City Council Worksession

South St. Paul WORKSESSION AGENDA SSP City Hall 125 3rd Avenue North Training room Monday, July 26, 2021 7:00 pm AGENDA: 1. Closed session pursuant to Minn. Stat. 13D.05 subd. 3(b) for attorney-client privileged communication regarding the Minnesota Department of Human Rights litigation – Jessica Schwie – No Attachment 2. EMS Taxing District/South Metro Staffing 3. Comprehensive Plan Regulations along Concord Street, Concord Exchange, and on the Hardman Triangle 4. Draft Revolving Loan Fund Policy 5. Council Comments & Questions A COUNCIL WORKSESSION REPORT DATE: JULY 26, 2021 2 DEPARTMENT: SOUTH METRO FIRE Prepared by: Chief Mark Juelfs ADMINISTRATOR: JRH AGENDA ITEM: EMS Special Taxing District Levy Increase for Personnel Additions DESIRED MEETING OUTCOMES: DISCUSS INCREASING THE EMERGENCY MEDICAL SERVICES SPECIAL TAXING DISTRICT LEVY TO FUND ADDITIONAL THREE ADDITIONAL FIRE FIGHTERS OVERVIEW: Adding three new firefighter positions in 2022 was presented to the Fire Board during budget discussions. During the discussions, the Board agreed with the need to add the additional staff but questioned how we pay for the increased cost without adversely affecting each City’s tax levy. In addition to the contribution by both South St. Paul and West St. Paul to South Metro’s budget, South Metro also receives $550,000 from an EMS special taxing district that was established in 2012. The taxing district is overseen by the same members of the Fire Board. The levy limit for this district had been $550,000 until the recent Fire Protection and Emergency Medical Services Special Taxing Districts legislation was signed into law following the 2021 legislative session. The new law amended the former Emergency Medical Services Special Taxing District law to include the formation of Fire Protection districts. Another change was to remove the levy limit from the law thus enabling South Metro to raise its current levy of $550,000 to cover the cost of the three new positions requested in the 2022 budget. If the three new positions are added to the 2022 budget, the EMS taxing district levy would increase from the current $550,000 to $825,000. It needs to be understood that this added funding will not increase the levy support needed from each city. However, it will still impact the property taxpayers of each community under a separate line entitled “Special Taxing Districts” on each property tax statement (see example attached). In the case of South St. Paul, this line includes the South Metro EMS, the SSP EDA, the SSP HRA and the Dakota County CDA. Assuming a 50/50 split of the increase ($137,500), the impact to a home valued $222,800 (which is approximately a mean valued home) would be about $15. At its July meeting, the Fire Board was in favor of increasing the EMS taxing district levy but wanted to have a discussion on the topic with each City Council before moving forward. Supporting Information: Calls for Service - In 2008, our first operational year, South Metro responded to 4622 calls. In 2020, South Metro responded to 6760 calls. In 2008, South Metro had 33 operational staff. In 2020, South Metro had 35 operational staff. Currently South Metro  remains at 35 operational staff. In 12 years of operations, our call volume has risen by 46.3% while or operational staffing has increased by 6%. Through the first six months of 2021 our call volume is up an additional 5%. BLS Transports - In 2008, South Metro transported 565 patients. In 2020, South Metro transported 1651 patients an increase of 192%. In 2020 there was a slight reduction in transports due primarily to Covid-19, industry wide EMS calls were down. Through the first six months of 2021 we are on pace to exceed our budgeted amount of 1750 transports. Average Calls Per Day - In 2008, South Metro averaged 12.7 calls for service a day. In 2020, South Metro averaged 18.5 calls for service a day, an increase of 45.7%. Burnout - As a department, we have made great strides in the last two years regarding our personnel’s mental health. However, as our call volume continues to increase our staff is exposed to more and more trauma each day which leads to an increase in burnout. In addition, we are consistently short staffed due to retirements or injuries which creates significant overtime thereby exposing our personnel to additional traumatic calls. Adding the three new firefighters, one per shift, will eliminate the need for much of the current overtime resulting from being short staffed. Recommendation: Discuss the impact of increasing the EMS taxing district levy to support the hiring of three additional