HomeMy WebLinkAbout09. 20-149 APRIL 14, 2020 20-149 RESOLUTION
(CARRIED 7-0 LOST LAID OVER WITHDRAWN )
PURPOSE: APPROVE REVISION TO ECONOMIC DEVELOPMENT
REVOLVING LOAN FUND PROGRAM MANUAL
INITIATED BY: DEPARTMENT OF COMMUNITY DEVELOPMENT
WHEREAS 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; and
WHEREAS the City Council has allocated cash balances from closing TIDs #6, #7
#8 and #9 to fund a new Economic Development Revolving Loan Fund (RLF); and
WHEREAS City staff has worked with the Long Range Finance Committee and
Greater Oshkosh Economic Development Corporation (Greater Oshkosh) to draft a
program manual for administering said RLF; and
WHEREAS the Economic Development Revolving Loan Fund Program Manual
was previously approved by Council in 2014 with revisions in 2016; and
WHEREAS Greater Oshkosh Economic Development staff and Long Range
Finance Committee have reviewed the attached revisions.
NOW THEREFORE BE IT RESOLVED that the Common Council of the City of
Oshkosh hereby approves the attached, revised Economic Development Loan Fund
Program Manual to be administered by Greater Oshkosh and the proper City officials are
hereby authorized to take those necessary steps to implement said program.
y
OF
Oshkosh
TO: Honorable Mayor and Members of the Common Council
FROM: Allen Davis, Community Development Director
DATE: April 7, 2020
RE: Approve Revisions To Economic Development Revolving Loan Fund Program
Manual
BACKGROUND
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. City staff has worked with the staff at GO-EDC and the Long
Range Finance Committee to draft a few revisions of the program manual for administering
the RLF over the last year. The program manual contains the rules and regulations for the use
and administration of the RLF.
ANALYSIS
The 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
General Provisions of the Manual identify private funding leverage, quality jobs, relocation or
attraction of jobs, and target opportunities aligned with the GO-EDC Strategic Plan.
The target markets for the RLF include businesses exporting outside the Oshkosh area, firms
growing at rates faster than the overall economy, and businesses that are positioned for future
success through innovation, high quality, technology and high performance.
The proposed program manual revisions are based on the City's experience with the RLF, best
practices of other RLFs around the state and nation, and recommendations from the City's
Auditor. A summary of the revisions is below:
• Defines the source and use of funds for GOEDC administration of the fund to be no
more than 15% of the interest paid on the loans, as documented by GOEDC.
• The City will receive a copy of the closing documents for allloans.
City Hail,215 Church Avenue P.O. Box 1130 Oshkosh,WI 54903-1130 920 236 5000 http://www.ci.oshkosh.wi.us
• GOEDC will contract with a CPA for annual auditing and identifies the audit
procedures that the CPA will use.
• GOEDC may maintain up to $50,000 in loan repayments for subsequent loans.
Amounts exceeding the $50,000 shall be forwarded to the City.
• Better defines the quarterly RLF financial reporting requirements.
FISCAL IMPACT
There is no fiscal impact of these revisions since the RLF has no impact on the levy.
RECOMMENDATION
The City Council approves the proposed revisions to the Economic Development Revolving
Loan Fund Program Manual.
