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Economic Development Program Manual


Table of Contents:

1.   Strategy

2.   Program Terms and Funding

       A.  Duration

       B.  Funding

3.   Budgeting

       A.  Annual Budget

       B.  Appropriated Funds and Restrictions to Appropriation

       C.  Expenses

       D.  Other Economic Funds

4.   Investments

5.   Audit

6.   Administration

       A.  The Program Administrator

       B.  The Citizens Review Committee

       C.  Grant City Council

7.   Eligibility

       A.  Qualifying Business

       B.  Eligible Activities

8.   Application to the Program

9.   Loan Program

       A.  Conditions

       B.  Loan Closing

       C.  Loan Default

       D.  Loan Forgiveness or Grant

10.  Confidentiality



1.   Strategy:

      The general strategy for the Economic Development Program and the effort to be undertaken under the Local Option Municipal Economic Development Act is to build on the community’s strength, to promote businesses, and industry, and the retention and creation of employment for the community.  The strategy is to maintain a good quality of life for our citizens, develop a strong workplace, develop our community’s resources, attract new capital investment, broaden the community tax base and insure economic stability for the City of Grant.


2.   Program Terms and Funding:

      A.  Duration:

            The Grant Economic Development Program will begin on October 1, 2002 and end on September 30, 2013.  However, uncommitted funds and revenues including but not limited to repayment of loans, return on investments, fees for activities such as loan guarantees, and sales proceeds from properties, may continue to be used for Program approved activities for an additional twenty year period.  Thus, the Program shall remain in effect until September 30, 2022 for Program approved activities.

       B.  Funding:

             Funds that shall be deposited into the separate economic development accounts established by the City of Grant’s Economic Development Program are:

             1.  Annual property taxes

             2.  Earnings from investment of funds

             3.  Loan Proceeds

             4.  Proceeds from the sale of assets purchased by the economic development program


3.   Budgeting:

       A.  Annual Budget:

             The Budget for the Program shall be recommended annually by the Program Administrator to the City Council for final authorization at the same time it approves the City Budget.  The Budget shall include tax revenues, loan payments, and expenses to reflect the upcoming fiscal year.

       B.  Appropriated Funds and Restrictions to Appropriation:

            1.  The City may appropriate funds for the program from the estimated annual property taxes and carry over funds and program revenues from repayment of loans, sale and return of investments, fees, leases, etc.  All program funds shall be held in a fund separate from other funds of the City and which shall be known as the “Program Fund”.

            2.  The City shall not appropriate from funds derived directly from local sources of revenue for the program in any year, an amount in excess of four-tenths of one percent (.004) of the taxable valuation of the City in the year in which the funds are collected, or in an amount exceeding one million dollars ($1,000,000.00).  Furthermore, the City shall not appropriate from funds derived directly from local sources of revenue an amount for the program in excess of the total amount approved by the voters.  These restrictions on the appropriation of funds from local sources of revenue as set out in subsections apply only to the appropriation of funds derived directly from local sources of revenue and not received from program investments, grants, or other forms of funding, or funds which were appropriated but not expended during previous fiscal years.

            3.  Any funds in the Program fund not otherwise restricted from appropriation by reason of the City’s ordinance governing the Program or State statute may be appropriated and spent for the purposes of the Program in any amount and at any time at the discretion of the City Council subject to the annual budget.

       C.  Expenses:

             Program expenses may include (but are not limited to ), loans, property acquisitions, grants, recruitment, technical assistance, infrastructure, administration, qualifying programs as defined in the Program, and other expenses allowed by the Nebraska Local Option Municipal Economic Development Act.  Expenses shall not exceed the funds annually appropriated in the annual budget for the Program.

       D.  Other Economic Funds:

             Appropriations and expenditures made by a city which are authorized by Nebraska State Statute and made according to its provisions are not subject to the Local Option Municipal Economic Development Act and shall be kept separate and distinct form Program funds.

4.   Investments:

      Program funds not currently required or committed for purposes of the Program shall be invested in secure investments (insured deposits, collateralized deposits, securities issued by the United States Government or guaranteed by United States Government, securities issued by United States Government Agencies) to assure availability of funds to meet program requirements.  To the extent possible local financial institutions shall be utilized for deposit and investment of funds.

