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95-70Council File # RESOLUTION Presented Referred Green Sheet # �s��G 0 d�o 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 RESOLUTTON ADOPTING GUIDELINFS FOR THE NEIGIiBORHOOD SALFS TAX REVT�,IZATION (STAR) PROGRAM WHEREAS, by Resolution #94-1127, the Ciry Council of Saint Paul established the Neighborhood Sales Tax Revitalizadon (STAR) Program for the investment of 50� or the proceeds of the i/2 cent sales tax; and WHEREAS, the City Council directed the administration to prepare program guidelines for allocadon of the funds and implementation of the program to be reviewed and agproved by the City Council; NOW, THEREFORE BE IT RESOLVEA, that the City Council of Saint Paul adopts the attached guidelines for the Neighborhood Sales Taz Revitalization (STAR) Progrun. Requested by Department of: Adopted by Council: Date Certified by By: Approved Date By: Secretary By: � Foxm Appr d k By: Approv d y Ma} Counci By: City Attorney to �S_�o DEPARTMENT/OFFlCE/COUNCIL DATE INRIATED ' `O � " � O � c�t coun��i GREEN SHEE CONTACT PEflSON 8 PHONE INRIAVDATE INITIAUDATE � DEPARTMENT DIRECfOR � CITV COUNCiI Sanice Rettman 266-865 0 ASSIGN �CITYATfORNEY OCITYCIERK MUST BE ON CAUNCILAGEN�A BY (DATE) ROU7INGFOR O gUDGEf DIFEGTOR � FIN. & MGT. SERVICES DIR. ORDEA � MAYOR (OR ASSISTAM) � TOTAL # OF SIGNATURE PAGES (CLIP ALL LOCATIONS FOR SIGNATURE) AC[lON RE�UESTEO. _ Adopting Guidelines for the Neighborhood Sales Taz� Revitalization Program. RECAMMENDA710NS�Approre(A)oraejeet(R) pERSONALSERVICECONTRACTSMUSTANSWERTHEFOLLOWING�UESTIONS: _ PLANNING COMMISSION _ CIVIL SERVICE COMMISSION �� Has this person/firm eve� worked untler a contract for this departmeni? _ qeCOMMrt7EE _ YES NO _ S7AFF 2. Has this person/firtn ever been a city employee? — YES NO _ DISTRICT COUFT _ 3. DO¢5 thlS p¢(Sp(1flRm SSess d Skill nOt nOfmall � po y possessetl by any cuneM city empfoyee. SUPPORTSWHICHCOUNCILO&IECTIVE? YES NO Ezplain all yes answers on separete sheet anA ettach to green sheet INITIATING PROBLEM, ISSUE, OPPORTUNITV (Who, What, Wnen, Where. Why)� AOVANTAGES IFAPPROVED� DISADVANTAGES IF APPROVED: DISADVANTAGES IF NOTAPPROVED' TOTAL AMOUNT OF TRANSACTION $ COST/REVENUE BUDGETED (CIRCLE ONE) YES NO FUNDIfdG SOURCE ACTIVITY NUMBER FINANCIAI INFORMATIOM (EXPLAIN) 1 �S- �o 1 � � STAR PROGRAM �� NEIGHBORHOOD SALES TAX REVITALIZATION PROGRAM , � � � � � � � ' , ' ' ' �UIDELf�ES Adopted January 2b, 1$95 These guidelines have been developed for the use of program applicants and the STAR Board which is an advisory group responsibie for the review of STAR Program proposals. The STAR Board makes selection recommendations to the Mayor and City Council. GITY OF SAINT PAUL � Rddifiona� copies of the STAR Guidelines can be obiained from the ■ Department of Planning and Economic Deve%pment, 1400 City Hall � Annex, 25 West Fourth Street, Saint Paul, Minnesota 55f02. Phone: 266-STAR �►�N�4�- �-°�'Y ' , � � � � � � � � , � � � ' ' � � ' � q5 �o STAR Program Overview The Neighborhood Sales TaY Revitalization (STAR) Program will award grants and loans for physical improvement projects in Saint Paul neighborhoods. Key features include: * * * � Program funding: 50 percent of the proceeds of the City's half cent sales taY. Funds are awarded annually through a comperitive application process. STAR funds must be matched on a 1:1 basis with other resources. STAR funds must be spent on physical improvements that have an expected life of at least 10 years. * Eligible appiicants include any public, private, or non-profit organization located in or doing business in Saint Paul. Individual homeowners or individual businesses aze not eligible. � � x� * * Proposais developed with neighborhood involvement and support will be favored. Program allocation goals: 60% for loans, 30% (or $950,000 minimum) for grants, and 10% for seed capital proposals. Small grants: a number of small grants wiil be awarded (awards of $5,000-15,000), using a streamlined application and approval process. Program priorities: community development, business growth, and neighborhood polluted land clean-up. Funding recommendations are made to the Mayor and City Council by the 15 member STAR Board, appointed by the Mayor. Page i , TABLE OF CONTENTS q 5-10 � , � , ' PART I - Program Description I. Purpose and Objectives II. Priorities III. Program Funding IV. General Policies t. Eligible Applicants 11. Eligible Areas III. Eligible Activities IV. Ineligible Activities V. Eligible Expenses � ' 1. II. ' III. IV � ' LJ PART V- Loans, Grants and Seed Capital ' 1. Amount of funds al{owed per project II. Leverage ' 141. Additiona4 4nformation Regarding Program or Project Proposals IV. Loan Rates, Fees, Terms and Collateral V. Program Development and tmplementation � PART V{ - Review and Evatuation � t. Project Evaluation II. Annual Report to the City Council and Mayor III. Annuai Review of Priorities � IV. Review of Allocation Goals V. Audits - Qua!'sty Controt � PART Ill - Apptication Procedure Timeline Procedural Guidelines Pre Application Contents Final Application Contents PART IV - Project Selection I. Neighborhood STAR Board U, Selection Process Iil. Evaluation of Applications IV. Bonus Points Page 1 Page 1 Page 2 Page 2 Page 3 Page 3 Page 3 Page 5 Page 6 Page 6 Page 7 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 13 Page 15 Page 1& Page 17 Page 19 Page 19 Page 19 Page 19 Page 20 For informafion on the STAR Program, call 266-STAR (7827), or STAR Coordinators: Amy Filice 266-6648, Joan Trulsen 266-6694 or ponna Drummond at 266-6556. PART tl - Eligibility � Page ii 1 � ' PART 1 - Program Description * Purpose and Objectives 1 i. 1 � � ' � , ' � 11. 1 � ' ' ' � ' '` Priorities " Program Funding * General Policies � 5 -�0 Program Purpose and Objectives Saint Paul neighborhoods are one of the Cit�s most important strengths, and the sales tax proceeds represent an extraordinary opportunity to revitalize and invest in our neighborhoads. The net sates tax proceeds are to be ailocated for capital projects to further residentiat cuftural, commerciai and economic development and the intent of the City Council is that the proceeds be used in such a way that they have significant and positive fong term economic impact. The Neighborhood Sales Tax Revitalization Program was established to meet the following general objectives; A. Improve and /or stabilize housing stock B. Improve and/or stabilize local commercial and businesses C. Leverage private improvement efforts through use of sales tax funds D. Fund projects or programs that result in high visual or economic impact within the identified �roiect area E. Promote creative use of coalitions and imaginative development of strategies to address Saint Pau{ neighborhoods F. Build community and neighborhood capacity G. Build tax base H. Create family supporting jobs l. Provide job training Priorities The City Councii and Mayor shail clearly and publiciy state, and review annua! priorities for the use of sales tax funds in our neighborhoods. The initiai priorities for the use of these funds shali be: A. Community Develoament - prbjects which are key to promoting health and weil being of neighborhoods such as diversified housing, and attractive commercial business strips with ample park+ng, and an appealing physical environment. B. Business Growth - living wage manufacturing and service sector job growth. C. Neiahborhood PoNuted Land Clean-u� - return blighted parceis ofi real estate to productive uses which enhance the neighborhood and increase the tax base whiVe maximizing use of existing funds available for cleanup. Page 1 � q5�� Ill. Program Funding A. Fifty (50%) percent of the proceeds of the 1/2 cent sales tax, along with its corresponding interest eamings, are dedicated to investment in the neighborhoods (inciuding the downtown residen6al neighborhood and smalt businesses serving that residential population) of Saint Paul. B. The STAFt balance as of December 1 will be announced along with a request for preapplications for fhe next STAR funding cycie. The December 1 amount wifi be noted in the City budget as STAR Program funds. C. Aliocations 1. S'ixty (60%) percent of the (50%) neighborhood portion of sales tax proceeds shali be allocated to low interest loans which wiil return money to the neighborhoods again and again, and wilf buiid a long-term, growing fund source for the future. 2. 3. Ten (10%) percent shail be allocated to the capital portion of a seed capital fund. Thirty (30%) percent shali be ailocated to direct grants or $950,000 which ever is the higher amount. !V. General Policies A. Proposats must be neighborhood-based projects designed with neighborhood representafion to strengthen our neighborhoods and address perceived and actual problems, needs and opportunities. Proposals can be a project, program, or strategy that results in capital improvements in Saint Paul. These proposals may be generated by neighborhood and civic leaders, organizations, and businesses. tnnovative proposals are encouraged. B. In allocating funding for projects, it is the intent of the city to provide geographic equity of projects and do!lars, over 6me. C. Future sales tax proceeds can not be pre-committed to current or future projects or project extensions or expansions. A large project that needs mufti-year funding may be presented as a multi phase project. However, each phase must be viable as a stand-alone project Applications for future phases must compefe on an equal basis with all other applications in that future funding cycle. D. The same or simifar proposal can not be submitted to the CIB Committee or the Cultural District organization in the same year. Page 2 � 1 � ' � , �� ' q 5 -�a E. F Saies tax funds shail be matched on at least a i:1 basis. Projects considered to be of insufficient quality or impact will not be recommended for funding, even 'rf funds are available. G. In the event that Community Development Block Grants (CDBG) funds are added to the STAR Program, areas of the city that are generally considered eligible for CDBG funds, should receive their fair share of CDBG funds as well as their fair share of STAR funds. PART II - Eligibility '` Eligible Applicants * Eligible Areas * Eligible Activities * Ineligible Activities * Eligible Expenses 1. Eligible applicants A. Any public, private, or non-profit entities, which are located within or do business within the City of St. Paul - EXCEPT FOR THE FOLLOWING: , � ' � 11 � ' ' ' � 1. Churches and religious organizations. 2. Polifical parties and related political action groups. 3. Federal, state, and county agencies and departments. 4. Individual homeowners and businesses. (However, programs serving individual homeowners and businesses will be eligible.) LF� City departments or divisions are eligible when in partnership with or supported by an established and experienced neighborhood group. Etigible areas A. All areas within the legal limits of the City of Saint Paul. 111. Eligible aCtivltieS include any physical components of strategies, programs, and/or projects which strengthen andlor improves the neighborhoods in Saint Paul. Capital improvements have an expected life of ten (10) or more years. Some examples of eligible activities are: A. Minor public improvements such as: t�ees and shrubs, benches, play equipment, beautification of public space, decorative lighting, etc. Page 3 q 5 -�d !� lmprovements to property such as rehabilitation, construction or other capital improvements to residential, commercial and industrial property. Exampfes include: 1. Most fixed improvemenfs including the construction, repair and/or decoration of walls, ceilings, floors, lighting, windows, doors, entrances, e(ectrical, plumbing, mechanical, air-condifioning, architectural change, energy and security improvements, handicapped accessibility, eligible improvements shal following: code requirements, etc. For example, I include, but not be limited to the a. Cleaning, painting and staining of exterior surfaces. b. Masonry repairs. c. Repairing or replacing of cornices, entrances, doors, windows, decorative details and awnings. d. Sign remova(, repairing or replacement. e. Parking lots, including lighting, surfacing and landscaping. f. Site preparation, such as demolition, environmental cleanup g. Garages and retaining walls h. E�cpansion of a commercial structure will be a(lowed if it meets all City requirements such as zoning, parking, permit and license requirements, etc. i. Heatth and safety items required by City buiiding codes. particularly as they relate to a housing ar economic development strategy. Trees, shrubs, and lighting shoutd promote safety as well as aesthetics. The Program is not intended or normally sufficient to do major public improvements such as street paving, curb and gutter, sewer and water. Major public improvements should be channeled through the city's ClB process. When additional operation or maintenance costs resuft from the public improvements, the STAR proposal must identify how this project area wiil privately pay for their costs. Requests for capital impmvements that are defined by City policy as "above standard" will not be considered or reviewed ueless accompanied by a iegally-binding and enforceab(e ptan for maintenance and/or operation over the useful life of the improvements proposed to be funded through the STAR program. The most acceptable method for maintenance and operation of above- standard public improvements is assessments on the property taxes of those receiving the benefif from the improvements, t6ough proposals that commit private or non-profit organizations to operate and maintain above-standard public improvements will be considered, depending upon (at the Cify's judgement) the viability of the organization and the enforceability of the legal agreement. Page 4 � � , , , ' � C L J , �� 2. Permit and license requirements must be fu�lied prior to commencement of a project. In addition, the project must be in comptiance with ali legai requirements of ihe Ciiy (Part V, 111, S). C. Economic devetopment efforts such as new housing or business development or expansion, including but not limited to: 1. Acquisition costs including purchase options 2. Demolition costs 3. Commerciai parking devetopment. Acquisition (by tease or purchase), demolition, relocation, and construction 4. Costs of developing commercial parking facilities are eligible activities. If the parking is to be privately-owned, the STAR investment must be in the form of a loan, secured by a lien on the property. If the parking is to be publicly-owned, the STAR investment may be in the form of a grant, matched by capital and operating assessments over the useful life of the improvement. 