07/22/2003 Ordinances 8830
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ORDINANCE NO. 8830
An ordinance to adopt an economic development program for the City of Grand
Island; to repeal any ordinance or parts of ordinances in conflict herewith; and to provide for
publication and the effective date of this ordinance.
WHEREAS, at its November 26, 2002 meeting, the Grand Island City Council
approved Resolution 2002-366 which set forth an economic development program for the City of
Grand Island which was prepared in conformity with Neb. Rev. Stat. S18-2710; and
WHEREAS, Resolution 2002-366 further authorized a special election on May 6,
2003 to present the economic development program to the voters of the City of Grand Island;
and
WHEREAS, on May 6,2003, the voters of the City of Grand Island approved this
economic development program; and
WHEREAS, Neb. Rev. Stat. S18-2714 requires that the economic development
program be established by ordinance in conformity with the terms of such program as set out in
the original enabling resolution.
BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE CITY OF
GRAND ISLAND, NEBRASKA:
SECTION 1. The City Council of Grand Island, Nebraska, hereby establishes the
Economic Development Program as approved in Resolution 2002-366 and as set forth in Exhibit
"A" attached hereto and made a part hereof by this reference.
SECTION 2. Any ordinances or parts of ordinances in conflict herewith be, and
hereby are, repealed.
Approved as to Form IX
July 18, 2003
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ORDINANCE NO. 8830ont.)
SECTION 3. This ordinance shall be in force and take effect from and after its
passage and publication, within fifteen days in one issue of the Grand Island Independent as
provided by law.
Enacted: July 22, 2003.
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Attest:
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RaNae Edwards, City Clerk
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Exhibit "A"
CITY OF GRAND ISLAND, NEBRASKA
ECONOMIC DEVELOPMENT PROGRAM
General Community and Economic Development Strategy
November 20, 2002
In order for Grand Island to continue to grow and prosper, we need to broaden our wealth
producing economic base by bringing to our community new employers and helping our existing
companies to grow. Unfortunately, communities all across the nation are faced with potential
loss of jobs due to mergers, corporate takeovers, and changing economic events. It is becoming
increasingly difficult for our community to absorb the loss of this type of employment.
Faced with this challenge, it is the intent of the City to save the existing job opportunities within
the community and secure future additional jobs for Grand Island's residents. The formation of
an economic development program will provide a mechanism for assisting businesses interested
in locating in Grand Island or those interested in expanding their existing businesses. It will take
local participation in a financial partnership to develop this new program. Our only means for
acquiring the needed funds to carryon an economic development program is through an
affirmative vote ofthe citizens of Grand Island to support this project.
Need and Purpose
An economic development program is a community tool that encourages and stimulates the
growth of quality jobs, attracts permanent investment, broadens the tax base, and diversifies the
region's economic base that will lead to new opportunities and options for all citizens, ultimately
improving the quality of life for all taxpayers in Grand Island and the surrounding region.
Grand Island's best chance of long term growth and prosperity will come with increased
diversification with an overall goal of increasing per capita and median household incomes
throughout Grand Island and Hall County. Taking into consideration the very low
unemployment rates that Hall County has experienced in the 1990's, our focus will be on
attracting capital intensive instead of labor intensive businesses - businesses that hire skilled
laborers to complement million-dollar production equipment and machinery. In addition, we
will be targeting businesses that will provide employment opportunities for those who are
underemployed in Hall County and those seeking professional positions.
SECTION I. GENERAL COMMUNITY AND ECONOMIC DEVELOPMENT
STRATEGY
The Nebraska Legislature, in the Local Option Municipal Economic Development Act Neb. Rev.