5.   Audit:

      The City Council shall provide for an annual, outside and independent audit of this Program by a qualified private auditing firm or individual pursuant to the requirements of the Nebraska Local Option Municipal Economic Development Act.  The auditing business shall not, at the time of the audit or for any period during the term subject to the audit, have any contractual or business relationship with any qualifying business receiving funds or assistance under the Program or any financial institution directly involved with a qualifying business receiving funds or assistance under the Program.  The results of said audit shall be filed with the City Clerk and made available for public review during normal business hours.

6.   Administration:

       A.  The Program Administrator:

             The Mayor of the City of Grant with approval of the City Council shall appoint the Program Administrator for the Grant Economic Development Plan.  The Program Administrator’s duties shall include:

              1.  Responsible for the day-to-day activities of administering the Program.

              2.  The Program Administrator recommends the annual budget of the Program to the Council, and is responsible for Program compliance to the approved budget;

              3.  Assist applicants and conduct active recruiting for potential applicants;

              4.  Serve as a non-voting member of the Citizen Advisory Review Committee.  The Program Administrator shall provide this committee with necessary advice and information, and will prepare and submit reports, requests, and concerns of this Committee to the Council;

              5.  Maintain all files required by the Program at the City offices, and keep separate a file of all real estate, infrastructure and construction projects funded by the program;

              6.  Take appropriate action to maintain the integrity of the program and its funds, including retaining experts to invest, audit and collect Program funds;

              7.  The Program Administrator shall review the recommendations of the Citizens Advisory Review Committee and either accept and follow its recommendations, or submit the recommendations to the City council for further action.  The decision of the City Council is final action.  If disapproval or re-negotiation is recommended by or the Program Administrator or the City Council, specific reasons shall be cited.

       B.   Citizens Advisory Review Committee:

              1.  The Citizens Advisory Review Committee shall consist of no less than five or more than ten citizens who are registered voter of the City of Grant, and the Program Administrator who shall be a non-voting ex officio member.  The term of the Committee members shall be four years.  The Committee member shall be appointed by the Mayor with approval of the City Council.  At least one member of the Committee must have expertise or experience in the field of business, finance or accounting.  No appointed member of the citizen’s advisory review committee shall be an elected or appointed city official, an employee of the city, a participant in a decision making position regarding expenditures of program funds, or an official or employee of any qualifying business receiving financial assistance under the economic development program or of any financial institution participating directly in the economic development program.

              2.  The Citizens Advisory Review Committee will meet as required to review application, recommendations or concerns by the Program Administrator, to review loan applications, monitor existing loans, and to review the Program (but no less than quarterly).

              3.  This Committee shall report to the City Council on its findings, suggestion, and recommendations at such times it determines necessary or at any time the City Council or Mayor Requests.

              4.  The Citizens Advisory Review Committee shall submit semi-annual accountings, findings and summaries at a public hearing called for that purpose at the first regular scheduled meeting in January and July.  The Committee shall assure that the annual Program audit includes information necessary for a complete audit of the Loan Program.

              5.  The Citizens Advisory Review Committees is in charge of the primary administration of the Loan Program.  It will monitor the individual loan accounts of the Loan Program.  It will monitor the individual loan accounts of the Loan Program, and make a recommendation to the Program Administrator what is necessary for the applicant to accomplish a successful loan (in making the recommendation, the Committee shall consider collateral and other security, business plans, outside income, and other criteria it believes is necessary for a successful loan repayment, and may also recommend alternatives to a standard loan, additional information, and documents necessary for a valid loan, including security documents).

              6.  The Citizens Advisory Committee shall submit to the Mayor and City Council concerns as to impropriety, fraud or deceit in the Program.

       C.   Grant City Council:

              1.  The Grant City Council (governing board):

                    a.  Approves the annual budget for the Program.

                    b.  Approves expenditures of the Program funds.  This approval shall be made in the form of a motion or resolution at a special or regular meeting of the City Council.

                    c.  Has ultimate responsibility for the Grant Economic Development Program.

7.   Eligibility:

      The Grant Economic Development Program may provide direct or indirect financial assistance to “qualifying businesses” for “eligible activities” as allowed by the Local Municipal Option Economic Development Act and the Program.

