HomeMy WebLinkAboutApplication Guide for Business Financial Assistance1
APPLICANT GUIDE
Economic Development CDBG Funds
(Loans up to $25,000 at 0% interest)
Purpose ......................................................................................................... 2
Referral Sources ............................................................................................ 2
Process ......................................................................................................... 2
Review Criteria .............................................................................................. 3
Special Considerations .................................................................................... 3
Open Records Policy – Economic Development Projects ................................... 4
Job Creation Requirements ............................................................................. 7
Income Guidelines and Definitions .................................................................. 9
Employee Income Report ............................................................................. 10
Annual Employee Performance Report ........................................................... 11
Note: Please be aware that the funds available are federal funds; as
such various federal requirements may apply. Each applicant is
encouraged to speak with Neighborhood Services staff about the
requirements that will apply to your specific business prior to
submitting an application.
Please contact City of Iowa City Neighborhood Services with any questions.
City of Iowa City, Neighborhood Services
410 E. Washington Street, Iowa City, IA 52240
319.356.5230 or neighborhoods@iowa-city.org
Applications available online at www.icgov.org/financialassistance
2
Iowa City CDBG Economic Development Fund
Purpose:
Stimulate private sector investment in Iowa City that results in the creation
and/or retention of permanent, private sector jobs for low-to-moderate
income persons.
Referral Sources:
Referrals accepted by private financial institutions, the Small Business Development
Center, and the public.
If the applicant is referred by a financial institution or the Small Business Development
Center, Neighborhood Services staff will work with the private lender or technical
assistance provider to review the application, the underwriting analysis for the project,
and work with the private lender on a financial package that makes the project viable.
All applicants are encouraged, however not required, to apply to a financial institution
for financing. If applicant does not apply for funding through a financial institution,
the applicant must explain why.
Process:
1) Referral received from a financial institution, SBDC, or directly from the business.
2) Applicant meets with staff. Staff completes a preliminary review. If referred by a
private lender, staff contacts the lender to review the project.
3) City Council Economic Development Committee review and recommendation.
4) Council action.
5) CDBG agreement executed if approved by Council.
6) Recipients must receive pre- and post-award technical and management
assistance from local non-profit providers such as the Small Business
Development Center and/or from participating lenders. If necessary, assistance
may be paid through loan proceeds. For applicants not working through a private
lender, the process begins with the identification of a qualified technical
assistance (T/A) provider approved by the City. The applicant and T/A provider or
participating lender will complete an assessment of the applicant’s management
and business operations strengths and weaknesses. If weaknesses are identified
as a result of that assessment, the participating lender and/or City shall document
the T/A provider’s recommendation and verify the applicant receives the technical
assistance identified as a condition of the award.
7) City monitoring and compliance. At least one on-site monitoring visit will be
scheduled during the compliance period.
3
Review Criteria:
Applications will be evaluated based on the City of Iowa City Financial Assistance
Guidelines established on 9/24/1996, amended 2001, as applicable.
1) Meets all CDBG requirements and creates/retains employment opportunities for
low-to-moderate income persons
2) Applicant’s financial contribution to the project
3) Quality of jobs created
4) Economic Impact – potential for future growth
5) Consistency with the City’s Comprehensive Plan
6) Environmental Impact
Business Plan (start-up businesses):
Plan must demonstrate the feasibility of the business venture
Creditworthiness of the business/applicant
Reliability of the job creation and financial estimates
All private financing options considered
Business plan MUST be readable (font 11 or larger)
The City may verify the following (to verify some of these items, the City may be
required to ask the applicant’s birth date and/or social security number):
Credit history – Applicant Credit Score
Past employment
Current references
Financial institution – verify if assistance approved or denied. If denied,
primary reasons the institution denied the request. If approved, review private
lender’s underwriting analysis.
Any other information as supplied by the applicant on the application and
business plan to assist in evaluating the proposal
Special considerations:
The City will not shop banks.
The City will encourage applicants to seek private financing, but will not
recommend institutions.
