LB840

STATEMENT OF PURPOSE, GENERAL INTENT AND GOALS

It is the intent of the City of Fairbury, Nebraska, to implement an economic development program, the purpose and goals of which will be: to create jobs/generate employment opportunities; to expand the labor markets of Fairbury and Jefferson County; to attract new capital investment to the community to broaden the tax-base; to retain jobs and make existing current business more competitive and profitable; and provide economic diversification to ensure economic stability and vitality for the community of Fairbury and the surrounding area.

The City of Fairbury has adopted a new Comprehensive Plan. This Comprehensive Plan was the culmination of a planning process that also involved citizens of the city to define its future. It is important in preparation of an economic development plan that, in addition to soliciting specific input for the plan, an effort be made to ensure consistency with other plans and goals of the city.

To realize Fairbury’s community and economic development strategy, a portion of all funds collected each year to fund this economic development program may be ear-marked for expenditure on public works improvements, including but not limited to those public works improvements mentioned in this economic development plan, that would benefit a qualifying business or businesses without regard to whether that business is identified at the time the project or program is initiated or is to be determined by specific means at some time in the future.

ELIGIBILITY

Eligible Activities

Eligible activities under the economic development program may include, but shall not be limited to, the following:

1) Performance-based grants or loans tied to the creation and/or retention of a specified number of full-time jobs (full-time job defined as a position of employment consisting of at least 2,000 work hours per year)

2) Grants or loans for public works improvements essential to the location or expansion of a qualifying business.

3) Expenditures for public works improvements that would benefit a qualifying business or businesses, without regard to whether that business is identified at the time the project or program is initiated or is to be determined by specified means at some time in the future. Such public works improvements may extend beyond the corporate limits of the City of Fairbury

a) Eligible public works improvements shall include, but not be limited to:

i) Streets

ii) Water, sewer, gas, electric, and storm drainage

iii) Railroad extension and spurs

iv) Telecommunications, cable, fiber optic, satellite service

v) Airport expansion and upgrades

4) The purchase of real estate, options for such purchases, and the renewal or extension of such options.

5) Construction of facilities, structures, and/or appurtenances for new or proposed development or on a speculative basis to attract new business or industry. Such facilities, structures, and appurtenances are not required to be within the corporate limits of the City of Fairbury.

5) Contracting with an outside entity to implement any part of the Program.

6) The provisions of technical assistance to businesses, such as marketing assistance,

management, counseling, preparing financial packages, engineering assistance, etc.

7) Expenses for business recruitment and community promotional activities and related administrative expenses.

8) Expenses for locating a qualifying business into the area.

9) Grants or loan guarantees for qualifying businesses.

10) The authority to issue bonds pursuant to the Act.

11) Performance-based grants or loans for job training.

12) Small business development including expansion of existing businesses.

13) Grants or loans to businesses that construct or rehabilitate housing.

14) Assist in the hiring of an economic developer and the operation of an economic

development office.

15) Rehabilitation of commercial buildings or potential commercial buildings.

16) The eligible activities described above are considered priority activities for the use of funds generated under the local Option Municipal Economic Development Act. The City of Fairbury recognizes that the attraction of new business to a community or the expansion of existing businesses takes place in a very competitive marketplace. In order to keep Fairbury as competitive as possible in that marketplace, and in the creation of new jobs in the area, the City retains the right to include as eligible activities those additional activities allowable by law.

17) The Local option Municipal Economic Development Act has been changed in several Legislative sessions since it was signed into law on June 3, 1991. It is reasonable to assume the law will change during the course of Fairbury's Economic Development Program. In order to stay current with Nebraska Statutes, the City of Fairbury retains the right to amend this Economic Development Plan when such amendment pertains to changes made to the Local Option Municipal Economic Development Act or to other statutes that affect Fairbury's Program. Such amendments can only be made after a public hearing and a majority vote, of Fairbury's City Council.