       A.   Qualifying Business:

              1.  Any corporation, partnership, limited liability company, or sole proprietorship which derives its principal source of income from any of the following: manufacture of articles of commerce; the conduct of research and development; the processing, storage, transport, or sale of goods or commodities which are sold or traded in interstate commerce; the sale of services in interstate commerce; headquarters facilities relating to eligible activities as listed in this section; telecommunications activities, including services providing advanced telecommunications capability; or tourism-related activities.

              2.  A business shall also be a qualifying business if it derives its principal source of income for the construction or rehabilitation of housing.

              3.  So long as the City has a population of two thousand five hundred inhabitants or less, a business shall be a qualifying business even though it derives its principal source of income from activities other than those set out in this section including retail.

              4.  If a business which would otherwise be a qualifying business employs people and carries on activities in more than one city in Nebraska or will do so at any time during the first year following its application for participation in an economic development program, it shall be qualifying business only if, in each such city, it maintains employment for the first two years following the date on which such business begins operations in the city as a participant in its economic development program at a level not less than its average employment in such city over the twelve-month period preceding participation.

              5.  A qualifying business need not be located within the territorial boundaries of the City of the Grant City Council determines that there is clear economic benefit to the City.  Eligible qualifying businesses may apply more than once and receive program benefits more than once.

       B.   Eligible Activities:

              “Eligible Activities” mean those activities allowed by the Local Option Municipal Economic Development Act for the purpose of providing assistance to qualified business or for related expenses of the Program.  Eligible activities include, but are not limited to:

              1.  Direct loans or grants to qualifying businesses for fixed assets or working capital or both;

              2.  Loan guarantees for qualifying business;

              3.  Grants for public works and infrastructure improvements which are essential to the location or expansion of, or the provision of new services by, a qualifying business, including, but not be limited to street, storm drainage, water, sewer, gas , electric or railroad extensions;

              4.  Grants or loans for job training;

              5.  Purchase of real estate, options for such purchases, and the renewal or extension of such options;

              6.  Issuance of Program qualified bonds;

              7.  Payments for salaries and support of city staff to implement the Program or the contracting of such to an outside person or entity;

              8.  Business and industry recruitment;

              9.  Incentives for business and industry investment and job creation;

              10.  Purchase for commercial or industrial site(s) and obtaining potions for the purchase for such real estate;

              11.  Grants or loans for construction of facilities, structures, and/or appurtenances for new or proposed qualifying business or for a speculative basis to attract new business or industry

8.   Application To The Program:

       A.   In order to be considered for Program benefits, a qualifying business shall first become an “Applicant” by applying to the City for assistance.  The application shall contain information as required by the Program and any additional information as may be requested by the Program Administrator, the Citizen Advisory Review Committee, or the City Council.

       B.   Upon receipt of an application and a non-refundable fee of $100, the Program Administrator shall make a preliminary determination as to whether:

              1.  The Applicant is eligible;

              2.  The proposed activities are eligible;

              3.  The Applicant has no legal actions underway that may significantly impact its capacity; and

              4.  The business complies with the provisions of the application guidelines.

       C.   Once the Program Administrator makes a determination that the application appears to be complete and viable, the application is referred to the Citizens Advisory Review Committee.  Completed applications shall be submitted to the Committee in the same order they are received.  The Citizen’s Advisory Review Committee shall review the application to include any financial information furnished and provide recommendations to the Program Administrator concerning negotiations with the Applicant.  Once the Citizens Advisory Review Committee has completed its review, and following any additional negotiations conducted by the Program Administrator, the Citizens Advisory Review Committee shall make a recommendation that:

              1.  The application be approved;

              2.  The application be disapproved; or

              3.  The Committee is not able to make a recommendation due to lack of information or other factors to be cited by the Committee.  Approval or Disapproval will be based on whether the Applicant is able to show:

                   a.  Eligibility for funding; and

                   b.  That the type and level of assistance will not unduly enrich the business or be unreasonable in relation to the public benefit to be achieved from the funding.  If the recommendation is “disapproval” or the Citizen Advisory Review Committee is “not able to make a recommendation”, the reasons will be cited.  Recommendations for disapproval by the Citizen Advisory Review Committee will be final, subject to review and possible approval by the City Council.

              4.  All recommendations of the Citizen Advisory Review Committee for approval of a project, the City Council shall generally not be presented with any information, which has been determined, by the Program Administrator or the Citizens Advisory Review Committee as “confidential”.  An Applicant, which has been awarded funding under the Program, shall be referred to as a “Funded Business”.  All decisions by the City Council will be deemed final, subject to review and modification by the City Council consistent with the contractual rights of any parties involved.