5. Utility relocation and construction as it relates to a project. 6. Clearance: acquisition ofi iand or a building for clearance will only be undertaken when it is an initial step in a plan which will result in a capital pro}ect. 7. Construction costs including loan interest and fees. 8. Pollution testing and soil remediation as part of a capital project. ' IV. Ineligible activities A. Projects that substitute sales tax funding for other funding. � B. Any activity not leading directly to the completion of a capital project. C. Planning or study activities. D. Use of STAR funds to develop a STAR proposal or to organize an entity ' to manage an STAR proposal. E. Public service programs such as crime prevention, block nursing programs, child care, and similar efforts that do not result in direct � , � I _�� F H. physical improvements. These activities may be included in your total project description/strategy, but they are not eligible for sales tax funding. They will be directed to other City programs, if possible, or private funding for these activities can be part of the project match. Refinancing existing debts, except when ii results in business expansion, job creation, or is part of a larger project. Non-fixed improvements Working capital Genera! administrative expenses inc4uding project management, planning, development and administrative costs accrued before final approval of the application, are not eligible for sales tax funding. Examples include rent and utilities. ' Page 5 q5=�n J. K. L. M. N. Activities located outside the city limits. Major public improvement projects, i.e., street repavirrg, sewer work, recreation center, etc. Sweat equity - payment for the appGcanYs ovm labor and perforrr+ance for construction or improvements. Projects within the Saint Paul Cultwa! District, as long as the Cult�ra! portion of the sales tax is targeting that district. Duplication of a current City program such as the Houses to hfomes Program, or fhe Water Utility's Lead Pipe Replacement Program. Applicants are encouraged to coordinate or link proposed projects with existing programs. V. Eligible expenses inciude any legat direct project cost that specficalfy pertains to the execution of the capital project. Definition: F�cplicit costs that are expended to carry the capital project to comptetion. Exampies are dependant on the type of projecf/program being implemented: • buitding permifs; • design, engineering, soil, environmental, legal, financing, licensing and inspecfion fees; • general contractor's charges (must be in line with industry standards}; • develapers fee or project coordination fee thaf is appropriate to the project and in line with industry standards; • direct costs of staff managemenf that are clearfy associated with the completion of a capital project. Note: Persons receiving the benefit of the projecUprogram are not eligible for devetopers fee. Example: business owner rehabilitating his/her business site. PART !11 - Application Procedure * Timeline * Procedura! Guidelines " Pre Application Contents z Final Application Contents !. Timeline Early January Early February Notification of funding availability, and request for pre- applications STAR Board evaluation of pre-applications resulting in: (1) redirection of ineligible projects, areas, applicants; (2) request for rework and resubmission of application in next cycle; or, Page 6 ! � ' , � , , � , ' , � ' � � L 1 ' ' q 5 -�?D (3) invitation for final application along with request for project specific information to be included. Early March Final appiications due six weeks after preapplications. March Review of STAR Smaii Grant Prog: Council approvai March/April STAR Board Committees, Planning Commission, CIB Committee, and siafif review of applicaiions Early May Recommendations to Mayor May Review by Mayor and City Council Early June Adoption by City Council June Commitment letters with specific requirements and timeline for actions to be completed, sent to those recommended fior funding. July Contracts negotiated assuming stipulations and timelines have been met. Note: The 1995 timeline is subject to passage of guidelines and may be adjusted. 11. Procedural Guidelines A. A complete pre-application must be submitted, on time, for a proposal to be considered during a funding cycle. f� L A complete final application must be submitted, on time, for a proposal to be considered during a funding cycle. City staff will make available for interested parties, copies of the pre- applications and final applications for comment and review. D. City staff will organize a workshop at the beginning of each cycle to provide program application information to prospective applicants. Attendance at the orientation workshop is strongly recommended. Staff may be called upon to assist applicants in developing preapplications and final applications, based an availability of staff. E. Applications may not be changed or mod�ed once submitted. tt is the applicanYs responsibility to thoroughly develop the proposal before submission. However, applicants may be asked to provide additiona4 information to the STAR Board in the course of its review. III. Pre-Application Purpose and Contents Pre-applications will be used to determine eligibility and completeness of proposal. Those ineligible will be not�ed as soon as possible. Some may be Page 7 �5 �Q redirected to other programs. All pre-applications must be submitted on the Neighborhood Sates Tax Revitalization Program pre-application form and cantain the following information: A A brief description of the project proposal. � B. An estimate of the amount and type of funds (combinaUon requests including grants, loarts, and or seed capita! are also eligible) being requested from the Sales Tax program along with an estimate of private or other kinds of corrtributions. C. Name of the organiza6o�ndividual that will develop, imptement and operate the project proposal. D. Up to three letters of support from neighborhood groups located in the area affected by the proposed projecUprogram. (The preapptication includes a standardized form for these letters of neighborhood support,) tV. �inat Application Contents Final application forms will be sent to eligible applicants fo(lowing the preapplication review and approval process. The forms will be accompanied by requests for additional project-specfic information that must be addressed in the final application. Staff, if available, will be identified to provide technical assistance at eligible applicanYs request. All applications must be submitted on the Sales Tax application form and contain the following information, including but not limited to: A. Describe the purpose of the proposal including: 1. Neighborhood problems or needs which the proposal addresses. 2. Documentation of the above problem or needs - such as demographic data, statistics, and district, city and neighborhood plans, priorities, strategies and policies. (Plans are avaitable for review from the Saint Paul Planning Division, the Central Library and branch libraries as possible). 3. Detailed description of the proposal's activities or elements. 4. Neighborhood impact and projected results. — B. Level of neighborhood support and participation. 1. Three (3) additional letters of neighborhood support if the letters clarify, add to, or strengthen the proposal. 2. Description of neighborhood participation C. ApplicanYs management experience and capability, inctuding past Page 8 , , , � , l_l ' ' � ' C ' � , � ' � f� experience wfth similar programs. Please provide a board membership list, 'rf appiicable q�J'1l) Requested amount and type(s) of Sales Tax funding (grant, loan, andlor seed capital) E. Budget 1. Level and source of private commitment 2. Sources and uses statement for all project funds 3. Additional elements such as: a project proforma, sources of private lender financing, three years of financial data, and other information, may be required as it pertains to the proposal. F. G. H. Time line for project that is spec�c and lists milestones. Map indicating project location and street boundaries. Applicants should form coalitions 'rf capacity to implement a project is limited. t. tf above-standard public improvements are proposed for funding, describe the legally-binding and enforceable plan for operating and maintaining them over the useful life of the improvements. J. Evaluation criteria, including expected outcomes and a description of how they will measured. K. Application Fee: A non-refundable application fee of $100 must accompany final application forms. A reduced fee of $54 wi{I be charged for the Small STAR Grant Program. tf a proposal is incomplete or does not appear to be sufficiently developed to allow for reasonable review, the STAR Board may return the proposal to the applicant for further work with the suggestion that the proposal be resubmitted during the next funding cycle. PART IV - Project Selection * Neighborhood STAR Board " Selection Process " Evatuation of Apptications * Bonus Points ' 1. The Neighborhood Sales Tax Revitalization (STAR) Board G Page 9 q 5 =1� is appointed by ti�e Mayor and approved by the City Council. It serves as the formal review body for proposals requesting the neighborhood portion of sales tax funds. The Board recommends proposals to the Mayor and City Council. Ii. S@IeCtiOn P�OCeSS - the selection process for proposals will be competitive and the Board wifl determine the guality of the proposals. The number of applicanfs to be funded is dependent on the size and quality of the proposals and the availability of funding. A Pre applications will be reviewed by the STAR Board and will either: t. Be rejected as ineligible, or directed to other Cky programs if possible � 2. Be accepted for review. The applicant will be asked to submit a finat application with addifional supporting mate�iafs as requesfed by the STAR Board. Final Applications, upon submission, will be reviewed and summarized by sta{f. Applications wii(: Se rejected by the STAR Board if incomplefe or if insufficiently developed, the applicant will be invited to resubmit the proposal during the next funding cycle. 