Submitted, Approved:
44;
Allen Davis Mark A. Rohloff
Community Development Director City Manager
City Hall,215 Church Avenue P.O. Box 1130 Oshkosh,WI 54903-1130 920.236.5000 htip://www.ci.oshkosh.wi.us
GREATER OSHKOSH
REVOLVING LOAN FUND
PROGRAM MANUAL
Revised: July 7, 2o16
Revised Draft April 14, 2020
C* FR E A T E F4
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too N. Main St. Suite 104, Oshkosh,WI 54901
Telephone: (920) 230-3321
www.Greater0shkosh.com
TABLE OF CONTENTS
Page
FOREWORD 1
SECTION 1: GENERAL PROVISIONS 2
1.1 PURPOSE 2
1.2 OBJECTIVES 2
1.3 AMENDMENTS 2
SECTION 2: ADMINISTRATION 3
2.1 LOAN REVIEW COMMITTEE 3
2.2 MEETINGS 3
2.3 RECORDS 3
2.4 LOAN FEES 4
SECTION 3: ELIGIBILITY CONSIDERATIONS 5
3.1 ELIGIBLE AREA 5
3.2 ELIGIBLE APPLICANTS 5
3.3 INELIGIBLE APPLICANTS 5
3.4 ELIGIBLE ACTIVITIES 5
3.5 INELIGIBLE ACTIVITIES 6
3.6 MINIMUM REQUIREMENTS 6
SECTION 4: TERMS AND CONDITIONS 8
4.1 TERMS AND CONDITIONS 8
SECTION 5: APPLICATION PROCEDURES 10
5.1 INITIAL CONTACT 10
5.2 TIMING 10
5.3 PRIORITY 10
5.4 LOAN APPLICATION 10
5.5 REVIEW PROCESS 10
SECTION 6: DISTRIBUTION OF FUNDS 12
6.1 LOAN PROCEDURES 12
SECTION 7: POST APPROVAL REQUIREMENTS 14
7.1 OBLIGATION OF LOAN RECIPIENT 14
SECTION 8: PERFORMANCE MONITORING 15
8.1 PRIVATE LEVERAGE COMMITMENTS 15
8.2 JOB CREATION AND RETENTION 15
8.3 DEFAULT 15
SECTION 9: USE OF LOAN REPAYMENTS AND REPORTING 16
9.1 GREATER OSHKOSH RLF PROGRAM 16
SECTION io: LOAN SERVICING 18
10.1 MONITORING 18
10.2 RECORDKEEPING 18
ATTACHMENT A REQUIRED CERTIFICATION STATEMENT 20
FOREWORD
In 2014, the City of Oshkosh Common Council recognized the need for a targeted initiative designed
to accelerate quality job creation and growth of the tax base in a highly competitive economic
environment. A partnership between the City of Oshkosh (City) and Greater Oshkosh Economic
Development Corporation (GOEDC) created the Greater Oshkosh Revolving Loan Fund Program to
address competitive opportunities and concerns widely expressed within the local business
community and citizens of the City of Oshkosh.
The Greater Oshkosh Revolving Loan Fund (RLF) was established to be a flexible gap financing tool
for businesses engaged in high-income and job growth through projects involving expansion and/or
relocation in the City of Oshkosh. Impact, for the purpose of this program, is defined as any growth
activity that supports significant return to the tax payers of City of Oshkosh.
This manual contains the RLF policies and procedures that have been adopted locally to govern the
use of these revolving loan funds.
For further assistance and guidance,please feel free to contact:
Greater Oshkosh Economic Development Corporation (GOEDC)
2380 State Road 44, Suite B, Oshkosh,WI 54904
Telephone: (920) 230-3321
www.Greater0shkosh.com
SECTION is GENERAL PROVISIONS
i.i PURPOSE
The purpose of the policies and procedures contained within this manual is to present the
criteria which govern the economic development activities assisted with funds made available
through the Greater Oshkosh Revolving Loan Fund (RLF) program.
1.2 OBJECTIVES
Economic development activities funded through the RLF program are intended to meet the
following objectives in City of Oshkosh:
1. To leverage the growth of existing businesses that supports a significant return to the tax
payers of the City of Oshkosh
2. To encourage the creation and retention of quality jobs
3. To assist in the relocation or attraction of new businesses and capital to increase the tax
base
4. To target opportunities that are in alignment with the Greater Oshkosh Economic
Development Corporation (GOEDC) strategic plan
Identified target markets for RLF projects include:
1. Driver industries: businesses exporting outside the greater Oshkosh region
2. Growth businesses: firms with earnings that increase at rates faster than the overall
economy
3. Businesses positioned for success through innovation, high quality, technology and high
performance
1.3 AMENDMENTS
The Revolving Fund Committee may from time to time amend the provisions imposed by the
policies and procedures contained within this RLF manual and with consent of the Oshkosh
City Council.
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SECTION 2: ADMINISTRATION
2.1 LOAN REVIEW COMMITTEE
1. The City of Oshkosh Common Council (City) has designated the Revolving Loan Fund
Committee of the Greater Oshkosh Economic Development Corporation (GOEDC) and its
staff as responsible for the administration,monitoring and promotion of the RLF program.
GOEDC shall also be responsible for identifying potential businesses who may take
advantage of the RLF program, pricing and appraising development opportunities, the
review of RLF requests and their related consultative and technical services.
2. The Revolving Loan Fund Committee shall be responsible for funding decisions relative to
RLF loans.
