.
b. If a business receiving a loan from the
;..j Revolving Loan Fund displaces existing -
=� residents, then the Revolving Laan Fund } ::
Coordinator and the business will ensure -
x�':_'
_ that reasonable reimbursement is paid •';:`c.,
: ``�'�'�ft?
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and or that anple time is biven for the
��.�..���`i'.'.�,,,'_
existing resident to move.
c. Existing tenants will only be displaced
in accordance with existi�g leases. �
7. Allowable Costs and Procurement Regulations
A multiple vendor 2ist will be maintained for �
referring businesses to consultants.
'1+.
Recipients of P.egion 12 Revolving Loan Fund Y µ:r;,-.��
assistance are encouraged to affirmatively �'y_ ' '
solicit minority and women—owned businesses �t ":
for bids when putchasing goods or services <�.f{":'�;"
even if they are not being paid for with CDBG �'= '
funds. '�'
;�.:
-�"�
The availability of assistance and ' ��:.,,.;
application procedures will be publicized Co .K;,.::,:'
ensure the program is open to any interested, r �',
qualified business. ���
i �e'�" .
II. CRITERIA FOP. R:sVOLVIMG LOAN FUND COKMITTEE DECZSION 1r, ,
MAKING
,f':
A. Primary Determinants � `
1. Will the project employ low and moderate
, income people, as defined by the State of
Colorado, who are current residents o£ the
region?
a ,
2. When two or more proposals compete for the
same funds the project that best fulfills the
criteria on this list and provides the most
benefit to low and moderate income persons
will be given priority.
i B. Feasibi2ity
! � 1. Does the proposal have marketability? Is the
i product or service feasible?
i
' 2. Idill the success of this project at "lower"
interest rates eliminate similar companies
c
and their exisCing jobs?
3. Does the applicant have proven experience in
this field? Will the principal(s) supply � ,
daily "hands on" management?
4. Does the applicant have financial strength
and assets? ���' '``
� � 1�� ':�i:
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5. Is the project economicaliy viable?
C. Program Stipulations
� 1. Will the project help to diversify the local
economy?
2. Will the process help to support existin�
industries (tourism, mining, a�riculture, -
etc.)? :�.'� "
,;�ari:
7 ,.
3. How many private dollars are leveraged by the -
project? t�'hat percent of the project is
provided by the RLF? �FJ
i -
4. Is the project environmentally sound and does '
it meet the environmental requirements o£ the
Community Development Block Grant program?
�3 S. Will the project protect and enhance the �� .
� cultural and historical environment of the
region? CI �
T: }.f'•
From time to time the Loan Committee may want to (:` `
add to this criteria as experience and judgement �
�.� dictate. The integrity of the Revolving Loan Fund j '
must, at all times, be guarded against depletion. F
= f
�,� III. CONDUCTING REVOLVIIQG LOAN FUND BUSINESS � °
;r� A. All borrowers who submit a completed application �
� will he notified in writing that the Loan
_� Committee has:
";� 1. Approved the loan, with conditions;
,.� .
2. Disapproved the loan and why; or �
;
3. No action was taken, and why. ;
�
i
B. Funds will not be allocated to counties, towns or 4
- other areas [o achieve fair distribution in the '
region. Rather, projects which best meet the �'
:� policies and criteria of the Loan Committee will �
':` receive priority. This policy is created for two �
reasons: ��
�
1.. It is important to commit the funds as soon
s as possihle to initiate the revolution of
=? funds; and
2. As funds revolve they vill be available for
firms that are not ready at the outset and we ���-?
� +T`
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:�
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do not want to penalize a firm that is ready �'M'*°;'-
because we have set an arbitrary maximum to
be loaned in a seographic area.
C. Leveraging evidence of private and other public
' funds committed ta projects will be maintained to
support documentation on leveraged Funds.
D. Revolved funds will continue to be used in the
business assistance pro�ram. ;i.�•�,-•
t:
j;...-_
E. All interest and principal repaid to the Revolving
Loan Fund shall accrue to the Fund. �`,'k:a==
F. In the event of default, due diligence will be �;`.� "
exercised to collect loan payments or attached
'=:`� collateral.
G. A copy of the written policies of the Region 12 ��
=i-i Revolving Loan Fund Corporation will be submitted
�' to the Colorado Department of Local Affairs prior
', 3_; to the first request for grant funds to make a
M� loan.
T: ;r:�� ,�',
:� IV. FEES, TERM, INTEREST RATES, COLLATEHAL �''`.
- A. Loan term will be no longer than 10 years unless
�--'+ necessary to leverage other financing such as $BA
E:�
=�x 503 funds with approval of the state.
*=i::,, •
. '.:.,�.Y.y1 .
r;.� Suggested Loan Terms: -
,<p,� Working Capital & Inventory - Z-5 years
=�-i Fixtures & Equipment - 5 years
;:;;�'� Other - Case by Case Basis
�`:�
;�-� Loan closing documents may require maintenance of
'•,� the level of inventory for which the loan was
"�' made.
j;`.y:� - �:
i;�e4 B. Interest rates will be lower than standard rates.
_.�::i
�..�
�;;. C. Interest rate wiil be a 2R base adjusted upward,
y base on the folloving factors:
.�
,,..j
Quality of cnllateral
;:�'.� - Quality of credit
- Liquidity and quality of collateral '
;,__;� - Jobs saved or created �'
'""+ - Term of the loan
`:�
r(� as documen[ed by the RLF Loan Committee.
`..t ,
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,� ' ��,
_�°� 11 �`�'
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D. Guidelines for collateral relationships:
Inventory Loan - 1:1 for an existing business in
good standing
2:1 for new businesses
Fixtures & Equipment - 2:1 -
Other - Case by Case Basis
- Appraisals may be required "
- Attached leasehold improvenents may Y'.�.�";:'
� require addition collateral �ai r
- An account of inventory at time oF loan y '
may be requested to determine pre-loan „�,
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POTCMTIAL P,LP AORROWi3RS /;.�t'=�1.!-��:.
REGION 12 RLi'C
All of the following loans have been conceptua].ly reviewecl and approved by
the Region 12 RLFC:
BUSTNESS/ PRE-APP FULL-APP TYPC OT' I�US. AhiOUNT LEV6RAGED JOIIS ,
LOCATION RCQt1ESTED
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� Sahli / X X Manufacture $25-50,000 $150,000 10
Routt Co. "'a':
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The Store / X X Retail $30,000 $300,000 2 `�::�j.t^`"
Pitkin Co. - - -
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Colo. Pel Tech/ X partial Planuf.acture $�100,000 $2P1 15
Grand Co. -
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Avon Auto Dody/ X Service $25,000 $50,000 3
Eagle Co. -
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�=1 Wool Project / X Manufacture $150,000 $2M 15 ti,
`�j Routt Co. � '
i � Bowling Center / X X Service $100,000 $300,000 7 �` f��`.
�`t Eagle Co.
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TOTAL �430,000 $4.SM 52 '
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