2. Be accepted and all informafion wili be presented to the STAfZ Board. An estimate of city staff project management cosfs will be added to the proposal. Additional information wilt be provided by the following advisory bodies: a. The PED Credit Committee will review the appfications for fisca! responsibility, risk evaluation and appropriateness ot interest rates, terms and conditions, and provide this information to the STAR Board to assist them in making recommendations to the Mayor and City Council. b. The Planning Commission witl review proposais for compliance with the City's Gomprehensive Plan and Capital Allocation Policy. Comments will be forwarded to the STAR Board, Mayor and City Councit within the established timeline. c. Information on all proposals will be forwarded to the committee for informational purposes to allow for coordinated decision making and for coordination, comment, and review. Comments will be forwarded STAR Board, Mayor and City Council within the established timeline. Page 10 ��'- to the � , � ' ' ' , �5'�1C� C. If other entities wanf to review and make comments on applications, they are encouraged to submit these comments in writing to the STAR board within the time frame of board action. The applications will be available for review in central locations such as: the Saint Paui Pianning Division, the Central Library and at sevesa4 branch librar'ses, as appropriate. D. The STAR Board will review the applications based on program guidelines, CIB Committee and Planning Commission comments, and credit committee guidance, and make funding recommendations to the Mayor and City CounciV. E. The Mayor will present recommendations, along with the STAR Board recommendations and the CIB Committee and Planning Commission , comments, to the City Council. � ' III. � l! , ' F. '�he City Council will review recommendations and, by resoiution, make final selections of STAR project proposals and approve their budgets. EvaluBt't011 Of appliCetiolls: Proposals will be reviewed for the following eligibility and additional selection criteria. Proposal supports City Council priorities for the use of the Neighborhood Sales Tax proceeds as approved in a City Council resolution Q Proposal is an eligible program activity. (See Eligible and Ineligible Activities sections.) Proposal meets the minimum leveraging ratio. (See Leverage section.) ,� C. D. Proposa� is not a duplication of an existing private or public program or , replacement funding for an existing program. Fu�ding can be provided for the expansion portion of an existing program. , ' � ' E. Proposal is not in conflict with any city comprehensive plan element, small area plan, capita! allocation policy or adopted City ordinances and policies. Proposal is financially feasible. Requested STAR funds together with othec project resources are adequate to meet the identified need. F Managing arganization has the capabi{ity to successfu4ty manage and implement the project. G. ' Page 11 Q 5 �0 � f. Project effectively addresses a previously identifted or otherwise clearly documented neighborhood need or goal; Proposal was developed with sufficient neighborhood input, is neighborhood based and included in a neighborhood pian. IV. Proposals may receive bonuses for the following additional selection criteria if: A. Project has the foflowing: '!. a positive impact on tax base; 2. a positive impact on neighborhood businesses; 3. a positive impact on residentiat neighborhoods; and/or, 4. a positive impact on job creation. L� C« Q Projecf is part of a well-defined, broad strategy for neighborhood development or maintenance. Activities are sufficiently concentrated within an identified geographic area to result in a high visual or economic impact; Sufficient p(anning or feasibitify analysis indicates a high probabi(ity of success;and E. Neighborhood support is documented - an appropriate mix of residents, � property owners and/or business people relevant to the project included in the planning, development and implementation of the proposal. F. G. H. 1. Proposais include direct coordinafion with other cify, privafe, or non- profit programs and projects Project leverages additional funds or resources which exceed the required match. Percentage of the match that is direct cash or capital investment, is high Atl administrative expenses are funded through other sources J. Proposals are recommended in a District Council Plan, the City's Comprehensive Ptan, in an adopted small area plan, or through another similar neighborhood planning process. K. Proposat is in reaction to, or anticipation of, some City action. For example, a condemnation for eminent domain, widening of a street, or other public improvemenfs. Page 12 , � , , , , ' ' ' L � � ' ' , ' , ' � q5 =�0 PART V- LOANS, GRANTS AND SEED CAPITAL ' Amount of funds ailowed per project * Leverage " Additional lnformation Regarding Program or Project Proposals ` Loan Rates, Fees, Terms and Coilaterai ' Progrem Development and Impiementation Amount of funds atiowed per proposal: A. Regular STAR Program 1. There are no maximum loan/grant request amounts for the regular STAR program. 2. The minimum for the regular program is $15,001. Request for funds of $15,000 or fess wiil go to the Small STAR Grant program. 3. Proposals will be funded based on their merfts and funds available. B. Small STAR Grant Program - requests for small funding amounts will be in the form of a grant. The application and selection process will be reduced. Funding approval may be concluded several months before the regular STAR program process compietion. 1. Five (5%) percent of the total funds available per round will be ailocated to the Smali Grant STAR Program. 2. Minimum grant for the Small STAR Grant Program is $5,000. 3. Maximum grant for the small STAR Grant Program is $15,000. 4. A preappiication will not be required, instead a abbreviated final application form wili be used 5. Any proposals (loan or grant) for $15,000 or less will automaticaily be designated to the Small STAR Grant program. 6. Within three {3) months of the selection approval date, a standardized contract will be signed with the city. II. Leverage A. A minimum required match of one ($1) dollar for every one ($1) received as a grant or loan is required. B. County, Private, State and Federal funds can be used as a match. C. Other City money can not be used to match STAR funds. For purposes of this program CDBG money from City sources cannot be used as a match, (an exception is listed under D). Page 13 � � 1� ,� E. Other city funds that are provided as loans may be used as a match. This includes deferred ioans as tong as the toan is eventualty paid. Matching funds must be direct(y related to the project or program in the applicanYs proposai. F. Applicants are encouraged to fund their STAR administrative expenses with outside private resources, i.e., foundation grants, cash donations, etc. and to use these funds as part of the match. G. � J. Eligible matching contributions may include: 1. Direct f►rtanciaf resources such as private expenditures for commercial or residential physical improvements, contributions or funds raised ftom within the neighborhood, foundation and corporate grants, and tocal lender commitments or operating assessmenfs estimated over the usefut life of the improvements. 2. Indirect contributions can include: in-kind services ftom residents and businesses such as personnel, professional services, office space, supplies, volunteer labor, and sweat equity for physica! improvements. 7he value of sweat equity and/or volunteer Iabor may not exceed 30% of the to#al match. Ineligible matching contributions include: 1. Vatunteer meeting time. 2. In-kind service donations from STAR applicants such as already existing office space, phone service, etc. In-kind donations from parties other than the applicant are eligible. 3. Volunteer labor and sweat equity over 30% of required match. (Higher sweat equity matches will be considered for the small grant program.) 4. Any donation not direetly related to the STAR project. Under no circumstances wil! any match be reimbursed wfth STAR funds. The STAR board has the discretion to recommend approval of other matching contributions on a case by case basis. K Exceptions to the match requirement will be considered by the STAR — board in highly unusual cases such as when a proposal is in response to an urgent need or disaster. L. When inferim financing is used, the grant portion of the project will be considered matched when private funds replace the loan amount. For example: rehab of a house costs $90,000; appraised value after rehab equals $60,d00; resulting in a subsidy af $30,000. The STAR program Page 14 , � , , , , ' C� , � ' ' , L� ' , q� =�o program upon sale of property, and is considered a match to the $30,000 grant. provides a grant of $30,000, and interim construction financing of $60,000. Private mortgage dotlars of $6Q,000 are repaid to the STAR Ift. Additional tnformation Regarding Program or Project Proposals A. Program Proposals 1. Complete program guidelines must be part of the proposai application and must be approved by the City Council 2. If a program, such as a revolving loan fund, is established by the appiicant using grant doi{ars, repayments accrue to the applicant for reuse in the program for which the grant was approved 3. ff a program is established by an applicant using loan doifars, the foan from the Neighborhood Fund must be repaid in fuil and on time. Any excess funds accrue to the applicant. 4. Incentives for fund recipients which increase their success in maximizing the use of the money may be included in the proposal (i.e. with a revolving loan fund, the recipient may be aliowed to keep a portion of the payments, or excess funds due to higher interest rates.) ,� Ali legal requirements of the City of Saint Paul must be met such as: 1. the property must be appropriately zoned, meaning the prapesty must conform to use under the City Zoning Ordinance. 2. for new construction, properties must be on legal buildable fots 3. prior to pertorming leasehold improvements, the tenant must obtain written permission ftom the buitding owner for the improvements. 4. Prior to project implementaiion, aii necessary permits must be obtained. Upon compietion of improvements, the appiicant must have followed, and the property must meet, ail applicable code, permit and license requirements. Finally, the property must be properly inspected and must have a current Certificate of Occupancy upon completion, if applicable. 5. An applicant must have the ability to repay if requesting a loan and be an acceptabie credit risk as determined by a bank or the city. (See underwriting standards). 6. Funds wil! be released on a reimbursement basis upon receipt of documentation of eligibie expense. 7. Littie Dav'ss Bacon regulations must be followed as applicab{e. Page 15 q5 �0 IV. ' c. Projects and proposals must not conflict with adopted plans and policies � of the City of Saint Paui. D. Seed Capitai Loans: The Seed Capital funds wiil provide long term financing to growing businesses that are nof deve!oped enough to interest other venture capital injection. Businesses that promote stability irt rteighborhoods are of particular interesf. 1. the seed capitai funds must be used for capitai expenditures that will free up the business's funds to be used for development of an idea, product or service. 2. seed capital loans wiil usually be paired wfth technica{ assistance in such areas as financiat management and marketing. 3. seed capital loans must trigger other third party financial participation. Loan Fees, Rates, Terms, Coltaterai, artd Generat Servicing A. Rates: will be determined by the applicant, the STAR Board and the Credit Committee's analysis of application. The PED Credit Committee will analyze the housing, economic development, and seed capital loan requests and rate them based on industry and city standards. � C. Terms: terms and conditions - will be negotiated and customized for each individual proposal. Collateral may be required: The city shall file for any liens required on co(lafera(. D. Operating Assessments: If STAR capital funding is to be matched by the operating assessment, rto funding can be disbursed until ftnal ratification of the matching operating assessment. E. Loan Origination and Servicing 1. Individual payments for single projecfs and all payments for loans in programs wit( be processed througfi PED accounting. Individual loans through programs will be originated by the program operators 2. Servicing Fees a. Loans originated through PED (programs or single projects) will be charged a loan ctosing fee equal to 1 1/2% to 3% of the loan amounf, before any disbursements. (An approved origination fee may be charged by program operators for each loan originated.) Page 16 ' , � C' , , � � , ' �I C' ' V. ' � � ' ' Q5=10 3. b. a fee of $5 to $10 wil! be collected with each loan payment c. a charge of 5% of the monthiy payment will be assessed on late paymenis over 15 days delinquent. d. If another part}r (approved by PED Credit Committee) assumes the mortgage, a 1 1/2% to 3°lo assumption fee on the outstanding principal balance wiil be charged. A sub-accounting system wiii be used to monitor the fotal loan amount and to provide periodic reports to: a. the g�oupfindividua! impiement+ng the loan program; b. project managers c. the City's budget office d. the Mayor e. City Councii f. Citizens of Saint Paul 4. Revolving Loans: a. a percentage of the loan repayments, (up to 10%), may be kept by the revoiving loan operator, the remainder (90%) is returned to the City's sales tax fund for reinvestment in capital projects b. the program operator is responsible for handling delinquencies of loans they have originated. F. Loan Loss Ratio - in order to address loan needs which can not be met through standard financial institution lending programs, will have a loan foss ratio which may at times reach 20%. The risk rating system will be used to heip assure that the program operates within this range. Project Deve{opment and Imptementation A. Upon selection by the City Council, the STAR project applicant will receive a letter of commitment which spec�es a period of time during which the applicant must refine its project or program, secure its private match, meet other req�irements as specified in the fetter of commitment and enter into an agreement with the City for the use of the Star funds. Failure to act with+n the period of time specified in the commitment letter may result in cancellation of the commitment. Proposals should be completed or self-sustaining within the period of time approved by the STAR Board and specified in the agreement. L� Implementation Contract