Current through Register Vol. 48, No. 38, September 20, 2024
a)
Loan Terms - Infrastructure project loans will be at a fixed, low or no
interest rate for a term not to exceed 10 years. However, in extenuating
circumstances (e.g., based on the infrastructure improvement's useful life and
the local government's financial capacity to repay the loan) a longer term, up
to twenty years, will be considered. The loan term and amortization schedule
will be flexible, according to not only the life expectancy of the proposed
infrastructure improvement, but also the repayment capacity (based upon a
review of the local government's last year's audit) of the local government.
Installments shall be due and payable to the Department according to a
negotiated amortization schedule. All payments shall be applied first to
interest and then to principal.
b)
Reporting - The Recipient (applicant receiving grant/loan) will provide, at
least annually, information and reports required by the Department (e.g.
reports on job creation/retention; financial statement of assets, liabilities,
and net worth).
c) Termination of
Grant/Loans - Grants/loans shall be terminated for the following reasons:
1) Termination due to Loss of Funding - In
the absence of state funding for a grant year, all grants/loans for that year
will be terminated in full. In the event of a partial loss of state funding,
the Department will make proportionate cuts to all Recipients. In the event the
Department suffers such a loss of funding in full or part, the Department will
give the Recipient written notice setting forth the effective date of full or
partial termination, or if a change in funding is required setting forth the
change in funding and changes in the approved budget.
2) Termination for Cause
A) If the Department determines that the
Recipient has failed to comply with the terms and conditions of the grant/loan,
the Department shall terminate the grant/loan in whole, or in part, at any time
before the date of completion. Circumstances which will result in the
termination of a grant/loan include, but are not necessarily limited to the
following: consistent failure to submit required reports; failure to maintain
required records; failure to protect inventory; misuse of equipment purchased
with grant/loan funds; evidence of fraud and abuse; consistent failure to meet
performance standards and failure to resolve points of the agreement (i.e.,
narrative, number to be served). These circumstances are explained in the
grant/loan agreement.
B) The
Department shall promptly notify the Recipient in writing of the determination
to terminate, the reasons for such termination, and the effective date of the
termination. Payments made to the Recipient or recoveries by the Department
shall be made in accordance with legal rights and liabilities explained in the
grant/loan agreement.
3)
Termination by Agreement - The Department and the Recipient shall terminate the
grant/loan in whole, or in part, when the Department and the Recipient agree
that the continuation of the program objectives would not produce beneficial
results commensurate with the future expenditures of funds. The Department and
the Recipient shall agree upon termination conditions, including the effective
date and, in the case of partial termination, the portion to be terminated.
Recipient shall not incur new obligations for the terminated portion after the
effective date, and shall cancel as many outstanding obligations as possible.
The Department shall allow full credit to the Recipient for the Department's
share of the noncancellable obligations, properly incurred by the Recipient
prior to termination.
d)
Events of Default - The entire unpaid principal of the loan, and the interest
then accrued thereon, shall become and be immediately due and payable upon the
written demand of the Department, without any other notice or demand of any
kind or any presentment of protest, if any one of the following events
(hereafter an "event of default") shall occur and be continuing at the time of
such demand, whether voluntarily or involuntarily, or without limitation,
occurring or brought about by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rules or
regulations of any administrative or governmental body, provided, however that
such sum shall not be then payable if Recipient's payments have been deferred.
The Department will make deferrals based upon case by case review of the
Recipient's financial statements and projections (see Section
610.25(d) and (e)
) to determine if the Recipient will be able
to make payments at a future date.
1)
Non-Payment of Loan - If the Recipient shall fail to make payment when due of
any installment of principal on the loan, or interest accrued thereon and if
the failure to make payment shall remain unremedied for fifteen (15)
days.
2) Non-Payment of Other
Indebtedness - If default shall be made in the payment when due of any
installment of principal or of interest on any of the Recipient's other
indebtedness (any creditor the Recipient owes) and if such default shall remain
unremedied for (15) days.
3)
Incorrect Representation or Warranty - If any representation or warranty
contained in, or made in connection with the execution and delivery of, the
loan agreement, or in any certificate furnished pursuant hereto, shall prove to
have been incorrect.
4) Default in
Covenants - If the Recipient shall default in the performance of any other
term, covenant or agreement contained in the loan agreement, and such default
shall continue unremedied for thirty (30) days after either:
A) it becomes known to an executive officer
of the Recipient; or
B) written
notice thereof shall have been given to the Recipient by the
Department.
5) Voluntary
Insolvency - If the Recipient shall cease to pay its debts as they mature or
shall voluntarily file a petition seeking reorganization of, or the appointment
of a receiver, trustee, or liquidation of its assets or to effect a repayment
plan with creditors, or shall be adjudicated bankrupt, or shall make a
voluntary assignment for the benefit of creditors.