3. The Revolving Loan Fund Committee shall have the authority to make policy
recommendations for the administration of the RLF program. Quarterly activity reports
shall be provided to the City Council that contain information referenced in section 2.3.
4. The Chief Executive Officer of GOEDC or designee (hereinafter called "staff') shall be
responsible for the day-to-day administration of the Greater Oshkosh RLF program.
GOEDC is responsible for explaining the Greater Oshkosh RLF program to prospective
applicants,providing written information, assisting applicants in completing applications,
processing requests for financing, and, where necessary and appropriate, counseling and
guiding loan applicants to other more appropriate technical and financial resources when
the loan applicant has needs that cannot be met through the Greater Oshkosh RLF
program.
S. GOEDC shall periodically,but no less than annually, review financial statements and loan
amortization schedules for Greater Oshkosh RLF loan recipients. GOEDC is responsible
for the maintenance of all records for the Greater Oshkosh RLF.
6. GOEDC shall prepare all loan agreements, review all promissory notes and mortgage or
lien instruments, and record Greater Oshkosh RLF security instruments. Staff, with
guidance from the Revolving Loan Fund Committee and legal counsel shall negotiate,
prepare and execute on matters of default.
2.2 MEETINGS
Loan review meetings shall be held by the Revolving Loan Fund Committee on an as-needed
basis. A majority of the Revolving Loan Fund Committee in attendance at a meeting
constituting a quorum shall be required for official committee action.
2.3 RECORDS
Records of GOEDC, as a private contractor, shall not be deemed public records and GOEDC
may promise confidentiality of its records to those persons with which it deals. However,
GOEDC and the City agree that the following information is not confidential as to any project
funded: amount of funding; name and address of party to which funding was provided; the
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terms and conditions of the funding agreement;the purpose of the funding;the public benefit;
jobs impacted; and the total project budget. Additionally, any aging, delinquency or "loan
status" reports filed by GOEDC may contain specific loan status information for projects.
Written records shall be maintained in appropriate files located in a locked and fireproof place
with limited access by authorized personnel.
2.4 LOAN FEES
1. Pre-Closing Fees include but are not limited to: These funds are used to pay for
administrative costs associated with the Greater Oshkosh RLF program.
a) Loan Application Fee: GOEDC shall require a non-refundable loan application fee
Of$250 to be paid at the time of loan application. The application fee maybe waived
at the sole discretion of the RLF Committee.
b) Loan Origination Fee: GOEDC shall require a loan origination fee of 1 percent of
the RLF loan amount to be paid at the time of the loan closing.
c) Legal Fees: Payment of all legal fees and costs incurred by GOEDC for the RLF loan
closing must be paid on or before the closing in a manner agreeable to both parties.
These funds are used to pay for administrative costs associated with the Greater
Oshkosh RLF program
2. Post-Closing Fees: O an aiiiiidalbasis, p—te nt of the;featef 0shkash RLF
On an annual basis, up to 1s percent of the interest earned on the outstanding RLF loans
repayments may be used for GOEDC RLF administrative costs. No principal repayments
shall be used for administrative costs. The interest payments accrue from all outstanding
RLF loans. GOEDC's administrative costs may include personnel costs and other direct
expenses related to administering the RLF. GOEDC shall document the annual
administrative costs and shall provide the documentation to the City f�pproval prior to
transferring the annual administrative costs from GOEDC's RLF Fund to another GOEDC
Fund.
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SECTION 3: ELIGIBILITY CONSIDERATIONS
3.1 ELIGIBLE AREA
The area served by the Greater Oshkosh RLF program shall be within the corporate limits of
the City of Oshkosh. Exceptions may be made by a two-thirds vote of the GOEDC Board of
Directors for projects that occur in the communities contiguous to the City of Oshkosh with
demonstrated significant benefit to the citizens of the City of Oshkosh.
3.2 ELIGIBLE APPLICANTS
1. Any viable private enterprise with at least two years of financial history seeking to grow
operations in the City of Oshkosh. Exceptions to the requirement of two years of financial
history may be made for those situations in which a compelling case can be made for such
exceptions.
2. No member of the Common Council; GOEDC Board of Directors;the Revolving Loan Fund
Committee; employee of GOEDC; or any other official, employee, or agent of the City who
exercises decision-making functions or responsibilities in connection with the
implementation of the Greater Oshkosh RLF program is eligible for financial assistance
under this program. In addition, no Greater Oshkosh RLF loans shall be made which are
in conflict with Section 946.13 of the Wisconsin Statutes (Private Interest in Public
Contract Prohibited).