Job creation/retention by low-to-moderate income persons is a federal
requirement for CDBG assistance. The City will take all enforcement measures for
repayment if a business fails to create or retain the jobs required by the
Agreement the applicant enters with the City.
The CDBG Economic Development fund is not meant to compete with private
lenders but to provide incentives that lower private sector risk and leverage private
sector dollars in order to expand the amount of capital available to small
businesses.
4
Open Records Policy - Economic Development Projects:
Most documents in the possession of the City are "open records" and available to
the pubic for examination and review. The City may treat a record as a confidential
record and withhold it from examination only to the extent that the City is
authorized by Iowa Code section 22.7, another applicable provision of law, or a
court order.
Any person who would be aggrieved or adversely affected by disclosure of a record
and who asserts that Iowa Code section 22.7, another applicable provision of law, or
a court order authorizes the City to treat the record as a confidential record may
request the City to treat that record as a confidential record and to withhold it from
public inspection.
A request that a record be treated as a confidential record and be withheld from
public inspection shall be in writing and shall be filed with the City Neighborhood
Services Department. If the original record is being submitted to the City by the
person requesting such confidential treatment at the time the request is filed, the
person shall indicate conspicuously on the original record that all or portions of it are
confidential. The request for confidentiality must set forth the legal and factual basis
justifying such confidential record treatment for that record, and the name, address,
and telephone number of the person authorized to respond to any inquiry or action
of the custodian concerning the request. A person requesting treatment of a record
as a confidential record may also be required to sign a certified statement or
affidavit enumerating the specific reasons justifying the treatment of that record as
a confidential record and to provide any proof necessary to establish relevant facts.
Requests for treatment of a record as such a confidential record for a limited time
period shall also specify the precise period of time for which that treatment is
requested.
If the request is denied, the City shall notify the requestor of the determination and
the reasons therefore. On application by the requestor, the City may engage in a
good faith, reasonable delay in allowing examination of the record so that the
requestor may seek injunctive relief under Iowa Code section 22.8, or other
applicable law. The City shall notify requestor in writing of the time period allowed
to seek injunctive relief.
Failure of a person to request confidential record treatment for a record does not
preclude the City from treating it as a confidential record. However, if a person who
has submitted business information to the City does not request that it be withheld
from public inspection under Iowa Code section 22.7, the City may proceed as if that
person has no objection to its disclosure to members of the public.
5
Non-Iowa Economic Development Authority Projects
(Includes Community Development Block Grant Applicants)
The following records are considered confidential and will be withheld from public
inspection:
1. Consumer credit reports (15 U.S.C. 1681b)
2. Income tax returns, employer's contribution and payroll report, and other
"return information" (Iowa Code sections 422.20 and 422.72; 26 U.S.C.
6103(b); and 26 CFR 31.3406(f)-1(a))
The following records may be considered confidential and withheld from public
inspection:
1. Trade secrets (Iowa Code section 22.7(3))
2. Reports which, if released, would given advantage to competitors and
serve no public purpose (Iowa Code section 22.7(6))
Applications competing with other applications under a City-
imposed deadline will be kept confidential until the deadline
passes.
Unless confidential, in whole or part, pursuant to above, the following are not
considered confidential and will be available to the public:
1. Business plan;
2. Profit/Loss Statement;
3. Balance Sheets;
4. Application for City Economic Development Funds
Although the document may be a public record, specific information in the
document, if confidential, will be redacted, such as a social security number or a tax
payer identification number.
6
Summary: Public Disclosure of CDBG Economic Development Applications &
Required Documents per the Iowa Open Records Law
Item: Online-
Downloadable
Economic
Dev.