firefighters. SOURCE OF FUNDS: EMS Taxing District A CITY COUNCIL WORKSESSION REPORT DATE: JULY 26, 2021 3 DEPARTMENT: Economic & Community Development Prepared By: Michael Healy, City Planner; Ryan Garcia, Director of ECD ADMINISTRATOR: JRH AGENDA ITEM: Problems with Comprehensive Plan Development Regulations on Concord Street, Concord Exchange, and Hardman Triangle DESIRED OUTCOMES: • Discuss inconsistencies between the comprehensive plan’s density regulations and the City’s economic development goals for Concord Exchange, Concord Street, and the Hardman Triangle. • Determine whether a targeted comprehensive plan amendment would help the EDA and City Council better realize the City’s economic development goals. OVERVIEW: Background In recent years, the City Council has directed Staff to consider “up the hill” and “down the hill” as two separate character areas when it comes to planning for economic development: • “Up the Hill:” Residents like the existing look and feel of the neighborhoods “up the hill” and want to see that existing character maintained and enhanced. There is a general feeling that larger-scale, multi- story developments are not always a good fit for these established single- and two-story neighborhoods. • “Down the Hill.” Residents want to see more activity down on Concord Exchange, Concord Street, at the Hardman Triangle, and better connections to the Mississippi River. They want to see restaurants and retail and they understand that the best way to attract new amenities is to have more people living down the hill to support new businesses. There is a general feeling that new larger-scale, multi-story developments belong “down the hill.” The City Council and EDA/HRA have spent decades preparing land on Concord Exchange and Concord Street for mixed-use redevelopment. The EDA already owns a significant amount of land and is in the process of assembling the Hardman Triangle as a future mixed-use redevelopment opportunity. The EDA achieves redevelopment by partnering with private sector real estate developers. Developers looking to bring projects to South St. Paul must study the real estate market and also study the City Code and Comprehensive Plan to determine whether they will be able to build the type of project that the market will support. Several developers have informed City Staff that the 2040 Comprehensive Plan’s density regulations make it very difficult (and in some cases impossible) to create the type of development that the City Council wants to see “down the hill.” Problems with Comprehensive Plan Guidelines for “Down the Hill” The City adopted a new comprehensive plan in 2020. While many sections of the comprehensive plan were directly shaped by local residents and policymakers, some parts of the plan were required by the Metropolitan Council to be written a certain way. The Metropolitan Council has a number of mathematical formulas that they use to calculate what types of minimum density requirements each city in the region will be required to add to their comprehensive plans. The Metropolitan Council considers South St. Paul an ‘urban center’ community along with West St. Paul, Richfield, Hopkins, St. Louis Park, Columbia Heights, Saint Paul, and Minneapolis. City Council Worksession Report – Comp Plan Development Regulations July 26, 2021 Page 2 of 4 In order to comply with the Metropolitan Council’s minimum density requirements, the City added the following provisions to its 2040 Comprehensive Plan in Chapter 4: Land Use: 1. New development in areas that are guided “High Density Residential” must have a minimum density of 20 units per acre. The City has also set a ‘maximum density’ of 60 units per acre in these areas. 2. New development in areas that are guided “Mixed Use” must have a minimum density of 25 units per acre. The City has also set a ‘maximum density’ of 60 units per acre in these areas. The existing standards were written as a “one size fits all” rule and apply to all of South St. Paul. The standards are a good fit for the neighborhoods “up the hill” where the City really does not want to see new large multifamily buildings unless they can be designed to complement the character of the established neighborhoods. The standards are in direct conflict with the type of development that the City Council and the EDA want to see “down the hill.” The City wants to attract modern high-quality multifamily development to this area. These developments typically have structured parking and many have premium amenities such as swimming pools, lounges, fitness centers, and rooftop decks. It is generally not possible to