Statutes 18-2701, et seq., has made the following legislative findings: (1) there is a high degree
of competition among states and municipalities in our nation in their efforts to provide incentives
for businesses to expand or locate in their respective jurisdictions; (2) municipalities in Nebraska
are hampered in their efforts to effectively compete because oftheir inability under Nebraska law
to respond quickly to opportunities or to raise sufficient capital from local sources to provide
incentives for business location and expansion decisions which are tailored to meet the needs of
the local community; (3) the ability of a municipality to encourage business location and
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Exhibit "A"
expansion has a direct impact not only upon the economic well-being of the community and its
residents but upon the whole State as well; and (4) there is a need to provide Nebraska
municipalities with the opportunity of providing assistance to business enterprises in their
communities, whether for expansion of existing operations or creation of new businesses, by the
use of funds raised by local taxation when the voters of the municipality determine that it is in
the best interests of their community to do so.
The City of Grand Island faces stiff competition to recruit businesses to the community and to
retain businesses that not only are presently operating in the community but also are considered
anchors of the economic vitality of the City.
The City, through the Economic Development Corporation, has competed as best it could to
bring new business and new well paying jobs to the community, but frankly has less ability to
compete by not having available the tools granted by the Local Option Municipal Economic
Development Act. The City believes that not having the ability to directly fund economic
development activities in the past may have cost jobs and capital investment which otherwise
would have been realized. The effect is to hamper growth of the tax base of the City.
Only by adoption of an economic development program can the City of Grand Island directly
contribute to economic development projects and thereby compete successfully for location of
manufacturing facilities and other businesses to our community and retain those excellent
employers currently within our community. The well paying jobs and talented employees
employed in these fields are critical to Grand Island. Those jobs are among the highest paying in
the community and they attract the most capable and talented people in the work force. Absent
approval of the program by the voters, other communities and states could become more
attractive as the potential site for business and industry. Grand Island becomes less competitive.
The foregoing is a practical example of the underlying basis for the legislative findings set out in
the Local Option Municipal Economic Development Act.
The Local Option Municipal Economic Development Act became effective June 3, 1991, and
authorizes cities and villages to appropriate and spend local sales tax and property tax revenues
for certain economic development purposes. An economic development program formulated by
the City to implement this legislation is subject to the vote of the people.
The core of the process involves the formulation of a proposed plan for a local economic
development program. The program forms the foundation for the expenditure of local tax
revenues for economic development. Because the development and utilization of an economic
development program is truly a plan for the community, the Economic Development Fund will
be administered by a Citizens' Review Committee appointed by the Mayor and approved by the
City Council. The Committee would be comprised of seven members from the community.
Three at large members would be recommended for appointment by the Grand Island Area
Economic Development Corporation. All members must be registered voters in the city of
Grand Island. It is recommended that professionals in the fields of accounting and banking and
finance, small business owners, and business professionals be included on the Citizens' Review
Committee. At least one member of the Committee shall have expertise or experience in
business finance and accounting as a banker or accountant, at least one member of the
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Exhibit "A"
Committee shall be a business owner. No member shall be an elected or appointed City
Official, an employee of the City, an official or employee of any qualifying business receiving
financial assistance under the Program or an official or employee of any financial institution
participating directly in the Program. The City Administrator or designee will serve as Liaison
to the Economic Development Corporation.
The City has prepared the Program for submission, first to the City Council and, upon Council
approval, to the voters of Grand Island. The Legislature of the State of Nebraska has made
available through the Act an invaluable tool to recruit new businesses and to retain and expand
businesses presently located in a community. The City intends to use this tool to spur further
economic development within the City. The City seeks, through the Economic Development
Program, to be more competitive or at least as competitive in the economic development area as
any other community in this or any other State of comparative size. With voter approval, the
provisions of the Program become the basis for funding the economic development program and
thereby expanding job opportunities and the tax base in our community.
Through voter approval of the Economic Development Program, the City would be in a position
to operate a low-interest, performance based revolving loan fund, provide job creation
incentives, equity participation, interest buy downs, acquire commercial and industrial sites,
promote their development, and bond the costs of economic development pending sufficient
general fund revenues. The City proposes that funding from the City's general fund be dedicated
for the economic development program.
SECTION II.
