Agenda - 09-02-1997 - 9b - Laserfiche WebLink

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lc John Link Loan Pool Memo August 27, 1997 Page 3 • $11,000 was budgeted to pay a third party to do underwriting, servicing, and collection of the loans. Some of the costs of these services will be supported by borrower fees and the"spread" of the money. Fees ranging from$100 to $500 will be paid by all applicants. The"spread" is the difference between the cost of the money that the banks will provide, proposed at prime minus 2%, and the cost to the borrower, proposed at prime plus 2%to 3%. The $11,000, or some part of it, will cover the difference. Until final loan pool policies are approved, we cannot finalize a contract so exact cost is unknown. Any funds not needed will be returned to the General Fund. • $1,500 was proposed to be added to the EDC budget to cover marketing costs for the program(postage, printing a brochure, etc.). • There will be the cost of existing staff time. We have estimated approximately $23,000 in existing staff time. This is not a new cost and will not result in new personnel. Existing staff will assume whatever functions are appropriate, based on the final program. The revised Operating Policies and Procedures reflect the suggested change that the County appoint three members of the nine-member Loan Committee. Commissioner Brown has suggested that those three members be one County Commissioner, the County Manager, and the County Finance Director. If the Board of Commissioners agrees, this could be incorporated into the final operating policies. Additional suggestions for changes to the Operating Policies and Procedures have been made: one, eligibility requirements should include an item that states that any business applying for a loan must be located in an area zoned appropriately for that business use; two, that all loan applications be brought to the Board of County Commissioners for review and approval. The appropriate place in the process, if the Board wishes to add this, is to place the application on the next Board agenda after the Loan Pool Committee has given its approval. Finally, the issue of further targeting of the fund has been raised. Should the Commissioners wish, the loan pool could be restricted to ethnic and gender minorities, or it could be more geographically focused. I have tried to address the specific questions asked at the August 4th meeting as well as subsequent Commissioner suggestions. I would be happy to meet with any Commissioner to provide additional information prior to their next meeting. I have written to invite James Harris to discuss Carrboro's program at the September 2nd meeting, and he has agreed to be at that meeting.