Prior to the implementation of an applicanYs project, a contract will be entered into between the City of St. Paul and the selected applicant. ' Page 17 QS=I� The contract will contain, at minimum, a scope of services to be performed by alf parties, a private match section and a budgef section outlining ali funding sources, and an impiementation timeline. The contract wi{I be signed in accordance with City policy. Impiementation contracts require: 1• that the projeat applicant has insures the City of St. Paul. ' Ll �_I appropriate liability insurance which � 2. adherence, where applicable, to Federal, State and Local regutations, and palicies pertaining to fhe use of funds such as prevailing wage sfandards, relocation requirements, affirmative acfion, targeted vender programs, and the First Source program. The nature of the project (ie. residential vs commercial) determines which regulations apply. Staff wilf hold a compliance meeting prior to implementation of the �rontract fo identify regulations applicable to project activity. Sales Tax aonlicants are cautioned not to make anv neiahborhood commitmenfs untif thev fullv understand potential compliance and fundina reaulations 3. implementati�n must progress as projected in application, lack of progress is grounds #or withdrawing funding. C. Sales Tax Fund Distribution - Sales Tax Fund allocations will generally be on a reimbursement basis, Final payment wiil be made upon completion of the project and receipt of the final project report and evafuation. At the time of comptefion of all aefivities contained in the agreement or upon expiration of the agreement, any remaining project fund balances will be returned to the STAR Fund. D. Projects are expected to be completed within the time frame described in the final application. Requests for e�ensions to contract effective dates are discouraged. Proposals are setected based on certain criteria and should not be significantty changed during project implementation. Page 18 ' � � ' , � LJ ' q5 �� PART Vt - Review and Evafuation * Project Evaluation " Annual Report to the City Council and Mayor * Annual Review of Priorities "` Review of Aflocation Goals '' Audits - Quality Control Project Evatuation A. Semi-annuaf status reports wiil be required for each project, which wili provide an ongoing monitoring process. The report will include project expenditures, status of match comrriitments, and progress toward meeting expected project outcomes (as identified in the original application). This will allow for timely adjustment of individual projects if necessary. Project managers will monitor and report on individual projects for progress and compliance with contract. B. A final evaluation of each project will be required to determine the extent , to which the project has been successfui. Project success will be measured against expected project outcomes and the overall objectives t of the STAR Program. This fina! evaluation must be received before the final reimbursement request will be paid. , II. Annual Report to City Council and Mayor The annual report should be presented in September of each year and should include: �_ � A. B. C. D. E. F. Progress report on all projecis to date, their locations, and costs Percentage loans, grants, and seed capital funds awarded Fiscal analysis of overa{{ program Effectiveness in supporting priorities. Estimated funds available for the next funding cycle Evaluation of the program process and suggested revisions ' , � � ' C'' ' III. Annual Review of Priorities Priorities for the use of sales tax funds in our neighborhoods must be reviewed annually. These priorities shall be reviewed at a public meeting following the presentation of the annual report and the Council and Mayor shatl clearly and publicly state priorities for the upcoming funding cycle. Target allocation goals shall be reviewed, as necessary, by the Mayor and City Council. Page 19 q5=�� iv. Audits - Qualiiy Contro! A. The City wiit establish a monitoring and control system which ensures that loan repayments are made under the terms of each project's agreements. 1. tf wilt be the responsibilify of project developers to provide all necessary documentation, as determined by the City, for purposes of determining program etigibility and ongoing program compliance. 2. Reports on revoiving foan programs wili be periodicaily provided to the project developers to assist in their monitoring of their programs finances. B. Periodic extemal audits rrtay be required. Page 20 � ` � 5 -'ZC January 16, 1995 �� e�� St: Paul City Council 25 West Fourth Street St. Paui, MN 55102 Dear Council Members, Summit Hill Association District 16 Plan�ing Council 860 Saint Ciair Avenue Saint Paul, Minnesota 55105 Telephone 612-222-1222 � �� Fax 612-222-i 558 �CC3Lr}C[L PRESI�cNT C�VE T(;U[�E T�e foiiowing are comments and concerns about the proposed 1/2 Cent Sales Ta� Revitalization Programs guidelines. Affer careful review of said guidelines we have highlighted several points that we suggest be adjusted or changed. They are enumerated below. 1. Program 'Grant: Funds (page 4, IV, E) WQ he�ieve that a reqni"rement grant funds be;matched on a 1:1 basis potenhally excludes many worthy projects. Such pro}ects could easily gain public suppart yet have limited access to matching "fund, reson"rces:_ We tsetieve that -- additional ppi�ts couid be givem for. �those projects : which, have' �atctiing bu�t � matching" fund'ing �� shoulc� not. b"e' required. �� _� � . 2. .Fligible .Applicants'(page�4, I B) � � The proposed guidelines state that City d�parxmentis or „ divisions are eiigible wheri in partnership with a neighborhoad group. Tkis guidelirie ann�ars to create a. � conflict of interest on -the part of ttie PED which wil-1 be� �. __ involved in the sele�tidn of p�ojects. If tlie� PED proposes a project in partnership with a neighborfiood group they would then be in a position to favor their own project over other �worthy ap�licants. We propose thaf _ the guidelines be c�nstructed _in, a manner that will �� avoid any and_ all potential conflicts of �interest� on the part of Gity departmen�s or d"ivisibn's. � � 3. Eligible Expenses (page 6, V') �Under the cate�ory of eligible'expens�s the fiiial item enumerated"inciudes direcx �cos�s of City staff to rilanage �he�" � � . q57a pro}eet. While it is understatabie that the City dc�es not wish to incur administrative costs on these projects such fees charged by the City should, be limited to 2-3°� of the totai cost of the project. Presently there is no method to determine how much the City may charge for administrative costs or how much time City staff will devote to such projects. We believe that both the time devoted and the costs of such services be lirnited and clearly stated. Moreover, said charges should reflect the spirit of the overali 1/2 Cent Sales Tax Revitalization Program. 4. Small Star . Grant Program (page 14, I, B, 1&2) , We propose that the totai funds availabie per rounci be increased from S�Yo to10°6. Also, that the minimum grant be reduced from $S,Q00 to $2,000. The rationale behind such changes stem from our desire to _, see more applicants receive funding and That smalle�. �neighborhood projeets not be�discQUragQd f�om usi�ig fhis funding prog� due to. their size: If oniy 59'o- of the total' - fund 7s allocated. and a minimum grant wouid be $5.,004 the largest riurgber of_�iossible SmaYl Star Grants giveri per �� -rou�n�i-wouId be.riine (9); anz� fhe larg�st'num6er woul�t be -�- �� ` th�ee (3): It �voa]d�be preferable if more �vere fax�ds"�vem; .� �� dedieated �o`fhese grants and tYiat,tliey were inore :�. �, � e � � � �accesstble to sma�le� pro�ects� . � � _ � � � � � 5: � Servieing Fees . ( page.l.7, E 2 b) - " . . -- - � � �� The fee airangement proposed �for collection of each loan ��- � � payment is neither �ustomary oi reasa�able: . To�charge' �p "- � r� �12C�:�r►.for pay colleetietn�v_�hile ch�r�ing other �� .�administrarive fees'is un�ecessa3y'and appea� to be �:- � gaugi�g ori the-part oF the City. , We� pPOpose that; no ��. such collection fee,s _be charged. 6. =Revolving � I:oans (page 18, E 4� a�� _ � � � �-� The -fo�lowing quest�ons"need ra be addressed; 1. �hat is -� the PED �b�eing paid" for� ixs services? -2. ir�lho yvi11 � � � the loari �operator be? 3: "�Who will the prograrii, �� o_perator� be? Uni�er .tlie revolving 1oa� categor� it ° � � � � iridieaties that np tol0�lo af loan repayments'�in�y'be i�e�t by �_ t t�.�� the revolving loan operator. This area needs clarification, and if the amount 10% is correct it should be reduced. This amount seems too high especially in light that darification is needed for what PED and the loan operator are doing to merit such fees. 7. Sales Tax Distribution Fund (page 19, V C} We .oppose the reimbursement concept of.fund distribution. If funds are generally disbursed when the pro}ect is complete, many potential appiicants may avoid promoting worthy and needed projects because payment �omes only at completion of the project. We envision many projects that will require at least partial disbursement at an eariy phase of the project This in our opinion would be reasonable and not violate customary practices: �. � � Atso i� is �roposed that.any yrennaining project fund � � tialances be returned to the SFAR Fund. We propose tha"t • unnsed gran�tfiinds.be ret�rned specificaliy'to the graxit ". , fund; itself , If this dc�es not` occur the =gi ant fu�d in effect_ , � � � . � �loses a �rtion of its oiiginal,afinount��ecause a�loca'ted� ` � � , �� fuiids�we.re xiot �used._ We strbngly urge that � all� un�sed � , � �� . � , � _`gr"ant, fun�ds b� protected and funneled back to the � � � � � � � �. � � grant'�.fund ��o �hat the �30��allocated �or, grants� not ;- �= - _� �- ' � �� ' :b�e� �diminished beca�se:,projects, come in ��nder cosi.� � � � � �; �`: �Ne hope that our comxnen-is��e help€u�l and�will be considered fully. �� _ �'i3.�.�"-k �,r�e� f�_ cni�ri!1:?b L^:.'i CQi'!?�*nP� y.c, .�rP an»,s'ar�iatr` �rn2��- �nta�-PCt. � _ � � �ineerely, � � � . ' � � - � � � , � . - �� ° � , � - � _ �_ � `_ Frank 1yliley-ori behalf of Hi1T Board of Directors ,_ " �. � ��,cc.Amy-Filice � , �� - r�n��R�vtLHNDGULN{ 6126987975 p_8y 11 �acalester-Grovel,axid Com�n.wn�i.ty Council 3zo so[r�tt c:k[c;cs s�r.hF r SAIIYI'I'AUI. MINNFSO"PA 55105-2Ei(10 TF.LPY110NE: (Gt2) 6)ti-797i Januazy 24, 1995 Dave Thune, President Saint Paul CYty Conncil C�ty Hall Saint Paul, MN 55102 Dear Dave, q� -�0 We are excited about the Neighborhood Sales '�'ax Revitalization Prograrn and the prospect o£ new, no-strings, fle�cible, citywide money to do new things to iznprove the housing and business growth in our azea. The Macalester-Groveland Community Council has for many months been working to develop a strategy to help address the daferred maintenance of our aging housing stock. We are hoping to be able to use Nezghborhood Sales Tax funds to paztially fund a program which will provide incentives for people to do the work that currently is being put off. The community council is hopefui that the guidelines for this program will be such that v✓e w+ill not be precluded from using these funds. We have identified the barriers that are preventing our residents from taking on maintenance and fix-it projects and hope to use the Sales'�'ax funds to "guazantee" the risks assoGated with lender equity, etc. We are hopeful that the guidelines will allow for organizations like ours to use these funds in conjuncdon with a partnering locai bank. It appears that the draft guidelines call for Saies Tax funds to be held in PEb. It concerns us that a bank may not have as much incentive to partner with community organizations if the funds cannot be deposited with that bank. Sincerely, .G'� "'�� Je££zey Cairns President 2 S1 .T�vt/<ee»ner The St. Paul Coalition for Community Development Aurora St Anthony Area Block Clubs Inc Conmrd Street Business Assotiation Dayton's BWff Neighborhood Housing Services East Side Neighborhood Development Gompany Fort Road Federaaon Frogtown Attion Alliance Hamline Midway Area Rehabilitation Corporation Neigh6orhood Devetopment Alliance North End Area Revitalizatron, Inc North East Neighborhoad Development Corporation Selby Area Communiry Developmen[ Corporation Umversiry Umted West Side Neighbarhood Housing Serv¢es Thomas/Dale Distnct Seven Communiry Countil West Side Citizens Organization Arupace Locai lnitiative Supporc Corporation Neighborhoad Development Cenrer Project for Pride m Living SL Paul Ecumenical Alliante of Congrega[ions TO: MEMBERS OF THE SAINT PAUL CITY COUNCIL �� FROM: Susan Rimberly, Executive Director RE: Written Testimony on the Draft Guidelines for the Neighborhood Sales Tax Revitalization Program DATE: January 18, 1995 Council President Thune and Members o£ the Council: Attached to this memorandum you will find a copy of the Report of the Neighborhood Caucus on the Use o£ Sales Tax Proceeds published in November of 1993. We are providing you with still another copy of this report because we still believe that it is superior to the program design you adopted last summer. Had you adopted our program design, we believe you would have a very different set o£ program guidelines before