STATEMENT OF PURPOSE DESCRIBING GENERAL
INTENT AND PROPOSED GOALS
The general intent and goal of the Grand Island Economic Devel9pment Program is to provide
well paying jobs to the citizens of Grand Island, Nebraska, by encouraging and assisting local
businesses to expand as regards job creation and capital investment and to recruit new qualified
businesses which results in creation of jobs and expansion of the tax base. The success of the
Program will be measured by the number of jobs created and retained for the length of the
Program, the total dollars invested in fixed assets, i.e., buildings, new commercial real estate and
business equipment and finally, the growth in total valuation in the City. Each project will be
considered on its merits, but priority will be given to jobs created and/or retained at or above
average wage and benefits for the community.
SECTION III.
TYPES OF ECONOMIC ACTIVITIES THAT WILL BE ELIGIBLE
FOR ASSISTANCE
A. Definition of Program
Economic Development shall mean any project or program utilizing funds derived from the
City's General Fund, which funds will be expended primarily for the purpose of providing direct
or indirect financial assistance to a qualifying non-retail business, the payment of related costs
and expenses, and/or through a revolving loan fund. The purpose of the Program is to increase
job opportunities and business investment within the community.
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Exhibit "A"
B. Eligible Activities
The Economic Development Program may include, but shall not be limited to, the following
activities:
1) A revolving loan fund from which performance based loans will be made to non-retail
qualifying businesses on a match basis from the grantee business and based upon job
creation and/or retention, said jobs to be above the average wage scale for the
community.
2) Public works improvements and/or purchase of fixed assets, including potential land
grants or real estate options essential to the location or expansion of a qualifying business
or for capital improvements when tied to job creation criteria or when critical to retention
of jobs of a major employer within the community, which equity investment may be
secured by a Deed of Trust, Promissory Note, DCC filing, personal and/or corporate
guarantees or other financial instrument.
3) The provision of technical assistance to businesses, such as preparation of financial
packages, survey, engineering, legal, architectural or other similar assistance and
payment of relocation or initial location expenses.
4)
The authority to issue bonds pursuant to the Act.
5)
Grants or agreements for job training.
6) Interest buy down agreements or loan guarantees.
7) Other creative and flexible initiatives to stimulate the economic growth in the Grand
Island area (activities which may be funded through the Economic Development
Program or General Fund as authorized by Section 13-315 R.R.S.).
8) Commercial/industrial recruitment and promotional activities.
9) Payments for salaries and support of City staff or the contracting of an outside entity to
implement any part of the Program.
10) End Destination Tourism Related Activities.
11) Reduction of real estate property taxes for City of Grand Island to stimulate local
economy.
12)
Development of low to moderate income housing.
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Exhibit "A"
SECTION IV.
DESCRIPTION OF TYPES OF BUSINESSES THAT WILL BE
ELIGIBLE
A. A qualifying business shall mean any corporation, partnership, limited liability company
or sole proprietorship that derives its principal source of income from any of the
following:
1. The manufacturer of articles of commerce;
2. The conduct of research and development;
3. The processing, storage, transport, or sale of goods or commodities which are
sold or traded in interstate commerce as distinguished from goods offered for
sale at retail locally;
4. The sale of services in interstate commerce as distinguished from services
offered on a local or area basis;
5. Headquarters facilities relating to eligible activities as listed in this section;
6. Telecommunications activities; or
7. End Destination Tourism-Related Activities.
B. A qualifying business must be located within the zoning jurisdiction of the city unless a
variance is granted for special circumstances.
C. Any other business deemed a qualifying business through future action of the Legislature.
SECTION V.
REVOLVING LOAN FUND
A. The amount of funds available for any 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 fifty percent (50%) of total project costs. An applicant must provide
participation and evidence of participation through private funding as distinguished from
federal, state, or local funding in the minimum amount of fifteen percent (15%) equity
investment. The right is reserved to negotiate the terms and conditions of the loan with each
applicant, which terms and conditions may differ substantially from applicant to applicant.
