Loan and Grant Information
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:
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.
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.
The amount of grant will be based primarily on the number of eligible commercial and industrial jobs proposed to be created or retained with a maximum of $5,000 for each job created or retained.
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.
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.
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.
The Authority cannot expend more than $900,000 for grants or direct assistance, if any, for planning projects to municipalities in a biennium.
The Authority cannot commit more than $2,000,000 for grants for Firm Business Commitment development projects in a biennium.
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:
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;
Eligible commercial jobs will be created or retained as a result of the grant being awarded; and
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.
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.
A development project may receive loan funding as follows:
The initial or renegotiated term is limited to the usable life of the contracted project, or a maximum of 30 years from the year of project completion, whichever is less.
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.
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.
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.
A loan amount requiring Board approval will be established by the Board.
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:
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.
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.
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.