you today. Program guidelines growing out of our design would be more neighborhood-centered, more flexible and better suited to meeting the challenges facing our neighborhoods. Having said that, we also acknowledge that you did adopt a program design and that the guidelines be£ore you today are not inconsistent with the design you adopted. We have been debating this issue for a very long time and we believe it is now time to set aside our differences and go to work on this important program. If problems arise, we will point them out as they occur. TwinCitiesHabitatforHUmaniry Before CIOSIRCJ however, We C�O W1S11 t0 address OIl8 specific point: On Page 3, under III. Program Funding TwinCinesHOUSingDevelopment sub ara ra h A the roceeds of the nei hborhood Corporation P g p / P g weso-„��e, co��at�o� portion of the sales tax are "dedicated to investment in neighborhoods (including the downtown neighborhood) of Saint Paul." susan K�mberly This language is much more general than we would ExecutiveDirector like. We would prefer that neighborhood sales tax Te1672-292-8074 proceeds used in the downtown area be limited to neighborhood scaled housing and economic development projects in the residential areas of downiown Saint Paul. FAx Zqt-pqz5 �}g� S, Wqeq�sttqsr The language as proposed would a11ow funding of sr'�rWt MN 5s�o7 virtually any project in the downtown area and we do not believe that this language is in keeping with the original intent of the sales tax program. S ��, 3 �� REPORT OF THE NEIGHBORHOOD CAUCUS ON THE USE OF SALES TAX PROCEEDS November 9, 1993 The key is to focus on the neighborhoods. Historically, they've made Saint Pau1 a distinctively livable community. A community strategy centered on empowered, supported, successful neighborhoods is the smartest thing Saint Paul could do. -- Neal Pierce THE PIERCE REPORT November 1991 SO CONCLUDES THE PIERCE REPORT published in the Saint Paul Pioneer Press just two years ago. Our community's efforts to levy a half-cent sales tax grow directly £rom the publication of that report. When he was in town last month for the National LISC conference, Pierce said he was not surprised that Saint Paul neighborhoods were going to benefit from this tax levy although he was surprised that neighborhoods "had bitten off half of the proceeds." It seems to us that empowered neighborhoods would settle for nothing less. In this light: A UNIQUE COMMUNITY RESOURCE WE BELIEVE THAT sales tax proceeds designated for neighborhood revitalization represent an extraordinary opportunity for community development and capacity building and, therefore, should be treated as a unique community resource. l. Sales Tax Proceeds come from everyone and, to some extent, belong to everyone. The availability of sales tax proceeds is the result of the efforts of a broadly based community partnership of public, private and nonprofit labor, business, government, neighborhood and arts organizations. Sales tax proceeds are collected from everyone making retail purchases in the Report of the Neighborhood Caucus November 9, 1993 Page 2 City. They are not simply "just another city revenue source" and should not be viewed as such by anyone. 2. Sales Tax Proceeds are public monies, but they are also community monies. As public money, sales tax proceeds call for a high level of sound fiscal oversight and public accountability. Specifically, sales tax proceeds and their uses should be subject to the terms of state and local law, generally accepted accounting standards and full public disclosure. At the same time, as community money, sales tax proceeds call for a special kind of community stewardship. Sales tax proceeds must be allocated through a broadly-based, open, public process. No one should presume to use or allocate them outside of this public process. In addition, be formally i2fla� E9V2Ty the use of evaluated on �i�ree y2ars . sales tax proceeds should a regular basis, i.e., at FUND STRATEGIC OUTCOMES AS REQUIRED by State Statute, sales tax proceeds must be used for residential, economic development and cultural capital projects in Saint Pau1 residential neighborhoods. Furthermore, the Caucus agreed that sales tax proceeds should be used to £und strategies which promote the following strategic outcomes: General Neiahborhood Outcome Culturally diverse, safe neighborhoods where people want to live, invest and do business. Nei4hborhood Housina Outcomes 1 2 Increased and increasing real estate values. Fewer vacant homes and buildings. � 5 �� 3. An increased level of owner occupancy. Report of the Nei€hborhood Caucus November 9, 1993 Page 3 4. Improvement in the condition of the existing housing stock -- both owner occupied and rental. 5. Removal of lead from neighborhood buildings and resolution of other neighborhood environmental issues. 6. Financing assistance for home buyers. Neiahborhood Economic Develooment and Job Ou*comes 1. An increase in the value of the City's commercial/industrial tax base. 2. An increased number of family wage paying jobs available to City residents. 3. Improved/revitalized neighborhood business districts and hubs. 4. BetLer access to jobs for people living in Seint Panl reighbo_hcod -- cvhe_ever �hose jobs might be. � 5. Retention and expansion of existing businesses. 6. Retention of existing jobs. 7. Additional parking facilities. 8. Improved transportation facilities and opportunities. 9. Clean up of polluted buildings and building sites. Neiahborhood Cultural/Artistic Outcome Cultural and artistic activities should be encouraged in all City neighborhoods. FUND STRATEGIES RATHER THAN PROJECTS SALES TAX PROCEEDS earmarked for neighborhood activities should be used to support these outcomes and to fund strategies rather than projects. q5�10 Report of the Neighborho.•u C.�ucu� November 9, 1993 Page 4 1. Strategies should be neighborhood generated. By this we mean that neighborhoods should have the opportunity of articulating their own perceived problems, needs and opportunities. And, in concert with shared neighborhood values, they should have the opportunity of articulating the best approaches and alternatives available to address these problems, needs and opportunities. 2. These stzategies should be custom-built and governed by individualizad contracts. By thi5 we mean that strategies should be funded through individually negotiated contracts. The terms of the contract should specify the expected outcomes in both quantitative and qualitative terms, identify acceptable costs, maximum spending levels and agreed upon options and/or action alternatives. Accountability must be rigorous, but it should be achieved through the terms of the individual contracts rather than through general programmatic regulations. 3. In most cases, these strategies should be generated by neighborhood leaders and neighborhood organizations. In the majority of cases, we would expect that strategies would emanate from neighborhoods and should be sponsored by a neighborhood-based district council, community development corporation, business association or arts organization. Collaboration among community-based organizations should be encouraged, but not required. GOVERNANCE OPTIONS GIVEN THESE CONSIDERATIONS, the Caucus examined several governance options for the administration and allocation of sales tax proceeds for neighborhood activities. The Caucus determined that either of the following governance models would be acceptable: q5=�0 1. The Caucus characterized the first option as a trust fund governed by a citizens advisory board which would make administrative, funding, allocation and policy Report of the Neighborhood C�ucus November 9, 1993 Page 5 recommendations to the City Council. The City Council would then make final decisions on the advisory board`s recommendations. 2. The Caucus characterized the second option as a trust authority governed by an independent citizens board. This board would have the authority to make administrative, funding and allocation decisions within policy parameters established by the Mayor and City Council. The Caucus makes no recommendation as to the size of either governing body. However, in either case: 1. The governing board should be comprised of neighborhood residents and owners of neighborhood businesses and board members should be representative of the City's geography as well as a variety of neighborhood interests. 2. Appointees to the governing board should be appointed by zhe Mayor and confirmed by the City Council after the Mayor has sought nominations from neighborhood district councils, business associations, community development organizations and arts organizations. 3. Governing board members should be limited to serving two staggered three-year terms. ALLOCATION PROCESS AND CRITERIA ALL SAINT PAUL NEIGHBORHOODS should be abie to compete for sales tax proceeds on the basis of strategies as described above. We would also propose that allocation of funding to any particular strategy would be made through a competitive process. The competitive process we envision would be neighborhood driven and initial ratings and rankings would be done by a group representative of a variety of neiqhborhood district council, community development, arts and business organizations. "IJ �� Consistent with this process, the Caucus proposes that the following Rating Criteria be used. All =�aport of the .Ieiohborhood Carcus �:ovember 9, 1993 Page 6 strategies funded would be req_uired to demonstrate: 1. Consistency with the desired outcomes listed above. 2. Consistency with the neighborhood's own strategic goals and plans. 3. Feasibility in terms of financing, workability, practicality and timing. 4. Suppozt from the affected district council. �5. That alternative funding is not readily available from another source. Housing strategies funded should also demonstrate a positive impact on existing/suzrounding housing stock. Economic Development strategies funded should also demonstrate positive economic impact in terms of producing jobs, increasing �he tax base or increasing family income in the neighborhood. Bonus credit should be awarded to strategies demonstrating: 1. A consensus of support from district council, community development, arts and/or business organizations in the affected neighborhood. 2. A positive impact on the City's property tax base. 3. A positive impact on the environment of the affected neighborhood. 4. A positive impact on the parking or transportation systems in the neighborhood. 5. A positive impact on small businesses in the area. ;6. An ability to leverage additional public or private funds or resources. 7. A positive impact toward balancing the distribution of City and/or regional resources. ��J-�� Report of the Neighborhood Caucus november 9, 1993 Page 7 The Caucus examined carefully the possibility of giving weight to the economic need of the neighborhood and rejected that concept. The Caucus also considered the possibility of developing an allocation formula that would provide some amount of money to every Saint Paul neighborhood. This concept was also rejected. The Caucus agreed that "merit" should be the critical factor in allocating sales tax proceeds. NOT! FINALLY, we believe that sales tax proceeds should not be used to: 1, Displace existing £undinq sources. The availibility of sales tax proceeds should not be used as a reason for reducing the City's existing commitments to neighborhood revitalization. To replace existing funding programs. Sales tax proceeds should not be used as a replacement of existing CI8 or other similar capital project resources. A FEW WORDS ABOUT THE CAUCUS. The Caucus met six times during August, September and October. These meetings were convened by the St. Paul Coalition for Community Development and facilitated by Carol Lukas of the Amherst H. Wilder Foundation and Eustolio Benevides of Neighborhood House. Approximately 135 neighborhood leaders were invited to each of the meetings. Specifically, the chair and community organizer of each district council, the chair of each neighborhood business aesociation, the directors of each of the City's community development corporations and the directors of some three dozen neighborhood-based arts organizations were notified of of the Caucus' meetings. Some 50 individuals took part in one or more of these meetings: The interim reports of these meetings were distributed to all 135 people invited. q5 �o � C11'Y OF SAIl�PT PAUL Norm Coleman, Mayor MEMORANDUM DATE: TO: FROM: RE: December 8, 1994 Interested Citizens Amy Filice DEPARTAffi�71' OF PLANNING a S —� C7 & ECONOMIC DEVE[,OPMENr Lmry D. Bueglc, Dvertor 2S wertFowth strat Telephone: 612-266fi700 SacuPau7,MN55102 Facsmile:612-228d261 Draft Guidelines for 1/2 Cent Sales Tax Revitalization (STAR) Program Attached is a draft of the guidelines for the 1/2 Sales Tax Revitalization Program for your review. We weicome written comments which we will distribute ta the administration and the City Councii ar if you or your group have questions or comments or wouid like to discuss the guidelines in depth, we would be happy to speak with you on the phone or to schedule a meeting. Please call Amy Filice at 266-6648 or Joan Trulsen at 266-6694. The City Council