B. The interest rate shall be negotiated on an individual basis. The term shall not exceed fifteen
(15) years for loans used for real estate and building assets and not to exceed seven (7) years
for loans involving any other asset category such as furniture, fixtures, equipment or working
capital. Security for loans will include, but will not be limited to, Promissory Notes, a Deed
of Trust, DCC filings and personal and/or corporate guarantees as appropriate and may be in
a subordinate position to the primary commercial or government lender.
C. If the loan is approved as performance based, a qualifying business may be approved to
recapture on a grant basis a portion of the loan amount to be determined by the Economic
Development Corporation based upon job creation or retention and economic impact of the
project to the community.
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Exhibit "A"
D. A loan repayment schedule providing for monthly, quarterly or annual payments will be
approved in conjunction with project approval. Repayments will be held in a revolving reuse
loan fund for future projects as approved.
E. The City Administrator or his designee is responsible for auditing and verifying job creation
and retention and determines grant credits toward any loans made. No grant credits are
available unless pre-approved in the initial application and project approval and no grant
credits are available beyond the level initially approved.
F. The Revolving Loan Fund and its portfolio of loan funds will be audited annually by a
selected firm of certified public accountants. The audits will be funded by the Economic
Development Fund and the findings will be presented to the Citizens' Review Committee.
G. It is anticipated that the Program can be fully administered by the Community Projects
Director. Financial assistance will be provided by the Finance Department.
SECTION VI.
SOURCE OF FUNDING
The Program will be funded from local sources of revenue, including property taxes and/or sales
taxes, contained in the City's general fund. The City shall not appropriate from these funds for
approved Economic Programs, in any year during which such programs are in existence, an
amount in excess of four-tenths of one percent of actual valuation of the City of Grand Island in
the year in which the funds are collected, and further, will be subject to the limitation that no city
of the First Class shall appropriate more than two million dollars in anyone year. The City of
Grand Island shall appropriate $750,000 annually for the Economic Development Program. The
restrictions on the appropriation of funds from local sources of revenue shall not apply to the re-
appropriation of funds that were appropriated but not expended during the previous fiscal years.
If, after five full budget years following initiation of the approved Economic Development
Program, less than fifty percent of the money collected from local sources of revenue is spent or
committed by contract for the Economic Development Program, the governing body of the City
shall place the question of the continuation of the City's Economic Development Program on the
ballot at the next regular election.
A. Time Period for Collection of Funds
Annual funding for the program, $750,000 per year, will come from the City's General
Fund. These funds will be allocated commencing with the FY 2003-2004 budget year,
beginning October 1, 2003 and will continue for 10 years.
B. Time Period for Existence of the Program
The Economic Development Program will be in effect beginning October 1, 2003 and will
continue for 10 years.
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Exhibit "A"
C. Proposed Total Collections from Local Sources
Fiscal Year Estimated Collections
2003-2004 $750,000 (General Fund revenues)
Every year for 9 years thereafter $750,000 (General Fund revenues)
The total amount of City General Fund revenues to be committed to the Economic Development
Fund Program for 10 years is $7,500,000.
D. Basic Preliminary Proposed Budget
It is anticipated that the proposed annual total budget of $750,000 will be allocated to the
Economic Development Fund. Any funds not expended in the revolving loan category will be
used to fund the other eligible activities as set out in Section III above.
SECTION VII.
APPLICATION PROCESS FOR FINANCIAL ASSISTANCE TO
BUSINESSES
A. Application Process and Selection of Participants:
Businesses seeking assistance will be required to:
1. Complete an application which may be obtained from the Grand Island Area
Economic Development Corporation or the City of Grand Island.
2. Submit the completed application together with all information as set out below to the
Grand Island Area Economic Development Corporation or the City of Grand Island.
Following review by the Economic Development Corporation Executive Board and
Citizens' Advisory Review Committee, an overview of the proposed application for
assistance will be forwarded by the Citizens' Advisory Review Committee to the
Mayor and City Council. The overview shall contain sufficient information in order
for the elected officials to make an informed decision yet maintain confidentiality of
information that, if released, could cause harm to such business or give unfair
advantage to competitors. The City Council will approve or deny the application.