build this type of housing product with a maximum density of 60 units per acre. Staff would note the following: • Bill Beard, the developer of “The Yards,” and Max Heitzmann, the developer of “The Drover”, have indicated that modern apartment buildings with premium amenities and structured parking generally must have a minimum a density of 64-68 units per acre. According to these developers, this is a minimum threshold that needs to be met in order to make this kind of project “pencil out”, and these projects are not usually possible at lower densities. • “The Yards” could only be approved because the City was able to count some of the bluff area next to the development site when calculating the total density of the project. Otherwise, the project would exceed the 60-unit per acre density limit. The City will not be able to use this strategy on the Hardman Triangle since there is no adjacent bluff area there. The 60-unit per acre maximum will make it very difficult to attract developers to redevelop the Hardman Triangle. • Development costs – particularly underbuilding parking – are generally fixed costs that directly impact the income that will be required to make a project economically viable. In Cities like South St. Paul that are mostly/fully developed and have scarce land resources, underbuilding parking is the smart option versus dedicating numerous acres to surface parking lots. This drives construction costs higher, which in turn requires additional income (i.e. more units) to be economically viable. • Vertical mixed-use buildings, which are generally buildings that have retail/commercial space on the street level and residential units above, are challenging to finance in even the strongest retail markets. For these to be viable in South St. Paul – unless market and lending dynamics significantly change – the income a developer/owner can generate on the residential component of a project will be paramount, because essentially the residential will need to “subsidize” the first floor retail to pass underwriting. • In most other inner-ring suburbs, the comprehensive plan differentiates between different mixed-use areas. There is not a “one-size-fits-all” maximum density rule that applies citywide. City Council Worksession Report – Comp Plan Development Regulations July 26, 2021 Page 3 of 4 • Most other inner-ring suburbs that are trying to attract modern apartment buildings with premium amenities to their mixed-use areas have at least 75 units per acre as their maximum density in the areas where they are trying to steer the development of new multifamily buildings. o St. Louis Park has a 75 units per acre maximum in some mixed-use districts and a 125 units per acre maximum in other mixed-use districts. o Richfield has a 75 units per acre maximum in some mixed-use districts and a 150 units per acre maximum in other mixed-use districts. o Hopkins has a 60 units per acre maximum in some mixed-use districts and a 100 units per acre maximum in other mixed-use districts. o Edina has a 75 units per acre maximum in some mixed-use districts and a 150 units per acre maximum in other mixed-use districts. • The previous 2030 Comprehensive Plan (in place until August 2020) did have a density maximum in the mixed-use districts BUT it stated that densities could be allowed to exceed that maximum through a Conditional Use Permit or Planned Unit Development. It is not entirely clear why this flexibility was taken out of the comprehensive plan during the 2040 update. The old comprehensive plan was more in alignment with the City’s economic development goals. Comprehensive Plan Update to Fix Development Issues As it is currently written, the Comprehensive Plan is going to pose a major barrier to the EDA’s efforts to redevelop the areas down the hill, specifically its efforts to redevelop the Hardman Triangle. Staff recommends that the City Council move forward with a very targeted comprehensive plan amendment that would: 1. Continue to protect the neighborhoods “up the hill” and prevent them from being over-developed in a way that might undermine their existing character. 