wiil hold a public hearing on the guidelines: January 18, 1995 at 3:30 City Council Chambers in City Hali. �S �� * EI��sCUTIVE SUMNIAKY * NEIGHBORHOOD SALES TAX REVITALIZATION PROGRAM: DRA�T GUIDELINE.S 12/7l94 Introduction On September 28, 1994, the City Council approved the purpose and general guidelines for the Neighborhood Sales Tax Revitalization (STAR) Progtam. Staff from the Department of Planning and Economic Development (PED) were directed to develop specific pmgram guidelines for allocation of funds and implementation of the program. PED staff sponsored two workshops to solicit public input on program guidelines. The draft guidelines developed by PED aze attached, and have been released for a public hearing before the City Council on January 18, 1995. This executive summary includes: guidelines contents by major heading, an overview of the program, and identification of major issues yet to be resolved. Guidelines Contents Part I - PartII- Part III - Part IV - Part V - Part VI - Program Descripdon Fligibility Applicarion Procedure Project Selection Loans, Grants, and Sced Capital Review and Evaluation Pa¢e 2 4 7 10 14 19 Program Overview The Neighborhood Sales Tax Revitalization (STAR) Program will award grants and loans for physical improvement projects in Saint Paul neighborhoods. Key features include: * Program funding: 50 percent of the proceeds of the City's half cent sales tax. * Funds awazded annually through a compefitive application process. * Program grant funds must be matched on a 1:1 basis with other resources. * Eligible applicants include any public, private, or non-profit entity located in or doing business in Saint Paul. * Proposals developed with neighborhood involvement and support will be favored. * Program allocation goals: 60% for loans, 30% (or $950,000 minimum) for grants, and 10% for seed capital proposals. * Small grants: a number of small grants will be awazded (awards of $5,000-15,000), using a streamlined application and approval process. * Program prioriues: communiry development, business growth, and neighborhood polluted land clean-up. * Funding recommendations made to the Mayor and City Council by the 15 member STAR Board, appointed by the Mayor. q5 �� NEIGHBORHOOD SALES TAX REVITALIZATION PROGRAM (Neighbort�ood STAR Program) DRAFT GUIDEUNES* December 7, i994 * This is a working document designed to elicit questions, reaction, and recommendations. Please call Amy Fillce (266-6648) with comments, suggestions, or questions. L"vrrently, the PlantsitEg Commissian � cons3desu� metihods tn �l�dat� #�ie �ity's cusnpetitive grant programs into one fundu�g iyc� +C�te opunn 1'r�ing t�ider�,is tu . .,:a�d a portion of. t�►e BwTding N�ighborh� T�Se�s�r : ($1+1T� itr�gcam fiinds to ti�� `.: �1'�1R Progam a�d a porEion af °the B�1'I' #undq;tt� ��iv�c �k�iiiu�t�� Partnershi��, : :PFggiam {�C3Pp) iafher fhan im�iemcnttn& tw�;proSra�!s {BNT aiid a�"'�'AT�� _f6at ar�. .. sun�lar �n i�t�n. :�apitat prqj�cts wniild Tze ��d vtic�` thhe ST�1R �r�,grani and ;�v�nan servx�s proposals wontd be cz�s�ecec� �adet fhe :GtDPP progra� ° T'h� B�t'I'_ `; ^: pro� vvas knt�nded primai�,Ty as �ts, sa t�s maa�y i�w�id be �ddci� �a tite �trsnt �oc�i cif eitt� th� S't'x�R pTaB'ard or t� �CSPP�sa,gram; i� e�r rsse, t#iete woutd fxe e#fiitienairs fo�r �pp3icants, etected o� ��taff T�y ie�t�g t#i� �ntriti�r c�f �g .:: pmgarns, snd rs+�uld siic��e more stratcgue ��rch�t�scva tt�vestmeait �i�ets�ns. •-: "`; Page 1 q5= �o PART I - Program Description * Purpose and Objectives * Priorities * Program �nding * General Policies I. Program Parpose and Objectives Saint Paui neighborhoocls are one of the City's most important strengths, and the sales tax proceeds represerrt an extraordinary opportunity to revitalize and irtvest in our neighborhoods. The net sales tax proceeds are to be atlocated for capital projects to further residential, cultural, commeraat and economic developmerrt and the irrteM of the City Council is that the proceeds be used in such a way ihat they have significant and positive long term economic impact. The Neighborhood Sales Tax Revitalization Program was estabiished to meet the fo0owing general objectives; A. Improve and /or stabilize housi�g stodc B. Improve and/or stabilize local commerciai and businesses C. Leverage private improvemerrt efforts through use of sales tax funds D. Fund projects or programs that resuR in high visuai or economic impact within the identified project area E. Promote creative use of coalitions and imaginative devefopmerit of strategies to address Sairrt Paul neighborhoods F. Build community and neighborhood capaary G. Build tax base H. Create famify supporting jobs I. Provide job uaining II. Priorities The Ciry Counal and Mayor shall dearly and publ'idy state, and review snnual priorities for the use of sales tax funds in our neighborhoods. The initial priorides for the use of these iunds shall be: A Communitv De�relonmeM - projects which are key to promoting heatth and we11 being of neighbofioods such as diversified housing, and attracdve commeraal business strips with ample parking, and an aPP��9 PhYSical ernironmerrt. B. Business Growth - family supporting manuFacturing and service sector job growth. C. Nei9hbort�ood Polluted L.and Clean-up - retum blighted parcels of real estate to producctivve use.s which enhance the neighborhood and increase the tax base while maximizing use of existing funds available for c�eanup. Page 2 q5=10 III. rrogram Funaing A. Fitty (50%) PerceM of the proceeds of the 1/2 cerrt sates ta�c, along with its corresponding irtterest eamings, are dedicated to irnestmerrt in the neighborhoods (rtt�uding the dowr�town neighborhood) af Sairrt Paul. B. At the time of the adoption of the City Budget, the uncommitted balance of the Neighborhood Sales Tax Revitalization Program's share of the sales tax proceeds wili be determined by Ciry staff. That amour�t will be availabie to fund the program for the following calendar year. C. Allocations 1. Sixry (60%} percer�t of the (5096) neighborhood porGon of sales tax proceeds shall be aUocated to low irrterest loans which wiU return money to the neighborhoods again and again, and witl build a long-term, growing fund source for the future. 2. Ten (10%} percent shafl be aifocated to the capital portion of a seed capitai fund. 3. Thirty (30%) percent sha{I be aliocated to direct grar�ts or $950,000 which ever is the higher amount. _ �fiese aliocatioas w�t afiow she. aeip,�borho�i�t �nd to g�ow �vei xi�ne. Lsfiuiiates`suggest . 31�at dne to �be loan �aipan�nt the total miriiey avaitable to iuvest im ihe tieight�tliabds witT i�rease°by 3Q Io itt fhe f�rst 20years ; ;. : , IV. General Policies A. Proposals must reflect projects designed with neighborhood represerrtation to strengthen our neighborhoods and address perceived and actuai problems, needs and opportunities. These strategies may be generated by neighbofiood and civic leaders, organizations, and businesses. Innovative proposais are encouraged. B. In allocating funding for projects, it is the iniertt of the ary to provide geographic equiry of projects and doliars, over time. C. Future sales tax prxeeds can not be pre-committed to cunertt or future projects or project extensions or expansions. A targe project that needs mui�-year funding may be presented as a muld phase project. Nowever, each phase must be viabie as a stand-atone project. Applications for future phases must compete on an equal basis with aU other applications tri �I'18t fUtUf@ fl111dRig G'�IC�B. Page 3 �5 �d D. The same or similar proposal can not be submitted to Uie C�B Committee or the Cutturat District organization in the same year. E. Sates ta�c grarrt fiuncis shafl be matched on at least s 1:1 basis. Sales tax loans will also be expected to have signficant matching partiapation in the form aF equity, private financing, eqvipmerrt, or reai property- F. Projects consider�! to be of insu'fficient quality Or impact wiil not be recommended for funding, even if funds are available. PART I! - Eligibility * Eligible Applicants * Eligible Areas * Eligihle Activities * Ineligible Activities * Eligible E�,tpenses I. Eligble applicants A Any pubfic, private, or non-prafit errtities, which are located within or do business within the CiFy of St. Paul - IXCEPT FOR TFIE FOLLOWING: 1. Churches and retigious organizations. 2. Polidcal parties and retated poiibcai actian groups. 3. Federal, state, and county agencies and departmerrts 4. Single individuals (However, programs serving singie individuais will be enCOUraged.) B. City departments or divisions are eligible when in partnership with or supported by a neighborhood group. II. Eligible areas A. Afl areas wiihin the legai limi�s of the City of Sair�t Paui. III. Eligible activities indude any physical componertts of strategies, programs, and/or proje�ts which strengthsn and/or improves the neighborhoods in Saint Paui. Some exampies of eligibfe acbvities are: A. Minor public Improvements such as: Vees and shn�s, bend�es, pfay equipment, beautification of pubiic space, decorative lighting, etc. particularly as they retate ta a housing or economic developmeM sirategy. The Program is not irrtended or normaliy suffiaent to do major Page 4 Q 5-�C� pubiic improvemerrts such as strset paving, curb and gutter, sewer and water. Major pubiic improvemerrts shouid be channeted through the c�ty's CIB process. Whert addibonal aperation or mairrtenance costs resuft irom the pubiic improvemerrts, the STAR proposal must iderrtify how this project area will privately pay for iheir costs. Requests to� capttal improvements that are detined bY Ciiy policy as "above standard" will not be considered or revievred untess acxompanied by a legaily-binding and ento�ceable plan for maintenance and/or operation over the usefu111ts of the improvemerns proposed to be funded through the STAR program. The most acceptabte method for maintenance and operation of above-standazd pubiic improvemerrts is assessments on the property taxes of those receiving the benefit from the improvemerrts, though proposals that commit private or non-profit organizations to operate and mairnain above-standard public improvemer�ts wiil be considered, depending upon (at the City's judgement) the viabitity of the organization and the enforceabitity of the legai agreement. B. improvements to property such as rehabilitation, canstructiort or other capitol improvements to residerrtial, commercial and industrial property. Examptes inciude: 1. Most fixed improvemertts including the consvuction, repair and/or decoration of walls, ceilings, floors, lighting, windows, doors, entrances, etectricai, plumbing, mechanical, air-conditioning, architectura! change, energy and security improvements, handicapped accessibility, code requirements, etc. For exampie, eligible improvemerrts shall include, but not be timited to the foAowing: a. Cieaning, painting and staining of e�erior surfaces. b. Masonry repairs. c. Repairing or raplacing of comices, entrances, doors, windows, decorative details and awnings. d. Sign removal, repai�ing or reptacement. e. Parking lots, i�cluding fighting, surfacing and landscaping. f. Site preparation, such as demolition, erniromental cleanup g. Garages and retaining walls h. Expansion of a commercial structure will be albwed ff it meets ali City requiremeMs such as zoning, parking, permit and license requiremerrts, etc. i. Heafth and safsiy items required by the City building cocles. C. Ecc�nomic development effoRs such as new housing ar business development or expansion, induding but noi limited to: 1. Acquisition costs induding purchase options 2. Demolition costs Page 5 q� �o 3. Commerciat parking developmerrt. Acquisidon (by lease or purchase), demolition, reloca�on, and construction 4. Costs of developing commercxal parking f�ifities are eligible activities. if the parking is to be privately-owned, the STAR irnestrnerrt must be in the form of a ban, secured by a lien on the PropertY. If the parking is to be putMidy-ovmed, the STAR investrnerrt may be in the form of a grant, matched by capital and operating assessmerrts over the useful life of the improvamerrt. 5. Ualit�/ relocation and construcdon as R relates to a project. 6. Cfearance: acquisition �f fand or a building for dearance witl onty be undertaken when an eifectnre market epsts, or ather re-use wi►i result. 