3. The Community Projects Director, as Program Administrator, will coordinate with
the Economic Development President to notify any applicant whose application is not
approved. Such applicant may request in writing that the application, with the
recommendation not to approve, be forwarded to the City Council for re-
consideration.
B. Information Required:
The qualifying business shall provide the following information before any application is
considered by the Economic Development Executive Board and the Citizens' Advisory Review
Committee:
I Sole Proprietorship:
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Exhibit "A"
1).
2).
3).
4).
5).
6).
Submit a Grand Island Economic Development Loan Fund Application
Business Plan
Two years complete Individual Federal Tax Returns (signed)
Current Year to Date Profit and Loss Statement
Recent Balance Sheet (signed)
Other information as requested
"S" Corporation:
1). Submit a Grand Island Economic Development Loan Fund Application
2). Business Plan
3). Two years complete Individual Federal Tax Returns, if over 25% ownership (signed)
4). Two years complete Corporate Tax Returns (signed)
5). Current year to Date Profit and Loss Statement (signed)
6). Recent Balance Sheet (signed)
7). Other information as requested
"C" Corporation:
1).
2).
3).
4).
5).
6).
7).
Submit a Grand Island Economic Development Loan Fund Application
Business Plan
Two years complete Individual Federal Tax Returns (signed), if over 25% ownership
Two years complete Corporate Tax Returns (signed)
Current year to Date Profit and Loss Statement (signed)
Recent Balance Sheet (signed)
Other information as requested
General Partnership:
1). Submit a Grand Island Economic Development Loan Fund Application
2). Business Plan
3). Two years complete Individual Federal Tax Returns, if over 25% partnership (signed)
4). Two years complete Partnership Tax Returns (signed) and K-ls for all partners
5). Current year to Date Profit and Loss Statement (signed)
6). Recent Balance Sheet (signed)
7). Other information as requested
Limited Partnerships:
1). Submit a Grand Island Economic Development Loan Fund Application
2). Business Plan
3). Two years complete Individual Federal Tax Returns (signed) and K-ls for all partners
4). Complete copy of Partnership Agreement for Partnership
5). Other information as requested
Limited Liability Companies:
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Exhibit "A"
1).
2).
3).
4).
5).
6).
7).
Submit a Grand Island Economic Development Loan Fund Application
Business Plan
Two years complete Individual Federal Tax Returns (signed)
Two years complete Entity Tax Returns (signed) and K-ls for all partners
Current Year to Date Profit and Loss Statement
Recent Balance Sheet (signed)
Other information as requested
C. Verification Process:
1). Credit check
2). Dun and Bradstreet Credit Report
3). Examine information required
4). Examine internal records
5). Obtain oral and written verification of application information
6). Other investigations as may be deemed necessary
SECTION VIII.
PROCESS TO ENSURE CONFIDENTIALITY OF BUSINESS
INFORMATION RECEIVED
In the process of gathering information about a qualifying business, the Economic Development
Corporation and City may receive information about the business that is confidential and, if
released, could cause harm to such business or give unfair advantage to competitors. The
Economic Development Corporation and City shall endeavor to maintain the confidentiality of
business records that come into its possession.
To protect businesses applying for assistance and to encourage them to make full and frank
disclosure of business information relevant to their application, the Economic Development
Corporation and City will take the following steps to ensure confidentiality of the information it
receIves:
1) The adoption of a City ordinance that makes such information confidential and punishes
disclosure.
2) A restriction of the number of people with access to the files which files will be
maintained in the Economic Development Corporation Office, who shall be primarily
responsible for their safekeeping and any distribution of information contained therein,
and
3) Require personnel involved in the Program Review, including Economic Development
President, secretarial staff assisting the President, Citizens' Advisory Committee, and
City staff, to sign statements of confidentiality regarding all personal and privatt:
submittals by qualified businesses.
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Exhibit "A"
SECTION IX.
