The URL can be used to link to this page

Home My WebLink About026224 RES - 04/19/2005 RESOLUTION APPROVING AMENDMENT NO, 1 OF THE AGREEMENT BETWEEN THE CORPUS CHRISTI BUSINESS AND JOB DEVELOPMENT CORPORATION AND ACCION TEXAS, INC. REGARDING INTEREST BUY DOWN PROGRAM APPLICATION PROCESS AND JOB CREATION DEFINITION WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernon's Texas Revised Civil Statutes ("Development Corporation Act of 1979") empowered local communities with the ability to adopt an optional local sales and use tax as a means of improving the economic health and prosperity of their citizens; WHEREAS, on November 5, 2002, residents of the City of Corpus Christi passed Proposition 2, New and Expanded Business Enterprises, which authorized the adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of one-eighth of one percent to be imposed for 15 years; WHEREAS, the 1/8 cent sales tax authorized by passage of Proposition 2 was subsequently enacted by the City Council and filed with the State Comptroller of Texas, effective April 1, 2003, to be administered by the Board of Directors ("Board") of the Corpus Christi Business and Job Development Corporation ("Corporation"); WHEREAS, Section 21 of the Development Corporation Act of 1979 requires the City Council to approve all programs and expenditures of the Corporation; WHEREAS, Accion Texas, Texas nonprofit corporation, submitted a proposal to the Corporation to request business development funds of $150,000 for loan interest buy down assistance for qualifying small businesses in Corpus Christi; and WHEREAS, the Board authorized agreement at its meeting of July 8, 2004 to provide business development funds to Accion Texas to be used by Accion Texas for small business loan assistance programs which will result in creation of new full-time permanent jobs in the city of Corpus Christi; WHEREAS, on July 27,2004, the City Council approved the proposed Accion Texas project and its associated expenditure be approved by Resolution 025876 ; WHEREAS, the Board authorized Amendment NO.1 to the Agreement at its meeting of April 4, 2005 to revise the interest buy down program application process and amend the job creation definition; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: 026224 Page 2 of 2 SECTION 1, The City Council approves the Corpus Christi Business and Job Development Corporation's Amendment NO.1 to the contract with Accion Texas, Inc. regarding interest buy down program application process and job creation definition. A copy of the amendment is attached as Exhibit A. ATTEST Armand~ City Secretary Approved: April 12,2005 ~n-~ Lisa Aguilar Assistant City Attorney for City Attorney H:ILEG-DIRILisaIRESlAccion Res. April 2005.doc Corpus Christi, Texas 1Cfn-- Day of ~)r I I ,2005 TO THE MEMBERS OF THE CITY COUNCIL Corpus Christi, Texas For the reasons set forth in the emergency clause of the foregoing ordinance an emergency exists requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings: I/we, therefore, request that you suspend said Charter rule and pass this ordinance finally on the date it is introduced, or at the present meeting of the City Council. Respectfully, Respectfully, Council Members The above ordinance was passed by the following vote: Mark Scott ~ ~ J ~ ~ ~lJ;.. v-y_ ~- C~l/~"~ "'""' 1/ U../ Yo. Henry Garrett Brent Chesney Melody Cooper Jerry Garcia Bill Kelly Rex Kinnison John E. Marez Jesse Noyola O ) ." }.~ 1 (.. b;:.,.~. tt fxh-/ 't A _ Ik:;:>l Amendment No.1 to the Agreement between City of Corpus Christi Business and Job Development Corporation and ACCION Texas, Inc. Whereas, in July 2004, the City of Corpus Christi Business and Job Development Corporation ("Corporation") and ACCION Texas, Inc. ("ACCION Texas") executed an agreement to provide business and job development incentives; NOW, THEREFORE, the parties agree to amend the Agreement as follows: 1. Section 4. Interest Buy Down Program, is amended to read as follows: "4. Interest Buy Down Program. "a. In consideration for creation and maintenance of new jobs as provided in this Agreement, the Corporation agrees to pay ACCION Texas up to $150,000 for the Interest Buy Down Program as follows: "i ACCION Texas must first receive a request for a loan from a small business located in Corpus Christi, or a business locating in Corpus Christi ("Business"). "ii