Ordinance No. 4,926Page 80225 -1
ORDINANCE NO. 4926
AN ORDINANCE AUTHORIZING AND DIRECTING THE MAYOR TO
EXECUTE AND THE CITY CLERK TO ATTEST TO AN AGREEMENT
WITH THE BAYTOWN AREA /WEST CHAMBERS COUNTY ECONOMIC
® DEVELOPMENT FOUNDATION FOR THE ADMINISTRATION OF A SMALL
BUSINESS REVOLVING LOAN PROGRAM; AND PROVIDING FOR THE
EFFECTIVE DATE HEREOF.
E
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: That the City Council of the City of Baytown,
Texas, hereby approves an agreement with The Baytown Area /West
Chambers County Economic Development Foundation for the
administration of a Small Business Revolving Loan Program, and
authorizes and directs the Mayor and City Clerk of the City of
Baytown to execute and attest to said agreement. A copy of said
agreement is attached hereto, marked Exhibit "A," and made a part
hereof for all intents and purposes.
Section 2: This ordinance shall take effect immediately
from and after its passage by the City Council of the City of
Baytown.
INTRODUCED, READ and PASSED by the affirmative vote of the
City Council of the City of Baytown, this the 25th day of
February, 1988.
MET
T 0. HUTTO, Mayor
ATTEST:
EILEEN P. HALL, City Clerk
RANDALL B. STR G, Cit torney
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AGREEMENT FOR ADMINISTRATION OF SMALL
BUSINESS REVOLVING LOAN PROGRAM
® STATE OF TEXAS:
COUNTY OF HARRIS:
This agreement is made as of the day of
, 1988, by and between the City of Baytown (City)
and the Baytown Area /West Chambers County Economic Development
Foundation (Foundation) .
W I T N E S S E T H:
WHEREAS, the City and the Foundation desire to create
economic growth and expansion in the Baytown area, as well as
create employment opportunities for low and moderate income
persons; and
WHEREAS, the City and the Foundation desire to make the
financing needed for the growth and expansion of small businesses
more readily available within the Baytown area; and
WHEREAS, the City has funds available for use in a small
business revolving loan program that were provided by the
Department of Housing and Urban Development under Contract No.
B- 87- 1MC -48 -0033; and
WHEREAS, the City and the Foundation desire that the
Foundation administer and operate a small business revolving loan
program utilizing the above described funds for and in behalf of
the City in order to promote the public goals described above;
NOW THEREFORE, for and in consideration of the premises and
mutual convenants herein contained, it is agreed as follows:
Section 1: The Foundation shall administer and operate for
and in behalf of the City of Baytown a small business revolving
loan program utilizing funds provided by the Department of
Housing and Urban Development as described above. Such
administration and operation by the Foundation shall be pursuant
to the procedures and requirements set forth in attachment 'A' to
this agreement, which attachment is entitled "City of Baytown,
HUD -CDBG, Small Business Revolving Loan Program ". The Foundation
® shall also comply with all federal and state requirements that
pertain to such programs, including all rules, regulations and
requirements of the Department of Housing and Urban Development.
Section 2: The Foundation shall prepare and submit to the
City, within 30 days from the end of each calendar quarter during
the term of this contract, or at the first City Council meeting
thereafter, verbal or brief written reports describing the
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services performed by the Foundation pursuant to this agreement
during the previous quarter. Such report shall also summarize
the services and activities performed by the Foundation in
previously reported quarters.
Section 3: This agreement shall be effective for one year
beginning March 1, 1988. This agreement may, however, be renewed
for subsequent one -year periods upon mutual agreement of the
parties. Either party may for any reason terminate this
agreement upon thirty days prior written notice to the other
party.
Section 4: For and in consideration of the services to be
performed by the Foundation and in compliance with the terms of
this agreement, the City agrees to pay to the Foundation the
total sum of $250.00, payable March 1, 1988. It is the intent of
the parties that this amount be sufficient to cover the material
supply expense of the Foundation and cost of administering
operation of this program. This amount may be adjusted on
agreement of the parties if and when this agreement is renewed
for additional one -year periods.
Section 5: Funds to be used for the revolving loan program
will be supplied by the City of Baytown, with the amount to be
determined by the City Council of the City of Baytown.
Additional funds may be placed within the revolving loan program
by the City of Baytown upon appropriation by the City Council for
such purposes.
Section 6: Failure
strict performance of any
any rights or remedies
failure of performance
right to insist on and to
conpliance with any other
right or remedy occurr
failure of performance.
of either party hereto to insist on the
of the agreements herein or to exercise
accruing thereunder upon default or
shall not be considered a waiver of the
enforce by an appropriate remedy strict
obligation hereunder or to exercise any
ing as a result of any future default or
Section 7: Any notice required or permitted hereunder shall
be in writing and shall be delivered to the following parties:
Executive Director
Baytown Area /West Chambers County
Economic Development Foundation
Suite 403
1300 Rollingbrook
® Baytown, Texas 77521
City Manager
City of Baytown
P. 0. Box 424
Baytown, Texas 77522
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10 Section 8: This written agreement contains all the
agreements of the parties relating to the subject matter hereof,
and is full and final expression of the agreement between the
parties.
