It shall be the policy of the City to consider requests from qualified applicants (“Applicant “) that the City issue its industrial revenue bonds (hereinafter referred to as an “IRB”), for projects serving those purposes described in R.S.A. 12-1740, et seq. (the “Act”), The City will issue such bonds when, in the judgment of the governing body, it is in the best interest of the City to do so, and providing that the proposed use and the Applicant therefore meet all of the criteria set forth in this policy as the same may be amended or otherwise modified from time to time.
(Ord. 1432, Sec. 1; Ord. 1549, Sec. 1)
(a) The City’s interest in providing IRB financing, is to promote, stimulate and develop the general economic welfare of the City. Therefore, to accomplish this objective, requests will be considered from Applicants who can demonstrate that:
(1) An employment increase in the City will result from the improvements financed by the IRB issue.
(2) The project will add to the needed diversification of the economy or have an economic impact on a particular area of the community where economic assistance is needed.
(3) The project encourages economic growth potential and benefit to the City, e.g., the tenant shall be one with a substantial part of its total products and/or services being exported from the Russell area or produce items for local consumption that will either add jobs and/or replace purchases now being made by Russell citizens from outside the City.
(4) The project should expand the type of job skills available to the local labor market, in the community, and/or utilize key skills of locally unemployed persons.
(b) IRBs will not be issued when the effect would be to grant an unfair financial advantage to one firm over other competing firms within the community.
(c) The proceeds of an IRB issue shall be used to purchase, construct, maintain, or equip buildings; acquire sites for buildings, to enlarge, equip or remodel buildings for manufacturing, commercial, industrial, hospital or agricultural purposes as described in the Act.
(Ord. 1432, Sec. 2; Ord. 1549, Sec. 1)
(a) Proposals submitted to the City must be in writing, addressed to the City, signed by a representative of the Applicant and contain at least the following information:
(1) Names and addresses of all persons who would be obligated as either tenant and/or guarantor under the bond documents.
(2) Names and address of the principal officers, and if a corporation, the directors of the Applicant.
(3) A general description of the nature of the business of the Applicant and a list of the principal competition in the local market.
(4) A general description of the proposed project and improvements.
(5) A specific location by street address of the proposed project (a legal description is not required for application purposes).
(6) Statement of the projected benefits to the City.
(7) The dollar amount of the bonds being requested for the Project.
(8) A detailed breakdown of all proposed costs including an estimate of the underwriting fees and other miscellaneous expenses.
(9) The name and address of the proposed underwriters and bond counsel.
(10) Any other information which might be helpful or which is desired to be given to assist the City in its determination of the issuance of the proposed bonds.
(b) In addition to the letter of request, the following information is required as part of the proposal:
(1) An audit of the last fiscal year’s business of the prospective tenant and guarantor(s), if any, prepared by an independent and recognized certified public accountant. If substantial time has passed since the last audited year of operation to the date of IRB request, the City may require additional financial statements.
(2) New businesses, without operating history, will be required to submit financial information relevant to the feasibility of the project; which will include feasibility studies, proforma financial statements, financial statements of all principals of the proposed business and a complete outline of the total project plan including debt retirement.
(3) Prospective tenants will be required to state their agreement to annexation to the City of the property involved, if the proposed project site is not already within the City limits.
(4) The City will not remove any property or existing improvements from the tax rolls due to the issuance of an industrial revenue bond issue and, notwithstanding the provisions of K.S.A. 79-201a, which provides that any property constructed or purchased with the proceeds of IRBs is entitled to an exemption from ad valorem taxation for a period of 10 calendar years after the calendar year in which the bonds are issued, the parties agree that no application for such exemption shall be filed so that the tenant shall pay ad valorem taxes thereon as though such property had not been acquired with proceeds of industrial revenue bonds. The tax exempt status of any new improvements or additions, and/or property acquired which is not currently on the tax rolls, will be evaluated by the City on a case by case basis. If a tax exemption is granted, a payments in lieu of taxes will be required. The letter of request shall note compliance with this ad valorem section.