18) A revolving loan fund from which low interest or performance-based loans will be made to qualifying businesses on a match basis from the grantee business and based upon job creation and/or retention, extra consideration given to jobs above the average wage scale for the community. At that time a loan fund is created under the Economic Development Program, all statutory requirements under the Local Option Municipal Economic Development Act regarding the creation of a loan fund, including specifying those items currently found in Neb. Rev. Stat. § 18-2711, shall be fulfilled through passage, pursuant to this Economic Development Plan, by the City Council and any other reviewing authority as established by the City Council, of rules and regulations addressing such requirements.

Types of Businesses That Will Be Eligible

A qualifying business shall mean any corporation, partnership, limited liability company or sole proprietorship which derives its principal source of income from any of the following:

1) The manufacture of articles of commerce

2) The conduct of research and development

3) The processing, storage, transport or sale of goods or commodities which are sold or traded in interstate commerce

4) The sale of services in interstate commerce

5) Headquarters facilities relating to eligible activities as listed in this section

6) Telecommunications activities

7) Tourism related activities

8) Any business that derives its principal source of income from the construction or

rehabilitation of housing

9) Any business that derives its principal source of income from retail trade. Subject to prevailing law, no more than forty percent of the total revenue generated for the City’s economic development program in any twelve-month period and no more than twenty percent of the total revenue of the City’s economic development program in any five-year period, commencing from the date of municipal approval of this economic development program, shall be used by the City for or devoted to the use of retail trade businesses. For purposes of this section, retail trade shall mean a business which is principally engaged in the sale of goods or commodities to ultimate consumers for their own use or consumption and not for resale.

10) Retail or any other business deemed as a qualifying business through future action of the legislature.

If a business which would otherwise be a qualifying business employs people and carries on activities in more than one city in Nebraska or will do so at any time during the first year following application for participation in the Program, it shall be a qualifying business only if, in each such city, it maintains employment for the first two years following the date on which such business begins operations in the city as a participant in its Program at a level not less than its average employment in such city over the twelve-month period preceding participation.

A qualifying business need not be located within the territorial boundaries of the city if the City Council determines that there is a clear economic benefit to the city. Eligible qualifying businesses may apply more than once and receive program benefits more than once.

BUDGET

This section describes a preliminary source of funds and budget for Fairbury's economic development program. It is important to note that this budget must be developed annually and may be modified from time to time by the City Council. In the field of economic development, it is impossible to anticipate every condition or requirement. The city should maintain the flexibility to respond to specific requirements and opportunities on a short-term basis.

Proposed Funds to be Collected and Length of Time the Plan Will Exist

The city source of public funds for the Fairbury Economic Development Program will be a one-half of one percent local option sales tax. If approved by the voters, this tax will remain in force for a period of ten (10) years, beginning on or about June 1, 2010. The total amount to be collected from such one-half of one percent sales tax is estimated to be $1,850,000 over the ten (10) year period. This economic development plan shall be in effect commencing upon the date of its passage as provided by the Local Option Municipal Economic Development Act, and ending ten years thereafter, on or about May 31, 2020.

Bond Authority

Fairbury may have a business opportunity or other economic development project that requires initial funds that exceed the single year proceeds of the local option sales tax. In order to take advantage of such an opportunity, Fairbury should have the ability to issue bonds. Future sales tax receipts will then retire these bonds. The City Council may authorize the issuance of bonds to carry out the Economic Development Program following a public hearing.

Preliminary annual budget for the program

Annual Estimated Funds Collected $185,000

Expenditures

Land Acquisition and Building Construction $ 17,500

Business Recruitment / Development $ 50,000

Infrastructure $ 92,500

Administration $ 25,000

Total Expenditures $185,000

APPLICATION PROCESS

The intent of the City of Fairbury is to contract with an outside entity, likely a non-profit corporation (herein referred to as "Program Administrator"), to administer the Economic Development Program.