2. Allow slightly higher densities on Concord Exchange, Concord Street, and the Hardman Triangle to align with market realities and make these areas “shovel ready” for high quality multifamily development. Staff would propose adding the red underlined text to Chapter 4:Land Use of the 2040 Comprehensive Plan: MU: Mixed-Use (25-60 u/ac): The Mixed-Use category is intended to allow for developments which combine residential, office, retail, and commercial uses through planned development. These uses may be mixed within the same building (vertical mixed use) or may be in separate buildings that are mixed within the same area (horizontal mixed use). Overall, throughout all mixed-use areas, 40% of development is expected to be residential. The exact mix of uses will depend on the site and will need to be sensitive to the development context. Mixed-use development within the Southview Hill area is expected to be of lesser scale than sites identified along Concord Street due to the size of remaining developable sites and the context of the surrounding neighborhood. A switch to a minimum average density of 25 units per acre is consistent with Metropolitan Council’s standard for “Urban Center” communities. The maximum density in this category is 60 units per acre except that the mixed-use areas City Council Worksession Report – Comp Plan Development Regulations July 26, 2021 Page 4 of 4 along Concord Street, Concord Exchange, and on the Hardman Triangle shall have a maximum density of 75 units per acre . DIRECTION NEEDED Staff is looking for feedback regarding the disconnect between the 2040 Comprehensive Plan and the City Council & EDA’s goals for redevelopment along Concord Street. If the City Council is agreeable to Staff’s proposed “fix,” Staff should be directed to begin the comprehensive plan amendment process. ATTACHMENTS A. 2040 Comprehensive Plan Future Land Use Map  Attachment A F utu reL andU seM ap CityofSouthS tPaulPla nningD epa rtm ent h ttp s ://w ww .s o uth stpa u l.o rg / F utu reL a n dU s e A cre s P erc e n tag e LDR-L o wD e n sityR esid entia l 4 94.0 9 1 2.4 % L M D R-L o w -Me d m iu e Dn e sityR e sidn l tia 9 68 9 .8 7 1 % .5 M DR-M ediu m D ensityR esid entia l 2 3.6 7 .6 % 9 9.2 1 2 .5% H DR-H ighD ensityR esid entia l M U-M ix edU se 1 98.0 4 5 .0% C O M-C omm ercia l 1 17.3 3 2 .9% A IR-A irp ort 1 99.3 3 5 % I-In dustria l 1 55.4 2 3 .9% L I-L igh tIn dustria l 3 27.7 3 8 .2% R O W-R igh tOfW ay 6 06.8 5 1 5.2 % P-P ark sandR ecre atio n 2 65.9 7 6 .7% IN-In stitu tio nal 1 95.0 5 4 .9% U TL-U tility 3 3.4 5 .8 % O-O fficeS pace 0 0 % O S-O penS pace 2 04.3 6 5 .8% R R-R ailro ad 8 2.7 3 2 .1% W AT-W ate r 2 91.4 4 7 .3% R ailro ad 0 0 .28 0 .55 1 .1 Mile s TheF utureL an dU s em a pisare prese ntatio no fvariousm apsan do rd ina ncesth atm akeu p theC ityo fSo uthS t.P au lz oningc o de.Pe rc e ntageo fAcre ageisc alcula te dfro m PrintDate :T ues d ay,Nov e mb e r1 0,2 020 countyp a rceld ata.R e s ultsarere p re s en ta tionalandn o ttobeu s edfo rp u rpo s eso th er L a s tU pdate d :Octobe r12,2020 thanz o n in g.Fo rd etail inform atio np ertainin gtoasp e cificpropertyo rz o ningd is trict, pleasec o ntactth eC ityo fS outhS t.Pa ulP la nnin gD epartm entath ttp ://w w w.s o uth s tp aul.o rg/ Prep re a db y:SouthStPaulGIS A COUNCIL WORK SESSION REPORT DATE: JULY 26, 2021 4 DEPARTMENT: ECONOMIC DEVELOPMENT PREPARED BY: Monika Mann, Community Development Support Specialist ADMINISTRATOR: JRH AGENDA ITEM: Revolving Loan Fund DESIRED MEETING OUTCOMES: • Discuss Common Elements of a Revolving Loan Fund Policy • Discuss Best Practices for Executing a Revolving Loan Fund Policy • Discuss Preferred Components in a Revolving Loan Fund Policy • Direct Staff to bring the Policy to the EDA for formal approval OVERVIEW: Background At the June 14th work session, the City Council discussed the future of the City’s Business and Development Loan Program. This program was established in the early 2000s by the HRA and has assisted at least 35 businesses since that time. Despite the program’s ample funding, the program has been underutilized in recent years due to declining interest rates and the strict program guidelines that limit business eligible for the program. The program is currently structured primarily to support major industrial expansions. The City’s thriving industrial park is mostly built out, leading the criteria of this program to be outdated and in need of an adjustment to better serve the business community. Based on the work session discussion, staff researched Revolving Loan Fund policies in other communities to give Council an idea of what a revised loan program could look like. Overview of Best Practices and Common Elements of a RLF Policy • Defined Goal or Objective of the Program Most cities or counties that offer a revolving loan fund have a goal in mind that they would like to see a business achieve as a result of receiving funding. Goals can range from very specific (creating additional entry level jobs for low to moderate income recruits) to general (increasing local tax base). • Eligible Businesses RLFs are typically