The request A'l~st inGiude the b~siness name, name of s~siness ownm(s), loc3tien of b~siness, type ef business, n~mber ef new jess te be Gr-eated, ame~nt ef lean, and amount of interest buy down pr-o~ram funds requested (~p to 7% of the loan inter-ost rate). "jjHL ACCION Texas shali review the request for a loan from the Business. "iv-ciii. Upon ACCION Texas approval of a loan and prior to the closinq or the loan, ACCION Texas shall submit re~~estte Cerporation fer tAe interest buy de'lln pr-e~ram funds fer the 103n (~p te 7% of the lean) ATTACHMENT "A" to the Corporation requestinq funds to buy down the interest rate from the interest rate allowable per the underwritinq criteria to 5.5%. The Corporation authorizes an interest buy-down UP to 7% of the interest rate to finance the loan. Payment by Corporation shall not exceed $17.500 per loan and shall be calculated using the following formula: ((lean amount x interest rate (up to 7%))!12 N. ((loan amount x interest rate to buy down to 5.5% / 12 = N. N x number of payments = interest buy down reimbursement to ACCION for business loan. (The number of monthly payments shall not exceed sixty (60).) Example ($10,000 x 7%)/12 = 55.33 55.33 x 36 = $2100=amount to be reimbursed to ACCION for business loan. "\'oiv. The Corporation shall provide a response to approve or denv the reimbursement for to the Interest Buy Down Proqram funds to ACCION Texas within 2 business days of receipt of Attachment "A" The Cerperatien shall distrib~te tAe interest buy down pr-e!jram I~nes te .^,CCIOn Texas '.vitA in :lQ eays of receipt ef netifiGation of appreval ef lean ~neer the intorest b~y eown pro!jram. The Corporation shall reimburse funds within 30 days after evidence of closinq the loan is submitted. "vi.,,,,- The total funds available on an annual basis under the Interest Buy Down Program under this agreement is $150,000. Page 2 of 8 "b. The loans assisted with this program shall be within the range of $19,000 $5.000 to $50,000. "c. This program shall result in the creation of one permanent full-time job per every $50,000 in loans assisted with the Interest Buy Down Program within two years of the loans. ACCION Texas shall ensure that the loan will result in the creation of one new full-time permanent job in the city of Corpus Christi. "d. Businesses assisted through this program must be: 1. unable to obtain a loan from a traditional financial institution or unable to Qualifv for the total needed for a business loan throuQh a bank or credit union. in which case ACCION Texas can loan the remainina amount with the buY-down interest rate proaram in coniunction with the bank/credit union. 2. Located in or locatina in Corpus Christi city limits. 3. New or expandina business or home-based businesses located in the Corpus Christi city limits. 4. Current on payment of all sales tax. 5. Current on payment of all ad valorem taxes in the City of Corpus Christi. "e. The followina proiects are ineliaible for this proaram: 1. Refinancina of existina loans or debt 2. Businesses located outside the Corpus Christi city limits 3. Home-based businesses located outside the Corpus Christi city limits 4. Loans to existina businesses which are not plannina on expandina 5. Business retention. "eeL ACCION Texas shall provide the Corporation with quarterly reports as provided in Attachment B to identify the loans made, name and address of the business receiving the loan, jobs created under the Interest Buy Down Program, and other reports as requested by the Corporation. :BL ACCION Texas shall provide funds for operations and loan capital to implement and sustain the program. "!r.!1. ACCION Texas shall develop loan underwriting criteria and payment terms and conditions for its loan program and provide to the Corporation. 