The City of Hillsboro is committed to encouraging economic development of the City, Marion County and the State of Kansas, by promoting the expansion and improvement of existing businesses and by encouraging new business enterprises to locate facilities in the Hillsboro area. Preservation and expansion of the Industrial Park areas are a principal concern along with the expansion of job opportunities for persons of all skill levels. To assist in such economic development efforts, the City is willing to consider requests for the issuance of industrial revenue bonds under the provisions of Kansas law.
1. The following policy is intended only as a guideline and should not be considered as inflexible in individual applications. The failure of an applicant to meet all of the criteria set forth herein, shall not necessarily require rejection of the application. Conversely, the fact that an applicant meets all the requirements shall not of necessity require the approval of the application. The City Governing Body shall retain sole and absolute discretion as to whether or not to issue said bonds; HOWEVER, the policy proposed herein shall be given great consideration by the Governing Body prior to the issuance of any industrial revenue bonds. Industrial revenue bonds should be issued only to those applicants who can demonstrate that:
a. A substantial employment increase will result from the improvements financed by the industrial revenue bonds. The meaning of “substantial employment” will not contain a firm number of employees, but will be considered for each issue and will depend on the nature of the product, on the nature of the project or service, and the amount of the investment into the community; or
b. The project may add significantly to the needed diversification of the economy within the community; or
c. The project should result in an economic growth potential, and benefit to the community; or
d. The project would provide needed services and/or products to the citizens not otherwise available, or inadequately available; or
e. The project would expand the type of job skills available to the job market in the community, or utilize key skills of locally unemployable or unemployed persons.
Industrial revenue bonds will generally be discouraged when the effect would be to grant an unfair advantage to one firm or one person over other firms or persons within the local market.
2. Industrial revenue bonds generally should be used to finance the purchase of land, land improvements, machinery and equipment, which have an asset life span at least equal to the term of the lease. No industrial revenue bonds shall be issued where the nature of the project is primarily to refinance an existing debt.
The security for the proposed bonds shall be a pledge of all facilities and assets acquired and constructed, or to be acquired and constructed from bond proceeds. In addition, the City may require, and tenants, upon demand, shall pledge all income of tenant and guarantors of the lease and all income from the leased facilities as additional security for the faithful performance of the lease agreement. In addition, the City may require such additional sureties or guarantors as the City may in its absolute discretion, consider necessary or appropriate to assure faithful and punctual compliance with the lease agreement.
3. Proposals submitted to the City will be complete and must contain, as a minimum, the information requested in the Application attached to this Policy Statement.
4. To facilitate the processing of the application, the following items shall be attached to the application:
a. Certified copies of the applicant’s financial audits for the past three (3) years,
b. Applicant’s most recent interim financial statements to date, for the current fiscal year,
c. Financial Statement, current to date, for each personal guarantor,
d. Pro forma statements for the first five ( 5) years of operation after issuance of the Bonds, including revenue projections, operating expense projections and a debt amortization schedule.
5. Prospective tenants seeking the issuance of the bonds will be asked to state their agreement to immediate annexation to the City of the property involved if is not already in the City. The proper zoning classification will be obtained prior to the issuance of the letter of intent.
6. Each project shall be evaluated on its own merit for property tax exemption. Following the preparation of a cost/benefit report prepared in compliance with Kansas Statutes and the holding of a hearing, notice of which shall be published and provided to the county and the unified school district, a property tax exemption may be considered for facilities constructed with industrial revenue bond proceeds.
7. Any applicant receiving a tax exemption pursuant to this Policy Statement shall be required to make a minimum payment in lieu of taxes which equals the amount of property tax which was paid or was payable for the most recent year on the appraised valuation of the real and personal property, prior to the construction of new buildings or needed improvements and machinery and equipment, purchased or to be purchased with the proceeds of the industrial revenue bonds issued. The purpose of requiring this minimum in lieu of tax payment is to ensure that the City, County, School District, the State of Kansas and any other taxing jurisdictions affected by the exemption will not receive less tax revenue from the exempted property than was received prior to the exemption. For extraordinary reasons, such as when vacant buildings are acquired for a new business, when the market value of the property decreases, or for any other reason determined reasonable, at the sole discretion of the governing body of the City, this requirement may be waived in part or in whole by the governing body.
8. In accordance with K.S .A. 12-1742, the City may require the tenant to make payments in lieu of taxes. The criteria used to determine the amount of payments in lieu of taxes shall include those established by Section 14 of the City’s Economic Development Tax Exemption Policy as approved by Resolution No. 2001-10 adopted November 20, 2001. In all cases, the City may consider a contract fee for City services in addition to or in place of other payments, and/or annual administrative fee. The Letter of Intent shall note compliance with this section.
