Sec. 42-56. - Title and citation.

This division shall be known and cited as the "Collier County Community Block Grant Economic Development Program Income Disposition Ordinance".

(Ord. No. 93-69, § 2)

Sec. 42-57. - Definitions.

The following words, terms and phrases, when used in this division, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

Act means the Housing and Community Development Act of 1974, as amended (24 C.F.R. part 570).

CDBG means a community development block grant.

CDBG award agreement means the agreement between the county and the DCA dated January 5, 1993.

DCA means the state department of community affairs.

RLF means the revolving loan fund.

Sec. 42-58. - Purpose.

This division provides policy and program guidance for the implementation of the county's RLF program.

(Ord. No. 93-69, § 1)

Sec. 42-59. - Goals and objectives.

(a)

The establishment of the RLF is an effort to address the problem of credit availability and to provide additional capital to the community which otherwise would not be available for local economic development.

(b)

The primary program objectives are private-sector job creation for members of low and moderate income families and capital formation. Projects are expected to support specific economic development activities planned in the community, including, but are not limited to, the following types of projects:

(1)

Small business development, including the start up or expansion of locally-owned businesses;

(2)

Redevelopment of blighted and vacant facilities for productive use (eligible only if the redevelopment of the vacant facilities is completed as part of an eligible activity, i.e., demolishing structures and clearing land are eligible only as part of an activity to immediately put the land to use for an eligible purpose); and

(3)

Development of businesses owned and operated by minorities, women and other economically disadvantaged groups.

(c)

The county's lending policies and procedures shall include, but are not limited to:

(1)

Providing innovative repayment terms, such as short-term deferral of initial principal and/or interest payments;

(2)

Taking greater risks than banks are prepared to take, but only when substantial economic development benefits will result if the applicant succeeds;

(3)

Providing below market interest rates;

(4)

Utilizing other state and federal programs in conjunction with the RLF program in order to maintain maximum dollars within the RLF;

(5)

Requiring a minimum one-to-one leverage of equity investment to borrowed RLF funds;

(6)

Not lending for the purpose of providing working capital, inventory, or supplies; and

(7)

Not utilizing RLF funds for purposes unless provided herein.

(d)

All proceeds from interest payments on the principal of the RLF funds will be utilized in the following manner:

(1)

To cover administrative cost related to the RLF program; and

(2)

To provide funds for additional loans after the RLF funds are returned to the county.

(Ord. No. 93-69, § 3)

Sec. 42-60. - Eligibility requirements.

(a)

Eligible applicants for RLF assistance include:

(1)

Any legal corporate entity, individual, private organization, and federally-recognized Indian tribal group which resides or desires to locate within the geographic boundaries of the county;

(2)

Applicants will be considered without regard to race, color, religion, sex, national origin, age, handicap condition, familial status, or marital status;

(3)

Applicants must demonstrate that the project to be financed will result in private sector new job creation or retention and contributes to the economic development efforts of the Board of County Commissioners;

(4)

Applicants must demonstrate that the request is necessary or appropriate as defined in 24 C.F.R. part 570 (exhibit 1-A must be completed and submitted with all the applications); and

(5)

Applicants must demonstrate that the request meets a national objective as defined in 24 C.F.R. part 570 (exhibit 1-B must be completed and submitted with all applications).

(b)

Eligible activities for RLF assistance within the county include:

(1)

Acquisition, or construction of commercial and industrial buildings and structures;

(2)

Purchase of capitalized machinery and equipment with a useful life of at least five years;

(3)

Acquisition of real property; and

(4)

Removal of architectural barriers which restrict the mobility of elderly or handicapped persons.

(c)

Ineligible activities for RLF assistance include:

(1)

Speculation activities such as land banking and the construction of speculative or unleased buildings;

(2)

Loans which assist the relocation of jobs from another labor area in the state;

(3)

Loans for the purpose of investing in high interest accounts, certificates of deposit, or other investments not directly related to job creation;

(4)

Loans which would create a potential conflict-of-interest for any officer or employee of the county or any current or former member of the loan administration committee provided in section 42-61, or staff who reviews, approves, or otherwise participates in decisions on RLF loans;

(5)

Loans to any applicant who was an original recipient of a CDBG loan from the county and whose repayment is to be a capitalization source of the RLF; and

(6)

Purchase or construction of any building the purpose for which will be the general conduct of government or whose initial occupant is any governmental unit, agency, instrumentality, or subdivision.

