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Home My WebLink About17. 20-157 APRIL 14, 2020 20-157 RESOLUTION (CARRIED 7-0 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVE ECONOMIC DEVELOPMENT REVOLVING LOAN FUND COVID-19 EMERGENCY RESPONSE PROGRAM; $250,000 INITIATED BY: DEPARTMENT OF COMMUNITY DEVELOPMENT Whereas, a novel strain of the coronavirus, named COVID-19 has spread throughout numerous countries including the United States; and Whereas, the United States Department of Health and Human Services and State of Wisconsin have declared a Public Health Emergency; and Whereas, the Common Council for the City of Oshkosh ratified the Declaration of Emergency for the City of Oshkosh on March 18, 2020; and WHEREAS businesses in the greater Oshkosh region are experiencing financial pressures due to the unforeseen event throughout our global and local economies; and WHEREAS City staff worked with the Greater Oshkosh Economic Development Corporation (Greater Oshkosh) to develop a COVID 19 Emergency Response Program through the Revolving Loan Fund (RLF); and WHEREAS business within the City of Oshkosh can apply for loans to cover costs of basic needs to keep their business sustained through this unprecedented time. NOW THEREFORE BE IT RESOLVED that the Common Council of the City of Oshkosh hereby approves the attached, Economic Development Loan Fund COVID-19 Emergency Response Program to be administered by Greater Oshkosh and the proper City officials are hereby authorized to take those necessary steps to implement said program. BE IT FURTHER RESOLVED that funds for the COVID-19 Emergency Response Program are hereby appropriated from the following account: 0302-0740-6401 $250,000 Local Economic Development RLF mi r.A.. Oshkosh TO: Honorable Mayor and Members of the Common Council FROM: Allen Davis, Community Development Director DATE: April 7, 2020 RE: Approve Economic Development Revolving Loan Fund COVID-19 Emergency Response Program ($250,000) BACKGROUND Recent events created by the COVID-19 pandemic has disrupted many small businesses in the City. The City's 2013 Strategic Plan identified the goal of creating additional sources of capital to leverage private investment for economic development projects in Oshkosh. The City funded the Economic Development Revolving Loan Fund (RLF) with cash proceeds from TIF Districts terminated with cash balances. Many small businesses today find themselves in a situation they did not create, short on capital, and needing to fund on-going rent and payroll costs, with little or no income. ANALYSIS The original Revolving Loan Fund was established to be a flexible, gap financing tool for businesses producing high-income jobs, through projects that expand, attract or retain those jobs. The COVID-19 fund is attempting to fill a gap in the revenue for these businesses. The target markets for the RLF-COVID-19 include small businesses would be located outside the central part of the City. The small businesses located in the central part of the City can also be served by the RLF-TID 16 loan program recently authorized by the Joint Review Board. City Council action to appropriate the funds for RLF-TIF 16 is also on the April 14, 2020 Council agenda. The proposed RLF-COVID-19 program would be temporary and follow a modified version of the RLF manual, administered by GOEDC and follow the basic outline in the information sheet attached. City Hall,215 Church Avenue P.O.Box 1130 Oshkosh,WI 54903-1130 920.236.5000 htlp://www.ci.oshkosh.wi.us FISCAL IMPACT There is no fiscal impact to the City's General Fund since the RLF-COVID 19 has no impact on the levy. After allocating $250,000 out of the RLF for this emergency program, the remaining funds in the RLF would be about$1.1 million. A potential Capital Catalyst III could account for another$125,000 with about$1.0 million remaining in the RLF after all funds are committed. RECOMMENDATION The City Council approves the proposed the Economic Development Revolving Loan Fund COVID-19 Emergency Program with initial appropriation of$250,000. Submitted, Approved: r Allen Davis Mark A. Rohloff Community Development Director City Manager City Hat,215 Church Avenue P.O.Box 1130 Oshkosh,WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us G R 6 A TERECONOMIC DEVEOPMEN i V Y H K4�S H 100 NT MAIN SST,OSH SUITE 04, OSHKOSHLWI 54901TCORPORATION i Greater Oshkosh COVID 19 Loan Response Program March 24, 2020 Description:Businesses in the greater Oshkosh region are experiencing financial pressures due to an unforeseen event throughout our global and local economies.The City of Oshkosh and Greater Oshkosh Economic Development Corporation have worked together closely in managing the Greater Oshkosh Revolving Loan Fund and feel that this is at time to be innovative and respond quickly to the needs of their local businesses to assist in ensuring that we will continue to have the strong business economy after COVID ig as we did before it arrived. Funding Gap:Having a fund that can respond quickly and in an agile fashion to our local businesses for them to have the capital to cover costs of basic needs to keep their businesses sustained through this unprecedented time. Funding Levels Available: $1,000-$2,500-$5,000-$10,000 Initial amount in fund:$250,000 to$300,000($5o,000 from Greater Oshkosh EDC and$250,000 pending support from the City of Oshkosh for reallocated RLF dollars) Funds must be used for:Rent/mortgage,utilities,pre-existing purchase orders(placed prior to 3/15),and payroll expenses including covering paid leave(including sick,family and other leave related to COVID-ig). Geographic Area:Applicants must be located within the city of Oshkosh.Consistent with the Greater Oshkosh EDC RLF manual,applications can be submitted by commercial borrowers located with municipalities adjacent to the city of Oshkosh but must receive the approval of both the RLF committee and the full Greater Oshkosh EDC board,of which the city has a? vote.Loans can be made to businesses beyond adjacent municipalities with standard RLF committee approval provided financing is extended solely from privately donated funds. Loan Terms: • 2%interest;3-year amortization • Loans distributed immediately,principal and interest payments commence six months after distribution. Streamlined Application Process: • Amended version of current RLF application • Statement of economic impact,how will the money be used • Prior years'worth of financials • Greater Oshkosh RLF Committee would meet weekly to review applications. Requirements/Criteria: • Number of employees = =i • Minimum of 1 years'worth of financials • Demonstration of economic hardship/impact Internal Process: • Initial Evaluation of Prospects _ • Greater Oshkosh staff application review - • Revolving Loan Fund Committee Weekly Review Loan Document Preparation&closuigs Timeline/Rollout: • Establish processes and procedures(March 25-26) • Friday,March 27th rollout to public _ w ' • The loan program will cease upon the lifting of all.emergency declarations at the local,state and federal levels At that point,any remaining dollars in the fund reverts to the City of Oshkosh, emus auy dollars that': were contributed by organizations,individuals,or businesses not in direct affiliation with the C'>ty o ,C)shkashj ._.-. - .. .. ._v.._...—r..n..<.a...i...—.�.- A k S