3. Applicants shall not be disqualified based on age, race, religion, color, handicap, sex,
physical condition, development disability as defined in s. 51.01(5), sexual orientation or
national origin.
3.3 INELIGIBLE APPLICANTS
Greater Oshkosh RLF loans shall not be available for the following businesses:
1. Failing companies (bankruptcy reorganization, stage of foreclosure)
2. Start-up companies (less than two years of financial history) }Exceptions to the requirement
of two years of financial history may be made for those situations in which a compelling case can be made
for such exceptions.
3. Any entity not serving the interests of City of Oshkosh
3.4 ELIGIBLE ACTIVITIES
Greater Oshkosh RLF loans shall be provided to eligible applicants for the following
activities:
1. The acquisition of land,buildings, and/or fixed equipment
2. Inventory essential to the business operations
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3. Site preparation, the construction and/or reconstruction of buildings, the
rehabilitation of buildings including leasehold improvements, and/or the
installation of fixed equipment
4. Clearance, demolition, or the removal of structures
5. Working capital
6. Research and development
7. Intellectual property
8. Employee training
9. Marketing of new products or its emergence into a new niche
io. Employee recruitment, retention and/or transfer
ii. Interest rate buy-down with private sector lender
3.5 INELIGIBLE ACTIVITIES
Due to the intentional enhanced flexibility of this program,the GOEDC RLF Committee
reserves greater flexibility to determine eligible uses; hence, specific exclusions are limited to:
1. Refinancing or consolidating existing debt.
2. Reimbursement for expenditures made prior to loan approval.
3. Residential building construction and/or reconstruction (unless such reconstruction is
intended to convert the building to a business use).
4. Other activities that the RLF Committee may identify as inappropriate for the Greater
Oshkosh RLF program.
3.6 MINIMUM REQUIREMENTS
To be eligible for funding, a proposed project shall meet all of the following minimum
requirements:
1. Private Funds Leveraged. One dollar of private sector investment shall be provided for
each dollar of RLF investment. Private investment is defined as new equity injected and/or
financing from private lending institutions or public sector loan programs other than the
Greater Oshkosh RLF. The applicant contribution to the project will be determined by the
private lending institution.
On a selective basis the Greater Oshkosh RLF may participate at levels higher than one
dollar for each dollar of private sector investment subject to demonstration of substantial
project. In such cases, approval for the loan will be required by the GOEDC Board of
Directors.
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2. Cost Per Job. A minimum of one full-time position as defined as 2,08o hours/year shall
be created or retained for each $25,000 of RLF funds requested. On select cases, projects
outside of the established cost per job parameter may be awarded with approval of the RLF
Committee and justification of the exception provided in the quarterly report provided to
the City.
3. Financial Feasibility and Business Viability. The applicant shall demonstrate that the
proposed project is viable and that the business has the economic ability to repay the funds.
4. Compliance with Applicable Laws. Applicants shall comply with all applicable local, State
and Federal laws and codes.
S. Project Completion. Each loan project completion timeline will be customized to the needs
of the project and the discretion of the RLF committee.
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SECTION 4: TERMS AND CONDITIONS
4.1 TERMS AND CONDITIONS
Loan terms and conditions shall be structured on the basis of need and ability to repay and
will be outlined in a commitment letter to the applicant. Minimum standards include the
following:
1. Loan Amount. The amount of funds available for any single business enterprise shall range
from a minimum of$25,000 to a maximum of$250,000.
2. Interest Rate. The interest rate on each loan shall be determined on a case-by-case basis
by the Revolving Loan Fund Committee,balancing risk and return for City of Oshkosh, as
well as applicable margins to cover associated costs. The interest rate may or may not be
fixed for the life of the loan.
3. Loan Term. The specific term of the loan will be determined on a case by case basis,
designed around generating maximum success and outcomes.The RLF Committee will use
current RLF and industry standards as foundational guidelines.
4. Repayment. Deferral of principal payments may be provided,but will be determined on a
case by case basis designed around generating maximum project success and outcomes.
Payments will be made via direct automatic electronic withdrawal.