(5) The parties further will agree that no expense whatsoever will be incurred by the City during the course of review and execution of the industrial revenue bond documents inclusive of final bond closing; that such expenses be, but are not limited to, administrative, legal, staff review time, document reproduction, necessary travel, lodging, telephone and wire services. Should the City incur any expense, it will be promptly reimbursed; and provided further, that the City will incur no expense whatsoever as a result of a default or any subsequent legal action it being understood that the Applicant, Tenant and Guarantor(s), if any, shall be jointly and severally liable for such expenses, if any, and by filing such application with the City requesting the issuance of IRBs of the City such parties acknowledge and shall be deemed to acknowledge their joint and several responsibility to indemnify and hold the City harmless from any such expenses.
(6) The proposal must contain any maps or diagrams necessary for complete understanding of the proposed project and its location.
(7) The proposal must contain a statement from the underwriter indicating their willingness to underwrite the bonds and to assure their marketability.
(8) The proposal must contain information relating to the method intended to be used in bidding or otherwise contracting for the construction of the facility. This information should include the planned method of bidding (negotiation, public or private bid) or the name of the contractor if known at the time of the request.
(Ord. 1432, Sec. 3; Ord. 1549, Sec. 1)
The procedure required for submission, analyses, recommendation and issuance of a resolution of intent by the City council is as follows:
(a) The proposal in the content as required by this resolution, shall be submitted in 12 copies, by the Applicant to the office of the City manager.
(b) The proposal will be reviewed for the completeness of documents and information. If it is incomplete in any manner, the prospective tenant will be immediately advised of the deficiencies and the proposal will be returned, in its entirety, for correction.
(c) After receipt of 12 complete copies by the City manager, the review process will begin.
(d) Upon completion of the review process the proposal will be forwarded to the City council for its consideration.
(e) In order to complete the process and allow adequate time for the necessary review by financial, legal and other staff members of the City, the proposal must be submitted in total and in acceptable content no later than 30 days prior to the date it is desired to be considered by the City council.
(f) Upon approval of the proposal by the City council, a resolution of intent to issue industrial revenue bonds will be adopted by the City council and approved by the Mayor. The resolution of intent will normally contain those conditions which are required to be met prior to the issuance of IRBs.
(g) Notwithstanding the provisions set forth above for the issuance of a resolution of intent, the City council shall deem the resolution of intent to be null and void if the prospective tenant does not present an acceptable bond ordinance, trust indenture, lease agreement and related documents, if any, for the governing body passage and consideration under the terms set forth below within a six month period from the resolution of intent.
(Ord. 1432, Sec. 4; Ord. 1549, Sec. 1)
(a) The bonds will be issued upon satisfaction of all conditions set forth in the resolution of intent as adopted by the City council and the submission of 12 copies each of the following documents to the office of the City manager:
(1) The proposed bond ordinance, trust indenture and lease agreement for consideration and execution by the City council. The proposed lease and agreement will include a requirement for an equal opportunity affirmative action program.
(2) Any lease guarantee previously agreed to and/or required by the resolution of intent.
(3) The preliminary official statement as prepared by the bond underwriter.
(4) A written legal opinion from the City attorney and the Bond Counsel that the bond ordinance, trust indenture, lease agreement and other documents and matters are proper and prepared to their satisfaction.
(5) Any other statements or documents which may be deemed pertinent and necessary to issuance of the bonds may be requested for review by City staff and Bond Counsel prior to execution by the City council.
(6) The final execution and closing of the industrial revenue bond issue shall be done in Russell, Kansas, unless another closing location is approved by the City Attorney.
(b) The information and documents required will be delivered no later than 30 days prior to consideration by the City council. The City staff will review the documents and upon completion of the review, all documents requiring the approval of the City council shall be placed before the City council for its consideration and action following such authorization by the City council, subject to both the compliance with all applicable law and the approval of both the City Attorney and Bond Counsel, the bonds may be issued.
(Ord. 1432, Sec. 5; Ord. 1549, Sec. 1)