(d)

The RLF capital may only be used for debt financing through direct loans. RLF capital cannot be used to:

(1)

Purchase or finance equity in private businesses;

(2)

Subsidize interest payments on existing loans;

(3)

Refinance loans made by other lenders;

(4)

Finance working capital, inventory, or supplies; and

(5)

Purchase an asset owned by the applicant or a principal of the applicant.

(e)

The RLF program is available to make loans to eligible borrowers at interest rates and conditions determined by the Board of County Commissioners to be most appropriate in achieving the goals of the RLF.

(1)

The interest rate may be from three to 5.5 percent below the prime interest rate on the date of loan application, but in no case may the interest rate be less than three percent.

(2)

Where necessary, RLF financing should assist applicants with special credit problems, and therefore may involve greater risks and more lenient terms rather than conventional financing. Nothing in this section should be interpreted to encourage or advocate loans to individuals or firms with adverse credit history or who are insolvent.

(3)

The RLF funds will not be commingled with other county funds or with program income from other CDBG noneconomic development activities. The funds will be deposited into a fund which is interest bearing. All earned interest will be accrued to the RLF.

(f)

In the determination of collateral requirements, the board of county commissioners shall consider the merits and potential economic benefits of each request. When appropriate and practical, RLF financing shall be secured by liens, mortgages, or assignments of rights in assets of assisted firms as follows:

(1)

The lien position of the RLF may be subordinate and made inferior to a lien or liens securing other loans made in connection with the project prior to or concurrent with the RLF loan;

(2)

The RLF shall obtain collateral such as liens on land, buildings, equipment, inventories, receivables, or other available assets of applicants. Such liens may be subordinate only to existing liens of record and other loans involved in the project in accordance with the terms of the RLF contract and loan documents between the applicant and the county; and

(3)

In addition to the above types of security, the RLF may also require security in the form of assignment of patents and licenses, the acquisition of hazard and other forms of insurance, and such other additional security as the board of county commissioners determines is necessary to protect the RLF's interest.

RLF loan requests submitted by closely-held corporations, partnerships or proprietorships dependent for their continuing success on certain individuals will ordinarily be expected to provide and assign life insurance on these key persons to the RLF; and personal guarantees will also be required from principal owners.

(Ord. No. 93-69, § 4)

Sec. 42-61. - Loan administration committee.

(a)

The county will establish an RLF loan administrative committee, hereinafter referred to as the committee. The committee will consist of seven members representing a cross section of business leaders, minorities, and the banking community. The duties of the committee will be as follows:

(1)

Review all loan applications submitted for funding, establishing that each loan request has sufficient collateral, financial feasibility, and sound management practices;

(2)

Recommend approval or rejection of applicants to the board (all loans receiving approval recommendations will be in compliance with the goals, policies, and procedures as set forth in this division); and

(3)

Establish, with the approval of the board, rules, procedures, policies, goals, and forms to further the purpose of this division.

(Ord. No. 93-69, § 5)

Cross reference— Boards, commissions, committees and authorities, § 2-816 et seq.

Sec. 42-62. - Loan selection, approval and servicing process.

(a)

The loan administrative committee will provide notice of the availability of the RLF program in a newspaper of general circulation setting forth the availability of the loan, the minimum qualifications, the purpose of the loan and the date by which applications must be received by the county. The committee will review and recommend approval of loans to the board, after:

(1)

Meeting and interviewing the applicants to gain an understanding of the project, its parameters, the principals, and the potential structure of the loan. The goals of this initial interview are to give the applicant specific information about the RLF Program, to determine the viability and feasibility of the proposed project, and to determine whether the proposed project meets goals of the RLF Program; and

(2)

Seeking, if necessary in the opinion of the committee, technical and management assistance from various federal, state and local government agencies, university centers, and other groups composed of persons familiar with the effective administration of the funding process. These agencies may provide sources of funding, development of market feasibility studies, conduct labor and resource surveys, make environmental impact assessments, and refer applicants to qualified advisors (such as bankers or accountants).