              5.  There shall be no limit on the number of times that a Qualifying Business may apply for assistance.  Applications shall be received until all funds anticipated for the Program have been committed.  The decision as to whether or not Program benefits shall be granted is at the sole discretion of the City Council.

              6.  The Citizen Advisory Review Committee and the Program Administrator shall develop guidelines and application forms for the procedures of applying and approval of projects that comply with this ordinance.  These guidelines shall be approved by the Council and should require from the applicant at the minimum:

                   a.  A detailed description of the proposed project.

                   b.  A business plan, including employment and financial projects.

                   c.  Current financial statements, financing requirements for the project, and total project cost.

                   d.  A completed Program application for financial assistance.

                   e.  Additional information, necessary to determine the economic viability of the proposed project(s).

9.   Loan Program:

       A.   Conditions:

              1.  Loan Amount- funds for a single project shall not exceed the amount of funds available under the Economic Development Program during the project term, nor shall it provide for more than 50% or the applicant’s total project costs.  The maximum loan amount will generally not exceed $25,000 per quality job created and maintained for a minimum of two years.

              2.  Equity- Applicant must have minimum equity investment of 10%.

              3.  Interest Rate- Interest rates will be negotiated on a case by case basis and shall generally be fixed at prime less 1 basis point on the day of loan approval with a 2% floor.

              4.  Collateral- Security for the loan will include, but not be limited to, Promissory Notes, Mortgages or Deed of Trust and Personal and/or Corporate Guarantees and may be in a subordinate position to the primary lender.

              5.  Terms- Terms will be negotiated on a case by case basis not to exceed 10 years.

              6.  Period of Payment- A loan payment schedule providing for monthly, quarterly or annual payments will be approved in conjunction with project approval.

       B.   Loan Closing:

             At the time of loan closing the city attorney and the program administrator will follow proper procedure to ensure documentation for the loan or grant is completed.

       C.   Loan Default:

             The City Superintendent will be responsible for contacting the borrower if a payment is in default. If a payment is more than 30 days in default, a letter will be sent by the City Superintendent to the borrower requesting immediate payment.  If a payment or arrangements are not made within 10 days of the letter a meeting with the City Superintendent, program director, and the advisory committee may be called to determine appropriate action.

       D.   Loan Forgiveness or Grant:

              Loan forgiveness or grant is an option in the City of Grant’s Economic Development Plan.  If the Advisory Committee determines that the forgivable loan or grant is in compliance with the Development Plan, it may pass its recommendation on to the City Council.  Loan forgiveness must be negotiated prior to loan closing.  Forgivable, performance based loans or grants will be considered in regard to one or all of the following criteria:

              1.  The level and duration of job creation/job retention being proposed as job performance requirements to be met by the benefited business.

              2.  Level of economic impact to the community.

              3.  The overall wage levels being paid by the benefited business.

              4.  An assessment of the ability of the benefited business to repay the loan if the job performance requirements are not met.

10.   Confidentiality:

         A.   Confidential information will be that information that is provided by the applicant, declared to be confidential by said applicant, and may be withheld from the public pursuant to Neb. Rev. Stat. 84-712-.05.

         B.   The applicant may remove the “confidential” characterization at any time in writing to the Program Administrator at which said information shall be declassified.

         C.   The Program Administrator and the Advisory Committee will be responsible for development of procedures to insure the confidentiality of business information received from applicants for financial assistance. These will include a restriction on the number of people with access to the files with the responsibility for their review to sign statements of confidentiality regarding all personal and private submission of applicants.

         D.   The Program Administrator, Advisory Committee, and the City Attorney shall have access to confidential information for their review for program benefits.  Said information shall be clearly identified as “confidential” by the Program Administrator and shall be kept in a separate secure file in the City offices.

         E.   If it is determined by the Program Administrator that it is necessary for said “confidential” information be declassified to obtain program benefits, the applicant shall be so notified. If applicant refused to declassify the information, no program benefits shall occur and the information shall be returned to the applicant.

         F.   It shall be a Class III Misdemeanor and punishable as any other Class III Misdemeanor in the State of Nebraska for a person to disclose program confidential information.