Submission of applications and selection of participants involves a two-phase process.

FAIRBURY ED APPLICATION FOR FINANCE ASSISTANCE

PHASE 1

Phase one determines the potential of financing for proposed project or activity.

To be considered for direct financial assistance under this plan, an applicant must provide the following unless waived by the Program Administrator.

1) A detailed description of the proposed project;

2) A business plan, including employment and financial projections; current financial statements, financing requirements for the project, total project cost;

3) A completed City of Fairbury Local Option Municipal Economic Development Program Application for Financial Assistance.

Additional information, as necessary to determine the eligibility and economic viability of the proposed project(s), may be requested by Program Administrator and/or by the City Council.

Program Administrator will review applications and requests for direct financial assistance in the order in which the Program Administrator receives them. Application review and approval, or disapproval, by Program Administrator will be based on project feasibility and compliance with the Economic Development Program and all applicable regulations thereunder, as determined by review of the applicant's business plan and other requested information by Program Administrator and the potential future economic benefit to the community of Fairbury, as evaluated pursuant to uniform criteria proposed by the Program Administrator and established by the City Council prior to review of any application. All applicants shall have access to such uniform criteria prior to making application for assistance.

Applications, whether approved or disapproved by the Program Administrator, shall be forwarded to the City Council, or other reviewing authority as established by the City Council for ultimate review by the City Council, with the Program Administrator’s recommendations attached. If, upon its review following all review processes it establishes, the City Council determines an application disapproved by the Program Administrator and/or other reviewing authorities it establishes should be approved, it may return the application to the Program Administrator and/or other reviewing authorities the City Council establishes for further review and/or with instructions, or may vote to approve the application. The Program Administrator will be responsible for verification of information in the applications of those eligible businesses which receive a recommendation for financial assistance before recommendation is made to the City Council. For each application approved by the Program Administrator and any other reviewing authority that the City Council establishes, upon the City Council’s review of such applications, the City Council shall hold a public hearing regarding the application and obligation of funding. All approvals by the City Council for the obligation of funding for an application shall be made by resolution.

In the event of termination of the contractual relationship between the City and the Program Administrator, the above-described responsibilities will be carried out by another entity, by existing city staff, or by an economic development specialist hired by the City.

PHASE 2

Phase two is the approval and execution portion of the process.

Upon completion of the negotiations on the terms and conditions of assistance between the Program Administrator and the applicant, the project will be submitted to the City Council for its review and approval. The Council will consider the overall benefits to the community in its deliberation and will provide the Program Administrator a decision that fits within the time frame suitable to meet the business requirements of the applicants. Once approved, the Program Administrator will take the necessary actions to execute the agreements made.

ADMINISTRATION OF ECONOMIC DEVELOPMENT PROGRAM

It is the intent of the Economic Development Program that the majority of the funds be used for supporting eligible activities and only the minimum required amount is to be spent to assist in the administration of the program. Three separate groups share the administration of the program. These are:

(1) Program Administrator:

- Will be responsible for the day-to-day activities of administering the program.

- Assists applicants and conducts active recruiting for potential applicants.

- Provides someone to serve as an ex-officio, non-voting member of the Citizen Advisory Review Committee who will provide that committee with necessary advice and information.

-Recommends approval or disapproval of applications for financial assistance to the City Council

-Proposes uniform criteria for the City Council’s adoption for evaluation of applications for financial assistance

(2) Citizens Advisory Review Committee:

- A group of citizens who are registered voters of the City, appointed by the Mayor and subject to approval of the City Council, who will review the functioning and progress of the economic development program and advise the City Council with regard to the program.

- Committee organization will consist of:

* Not less than five or more than ten members (none of which may be an elected or appointed official, employee of the City, nor anyone who

participates in the decision-making process regarding expenditures of program funds).

*At least one individual with expertise or experience in the field of business, finance or accounting.

*A City official or employee responsible for the administration of the economic development program who will serve as an ex-officio member.