S. Prepayment. There are no prepayment penalties.
6. Collateral. Collateral requirements shall be determined on an individual basis by the
Revolving Loan Fund Committee and may include: mortgages on land and buildings,liens
on machinery and equipment, liens on accounts receivable and inventory, and/or liens on
the corporate assets of affiliated businesses, where appropriate. This collateral may be
subordinated to private sector financial institutions participating in the RLF project, if
required. Unlimited personal guarantees from the principals of the business who have 20
percent ownership or more shall be required, along with junior mortgages on personal
residences. In addition,limited personal guarantees may be required for the owners of the
business who have less than 20 percent ownership. If personal guarantees are not feasible
or acceptable, a higher interest rate may be charged.
7. Insurance Requirements. Businesses receiving loans for fixed assets shall be required to
obtain property-casualty insurance for the appraised market value of the property being
financed, and businesses receiving construction loans shall be required to have builder's
risk insurance for the amount of the debt financing attendant to the project. GOEDC and
the City shall be listed as an additional insured on all such insurance policies.
8. Equity Requirements. The Greater Oshkosh RLF program may require an equity injection
from the applicant for each Greater Oshkosh RLF loan, when appropriate. Consideration
will be given for individuals that have made substantial equity commitments to the
applicant business, as well as to the individuals who do not have sufficient financial
resources to contribute to the Greater Oshkosh RLF project.
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9. Structure. The RLF Committee may offer multiple approaches with minimum standards,
as noted in section 4.1,including the possibility of participation agreements with approved
partners.
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SECTION 5: APPLICATION PROCEDURES
5.1 INITIAL CONTACT
Prior to submitting an application, all Greater Oshkosh RLF applicants must discuss the
program with staff, who will provide assistance, as is necessary, in completing an Greater
Oshkosh RLF application.All financial information shall be kept in a secured place with limited
access by authorized personnel.
5.2 TIMING
Applications may be submitted at any time during the calendar year.
5.3 PRIORITY
Applications shall be reviewed in the order received and based on readiness for the proposed
project to proceed. In those instances where the number of requests for Greater Oshkosh RLF
funds exceeds available funding, Greater Oshkosh RLF applications shall be prioritized based
upon:
1. Overall impact of project
2. Date of receipt of all requested application materials
3. Leveraging growth of existing businesses in City of Oshkosh
4. Relocation or attraction projects
5.4 LOAN APPLICATION
Applicants shall submit an application using forms available from GOEDC that includes the
following:
1. Greater Oshkosh RLF Application
2. Business Plan
3. Financial Statements
Applicants must complete the application checklist to ensure all supporting documentation is
included before submitting an application to GOEDC.
5.5 REVIEW PROCESS
Specific steps in the review process include the following:
1. Preliminary Review. GOEDC shall review the application for completeness and verify that
the proposed project meets the minimum requirements provided in Section 3.6. If the
application is not complete, staff will inform the applicant of the deficiencies.
2. Formal Review. The Revolving Loan Fund Committee shall meet to review an application
within 3o days of the receipt of a completed application.
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3. Negotiation of Terms. Upon acceptance by the Revolving Loan Fund Committee,staff shall
contact the business to review and explain the terms of the loan.
4. Notice of Award. If the application is approved, a closing shall be scheduled to execute the
necessary loan documents. All loan closings shall occur within go days of acceptance.The
award of a Revolving Loan Fund loan does not warrant and/or guarantee approval of the
project by the City of Oshkosh City Council or City of Oshkosh Planning Commission. The
approval is only for the Revolving Loan Fund program.
S. Rejection of Award. If the application is not approved, staff shall notify the applicant in
writing of the reasons for rejection and offer to meet with the applicant to explore ways to
strengthen the loan request or to identify alternative funding sources.
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SECTION 6: DISTRIBUTION OF FUNDS
6.1 LOAN PROCEDURES
Prior to releasing funds, the following documentation shall be in place or provided at the
appropriate time during the term of the loan.
1. Loan Approval. The Revolving Loan Fund Committee shall review and approve a complete
application for each eligible applicant.
2. Loan Agreement. GOEDC or the designee shall prepare a loan agreement which shall be
executed by Staff and/or the Chairman of the Revolving Loan Fund Committee, as well as
the authorized representatives of the business.
3. Promissory Note. A promissory note shall be prepared by GOEDC or designee and signed
by the authorized representatives of the business at the time of loan closing.The note shall
be dated, reference the agreement between GOEDC and the business, and specify the
amount and terms of the loan funds to be delivered.
