HomeMy WebLinkAbout03. 20-326
JULY 28, 2020 20-326 RESOLUTION
(CARRIED____7-0___LOST________LAID OVER________WITHDRAWN________)
PURPOSE: APPROVE $125,000 FOR CAPITAL CATALYST MATCHING FUNDS
FROM ECONOMIC DEVELOPMENT REVOLVING LOAN FUND
INITIATED BY: DEPARTMENT OF COMMUNITY DEVELOPMENT
WHEREAS, the Greater Oshkosh Economic Development Corporation (Greater
Oshkosh) and the City of Oshkosh recognize the need for a targeted funding initiative to
assist startups and entrepreneurs in greater Oshkosh; and
WHEREAS, Greater Oshkosh received a $125,000 grant from Wisconsin Economic
Development Corporation (WEDC) under the Capital Catalyst Program for a 1:1 matching
grant to help entrepreneurs and companies with startup costs in 2016 and those funds have
been disbursed; and
WHEREAS, Greater Oshkosh received a $125,000 grant from Wisconsin Economic
Development Corporation (WEDC) under the Capital Catalyst Program for a 1:1 matching
grant to help entrepreneurs and companies with startup costs in 2018 and those funds have
been disbursed; and
WHEREAS, Greater Oshkosh approached the City to provide the matching grant
funds from the City’s Revolving Loan Fund for a third $125,000 grant from WEDC; and
WHEREAS, Wisconsin Economic Development Corporation will require a $125,000
local match for a third Capital Catalyst Program for Greater Oshkosh; and
WHEREAS, the $125,000 matching funds from the City’s Revolving Loan Fund can
be used as match for a third $250,000 Capital Catalyst Fund and comply with WEDC
program requirements.
NOW THEREFORE BE IT RESOLVED, that the Common Council of the City of
Oshkosh hereby approves reallocating $125,000 from the Economic Development Revolving
Loan Fund Manual to match a $125,000 grant from WEDC to create a third Capital Catalyst
Program Fund and the proper City officials are hereby authorized to enter any documents
necessary for purposes of same and to take those necessary steps to implement said
program.
rCityo.
Oshkosh
TO: Honorable Mayor and Members of the Common Council
FROM: Kelly Nieforth, Economic Development Services Manager
DATE: July 22, 2020
RE: Approve $125,000 in Capital Catalyst matching Funds from Economic
Development Revolving Loan Fund
BACKGROUND
The Wisconsin Economic Development Corporation (WEDC) is offering grant funds through
the Capital Catalyst Program to local Economic Development agencies to help entrepreneurs
and start-up companies in their service area. The Greater Oshkosh Economic Development
Corporation (GO -EDC) and the City applied for the WEDC grant in 2016 and 2018 and were
successful. With funds from both grants depleted, GO -EDC is applying for a new grant from
WEDC for $125,000 and this application will require a local match of $125,000, the same as the
2016 and 2018 WEDC grant application. City staff have reviewed the proposal and support
the grant application and RLF matching funds request.
ANALYSIS
The WEDC Capital Catalyst program is a $1 WEDC to $1 local matching grant program for
funding. The request to use $125,000 from the RLF will be doubled by the WEDC grant of
$125,000. In this way, the City's $125,000 will leverage another $125,000 in additional funds
immediately. Additional private investment will multiply that city investment again.
In 2016 and 2018, WEDC awarded the $125,000 grant to GO -EDC with the condition that the
local match is documented prior to the disbursement of the WEDC grant funds.
There are a few critical points:
WEDC funds could be used with the company as grant funds, loan funds or equity
stakes in the companies or any combination. The City's RLF match would be used as
loans.
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://vnaw.ci.oshkosh.wi.us
GO -EDC could apply for more WEDC grant funds if the $250,000 Capital Catalyst
program is invested within 18 months.
The program will be used to target the same types of businesses that are best fits for
Oshkosh — advanced manufacturing, aviation and aerospace, information technology,
software etc.
This funding program may also prove crucial in recruiting entrepreneurs to Oshkosh
from local entrepreneur programs.
Both the GO -EDC RLF Committee and the GO -EDC Board of Directors have recommended
support for another round of Capital Catalyst funding. Even though startups and early stage
businesses can often fail, all loans from previous Capital Catalyst funds are current.
FISCAL IMPACT
The City's RLF has about $1,183,000 in the fund. The City has budgeted $250,000 for RLF loans
in 2020 in addition to the $125,000 match to the WEDC grant. The $250,000 that was used for the
COVID-19 RLF created this spring has already been deducted from the fund. If the WEDC grant
is awarded and the RLF loans the budgeted $250,000, the RLF could be reduced to $808,000 at
the end of 2020. Presently, there have been no funds loaned out through the RLF in 2020. The
balance remaining in the RLF should be adequate to serve the RLF needs to invest in other job
creation or retention projects in the near term.
RECOMMENDATION
The City Council approves the $125,000 in Revolving Loan Funds to match the $125,000 in
WEDC Capital Catalyst grant funds.
Respectfully Submitted,
Kelly Nieforth
Economic Development Services Manager
Approved,
Mark Rohloff
City Manager
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, wl 54903-1130 920.236.5000 htip://vnwv.ci.oshkosh.wi.us