6. Construction costs inGuding loan irrterest and fees IV. Ineligible activities A. Projects that subsfitute sales tax funding br other fiunding. B. Any activity not leading direc�dy to the compfetion of a capital project. C. Planning or study activities. D. Use of STAR funds to develop a STAR proposal or to organize an entiry to manage an STAR proposal. E. Public service programs such as crime preveMion, block nursing programs, child care, and similar efforts that do not resuft in direct physical improvemerrts. These activities may be induded in your total project description/strategy, but they are not eligible for sales tax fund'sng. They wiN be directed to other City programs, iE possible, or prnate funding for these aCavities Can be part of the project match. F. Refinancing e�asting debts G. Nan-fixed improvemerrts H. Working capital i. General administrative expenses are not etigibte for sales tax funding. examples inGude reM and utilities. J. Acdvities located outside the aty limits. K. MaJor public improvemeM projects, i.e., str�t repaving, sewer work, recxeation cerrter, etc. L Sweat equiry - paymerrt for the applicanYs own labor and performance for construetion or improvemerrts. M. Projects within the Sairrt Paul Cultural District, as long as the Cuftural portion aF the sates tax is targeting that district Y. Eligible expenses indude any Iegal direct proJed cost that speafica(ly pertains to the execution of the capital project Definition: Expticit costs that are expended to carry the capitol project to canpletion. Examples are dependar�t on the.type of project/program being impleme�ed: • building permits; • design, engineering, soil, environmerrtai, legat, financing, f�censing snd inspection fees; Page 6 � �J �� • general corrtractor's charges (must be in line with industry standards); • devetopers fee or project c:oord'mation fee that is appropriate to the project and in line with industry standards; • direct costs of Ciry staff to manage the project. Note: Persons receiving the benefit of the project/program are not eligible for developers fee. Example: business owner rehabilitating his/her business sfte. PART tli - Appiication Procedure * Timeline * Procedural Guidelines * Pre Application Contents * Final Application Contents �his suggested t3meTi�e coi�ld para11e1 the �'IB titteelit�e. . Advanfages are: !. The applic�nt woutd have orie ileatlTitie. �ey wot�ic� choose ir� �bmit ; Pr'oposais eith�r ta the G'�3 pr�s or the Saies Tax p�. 2. �is cxioi�aatian.supports at;oai�r��iensivs cap;#�I iav�suaen#,�laa wi�lii�► t6e City. 'The CIS c�mmitt�e wuuld receive timely i�►formatiun a&�nf .sales tax grojeccs and th� Saies fia� Board wotilci .ieceive'timely `: ;iarfc�r�tsatioi� abouc [.1B prs�� s:i�ninmert�tion� �te.i�eittg ma�e- 3. Sle�i officiats wc,�id be �e io sx�nsi� � rapiral projer�s iuid �ales °�:.'�'ax projee� at roughiy fhe sama:time: Cfn� diffesence; hstv�+evrs, is tiiat actu�t'�iiing of the sale� faz pin�e�ts wouid not have Ya vv$it fiir the �budget �r�ss. � � . � 'T�►ere 6as been ta�k abciut two fundin8 cySles �pr year. �ivea �e amosu�t t�f r�ew time nec�ary, i� seems more reaiistic and �cieati tv �nnsiic�er orie cycte pei y+eat. I. Timeline Eariy January Notification of funding availability, and request for pre- applications Ea�iy February STAR Board evaluation of pre-applications resulting in:� (1) redirection of ineGgibfe projects, areas, applicants; (2} request for rework and resubmission of appGcation in next cyde; or, (3) invitation for final apptication along with request for project spedfic ir�formation to be included. Early March Rnal applications due six wesks after preapptications. March Review of srr�all grants - approva! by Ciiy Council Page 7 q5 �o March/April STAR Soard Committees, Pianning Commission, CIB Comm�ttee, and staff revisw of appfications Eariy May Recommendations to Mayor May Review by Mayor and City Council Early June Adoption by Ciry Council June Comm'rtmeM tetters with speaFic requiremer�ts and timelines for actioris to be �mpleted, sent to those recommendetJ for funding. Juty Corrtracts negotiated assuming stipu{adons arx! timelines have been met. (Note: The �995 timeline is subject to passage of the guidelines and may be adjusted.) II. Procedural Guidelines A. A complste pre-application must be submitted, on time, for a proposal to be considered during a fun�ng cycle. B. A complete finaf appiication must be submitted, on time, for a proposal to be considered during a funding cyde. C. Ciry staff wii! make available for interested parties, copies of the pre- apPlications and final applications for commerrt and review. D. Ciry staff wiil wganize a workshop at the beginning of each cyGe to provide program application information to prospective appHcarrts. Attendance at the oriertation workshop is strong/y recommended. Staff may be cailed upon to assist appiicants in developin9 preapplications and fina! applications, based on availability of statf. E. Appfications may not be changed or modfied once submitted. It is the applicanYs respansibi{ity to thoroughly devefop the proposat before submission. Fiowever, applicants may be asked to provide additionaf information to the STAR Committee in the course of its review. III. Pre-Application Purpose and Coute�s Pre-app{ications wiil be used to determine etigibility and c�mpieteness of proposal. Those ineligibte will be notified as soon as possible. Some may be redirectad to other programs. Aif pre-appiicaiions must be submitted on the Neighborhood Sates Tax Revitalization Program pre-appiication form and corrtain the toilowing iMom�2tion: Page 8 q5 �a A. A brief description of the project proposal. B. An estimate of the amount and type af funds (combination requests induding grants, loarts, and or seed capitat are also eligible} being requested irom the Sales Tax program along with an estimate of private or other kinds of cormibudons. C. Name of the organizat+on/ind'nridual that will develop, implement and operate the project proposal. D. Up to three letters of support from neighborhood groups located in the area affected by the proposed project/program. (The preapplication includes a standardized form for these letters of neighbofiood support.) IV. Final Application Contents Fina! application forms will be serd ta eligible applicar�ts following the preapplication review and approval process. The forms will be accompanied by requests for additional project-specific information that must be addressed in the final application. Staff, ff available, wil( be ideritified to provide technical assistance at efigibie applicanYs request. Ait applications must be submitted on the Saies Tax apptication form and contain the fol(owing information, inciuding but not IimRed to: A. Describe the purpose of the proposal inciuding: 1. tVeighborhaad problems or needs which the proposat addresses. 2. Documentation of the above probiem or needs - such as demographic data, statistics, and d'rstrict, ary and neighborhood plans, priorities, strategies and poliaes. 3. Detailed description of the proposaPs activities or elements. 4. Neighborhood impact and projected resutts. B. Level of neighborhood support and paKidpation. 1. Three (3) additiona! leiters of neighborhood support if the letters clariry, add to, or strengthen the proposal. 2. Description of neighborhood partiapation C. Applicant's managemeM experience and capability, induding past experience with similar programs. Please provide a board membership iist, if appiicable D. Requested amouM and type{s) of Sales Tasc funding (grant, ioan, and/or seed capital) Page 9 �� -�o E. Budget 1. Level and source of private commitment 2. Sourc�s and uses statemerrt for aN praject funds 3. Additiana{ elsments such as: a projeot proforma, sources of private lender Tinancing, three years af financia! data, and other information, may be required as it pertains to the proposal. F. Time line for project that is speafic and lists milestones. G. Map indiqting project location and street boundaries. H. Fiscai agent; ff a d'rffererrt organization, attach letter of agreement to act as fiscat agerrt along witfi description of previous experience. ff above-standard public improvemertts are proposed for funding, describe tfie fegaily-binding and eriforceable pian for operating and maintaining them over the useful f'rfe of the improvements. J. Evaluation criteria, including expected outcomes and a description of how they wii! measused. K. Application Fee: A non-refundable application fee of $100 must accompany fi�al application forms. If a proposal is incompleie or does not appear to be sufficieMly developed to ailow for reasonabie review, the STAR Board may retum the proposaf to the appiicant for furtfier work with the suggestion that the proposal be resubmitted during the neut funding cycie. ,. _.. - It is �io�ifi �hat fees rov�1 eneovtage ivelt cteveloped prc��t. proposais and ser'iri�s , 8��. �� a�y i� �-� �� a� ��: . PART IV - Project Selection * Neighborhood STAR Board * SQleetion Process * Evaluation of Applications I. The Neighborhood Sales Tau Revitalization (STAR) Board is appoirrted by the Mayor and approved by the City Counat. R serves as the formai review body for proposals requesting the neighbofiood portion of saies tax funds. The Board recommends proposais to the Mayor and City Councii. Page 10 g5=I0 A. Pre applications will be reviewed by the STAR Board and will either. 1. Be rejected as ineligible, or directed to other Ciry programs if possible 2. Be accepted for review. The applicarrt will be asked to submit a final application with additional supporting materiais as requested by the STAR Board. B. Fnal Applications, upon submission, will be reviewed and summarized by staff. Applications wili: Be rejected by the STAR Board ff incompiete or 'rf insuFficierrtfy developed, the applicant wili be invited to resubmit the proposal during the next funding cycle. 2. Be accepted and all iriformation will be presented to tt�e STAR Board. M estimate of city staff project management costs will be added to the proposal. Additional i�ormation will be provided by the foliowing advisory bodies: a. The PED Credrt Committee will review the applications for fiscal responsibiliry, risk evaluafion and appropriateness of irrterest rates, terms and condidons, and provide this information to the STAR Board to assist them in making recommendations to the Mayor and City Council. b. The Planning Commission will review proposals for compliance with the City's Comprehensive Plan and Capital Allocation Policy. Commer�ts will be forwarded to the STAR Committee, Mayor and City Counal within the established timetine. c. Ir�formation on all proposals will be forwarded to the CIB committee for informational purposes to ailow for coordinated decision making and for comment and review. Commerrts will be forwarded to the STAR Committee, Mayor and City Counal within the established timeline. Page i 1 II. Selection Process - the selection process for proposals will be competitive and the Board wili determine the quality of the proposals. The number of aPPticarrts to be fus►ded is depender�t on the size and quatiry of the proposals and the availability of funding. q5 �o C. If other entities vvant to review and make commerns on appiications, they are encouraged to summit these commerrts in writing to the STAR committee within the time irame of cammittee action. The applications wiA be availabie in a ce►�trai location for review. D. The STAR Committee wiil review the applications based on program guidelines, CIB Committee and Planning Commission comments, and credit committce guidance, and make funding recommendations to the Mayor and Ciry Counal. E. The Mayor wiN present his recommendations along vvith the STAFi Committee recommendations and the CIB Committee and Planning Commission commerrts to the City Counal. F. The City Counal will, by resolution, seiect STAR project proposais and approve their budgets. III. Evaluation of appliCations: Proposals wili be reviewed for the foilowing eligibiliry and additional selection criteria. A. Proposal supports City Counci! priorities for the use of the Neighborhood Sales Tax proceeds as approved in a City Counal resolution B. Proposal meets the minimum leveraging ratio. (See Leverage section.) C. Proposal is an eligibie program ac�tivity. (See Eligible and Ineligible Activities sections.) D. Proposal is not a dupiication of an existing private or public program or replacemerrt funding for an existing program. Funding can be pravided for the expansion portion of an e�ostiUng progr�m. E. Proposai is not in comlict with arry aty comprehensive plan element, smali area plan, capitai allocation policy or adopted City ordinances and policies. F. Proposai is financially feasible. Requested STAR funds together with other project resources are adequate to meet the ider�tified need. G. Managing organization has the capabiliry to successfuily manage and implemerrt the project. H. Project effecUvely addresses a previousiy ider�tified or otherwise dearly documerrted neighborttood need or goal; Page 12 q5 �o Proposais may receive bonuses for the tollowing additional selection criteria ff: Project has the following: 1. a positive impact on tax base; 2. a posiave impact on businesses; and, 3. a positive impact on the neighbor�ioods Project is part of a weli-defined, broad strategy for neighborhood developmerrt or mairrtenance. J. Acctivvities are suffiaently conceritrated within an iderrtified geographic area to resuk in a high visual or economic impact; K. Sufficient planning or feasibility analysis indicates a high probability of success; and L. Broad neighborhood support is documented - a large and appropriate mix of residents, property owners and/or business peopie relevant to the project included in the planning, development and impiementation of the proposai. M. Proposals include direct coordination with other city, private, or non-profit programs and projects N. Project leverages additional funds or resources which exceed the required match. O. Percentage of the match that is direct cash or capitai investment, is high P. All administra4ve expenses are funded through other sources Q. Proposals are recommended in an adopted smail area pian or through another similar neighborhood planning process Page 13 q5=1� PART V- LOANS, GRANTS AND SEED CAPITAL * AmouM of tunds allowed per project ' Leverage * Additional ir�formation * Loan Rates, Fees, Ten * Program Devetopmerrt Regardlny Program or ProJect Proposals rts and Collateral and ImplemeMatlon I. Amount of funds allowed per prnposal: A Regular STAR Program 1. There are no maximum loan/grant request amour�ts for the regular STAR program. 