4. Security. Mortgage and/or lien instruments and personal guarantees provided as security
for all loans shall be prepared by GOEDC or designee and executed at the time of the loan
closing. GOEDC or designee shall record all security instruments and place copies in the
project file, as applicable,to include:
a) Mortgage and/or security agreement
b) UCC searches and filing
c) Guarantee agreement
d) Title insurance or letter report
e) Construction disbursements
f] Assignment of life insurance
g) Property-casualty insurance binder
h) Personal guarantee
i) Other documentation as may be appropriate
S. Evidence of Permits. Documentation must be provided by the applicant that all necessary
permits,licenses and any other registrations required have been obtained by the applicant
prior to the release of program funds.
6. Amortization Schedule. An amortization schedule shall be prepared by staff and forwarded
to the loan recipient prior to closing and attached to both parties' copies of the loan
agreement.
7. Evidence of Program Expenditures. Documentation shall be provided by the applicant to
evidence Greater Oshkosh RLF program expenditures prior to the release of funds.
Documentation may include invoices or receipts for materials and supplies, purchase
orders, final bills of sale, letters from lenders, and/or canceled checks. All required
documentation shall be determined by staff and the applicant at the time of the loan
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application in order to address the specific project needs. All documentation shall be
reviewed and approved by staff.Staff shall also verify the installation of all fixed equipment.
8. Other Documentation. Documentation shall be provided by the applicant to evidence that
all required permits, licenses, and registrations have been obtained prior to the release of
RLF funds. As appropriate or necessary, the borrower may also be asked to provide the
following documentation:
a) Certificate of Status from the Department of Financial Institutions
b) Articles of incorporation and by-laws
c) A resolution or agreement to borrow funds
d) Current financial statements
e) Evidence of having secured other funds necessary for the project
f) An environment analysis for real estate loans,if justified
With the above documentation in place,the staff will schedule a loan closing.All documents
will be executed before funds are disbursed, and mortgages and UCC Statements shall be
recorded with the Register of Deeds,.-and7_the Department of Financial Institutions and the
City of Oshkosh.
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SECTION 7: POST APPROVAL REQUIREMENTS
7.1 OBLIGATION OF LOAN RECIPIENT
In addition to the terms and conditions of the loan, all borrowers must agree to comply with
the following:
1. Not to discriminate on the basis of age, race, religion, color, handicap, sex, physical
condition, development disability as defined in S. 51.01(5), sexual orientation, or national
origin in any employment or construction activity related to the use of RLF monies.
2. To use Greater Oshkosh RLF monies only to pay the cost of services and materials
necessary to complete the Greater Oshkosh RLF project or activity for which the funds were
awarded.
3. To permit inspections by persons authorized by GOEDC of all projects and properties
assisted with loan funds. Related project materials shall also be open to inspections which
include, but may not be limited to: contracts, materials, equipment, payrolls, and
conditions of employment.Requests for inspection shall be complied with by the borrower.
Such inspections will occur at least annually.
4. To maintain records on the project that are necessary for the GOEDC to determine if the
performance of the business complies with the terms of the loan agreement. Files shall be
maintained as long as the loan is active or for at least three years after completion of the
work for which the loan has been obtained,whichever is longer.
5. To submit the following documentation during the outstanding term of the Greater
Oshkosh RLF loan:
a. Quarterly financial statements that are certified by the borrower
b. Annual financial statements of at least compilation quality by a certified
public accountant
c. Signed copies of corporate Federal income tax returns
d. Evidence of loan use and job requirements
6. To maintain property-casualty insurance for the property financed with Greater Oshkosh
RLF monies for the term of the Greater Oshkosh RLF loan. The City and GOEDC shall be
listed as an additional insured on the policy.In addition,key-person life insurance coverage
naming the City and GOEDC as a beneficiary, with a declining balance equal to the
outstanding loan balance may be used where appropriate
7. To abide by all Federal laws, when applicable. These include, but may not be limited to:
the Civil Rights Act of 1964; the Age Discrimination Act of 1975; the Contract Work Hours
and Safety Standards Act;the Copeland"Anti-Kickback"Act; and,all regulations pursuant
to these Acts.
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SECTION 8: PERFORMANCE MONITORING
8.1 PRIVATE LEVERAGE COMMITMENTS
Staff shall monitor the use of the funds and expenditure of private leverage commitments.
Documentation shall include invoices or receipts for materials and supplies, letters from
lenders,final bills of sale, and/or cancelled checks.