ADMINISTRATION SYSTEM FOR ECONOMIC
DEVELOPMENT PROGRAM
A. Program Administration
1). The Community Projects Director will administer the Economic Development Plan and
Program.
2). The City Administrator and Community Projects Director will also serve as ex-officio
members of the Citizens' Advisory Review Committee hereinafter established, which
Committee will hold regular meetings to review the functioning and process of the
Economic Development Program and advise the governing body of the City with regard
to the Program.
3). The Community Projects Director, in cooperation with the Economic Development
President, will review on a regular basis the progress of ongoing projects to ensure the
qualifying businesses are complying with the terms of any approved project.
4). The Economic Development President and the City Administrator or designee will advise
the Mayor and City Council as regards the status of ongoing projects in the Economic
Development Program.
5). A 3% fee will be retained by the City of Grand Island for program administration. The
3% fee will be retained in the City's general fund.
SECTION X.
PROCESS TO ASSURE LAWS, REGULATIONS AND
REQUIREMENTS ARE MET BY THE CITY AND QUALIFYING
BUSINESSES
The City will assure that all applicable laws, regulations, and requirements are met by the City
and the qualifying businesses that will receive assistance as follows:
A. Program Review
The Ordinance establishing the Program shall provide for the creation of a Citizens'
Advisory Committee to:
1). Review the functioning and progress of the Economic Development Program at regular
meetings as set forth by ordinance and to advise the governing body of the City with
regard to the Program, and
2). Report to the City Council on its findings and suggestions at a public hearing called for
that purpose at least once in every six-month period after the effective date of the
ordinance.
B. Monitor Participating Businesses
The Community Projects Director in cooperation with the Economic Development President or
appointed contract loan administrator will conduct reviews on a regular basis to ensure that
qualifying businesses are following the appropriate laws and regulations and meeting the terms
and conditions of assistance.
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Exhibit "A"
C. Monitor Regulatory Changes
The City Attorney will be responsible for keeping the City informed of relevant changes in the
law that could affect the Economic Development Program and will review Agreements, Deeds,
Leases, Deeds of Trust, Promissory notes, security documents, personal and/or corporate
guarantees and other documents relating to specific projects or to the Program as a whole.
D. The City shall provide for an annual, outside, independent audit of it's Economic
Development Program by a qualified private auditing business.
SECTION XI.
PURCHASE OF REAL ESTATE OR OPTION TO PURCHASE
If and when real estate is to be purchased or optioned by the City under the Program, it should
meet the following general criteria:
1). Be properly zoned with no excessive easements, covenants, or other encumbrances, and
2). Should conform and be able to be re-zoned to comply with the City's or County's
Comprehensive Plan.
3). Can be located either within or outside of the City limits.
The proceeds from the future sale of such land would be returned to the Economic Development
Program Fund for reuse for any activities eligible in the Program or for additional land
purchases.
SECTION XII.
INVESTMENT OF ECONOMIC DEVELOPMENT FUND
The City will establish a separate Economic Development Program Fund. All funds derived
from local sources of revenue for the Economic Development Program, any earnings from the
investment of such funds, any loan payments, any proceeds from the sale by the City of assets
purchased by the City under its Economic Development Program, or other money received by
the City by reason of the Economic Development Program shall be deposited into the Economic
Development Fund. No money in the Economic Development Program Fund shall be deposited
in the General Fund of the City except as provided by statute. A 3% administrative fee will be
retained by the City for program administration. This fee will be retained in the General Fund.
The City shall not transfer or remove funds from the Economic Development Fund other than for
the purposes prescribed in the Act and this Program, and the money in the Economic
Development Fund shall not be co-mingled with any other City funds. Any money in the
Economic Development Fund not currently required or committed for the purposes of Economic
Development shall be invested as provided in Section 77-2341 R.R.S. Nebraska. In the event the
Economic Development Program is terminated, any funds remaining will be transferred as
provided by statute to the General Fund of the City and will be used on an installment basis to
reduce the property tax levy of the City as provided by the Act.
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