only available to for-profit commercial and industrial businesses located within the community. • Eligible Activities Commonly eligible activities include acquisition of land, construction/demolition/rehabilitation of existing facilities, expansion of existing facilities, building improvements related to building code compliance, and equipment acquisition. Ultimately, the city gets to decide what activities they feel the RLF should be used for. • Ineligible Activities In addition to the list of eligible activities, most cities also list activities that are not eligible for funding. Ineligible activities vary from city to city. The use of funds by a gambling organization or the refinancing of existing debt through the RLF are common ineligible expenses. • Financing Policies The financing policies of a RLF lay out the terms of the loan, the interest rate of the loan, the loan size, the percentage of project equity or lender match that is required for the loan, and whether or not the loan is forgivable. Examples of finances policies in other cities include:  City of St. Cloud- $25,000 minimum loan, $300,000 maximum loan. 10-to-20- year loan terms for land or buildings. 5-to-10-year loan terms for machinery and equipment. Interest rates are 3% or the U.S. prime rate published in the Wall Street Journal on the data prior to the loan closing date. Minimum 10% equity.  Ramsey County- $150,000 maximum loan. Loan terms are negotiable. 2% interest rates. Private lender match of 50% required. Loans may be partially forgiven if the company operates successful in a locally target impact area for 10 years and/or hires harder-to-employ workers (veterans, disabled, felons).  City of Ramsey- $25,000 minimum loan, $300,000 maximum loan. Up to a 7- year loan term for machinery/equipment. Up to a 15-year loan term for land or building acquisitions. Up to a 15-year loan term for new construction/renovation. 10% owner equity investment. Interest rate equal to the 10-year Treasury bond rate, but not less than 3.0%  Greater Alexandria Industrial Network- $75,000 maximum loan. Terms of the loan coincide with the terms of the private portion of the loan or be negotiated. Applicant’s participating equity should be at least 5% of the total fixed asset costs of the project. Competitive interest rate.  City of Mankato- $10,000 minimum loan, $300,00 maximum loan amount. Up to a 7-year loan for machinery/equipment. Up to a 15- year loan for land or building acquisition. Up to a 15-year loan for new construction/renovation. Minimum 10% equity investment of total project costs. Interest rates shall be fixed rate at 70% of the prime rate at the date of application, but not less than 3%. • Loan Administration Typically, a municipal EDA serves as the body that administers loans. • Loan Application Process Many cities require a pre-application and a full application. Pre-applications include information about the applicant, the project scope, and project costs. The pre-application allows the City to screen for eligibility and pursue projects that are well thought out and feasible. The full application includes any information needed to make a decision on whether to issue a loan to an applicant. Documents that are required for the full application often include: o Business plans describing the scope of the project, including site plans. o Project budget o Private or equity financing commitment o Company or personal financial statements o Mortgage or lease of property be improved. o Number of jobs to be created or retained. Applications would be reviewed by a designated RLF committee or the EDA. • Distribution of Funds to Approved Applications Often RLF policies will lay out the types of documents needed prior to the distribution of funds for approved applicants. • Repayment and Default Information about the loan repayment schedule, including the day that repayment would start and the procedure for late payments should be included in any policy. Draft RLF Staff has drafted and attached an updated RLF Policy. Staff is seeking discussion, feedback, and confirmation or refinement of specific elements of the policy, as proposed: • Loan Amount (Section III, Page 1): the loans will provide a minimum loan of $5,000 and a maximum loan of $150,000. • Eligible and Ineligible Activities (Section IV & Section V, page 1 - 2): a range of economic development activities are identified. Should any be added (or subtracted)? • Priority Areas (Section VI, Page 2): Are these in the right order? Should any areas be subtracted (or added)? • Priority Considerations (Section VII, Page 2) • Loan Financing Policies and Conditions (Section VIII, Page 2- 4): In summary, Section VIII lays out the “structure” of loans that will be made available through the program. o We propose a baseline interest rate of 5.5%, with an opportunity to drive this rate lower if certain criteria are met. The lowest rate possible through this program would be 2.75%, which is currently 0.50% below the WSJ Prime rate. Staff suggests that the EDA review this portion of the policy, in particular, every year and make adjustments as necessary in light of Prime and the lending environment generally.  