(b)

Applicants will submit an application as provided by the county housing and urban improvement department or the board's designee and such financial information and other documentation as required by the county within the time specified in the committee's notice.

(c)

No applicant may request a level of funding that exceeds the funds available on the date of the application.

(d)

The board may not agree to obligate funds that have not been received on the date of an application.

(e)

The applicant will also be required to enter into a participating party agreement in form and content required by DCA upon submission of the application for the loan.

(Ord. No. 93-69, § 6)

Sec. 42-63. - Reporting requirements.

(a)

The loan administrative committee shall report to the board of county commissioners on a quarterly basis. This report shall contain:

(1)

The current balance in the RLF;

(2)

The current balance on all loans made with RLF funds to date;

(3)

The delinquency status of all contractually past due loans; and

(4)

The status of all applications under review for funding.

(b)

If the Board of County Commissioners has an existing CDBG grant, the board shall report to DCA on a quarterly basis using the most current quarterly status report form provided to the Board of County Commissioners by DCA. This report shall contain any and all data on program income requested or required by the department, but at a minimum shall contain:

(1)

Activities producing program income;

(2)

The schedule of payments, the estimated total of payments, and whether payments are occurring on schedule;

(3)

Amount of program income collected from the activity to date and during the reporting period; and

(4)

Proposed and actual uses of program income.

(c)

The Board of County Commissioners shall prepare a semiannual report effective January 1 and July 1 of each year detailing the loans made from the RLF during the previous year, the status of all existing loans, interest income from each depository, loan repayments received, program income received from any other source, and the current available balance in the RLF. After approval, an original copy shall be forwarded to DCA.

(d)

Program income reporting may be halted at the time when the program income on hand ceases to be regulated by CDBG requirements as defined in 24 C.F.R. part 570.

(Ord. No. 93-69, § 7)

Sec. 42-64. - Other requirements.

(a)

Civil rights. Assurance of equal opportunity in lending will be empowered by the following means: The Board of County Commissioners will ensure that borrowers do not discriminate against employees or applicants for employment by including in each application a statement requiring compliance with all applicable state and federal laws and regulations. The committee will monitor the employment practices of approved borrowers annually. Periodic reviews of the applicant's procedures may be made to ensure that job opportunities are duly advertised and that an affirmative action plan is being followed. No applicant will be denied a loan on basis of race, color, national origin, religion, age, handicap, familial status, marital status, or sex.

(b)

Environmental considerations. The Loan Administrative Committee will be apprised of state and federal statutes concerning environmental impact of the proposed projects. All potential projects will undertake an environmental assessment pursuant to 24 C.F.R. part 58 and will obtain a formal release of funds from DCA after completion of the assessment and applicable public notices and public hearings. All construction projects will require approval from the State Historical Preservation Office to assure that no historic properties or archaeological factors are affected. Projects which have potential liquid or harmful waste will be required to obtain a letter of approval from the department of environmental protection. In addition, all construction projects will be checked to ascertain location in relation to floodplains or wetlands. In floodplain or wetland locations, a letter of approval will be required from DCA. No project will be approved which produces an insurmountable, harmful alteration of the natural environment.

(c)

Relocation. No portion of the RLF funds shall be used in any way to assist in a transfer of jobs relocating from one labor market area to another within the state.

(d)

Flood hazard insurance. Prior to approval of any RLF project in a designated flood hazard area, the proposed applicant will be required to obtain flood hazard insurance. This insurance must be approved prior to disbursement of funds.

(e)

Access for the handicapped. If the proposed RLF applicant requests financing for a construction project, the plans submitted to the committee by the applicant must provide accessibility to the handicapped.

(f)

Labor standards provisions. If the proposed applicant requests funding for any activity that triggers compliance with the Davis-Bacon Act or other CDBG labor standards provisions, the applicant will agree to comply with those provisions and to cooperate with the Board of County Commissioners in its responsibility to monitor that compliance.

(g)

Financial management. The accounting and financial filing systems for each loan shall mirror the files of the most recently completed CDBG project.

(Ord. No. 93-69, § 8)

Secs. 42-65—42-80. - Reserved.