(amended 11-20-2001)
9. Any person, firm, or corporation desiring the City of Hillsboro, Kansas, to issue industrial revenue bonds pursuant to K.S.A. 12-1740 et seq., shall file an application with the City Clerk. The completed application must be accompanied by an application fee of $500.00 to be deposited in the General Fund. The filing fee shall be used to defray any expenses incurred by the City staff in processing, investigating and reviewing the application relative to the proposed bond issue and shall be nonrefundable. The applicant further agrees and understands that the applicant shall be responsible for paying, in addition to the non-refundable application fee, all expenses incurred by the City for professional services (i.e. fees of the city attorney and/or financial advisor) pertaining to this application and the applicant’s project regardless of whether or not the project is approved or a closing on the sale of the contemplated bonds take place.
10. Procedure for submission of application prior to the issuance of the “Letter of Intent”:
a. Ten (10) copies of the completed application shall be submitted to the City Clerk of the City of Hillsboro, Kansas
b. In order to complete the process and allow adequate time for review by the City, the completed application must be submitted in acceptable content not later than fifteen calendar days prior to the date it is expected to be considered by the City Council. Should during the course of review, the prospective tenant be required to provide additional or amended information, the fifteen (15) day review period may be extended.
c. Upon approval of the application by the City Council, a “Letter of Intent to Issue the Bonds” will be executed by the Mayor and the prospective tenant. The “Letter of Intent” will normally contain those conditions which are required to be met prior to the issuance of the bonds.
d. Notwithstanding the provisions set forth in c) immediately above, the City Council shall deem said “Letter of Intent” to be null and void if the prospective tenant does not present the Bond Ordinance and other required documents for Governing Body passage consideration under the terms of the “Letter of Intent” within a period of six (6) months from the date of issuance of the “Letter of Intent.” Until the bonds are issued, and, in any event, the “Letter of Intent” may be rescinded or recalled at any time by the City Governing Body.
APPLICATION TO THE CITY OF HILLSBORO, KANSAS
FOR THE ISSUANCE OF INDUSTRIAL REVENUE BONDS
I. GENERAL INFORMATION
1. _______________________________________ ______________________
Name of Applicant Date of Request
2. ___________________________________________________________________________
Address City/State Zip
3. _____________________________ ______________ _______________
Contact Person/Title Phone Number FAX Number
4. Names and addresses of other contacts:
_______________________________________________________________________________
Name Address Phone/FAX
_______________________________________________________________________________
Name Address Phone/FAX
5. Names and addresses of the principal owners, officers and directors of the firm requesting Industrial Revenue Bonds.
Name Title Address
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
6. __________________________ ____________________________ _______________
Applicant’s Attorney Address Phone/FAX
II. NATURE OF PROJECT FINANCING (if refunding/refinancing, skip to Section III)
1. Briefly describe the proposed financing:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2. Is the proposed project a new facility, expansion, or replacement of another existing facility?
___________________________________________________________________________
3. Is it the applicant’s understanding that the interest on the proposed issue is tax-exempt or taxable? (Consult Bond Counsel) ________________________________________________
4. Proposed number of years to amortize the bond issue _________________
5. Describe proposed call feature(s): ________________________________________________
___________________________________________________________________________
6. Describe the proposed security for the bonds (i.e. pledge of collateral, corporate/personal guarantees, debt service reserve fund, credit enhancements, etc.).
___________________________________________________________________________
___________________________________________________________________________
7. Proposed date of issuance: ____________________________________
8. Will the bonds be rated? _______________ By Whom? _________________________
9. Interest rate to be fixed or wariable rate? _______________. If variable, please describe:
___________________________________________________________________________
___________________________________________________________________________
10. Please attach proposed debt service schedule.
11. Anticipated source and use of project financing:
Sources:
Bond Proceeds $______________
Cash $______________
Other $______________
Interest on Bond Proceeds during construction $______________
TOTAL $______________
Uses:
Land Cost $______________
Construction Costs $______________
Machinery/Equipment $______________
__________________ $______________
__________________ $______________
Capitalized Interest during construction $______________
Debt Service Reserve Fund $______________
Underwriting & Cost of Issuance $______________
Other $______________
TOTAL $______________
12. Please indicate proposed Trustee: ________________________________________________
III. REDUNDING/REFINANCING (Fill out this Section if transaction is a refunding of an existing bond issue)
1. Which for refunding is proposed?
a) Advance Refunding
b) Current Refunding
2. Current Principal Outstanding $____________________
3. Purpose of Refunding:
a) Interest Savings (Attach proposed saving schedule) _____________
b) Extend of Shorten Repayment (Attach debt service schedule) _____________
c) Change Indenture Covenants (Specify) ____________________________________
d) Other (Specify) ______________________________________________________
4. Was the City of Hillsboro the original issuer? _____________
Original Date of Issue: __________________________
5. If an advance refunding is proposed:
Who is the proposed Escrow Trustee? _________________________________________
Who is proposed to provide escrow verification? _________________________________
What is the length of escrow account? _________________________________________
6. When are the bonds being refunded callable? ________/ ________/ ________
Mo. Day Year
7. Is there a call premium? Yes________ (If so ______%) No________
8. List estimated sources and uses of refunding bond proceeds:
Sources: Uses:
___________________________ ___________________________
___________________________ ___________________________
___________________________ ___________________________
___________________________ ___________________________
TOTAL = $_________________ TOTAL = $_________________
9. Please list the proposed security of the refunding issue:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
10. Proposed Offering Date of the Bond Issue: ________________________________________
11. Please describe any material changes that have occurred to the Company since the original bond issue, (i.e. new products or services, increase or decrease in employment, changes in sales, net revenues, net worth, profitability, new location, new owners or principal stockholders, etc.)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
IV. PROPOSED USE
1. Location of the proposed facility: _________________________________________________
2. Size of the proposed facility (Include size of building and amount of real property):
___________________________________________________________________________
3. Name of Architect and Contractor, if designated (name, address, phone):
___________________________________________________________________________
___________________________________________________________________________
4. What business is proposed by the Applicant at this location? __________________________
___________________________________________________________________________
5. List the products or services to be rendered (Include details of the nature and scope of the operation of the business)._______________________________________________________
___________________________________________________________________________
___________________________________________________________________________
6. What percentage of the facility will be occupied by the Applicant? (If less than 100%, please specify other occupants): _______________________________________________________
7. Describe type of building construction proposed. _____________________________________
8. Current zoning classification: _______________________
Does zoning need changed prior to construction?