o As drafted, we’re preserving the opportunity to structure loans in more flexible ways (deferred, forgiven, interest-only) “for projects that demonstrate extraordinary public benefit”. Admittedly, this is open-ended. Perhaps we could index “extraordinary public benefit” to the previous bullet point – such that to be eligible for these flexibilities, a project would need to meet at least 4 of the 6 criteria for rate reduction? • Loan Application and Review (Section IX, Page 5 – 6): Please note that the Policy suggests the creation of a “Loan Review Committee” designated by the EDA that would be responsible for the review and recommendation of approval or denial of any loan application. Staff suggests that this committee be comprised of representatives of the commercial banking community in South St. Paul (possibly overlap the SSP Future Board)? SOURCE OF FUNDS: EDA Loan Fund, EDA Levy  Economic Development Revolving Loan Fund Program Policy Established July/August 2021 Each application submitted for assistance will be evaluated by the City on a case-by-case basis to analyze the viability of a proposed project. Depending on the nature and complexity of a program, the timeframe from application to approval is approximately 8 to 12 weeks.  I. General The South St. Paul HRA first established a Revolving Loan Fund (RLF) Program in the early 2000s. The program aimed to increase job creation and enhancement of the property tax base. The program was intended to be a “supplement”- not a replacement- for owner/investor equity and bank financing in a project. Today, the RLF is administrated by the South St. Paul Economic Development Authority (EDA). The Economic and Community Development Department will provide general program oversight on behalf of the City and EDA. II. Program Purpose The goals of the revolving loan fund are to stabilize and increase the City’s tax base, create and retain permanent private sectors jobs and improve economic opportunities by promoting local business development and expansion, add additional skilled workers with wages above the median income, support business enhancements, and provide support for local business retention. III. Funding Available The minimum loan amount of a loan through this program is $5,000. The maximum amount of a loan from this program is $150,000. IV. Eligible Activities In order to apply, a business must be a for-profit enterprise. Eligible projects must meet one or more of the following activities: 1. Creation or retention of jobs; or the improvement of jobs as measured by wages. 2. Acquisition of land and buildings. 3. New Construction 4. Façade and building renovations, including renovations to address code deficiencies. 5. Purchase and installation of machinery and equipment. 6. Clearance, demolition, or removal of structures. 7. Infrastructure improvements necessary to support new or expanding businesses. V. Ineligible Activities Certain projects, activities, and costs are ineligible for revolving loan funds. These include: 1. Refinancing or consolidating existing debt.  2. Reimbursement for expenditures prior to loan approval. 3. Routine maintenance. 4. Specialized equipment that is not essential to business operation. 5. Working capital. 6. Management fees. 7. Projects in stand-alone residential buildings. VI. Priority Areas 1. Concord Street between Annapolis Street and Wentworth Avenue 2. Southview Boulevard and Marie Avenue 3. Concord Exchange 4. Concord Street between Dale Place and Linden Avenue VII. Priority Considerations 1. Assisting Business Expansion- Commercial or industrial-related expansions (ie, adding square footage or employees), and related costs. 2. Renovation to and/or reinvestment in a building constructed more than 35 years prior to the date of application 3. Business equipment acquisition- The purchase of additional depreciable assets for the purpose of expanding industrial/commercial activities. VIII. Loan Financing Policies and Conditions 1. Loan terms for fixed assets are anticipated to range between 10 to 20 years for land and buildings, and 5 to 10 years for machinery and equipment. 