® In witness whereof, the parties have made and executed this
contract in multiple copies, each of which shall be an original.
ATTEST:
EILEEN P. HALL, City Clerk
ATTEST:
Secretary
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CITY OF BAYTOWN
MMETT 0. UTTO, Mayor
BAYTOWN AREA /WEST CHAMBERS
COUNTY ECONOMIC DEVELOPMENT
FOUNDATION
CONRAD MAGOUIRR, Chairman
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CITY OF BAYTOWN
HUD - CDBG
SMALL BUSINESS REVOLVING LOAN PROGRAM
I. Goals and Objectives:
A) To create employment opportunities for low and
moderate income persons.
B) To create growth and expansion within the City of
Baytown.
II. Loan Terms and Conditions:
A) The City shall loan up to $50,000 but not greater
than 25% of the total cost of the project. The
remainder of the project cost must be comprised of
conventional loans and owner's equity, such equity to be
not less than 10% of the total cost of the project.
B) The city loan will take a "subordinate lien position"
to the conventional lender. However, the City reserves
the right to purchase the first lienholder's
encumbrances.
C) The term of the City loan may not exceed the term of
the conventional loan.
D) The City loan shall be made at a rate of interest of
4% per annum.
E) Loan funds may be used solely for acquisition or
construction of fixed assets with a depreciable life of
no less than ten (10) years. Funds may not be used for
reconditioning, refurbishing or repairing.
F) The borrower agrees to create or preserve a minimum
of three (3) jobs regardless of the amount of the loan
and also agrees that not less than fifty -one percent
(51 %) of new jobs created as a result of the Small
Business Revolving Loan Program shall be filled by low
and moderate income residents of the City of Baytown.
Documentation that every effort was made to hire
® low /moderate income citizens will be required.
G) The borrowers shall not engage in any discriminatory
practices based upon an individual's race, color, creed,
j sex or national origin.
HIBBI6 A
0 III. Administrative Procedures:
A) The Community
application and
funds will be
requirements.
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Development staff shall formulate an
review process that ensures program
utilized in conformance with HUD
B) The Baytown /West Chambers County Economic Development
Foundation under contract to the City shall originate
all applications. An application submitted to the City
staff for review shall include the following:
1) Project narrative detailing the company
history and type of product or service, number
of new jobs, and proposed uses of funds.
2) Project budget which includes line item
budget identifying proposed sources of funds.
3) Identification of HUD requirements which
are being fulfilled.
C) Functions to be performed by the Foundation staff
are:
1) Review proposals for compatibility with
program guidelines.
2) Assist with preparation of loan
applications.
3) Transmit applications to the Community
Development staff for review and approval.
4) Serve as liaison between applicants and
lenders.
D) Upon favorable review of a proposed project, the
borrowers shall receive a "Letter of Qualification" from
the Community Development staff, listing the conditions
and amount of the loan.
E) The "Letter of Qualification" will be used in
acquiring a conventional loan. The conventional lender
will be responsible for determining credit worthiness of
a project. Upon approval of the total loan package, the
Community Development staff will issue a check payable
to the conventional lender and the borrower. The
conventional lender will disburse both their funds and
the City funds at the time of loan closing. The
borrower shall bear the cost of preparing any and all
legal documents necessary to effectuate both loans.
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F) The conventional lender shall be responsible for
collecting both the conventional and City share of
funds. Semi- annally, the conventional lender will remit
to the City its share of the collections to include
principle and interest, less any pre- arranged service
fee.
G) Throughout the life of the city loan, the City
maintains the right for any of its representatives or
the representative of the Department of Housing and
Urban Development to inspect the borrower's premises,
interview its workers or take any other actions
necessary to insure that goals, objectives and
requirements of the program are being met.
IV. Eligibility Criteria:
A) The borrower warrants that the loan funds are
essential for the preservation or creation of jobs
through a duly licensed business enterprise located
within the corporate limits.of the City of Baytown.
B) Eligible borrowers are those business entities which
are classified as engaging in manufacturing /fabrication,
wholesale distribution and industrial services.
C) There shall be no minimum time period for having been
in business. However, the borrower must be able to meet
surety and collateral requirements of conventional
lending institutions. Additionally, the borrower must
provide evidence that sufficient cash flow exists to
meet operating capital and debt service requirements.
V. Enforcement
Should the borrower fail to meet any of the federal
requirements after the initiation of the loan, the City
may institute appropriate actions to ensure that these
requirements are met.
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