(If so, to what classification?) ________________________ , __________________________
9. Anticipated date of completion of Project: _______________________________
V. ORGANIZATIONAL
1. Describe the organizational structure of the firm (proprietorship, partnership, subsidiary, corporation, not-for-profit, L.L.C., etc.) ____________________________________________
2. Is the Applicant’s stock publicly held? ____________________
If so, which stock exchange? ____________________________
3. In what state is the Applicant incorporated? ___________________________
4. Date of Incorporation: __________________________
5. Indicate Applicant’s principal bank: _______________________________________________
6. Which CPA firm does the accounting/audit? ________________________________________
7. Please indicate what company will be performing the environmental assessment :
___________________________________________________________________________
(please list contact person, phone #) _______________________________________________
8. Describe any pending or threatened litigation: _______________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
9. Total employment of Applicant: __________________________
10. How many locations does applicant currently have? ____________________
List Locations:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
VI. MARKETING OF THE BONDS
1. Has the applicant retained an underwriter? If so, please indicate:
Firm Name: _________________________________________________________________
Address: ____________________________________________________________________
Contact Person: ________________________________ Phone/FAX __________________
2. Please indicate the proposed marketing arrangement:
Retail Public Offering: __________
Institutional Offering: __________
Private Placement: __________
Applicant Purchase issue: __________ (Indicate %)_______
Other (please describe) _________________________________________________________
3. Proposed date of issue: ______________________________
4. Proposed date of offering: ____________________________
5. Proposed date of closing: ____________________________
6. Is the issue to be sold intrastate or interstate? _______________________________________
VII. MEASURE OF ECONOMIC GROWTH AND BENEFIT
1. Number of expected new additional employees to be hired at this site:
Year 1 Year 2 Year 3
Professional _______ _______ _______
Technical _______ _______ _______
Clerical _______ _______ _______
Laborers _______ _______ _______
2. Please indicate any notable characteristics of the employees for this facility:
___________________________________________________________________________
___________________________________________________________________________
3. Describe the economic benefits to the City’s economy is the transaction is completed:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
VIII. POTENTIAL CONFLICTS.
1. Is any current owner, officer or director of the City Council either employed by Applicant or hold an ownership interest in Applicant’s firm? If so, please identify the individual and the nature of the relationship.
___________________________________________________________________________
___________________________________________________________________________
2. Please describe any other known circumstances that would create a conflict of interest.
___________________________________________________________________________
___________________________________________________________________________
PLEASE NOTE: Any potential conflicts as disclosed above do not necessarily negate the approval of the Issue, but are pertinent for determining those conflicts for the purpose of public disclosure.
IX. OTHER INFORMATION
Specify below any other data or information you deem pertinent for the City’s consideration in passing upon the approval of the proposed project or financing:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
X. APPLICANT’S AGREEMENT
In consideration for the City’s acceptance, processing and consideration of this Application, Applicant agrees, represents and warrants as follows :
Applicant agrees and understands that a non-refundable application fee of $500.00 must be submitted with this Application. Applicant further agrees and understands that Applicant shall be responsible for paying, in addition to the non-refundable application fee, all expenses incurred by the City for professional services pertaining to this Application and Applicant’s project regardless of whether or not project is approved or a closing on the sale of the contemplated bonds take place. Applicant represents and warrants that all statements of fact contained in this Application are true to Applicant’s knowledge and belief.
It is understood and agreed the information required in Section X or any other information will be disclosed to the financial team and may be disclosed to the public.
DATED this ________ day of ____________________, ___________.
__________________________________________ _____________________
Applicant’s Signature Date
_____________________________________
Title
To facilitate the processing of the application, the following items shall be attached to the application:
(a) Certified copies of the applicant’s financial audits for the past three (3) years,
(b) Applicant’s most recent interim financial statements to date, for the current fiscal year,
(c) Financial Statement, current to date, for each personal guarantor,
(d) Pro forma statements for the first five (5) years of operation after issuance of the Bonds, including revenue projections, operating expense projections and a debt amortization schedule.