8.2 JOB CREATION AND RETENTION
Staff shall monitor the borrower's progress in meeting agreed upon job creation or retention
goals. Job creation shall be documented using before- and after-project payroll records
provided by the borrower.
8.3 DEFAULT
In the event the business is in default on any of the terms and conditions of the loan agreement,
all sums due and owing, including penalties and clawbacks shall, at GOEDC's option,become
immediately due and payable. Interest penalties and clawbacks are determined according to
the "Impact" justifications made as part of the application and incorporated into the loan
agreements. To exercise this option, staff shall provide a written notice to the business. The
notice will specify the following:
1. The default
2. The action required to cure the default
3. A date, not less than 3o days from the date of the notice, by which the default shall be
cured to avoid foreclosure or other collective action
4. Any penalties incurred as a result of the default
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SECTION 9: USE OF LOAN REPAYMENTS AND REPORTING
9.1 GREATER OSHKOSH RLF PROGRAM
Repaid Greater Oshkosh RLF monies shall be deposited in the Greater Oshkosh RLF account
and used in a manner consistent with the Greater Oshkosh RLF manual.A separate record for
each loan shall be kept to account for all funds loaned.
GO-EDC shall contract with a licensed certified public accountant(CPA)to conduct an
annual financial audit of GO-EDC. GO-EDC will contract with a CPA to include the
procedures listed below. A copy of the financial audit will be submitted by GO-EDC to the
City annually by March 1st of each year.
Audit Procedures.
1) GO-EDC would provide yearend financial statements for the RFL moneY.
2) An independent accountant would verify the year end bank account balance(s) and
provide copies of the year end reconciliations.
,j) An independent accountant would confirm outstanding loan balances directly with the
borrowers and provide copies of the confirmations.
4) An independent accountant would confirm outstanding amounts payable to the City for
agreement with City records.
) A standard agreed upon procedures report would be prepared by the independent
accountant indicating the findings of the procedures performed.
6) Test individual RLF account files for evidence of compliance with loan terms and
conditions.
a. The number of files to be tested annually will be mutually greed upon by GO-
EDC and the City.
The Revolving loan funds (RLFs)program was established with available cash balances from
multiple TIF closures. To ensure accountability and transparency of these funds it is
important to establish procedures in which program income(interest repayments) are
secured and accounted for by GO EDC as well as the Cit .
GO EDC shall establish a mechanism to document each repayment received from a grantee.
Each repayment shall be recorded to separate the amount of principal and interest being
repaid. All loan repayments shall be maintained in a separate bank account and not
comingled with other cash funds at GO EDC. All revolving funds must be held in an interest
bearing account, and interest paid on revolving fund balances must be remitted to the City of
Oshkosh not less than annually. GO EDC will be allowed to maintain a maximum balance of
$5o,000 of revolving loan funds onsite to be utilized for loan requiring expedited
disbursement
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Quarterly GO EDC shall submit a report which reconciles total amount of revolving loan funds issued
from the City to GO EDC. This reconciliation shall include the total of outstanding loan balance(s),
the 1r,percent of RLF loan/origination fees (retained by GO EDC for administrative costs), and
principal interest income currently being held by GO EDC. After this reconciliation is complete GO
EDC will remit quarterly try of Oshkosh all revolving loan funds which are above their minimum
balance.
All revolving loan funds shall be monitored on a regular basis to ensure that the money is
actively being used for eligible activities.
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SECTION io: LOAN SERVICING
10.1 MONITORING
GOEDC staff shall monitor each loan to ensure compliance with the loan terms and conditions
and to monitor the financial health of the business to ensure continued repayment of the loan.
The monitoring will also ensure that all recordkeeping requirements are met particularly with
regard to the expenditure of matching funds.
10.2 RECORDKEEPING
A loan servicing file shall be established and maintained for each loan recipient that includes:
Loan Application File. The loan application file shall include:
a. A copy of the RLF application
b. Business plan documents
c. Business plan financial statements,personal financial statements
d. Other supporting loan information submitted to GOEDC, including all applicable
correspondence
e. A copy of the loan application summary with recommended actions regarding the
application.
These documents are secured in a locked and fireproof filing cabinet.
Loan Closing File. The loan closing file shall include:
a. All loan closing documents,including the note and other security instruments
b. Certificates of insurance for builder's risk, property-casualty, and life insurance, as
applicable
c. Documentation for job creation and retention
This file shall be placed in a locked, fireproof filing cabinet. Staff shall be involved in helping
create and complete this file to ensure complete loan documentation.Copies of the loan closing
documents and an amortization schedule shall be provided to the loan recipient, along with an
invoice for loan application and origination fees.