Committee
& Staff
By
Public
Request
Considered
Proprietary
(not available
to the public)*
Agenda Item X X X
Application (w/o attachments) X X X
Business Plan X X
Balance Sheet X X
Profit and Loss Statements X X
Fringe Benefit Description X X
Management’s Background X X
Social Security Number or Tax Payer
Identification Number
X
Consumer Credit Score X
Employer’s Contribution & Payroll
Report
X
Construction Cost Estimate X X
* The following records may also be considered confidential and withheld from public inspection:
3. Trade secrets (Iowa Code section 22.7(3))
4. Reports which, if released, would given advantage to competitors and serve no
public purpose (Iowa Code section 22.7(6))
(Applications competing with other applications under a City-imposed deadline will be
kept confidential until the deadline passes.)
The applicant may request that a record be treated as a confidential record and be
withheld from public inspection. Please see the Open Records policy to review when
and how to request confidential treatment of a particular document or a portion of a
required document.
7
Job Creation Requirements:
Job Activity
The use of Community Development Block Grant (CDBG) funds for an economic
development loan requires that the activity funded is designed to create or retain
permanent jobs where at least 51 percent of the jobs, computed on a full time
equivalent basis, involve the employment of low-and moderate income persons. To
qualify, the Company must document that at least 51 percent of the jobs will be held
by low and moderate income persons.
Low to moderate income means a household annual income that does not
exceed 80% of the area median income as defined by HUD (see page 9).
Documentation
Agreement
A written agreement is required with the Company in which that Company agrees to
keep or create a specific number of jobs, identifies each such job by type and
whether the job will be full or part time. The agreement must also specify the
actions the Company and City will take to ensure that at least 51% of the jobs
created will benefit low/moderate persons.
Records
To document that jobs will be held by low/moderate income persons, the records
must show:
A listing by job title of the specific jobs to be created
A listing by job title of the jobs filled
The name and income status of the person who filled each position,
and
The full-time equivalency status of the jobs
Document Income Status
Documentation is required that a particular applicant/employee has a household
income which meets the low/moderate income guidelines shall include any one of
the following:
Written certification signed and dated by the employee/applicant
indicating his/her family size and total income as necessary to
determine whether the person is a member of a low/moderate income
family at the time the certification is made. The form must include a
statement that the person making the certification is aware that the
information being provided is subject to verification by the local or
Federal government.
Evidence that the person is homeless
8
Evidence that the employee/applicant was a referral from a state,
county, or local employment agency or other entity that has agreed to
refer individuals whom they have determined to be low/moderate
income based on HUD's criteria.
Evidence that the employee/applicant has qualified for assistance
under another program with income qualification criteria at least as
restrictive as those used by this program
Job Calculation
In counting the jobs to be used in the calculation for determining the percentage
that benefit low/moderate income persons, the following policies apply;
Part time jobs must be converted to full time equivalents (FTE)
Only permanent jobs count; temporary jobs may not be included
Seasonal jobs are considered to be permanent for this purpose only if the
season is long enough for the job to be considered as the employee's
principal occupation
All permanent jobs created must be counted even if the activity has multiple
sources of funds
Jobs indirectly created by an assisted activity ("spin off" jobs) or jobs located
outside the City of Iowa City may not be counted
Reporting
An Annual Employment Performance Report will need to be submitted for each year
ending June 30th (July 1 to June 30) to the City of Iowa City, Neighborhood Services,
410 E. Washington St., Iowa City, IA 52240. Reports are due by July 16 for the
previous fiscal year (July 1 to June 30).
Page 9
TABLE OF INCOME GUIDELINES
Community Development Block Grant (CDBG)
Effective June 6, 2016
Household
Size
80% Median
Income
(Considered Low-
Mod. Income)
1 $46,000
2 $52,600
3 $59,150
4 $65,700
5 $71,000
6 $76,250
7 $81,500
8 $86,750
Page 10
EMPLOYEE INCOME REPORT
Community Development Block Grant Program
Low to Moderate Income Requirements
The U.S. Department of Housing and Urban Development (HUD) has asked that the following information be collected from
those individuals employed and/or interviewed by ___________________________________________________ to verify
that the company is achieving the goals of the Community Development Block Grant (CDBG) Loan Program. The
information is confidential and will be used solely by HUD for the purposes of monitoring. If you have any questions
regarding this form, please contact the Iowa City Neighborhood Services at (319) 356-5230.