2. Section 5. Job Creation Qualification is amended to read as follows: "5. Job Creation Qualification "a. In order to count as a created job under this Agreement, the job must pay wages as required in Section 38 (b) of the Development Corporation Act of 1979, as amended, which is the median waae of the occupation in the Corpus Christi MSA as determined bv Texas Workforce Commission's Texas Industry Profiles report. H:ILEG-DIRILisaI1800IACCION Texas April 4 2005 Amd No. 1.doc Page 3 of 8 "b. A full-time permanent job is one that provides at least 2,080 hours annually. The jobs shall be primarily en!!a!!ed in servin!! a c~stemer base o~tsise a 59 mile rasi~s of the city of Corpus GRfislio "c. ACCION Texas agrees to confirm and document to the Corporation that each job created Hflllef as a result of fundinG provided bv this Agreement is maintained throughout the term of IRis I\!!reement the loan to the Business. "d. ACCION Texas agrees to provide Corporation with a sworn certificate by authorized representative of each small business assisted under this Agreement certifying the number of full- time permanent employees employed by the small business. "e. ACCION Texas shall ensure that the Corporation is allowed reasonable access to personnel records of the small businesses assisted under this Agreement." 3. All other terms and conditions of the Agreement remain unchanged. Agreed to by: Corpus Christi Business & Job Development Corporation By: Name: Title: Date: Attest By Name: Secretary ACCION Texas, Inc. By: Janie Barrera President and Chief Executive Officer Date: STATE OF TEXAS ~ COUNTY OF NUECES ~ This instrument was acknowledged before me on ,2005, by Janie Barrera, President and Chief Executive Officer for ACCION Texas, Inc., a Texas non-profit corporation, on behalf of ACCION Texas, Inc. . Notary Public, State of Texas H:ILEG-DIRILisa\1800IACCION Texas April 4 2005 Amd No. 1.doc Page 4 of 8 ATTACHMENT A - Request for Interest Buy-Down Business Name Business Owner Business Address City Zip Business Phone Type of Business Tax ID # Criteria for EliQibility. Check all that apply o Unable to obtain a loan from a traditional financial institution o Located in or locating to the Corpus Christi City. o Company is a new or expanding business o Company is current on their sales tax o Company is current on ad valorem taxes in the City of Corpus Christi Unbankable Criteria: Please check one and orovide a brief exolanation o Credit Score o Loan to Value Ratio o Collateral o Other Briefly describe purpose of loan and how this loan will create a new iob Loan Amount Qualifying Interest Term (months) Buy-Down Request Rate H:ILEG-DIRILisaI1800IACCION Texas April 4 2005 Amd No. 1.doc TOTAL FTE JOBS Provide the following information for job(s) to be created due to this loan. JOb title lilIi:lmated ,amiuai'lN9 TOTAL FTE JOBS ACCION TEXAS Submitted by Title Send Attachment "A" to ATTN: Corpus Christi Business & Job Deyelopment Corp. Economic Development Office City of Corpus Christi P.O. Box 9277 Corpus Christi. TX 78469 Fax 361-880-3845 H:\LEG-DIR\Lisa\1800IACCION Texas April 4 2005 Amd No. 1.doc Date Page 5 of 8 fittitllilted aM!lplWlll!l't bwlll enqe Page 6 of 8 ATTACHMENT B - Quarterly Report Corpus Christi Business and Job Development Corporation Please check the box reflecting this report D July 9-0ctober 8 (Due Nov 1, 2004) 2005) D January 9 - April 8 (Due May 1, 2005) D October 9 - January 8 (Due February 1, D April 9 - July 8 (Due August 1, 2005) Name of Organization Contact Mailing Address City State Phone Fax_ Loan Loss Reserve Program (list businesses secured with loan loss reserve) I!lusi~ TJj3e Addre$S Olty EX: ABC Exports Export textiles 1200 Street H:ILEG-DIRIUsaI1800IACCION Texas April 4 2005 Amd No. 1.doc Default ? CC 50,00 10 o 5 1/4/20 N 05 Reser ve Balan ceto date 50,00 o Page 7 of 8 1-- l J II Capitalleveraaed from the Loan Loss Reserve Fu_tSQ~!1:!1J A~l.!liltQf~pillll .- ...... ~!lAllior10rL~arl EX: Sank of Corpus Christi 250,000 loan ---- -.--. H:ILEG-DIRILisaI1800IACCION Texas April 4 2005 Amd No. 1.doc Page 8 of 8 Interest Buy Down Program BU!lin.s Busi~s Address City Am~nt ~bs ". ......liDale Amount Reillei.g L.olll'I Type aflOllP Ofeli!t .Retaina' . Reimbursed ed d made by Corporation EX ABC Hardware 1 00 SPI D CC 1 0,000 2 3 1 /1 /20 1 , 500 Hardware Store 05 ----. _._~... I certify that the above information is true and correct to the best of my knowledge and that the businesses benefiting from the funds under the contract have met the criteria under the agreement and the Corpus Christi Business and Job Development Corporations Guidelines for granting business incentives. Signed Title Date Send Attachment "B" to ATTN: Corpus Christi Business & Job Development Corp. Economic Development Office City of Corpus Christi P.O. Box 9277 Corpus Christi, TX 78469 Fax 361-880-3845 H:ILEG-DIRILisa\1800IACCION Texas April 4 2005 Amd No. 1.doc