Current through Register Vol. 63, No. 3, March 1, 2024
(1) The moneys in the fund will be used
primarily to provide loans to municipalities for projects. Grants may be given
only when loans are not feasible due to the financial need of the municipality
or special circumstances of a project. The level of loan or grant funding, if
any, may be determined by the Authority on a case-by case-basis. The Authority
shall determine awards in a manner that maximizes the use of available
resources and maintains the desired credit standards of the fund according to
the following criteria:
(a) Amount
requested;
(b) Type;
(c) Interest rate;
(d) Terms and conditions of an award. The
Authority may offer an alternate mix or lower amount of assistance than
requested, and it may investigate and recommend other sources of funds for all
or part of a proposed project.
(2) Grants:
(a) If the Authority determines that a firm
business commitment project meets the minimum criteria for a grant, the
Authority may make a further determination on the amount of the grant. The
maximum grant amount is $500,000 per project or 85% of allowable project costs,
whichever is less. In-kind materials and services cannot be included in
allowable project costs.
(b) The
amount of grant will be based primarily on the number of eligible commercial
and industrial jobs proposed to be created or retained up to a maximum of
$5,000 for each job created or retained.
(c) If a grant is for the acquisition and
improvement of real property, the maximum grant amount cannot exceed the fair
market value of the real property after the improvements have been made or the
value placed on the real property and improvements on the assessment rolls,
whichever is less.
(d) The
Authority must receive, in accordance with OAR 123 division 70, a copy of the
appropriate First Source Hiring Agreement or assurance from the municipality
that one has been entered into before the grant is dispersed.
(e) Not less than 60 percent of the grants
awarded from the Special Public Works Fund in any biennium can be used to
provide assistance to distressed or rural areas.
(f) The Authority cannot award more than
$900,000 for grants or direct assistance, if any, for planning projects to
municipalities in a biennium.
(g)
The Authority cannot commit more than $2,000,000 for grants for Firm Business
Commitment development projects in a biennium.
(h) A development project that qualifies as a
firm business commitment project is eligible to apply for a grant. When making
a determination to award a grant, the Authority will apply prudent fiscal
management of the fund in order to manage constrained funding resources. In
addition to the criteria and process contained in its policies on grant and
loan funding, the Authority will apply the following minimum criteria for
grants:
(A) The Authority's financial analysis
determines that the municipality's borrowing capacity is insufficient to
support the amount of the loan requested for the project;
(B) Eligible commercial jobs will be created
or retained as a result of the grant being awarded; and
(C) The Authority has received confirmation
that the firm business commitment project will not occur, or that the eligible
commercial jobs will be lost, if the municipality does not receive a grant. The
following applies to both grants and loans for pre-disaster mitigation
projects:
(i) The project must have federal
disaster relief assistance or pre-disaster mitigation funds
committed;
(ii) The maximum grant
cannot exceed $500,000 per project, or the amount of the federally required
local match, whichever is less;
(iii) The maximum loan amount cannot exceed
$2,500,000;
(D) A
principal only, zero percent (0%) interest rate loan of up to $1,000,000 may be
awarded for each pre-disaster mitigation project. The zero percent loan cannot
exceed 50 percent (50%) of the total loan amount from the Special Public Works
Fund;
(E) The maximum grant for
construction or capital improvement projects may not exceed an amount equal to
80 percent (80%) of the total cost of the project; and
(F) Allowable project costs are eligible for
federal assistance, unless those costs are precluded by a restriction in the
state law or the Code of Federal Regulations.
(3) Loans:
(a) Maximum loan amount for a project will be
based on the Authority's financial and credit analysis of the municipality's
capacity to repay, the availability of moneys in the fund, and prudent fund
management. Projects that the Authority determines are not financially
feasible, or loans that cannot be adequately secured, will not be funded. The
maximum loan amount per project cannot exceed $10,000,000 plus applicable
fees.
(b) A development project may
receive loan funding as follows:
(A) The
initial loan term may not exceed the usable life of the project or 30 years
from the year of project completion, whichever is less. The term of a
renegotiated loan may not exceed the remaining usable life of the project or 30
years, whichever is less.
(B) The
interest rate on a loan will be based on market conditions for similar debt,
and will be set at the time of the award.
(C) The repayment terms of a loan can include
deferred repayment of principal and/or interest for a specified term of the
loan to address special circumstances and financial feasibility of a
project.
(D) The interest rate on a
state revenue bond loan will be equal to the coupon rates on the bonds. Until
the state revenue bonds are sold, the municipality will pay interest on the
outstanding principal balance of the loan at the rate established by the
Authority.
(c) A loan
amount requiring Board approval will be established by the Board.
(d) The loan will be a full faith and credit
obligation, which is payable from any taxes that the municipality may levy
within the limitations of Article XI, Sections 11 and 11b, of the Oregon
Constitution and all legally available funds of the municipality. Additional
pledges of revenue or other collateral may also be required and may include,
but are not limited to:
(A) Specific revenues
of the municipality may also be required to be pledged as security, including
revenues of the project, special assessment revenues and other
collateral.
(B) If repayment of a
loan substantially depends on revenues the municipality will receive from a
lessee or payments from a benefiting business, the Authority will assess the
financial capacity of the payor, the adequacy of the security, the financial
instrument(s) requiring such payments to the municipality, and any liens,
pledge(s), or assignments of collateral from the payor to the municipality. The
Authority may require an assignment of such revenue and collateral from the
municipality.
(C) If repayment of
the loan substantially depends on a pledge of tax increment revenues from an
urban renewal agency to the borrowing municipality, the Authority's financial
analysis will extend to the financial feasibility of the projected revenues and
the financial and legal adequacy of the proposed pledge of tax increment
revenue.