1. Financial Management File. Greater Oshkosh RLF financial management records shall be
maintained that include the following registers:
a. Greater Oshkosh RLF Register: A record of all deposits and disbursements to and from
the RLF,including funds used for RLF administration.
b. Greater Oshkosh RLF Loan Repayment Register: A record of all repayments made by
each business that has received a loan from the RLF, as well as the balance of
repayments from all Greater Oshkosh RLF loans. This report will be reviewed at least
quarterly by the RLF Committee.
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c. Collection Register: A register for each loan that contains the business name,loan date,
loan amount,terms, and date repayment begins.
2. "Tickler File" System. A tickler file system shall be established and maintained to ensure
that loan repayments, financial information, the loan agreement, UCC updates, and other
documentation requirements are tracked and obtained as required.The system will include
the following monthly-coded index files:
a. Expiration dates for property-casualty and/or life insurance policies
b. Due dates for all financial statements
c. Expiration dates for UCC Financing Statements, the reminder to update being at least
45 days prior to the expiration of the UCC filing on hand
d. Scheduled dates of annual loan performance and covenant reviews
e. Dates for site visits
f. Due dates for property tax payments
g. Review dates for job monitoring, and
h. Dates on which loan recipients will be notified of scheduled changes in the loan
amortization scheduled per loan agreements
3. Financial Statement File. The financial statement file shall include the business'quarterly
and annual financial statements as required by the loan covenants with a statement
indicating that staff reviewed the data.
4. Field Visit File. Staff shall make periodic site visits to verify information in the progress
report and financial statements. A summary of each site visit will be placed in the
permanent file, including any information that can assist in rating the overall
condition/risk of the loan.
5. Repayment Monitoring File. The repayment monitoring file shall include the loan
amortization schedule and status of payments on the Greater Oshkosh RLF loan.
Observations regarding concerns or problems shall be reported to the City and notations
placed in the tickler file to remind staff of the need to provide continued monitoring.
6. Loan Review File. All loans shall be reviewed on an annual basis, and at such other times
as may be deemed necessary by GOEDC and the City. The review will follow receipt of the
fiscal year-end financial statements,the year-end progress reports,and site visits.A report
on the loan review will be placed in the file and address the following:timeliness of monthly
payments; condition of collateral securing the loan and status of security documents;
overall financial condition of the business; the presence of material liens or lawsuits; and
violations of loan covenants and suggested corrective actions.
If the business is experiencing problems, staff shall work with the loan recipient to identify
actions that are needed to correct the identified deficiencies, including possible restructuring
of the loan to improve cash flow within the business. If appropriate, staff shall arrange for
business assistance, including services available through the University of Wisconsin-
Extension, Small Business Development Center (SBDC), the Service Corp of Retired
Executives (SCORE), and/or other entities having an interest in serving the needs of
businesses.
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Attachment A Required Certification Statement
The undersigned hereby:
1. Certifies that to the best of the applicant's knowledge and belief,the information being
submitted to GOEDC as part of the Greater Oshkosh RLF Program Application is true and
correct.
2. Certifies that the applicant is in compliance with all laws, regulations, ordinances and orders
of public authorities applicable to it.
3. Certifies that the applicant is not in default under the terms and conditions of any grant or
loan agreements,leases, or financing agreements with its other creditors.
4. Certifies that GOEDC is authorized to obtain a credit check and Dun and Bradstreet on the
applicant,the business and/or the individual(s).
5. Certifies that the applicant has disclosed and will continue to disclose any occurrence or
event that could have an adverse material on the project. Adverse materials includes but is
not limited to lawsuits, criminal or civil actions,bankruptcy,proceedings, regulatory
intervention or inadequate capital to complete the project.
6. Applicant requests that GOEDC treat the following items,if provided, as TRADE SECRET:
Yes No NA
A. Personal financial statements. ❑ ❑ ❑
B. Personal or business tax returns. ❑ ❑ ❑
C. Historical business financial statements. ❑ ❑ ❑
D. Business financial projections. ❑ ❑ ❑
E. Business Plan ❑ ❑ ❑
F. Other ❑ ❑ ❑
Signature: Date:
(Applicant)
Name: Date:
(Applicant)
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