6) Involuntary Insolvency - If an involuntary
petition shall be filed against the Recipient under any bankruptcy or
insolvency law or seeking the reorganization of or the appointment of any
receiver, trustee or liquidator for the Recipient, or the property of the
Recipient, or a writ or warrant of attachment shall be issued against the
property of the Recipient and such petition shall not be dismissed, or such
writ or warrant of attachment shall not be released or bonded within thirty
(30) days after filing or levy.
7)
Judgments - If any final judgment for the payment of money that is not fully
covered by liability insurance shall be rendered against the Recipient, and
within thirty (30) days, shall not be discharged, or an appeal therefrom taken
and execution thereon effectively stayed pending such appeal, and, if such
judgment be affirmed on such appeal, the same shall not be discharged within
thirty (30) days.
e)
Notice of Default - The Recipient agrees to give written notice to the
Department of any event, within 15 days after the event, which constitutes an
event of default as specified in Section
610.60(d).
f) Monitoring and Evaluation - Recipients
must permit any agent authorized by the Department, upon presentation of
credentials to, in accordance with the constitutional limitation on
administrative searches, have full access to and the right to examine any
documents, papers, and records of the Recipient involving transactions related
to a grant/loan from the Department.
g) Audits
1) The Recipient shall be responsible for
having an audit of all grant/loan records and such audit must be performed by
an independent certified public accountant, licensed by authority of the State
of Illinois in accordance with the Illinois Public Accounting Act (Ill. Rev.
Stat. 1991, ch. 111, pars. 5500.01 et seq.) [225 ILCS 450 ]. The audit must be
conducted in accordance with generally accepted auditing standards adopted by
the American Institute of Certified Public Accountants (AICPA) (office located
at 1211 Avenue of Americas, New York, N.Y. 10036-8775) (1989, with no later
amendments or editions).
2) The
Recipient may secure an independent audit of its grant/loan in the same manner
as it secures its regular audits, provided it provides for maximum open and
free competition. The audit should be conducted as part of the Recipient's
normal annual audit or, when the ending period of the audit covers the
expenditure of all loan funds, bi-annual audit.
3) The Recipient shall work cooperatively
with the audit firm selected; actively work with both the audit firm and the
Department to resolve any and all audit findings; and work cooperatively with
the Department's staff in preparing for, conducting, and resolving
audits.
4) Any Recipient receiving
a grant will provide the Department with 3 copies of its annual audit which
addresses Department grant(s). In instances where the grant period or term does
not coincide with the Recipient's fiscal year, two fiscal audit reports shall
be forwarded to the Department. Any Recipient receiving a loan will provide the
Department with 3 copies of its audit which addresses funds expended under the
Department's loan, within thirty days of its publication.
5) The Department reserves the right to
conduct special audits, including but not limited to an agency-wide audit, at
any time during normal working hours of funds expended under Department
grants/loans.
6) Any independent
public accounting firm that provides consultant services to a Recipient is
prohibited from conducting an audit of that Recipient for the period during
which services were rendered.
h) Complaint Process - In the event of a
Recipient complaint, the Department will follow the procedures outlined in 47
Ill. Adm. Code 10 (Review and Appeal Procedures).
i) Interest on Grant Funds - In accordance
with Section 10 of the Illinois Grant Funds Recovery Act (Ill. Rev. Stat. 1991,
ch. 127, par. 2310) [30 ILCS
705/10] , all interest earned on funds held by the
Recipient under the grant shall become part of the grant when earned. Any
interest earned under the grant, and not expended as grant principal during the
term of the grant, shall be returned to the Department.
j) Nondiscrimination - The Recipient shall
refrain from unlawful discrimination in employment and undertake affirmative
action to assure equality of employment opportunity and eliminate the effects
of past discrimination in accordance with the Illinois Human Rights Act (Ill.
Rev. Stat. 1991, ch. 68, pars. 1-101 et seq.) [775 ILCS 5 ].
k) Financial Management Standards - The
Recipient's financial management system shall be structured under the
Accounting Standards of the Financial Accounting Standards Board of the AICPA
(September 19, 1987, no later amendments or editions included) to maintain
control and accountability over grant/loan funds.
l) Maintenance and Insurance of Property
1) The Recipient shall at all times maintain
the property provided as security for the loan in such condition and repair
that the Department's security will be adequately protected.
2) The Recipient shall maintain, during the
term of the loan, adequate (at least covering the amount of the loan) hazard
(e.g., tornado, hail, acts of God) insurance policies, covering fire and
extended coverage for all such other hazards and issued by an insurance company
authorized to do business in the State of Illinois with loss payee clauses in
favor of the Department.
3) The
Recipient shall, if at any time during the life of the loan the Recipient's
property is declared to be within a flood hazard area, purchase federal flood
insurance if available. Such insurance shall be equal to the amount of the
loan.
4) The Recipient shall
maintain liability and worker's compensation insurance. The Recipient shall
provide written notice to the Department of any public hearing or meeting
before any administrative or other public agency which may, in any manner,
affect the chattel, personal property or real estate securing the
loan.