- No member of the Citizen Advisory Review Committee shall be an elected or appointed city official, an employee of the city, a participant in a decision making position regarding expenditures of program funds, or an official or employee of any qualifying business receiving financial assistance under the economic development program or of any financial institution participating directly in the economic development program.

- The Citizens Advisory Review Committee will meet regularly as required to review the program and will report to the City Council at least once in every six month period on its findings and suggestions at a public hearing called for that propose.

(3) City Council:

- Will have final authority on expenditure of funds in support of the Economic Development Program.

- Will contract with an organization to act as Program Administrator.

- Will have ultimate responsibility for the Economic Development Program and may establish all regulations and review procedures for the program.

- Will adopt uniform criteria, after reviewing criteria proposed by the Program Administrator, for the evaluation of applications for financial assistance.

- Will approve the membership of the Citizen’s Advisory Review Committee

Process to Insure Confidentiality of Business Information Received

In the process of gathering information about a qualifying, business, the city may receive information about the business, which is confidential and, if released, could cause harm to the business or give unfair advantage to its competitors. State law authorizes cities and other public entities to maintain the confidentiality of business records which come into their possession.

To protect the businesses applying for funds and to encourage them to make full and frank of business information relevant to their application, the City may take the following steps to ensure the confidentiality of the information it receives:

1) The adoption of an ordinance which makes such information confidential and punishes disclosure;

2) A restriction on the number of people with access to the files with the Program Administrator primarily responsible for their safe-keeping, and

3) A requirement that personnel involved in the program sign statements of confidentiality regarding all personal and private submittals by qualified businesses.

4) Review by the City Attorney of all public records requests that request documents related to a business applying for assistance from the economic development program

IDENTIFICATION OF REAL ESTATE

Continued development will exhaust existing industrial sites available in the Fairbury area well before the end of the planning period. Therefore, the City should provide for the acquisition of industrial and commercial land and provide for supporting infrastructure.

Eligible activities include the purchase directly or indirectly of commercial or industrial site(s) and obtaining options for the purchase of such real estate. Land to be purchased or optioned may be within or outside the corporate limits of the City and will be identified through local analysis by the City and/or Industrial Site Evaluation teams organized by the City or the Program Administrator of the Economic Development Program, or by other review bodies created by the City Council. These identified sites may then be considered for option or purchase and further development.

In addition, the funds may be used to provide the infrastructure to these sites or other sites to make them attractive to new or expanding businesses. Eligible infrastructure improvements will include, but not be limited to, street, storm drainage, water, sewer, gas, electric or railroad extension. Infrastructure improvements and costs may extend beyond the corporate limits of the City of Fairbury as allowed by law.

The funds may also be used to construct facilities, structures, and/or appurtenances for new or proposed development or to attract new business or industry. These facilities, structures and appurtenances are not required to be within the corporate limits of Fairbury, Nebraska.

These sites and facilities will improve the attractiveness of Fairbury, Nebraska as a location for new business and industry and may be used as an incentive to aid in the location, relocation or expansion of a business. The proceeds from the sale or lease of land purchased and developed with funds generated by LB 840 may be used for the purchase and development of additional land and may be used for all other eligible activities.

The attraction of a new business or industry may require an incentive to ensure its location in Fairbury. Any investment in land and infrastructure can provide that incentive

while at the same time providing a benefit that will remain in the community. Developed industrial sites, buildings, and infrastructure will be of long-term benefit to the community regardless of future ownership.

Land explicitly designated as incentives for economic development shall be identified by the City and/or Industrial Site Evaluation teams organized by the City or the Program Administrator of the Economic Development Program, or by other review bodies created by the City Council. and shall be under control of the City, Program Administrator, or other review authority created by the City Council, for the benefit of the Economic Development Program, for transfer or sale in development efforts.

The City Attorney will review applicable laws every year to assure that laws and regulations are being met.