2. Interest rates are fixed at 5.50%, subject to the following interest rate discounts, which may be combined: a. Applicants committing 15% or more in cash equity to a project will receive a 0.50% discount on their interest rate. b. Projects that have been approved for financing from a private commercial lender for at least 60% of the total project cost will receive a 0.25% discount on their interest rate. c. Applicants that are able to demonstrate that they have consulted with the “Open to Business” program, free to all South St. Paul residents and businesses, will receive a 0.25% discount on their interest rate. d. Applicants that are able to demonstrate that their project will result in a property value increase of 15% or more will receive a 0.50% discount on their interest rate. (Dakota County Property Taxation & Records can assist with this analysis.) e. Applicants that are able to demonstrate that their project will result in the creation of three (3) or more new jobs at or above the “2 Working Adults, 2 Children” Living Wage Calculation for Dakota County will receive a 1.00% discount on their interest rate. f. A 0.25% discount on interest will be provided for any project that involves any one or more of the following: i. Installation of an elevator in a multi-story building. ii. Installation of fire suppression systems. iii. Installation of environmental infrastructure, such as vapor mitigation systems. iv. Abatement of hazardous building materials, such as asbestos.  v. Installation of solar, geothermal, or wind energy systems or technologies. vi. Installation of commercial food preparation facilities and required ventilation systems. vii. Vertical commercial/residential mixed-use development (i.e., commercial unit(s) at the street level with residential unit(s) on upper level(s)). 3. For projects that demonstrate extraordinary public benefit, the EDA may choose to structure loans in such a way as to provide applicants/borrowers with deferred repayment, interest-only repayment periods, or partial loan forgiveness. 4. Interest earnings or other profits earned from the sale of the loan will be returned to the RLF fund for re-lending or for administrative costs. 5. The EDA may deny any project which it deems inappropriate according to the guidelines established in this document. IX. Loan Application and Review A. Pre-application or Preliminary Meeting- A pre-application is required to screen potential projects for eligibility. 1. A brief pre-application in narrative form will be required for all potential applicants in order to determine the proposed structure and eligibility of the project. 2. Pre-applications may be submitting on an open basis throughout the year. B. Applications 1. A full application requires the following documents: • Company description including product or service, history, legal structure, ownership and subsidiaries. • A detailed business plan describing the scope of the project including site plans, building plans, renderings or blueprints. • Project budget and amount of loan request. • Proof of private financing commitment. • Other documentation as requested.  C. Incomplete Application. The Economic Development Director will determine if the application is completed. D. Loan Review Committee. A loan review committee as designated by the EDA will be responsible for the review and recommendation of approval or denial of any loan application. X.Distribution of Funds to Approved Applicants A. Loan Agreement Prior to the city’s distribution of RLF funds, all appropriate documentation, including loan agreement, promissory notes, repayment schedule, security agreement, personal guaranty, and all other documents deemed necessary, shall be prepared and executed. B. Evidence of Expenditures The business must provide documentation related to the RLF fund expenditures prior to the release of RLF funds. Documentation may include invoices, receipts, final bills of sale, cancelled checks, a lien waiver or other documentation as deemed appropriate by the review board. XI. Repayment and Default A. Repayments All payments are due within 30 days of the billing date. The first billing will be X days after the funds have been released. B. Prepayments of Loans There is no prepayment penalty. C. Late Payments Any payments not paid within ten (10) days of the due date will pay a late fee equal to 5% of the amount of the installment due. Loan recipients will be contacted by staff requesting the account is brought current. After 21 days, staff will send a letter requesting full remittance of late payments.