INCOME VERIFICATION
1. Position interviewed or hired for: _____________________________________________________
2. Please CIRCLE, under Family Size on the chart below, the total number of related people living in your
household, including yourself.
3. Look at the income ranges on the line for the Family Size you circled. CIRCLE the income range that
includes your gross family income.
If your gross family income is greater than the amounts listed, check here.
(Income Limits Effective 3/6/2015) Family Size 0-30% Median Income 31-50% Median Income 51-80% Median Income
1 $0 - $17,300 $17,301 - $28,850 $28,851-$46,100 2 $0 - $19,800 $19,801 - $32,950 $32,951-$52,650 3 $0 - $22,250 $22,251 - $37,050 $37,051-$59,250
4
$0 - $24,700
$24,701 - $41,150 $41,151-$65,800 5 $0 - $28,410 $28,411 - $44,450 $44,451-$71,100
6
$0 - $32,570
$32,571 - $47,750 $47,751-$76,350 7 $0 - $36,730 $36,731 - $51,050 $51,051-$81,600
8 or more
$0 - $40,890
$40.891 - $54,350 $54,351-$86,900
4. Hispanic? Yes No
5. What is your ethnic origin? (Please check only one)
White Black/African American Asian American Indian/Alaskan native
Native Hawaiian/Other Pacific Islander American Indian/Alaskan Native & White
Asian & White Black/African American & White
American Indian/Alaskan Native & Black/African American Other
6. At the time of application, were you unemployed? Yes No I certify that the information above is, to the best of my knowledge and belief, true, correct and complete as of the date of
application. I am aware that the information being provided is subject to verification by the local or Federal government.
__________________________________ ________________________________________ __________________
Name (print) Signature Date
__________________________________________________
Address (street, city, state, zip)
Warning: Whoever knowingly and willingly makes or uses a document or writing containing any false, fictitious or
fraudulent statement or entry may be subject to federal prosecution.
Page 11
Annual Employee Performance Report Submit to: CITY OF IOWA CITY
For the Year Beginning July 1, 20___ and Ending June 30, 20___ Neighborhood Services
410 E. Washington Street
NAME OF COMPANY: ___________________________ SUBMITTAL DATE: __________________ Iowa City, IA 52240
BASE EMPLOYMENT: _________
NEW PERMANENT JOBS GOAL (FTE's): ______________ LOW/MOD JOB GOAL1 (FTE's): _________
JOB INFORMATION JOB INFORMATION ON HIRES IN NEW POSITIONS
Number of New Jobs Hires Meeting Low/Mod Income Status
Job Classification
(Please list each
separate position)
Total
Number
Employed
Low/Mod
Income
Persons
Interviewed
- Not Hired
Number
of New
Jobs2
Created
Wage
Rate
Range
Average
Hours
Per
Week
Moderate
Income
(51-80%)
Low
Income
(31-50%)
Very
Low
Income
(0-30%)
Employer
Sponsored
Health
Care
Benefits?
Unemployed
at Time of
Application? Race of New Hires
Hispanic
Ethnicity
Total Total
White, not Hispanic
Black or African American
Asian
American Indian or Alaska Native
Native Hawaiian or Other Pacific Islander
American Indian or Alaska Native and White
Asian White
Black or African American and White
Amer. Indian/Alaskan Native & Black/African
Amer.
Other Multi-Racial
1 Low/Mod benefit is met when an employee is hired who has a household income of 80% or less of area median income at the time of application.
To include individuals in this column, the Employee Report must be completed by each new employee and be retained in your files to verify
income.
2 New jobs are newly created positions that increase the total employment to meet the new permanent jobs goal. This does not include
new hires for existing positions.
I certify that these numbers are true and accurate: Signature: ___________________________________ For City Use Only:
Date Received: ________ Received by: ___
Name (Typed): ________________________________ Title: _________________________ Date: Compliance: ____Goal Met: Yes No