2. 3. The minimum for the regular program is $15,001. Request for funds of $15,000 or less will go to the Smail STAR Grant program. Proposals will be funded based on their merits and funds available. B. Small STAR Grant Prcgram - requests for small funding amourtts will be in the form of a grarrt. The appiication and selection process vin71 be reduced. Funding approvai may be conduded several months before the regular STAR program process completion. 1. Frve (5%) percent of the total funds available per round witl be aliocated to the Smalt Grarrt STAR Program. 2. Minimum grarrt for the Small STAR Grarrt Program is $5,000. 3. Maximum grarrt for the smali STAR Grarrt Program is $15,000. 4. a preapplication will not be required, instead a abbreviated finai application form will be used 5_ any proposals Qoan or grant) for $15,000 or less will automaticaliy be designated to the Smalt STAR Grard program. 6. within three (3) mor�ths of the selection approval date, a standardized contract will be signed with the city. II. Leverage A. A minimum required match of one ($1) doNar for every one ($1) received as a grarrt is required. Loans will also be expected to have signficant matching partiapation. B. State and Federal funds can be used as a match C. Other City money can not be used to match STAR funds. For purposes of this program CDBG money from City sources cannot be used as a match, (an exception is listed under D). Page 14 q5 �0 D. Other c�ty funds that are provided as loans may be used as a match. This indudes deferred loans as long as the ban is eventually paid. E. Matching funds must be directly related to the project or program in the apPiicanYs proposai. F. Applicants are er�couraged to fund their STAR administrative expenses with outside private resources, i.e., foundation g�ants, cash donations, etc. and to use these funds as part of the match. G. Eligibie matching cor�tributions may indude: 1. Direct flnancial resourc�s such as private expendih�res for commeraal or residential physical improvemerrts, cormibutions or tunds raised from within the neighborhood, foundation and corporate grants, and local lender commitments or operating assessments estimated over the useful Iffe of the improvemerrts. 2. indirect contributions can include: in-kind senrices from residents and businesses such as personnel, professionai services, office space, suppiies, volunteer labor, and sweat equity for physical improvemerrts. The value of sweat equity and/or volunteer labor may not exceed 3096 of the total match. H. Ineligible matching corrtributions include: 1. Volunteer meeting time. 2. In-kind service donations from STAR applicants such as already existing oifice space, phone service, etc. In-kind donations from parties other than the applicant are eligible. 3. Volunteer labor and sweat equity over 3096 of required match. (Higher sweat equ'ity matches will be considered for the smali grarit program.) 4. Any donation not directly related to the STAR project. i. Under no arcumstances will any match be reimbursed with STAR funds. J. The STAR board has the discretion to recommend approval of other matching cormibutions on a case by case basis. III. Additional Information Regarding Program or Pro)ect Proposals A. Program Proposals 1. Complete program guidelines must be part of the proposai application and must be approved by the City Counal Page 15 �51� 2. If a program, such as a revoNing loan fund, is established by the apPlicarrt using_grant_dollars, repaymerrts_accxue to the applicant for reuse in the program for which the grant was approved 3. if a program is established by an applicaM using loan doilars, the loan irom the Neighborhood Fund must be repaid in full and on time. Any excess funds accxue to the appiicant. 4. Incentives for fund recipier�ts which increase their sucxess in maximizing the use of the money may be induded in the proposal (.e. with a revoMng loan fund, the reapieM may be albwed to keep a portion of the paymerrts, or excess funds due to higher interest rates.) B. Ali legai requir�nents of the City ot Saint Paul must be met such as: 1. the property must be appropriatey zoned, meaning the property must conform to use under the City Zoning Ordinance. 2. for new construction, properties must be on legal buildable lots 3. prior to performing leasehold improvemer�ts, the tenarrt must obtain written permission from the building owner for the improvemerits. 4. Upon compietion of improvemerrts, the applicanYs property must meet all applicable code, permit and license requiremerrts and must have a current Certificate of Occupancy upon compietion 'rf applicable. 5. an appiicant must have the ability to repay if requesting a loan and be an acceptable credit risk as determined by a bank or the ciry. (See undenvriting standards). 6. Funds will be released on a reimbursemerrt basis upon receipt of documentation of eligible expense. C. Projects and proposais must comply with all adopted ptans and policies D. Seed Capltai Loans: The Seed Capital funds will provide long term financing to young, growing businesses that are not developed enough to irrterest other verrture capital injeation. Businesses that promote stabi(ity in neighborhoods are of particular irrterest. 1. the seed capital funds must be used for capital expenditures that will free up the busine,ss's funds to be used for developmerrt of an idea, product or s�vice. 2. seed capital loans will usually be paired with technical assistance in such areas as financial management and marketing 3. seed capital loans should trigger other third party finanaal partiapation Page i6 q� �o -r IV. Loan Fees, Rates, Terms, Collateral, and General Servicing ' A. Rates: will be detemuned by the appiicant� the STAR Committee and the Credit Committee's analysis of appi'�cation. The PED Credit Committee vn'll analyze the housing, economic development, and seed capkol loan requests and rate them based on industrv and ciN standards. - �.- - r _--+ — . _ -- s .r - ' .r � f07'ProBraat �. �rf r�AS�n i� #�te �IC z8t,�g syste�n $�ti �i � rif a, ciit report x� l� �trt'#iuted v�ntt;'the spp�2inns. -: ^_. B. Terms: terms and conditions - witl be negotiated and customized for each individual proposat. C. Collateral may be required: The ary shall file for any liens required on collaterai. D. Operating Assessmerrts: if STAR capital funding is to be matched by the operating assessment, no funding can be committed urrtil final ratfication of the matching operating assessment. . ;.;. : �iival Ioan �ng is es�tial for`sound �acat manag�medYOf this �ogtam .Aii. scrounting system �s beiag designecl to provi�e the most aa:essible i�r�c�mati9n ::.. inanagemen�. : As_ a P�� PT¢Sf'�> fsuitied,�th t�r_i�citi�ars, it is iai�ai t�tai�i�te ��rf .. 't�ese fnaz�s be :n�or�d and that reporttng ani� snatyss's bf t}�eii� use provide €he �fat�, Mayor, Carutcii, Tuti+d iecipients, and the publiC �b �£vzmation a� t�vmlit8fi�na tiaat -gives a clear pu�ure,of the Sales 'Tss progta�.: ? E. Loan Origination and Servicing 1. individual paymer�ts for single projects and ali paymerrts for loans in programs will be processed through PED accouMing. Individual loans through programs will be originated by the program operators 2. Servicing Fees a Loans originated through PED (programs or single projects) will be c�iarged a loan dosing fee equal to 1 1/296 to 3% of the ioan amourrt, before any disbursemertts. (M approved origination fee may be charged by program operators for each loan originffied.) b. a fee of $5 to $10 will be collected with each loan paymerrt Page 17 q5=1d c. a charge of 5% of the morrthly paymerrt wiN be assessed on late-PaYmerrts ovec-15 days_delinquent. d. If another party (approved by PED CredR Committee) �sumes the mortgage, a 1 1/296 to 3% assumption fee on the ocrtstanding prinapaf balance vwli be charged. 3. A sub-axour►iing system wil! be used to monitor the tota! )oan amourrt and to provide periodic reports to: a the group/individual impiemerrting the loan program; b. project managers c. tFte Mayor d. City Counal e. Citizens of Sairtt Paul 4. RevoNing Loans: a. a percentage of the foan repayments, (up to 10%), may be kept by the revolving loan operator, the remainder (9096) is retumed to the City's sales tax fund for reirnastmeni in capital projects b. the program operator is responsible for handling delinquencies of loans they have originated. F. Loan loss Ratio - in order to address loan needs which cart not be met through standard financial institution lending programs, will have a loan loss ratio which may at times reach 20%. The risk rating system will be used to help assure that the program operates within this range. V. Project Developmerrt and Implemerrtation A. Upon selection by the City Council, the STAR project applicant will receive a letter of commitrnent which spectifies a period of time during which the appiicant must refine its project or program, secure its private match, meet other requiremertts as spectified in the letter of commitment and eriter irrto an agreemerrt with the City for the use of the Star funds. Failure to act within the period of time speafled in the commitment letter may resuft in cancellation of the commitment Proposals should be compieted or self-sustaining within the period of time approved by the STAR Board and specxfied in the agreemerrt. B. Impiementatiort Corrtract Prior to the impiementation of an appiic�nt's project, a contract will be errtered irrto between the City of St. Paul and the selected appiicant. The c�tract will contain, at minimum, a scope of services to be performed by all parties, a private match section and a budget secction outlining all funding sources, and an implemerrtation timeline. The corwact will be signed by the Mayor, the directors of the PED and Fnance departmerrts, the City Attomey, the designee implemer�ting the project. Page 18 � q5 �o Implemer�tation cor�tracts require: 1. that the ProJect ePP�icant has insures the City of St Paul. appropriate liability insurance which 2. adhererx:e, where applicable, to Federai, State and Local regulations, and policies pertaining to the use of funds such as prevailing wage standards, relocation requiremerds, affirmative action, targeted vender programs, and the Frst Source program. The nature of the project (e. residerrtial vs commeraa� determines which regulations apply. Staff will hoid a compliance meeting prior to implemerrtation of the conVact to ider►tify regulations applicabie to project activiry. Sales Ta�c applicarrts are cautioned not to make any neighborhood commitments uMtl they tully�nderstand potentiai comRliance and funding�gulations. 3. impiementation must progress as projected in application, lack of progress is grounds for withdrawing funding. C. 5ales Tax Fund Distribution - Sales Tax Fund allocations will generally be on a reimbursemerrt basis. Fnal paymerrt wiil be made upon completion of the project and receipt of the finai project report and evaluation. At the time of completion of all activities contained in the agreement or upon expiration of the agreemerrt, any remaining project fund balances will be returned to the STAR Fund. PART VI - Review and Evaluation * Project Evaluation * Annual Report to the City Council and Mayor * Annual Review of Priorities * Review of Allocation Goals * Audits - Quality Control I. Project Evaluation A. Semi-annual status reports will be required for each project, which wili provide an ongoing monitoring pro�ss. The report wili include project expenditures, status of match commitments, and progress toward meeting expected project outcomes (as ideritified in the original application). This will allow for timely adjustmerrt of individual projects 'rf necessary. Page 19 q 5 �o II. B. A fina! evaluation of each project will be required to determine the exterrt to which the project has been successiut. Project success wiN be measured against expected project outcomes and the overall objecdves of the STAR Program. This final evaluation must be received before the final reimbursement rsquest will be paid. Annual Report to City Council and Mayor The annuai report shouid be presented in September of each year and should include: A. Progress report on all projects to date, their bcations, snd costs B. Percerrtage bans, grarrts, and seed capital funds awarded C. Fiscal analysis of overall program D. Effectiveness in supporting priorities. E. Estimated funds available for the next funding cyde F. Evaluation of the program process and suggested revisions III. Annual Review of Priorities Priorities for the use of sales tax funds in our neighborhoods must be reviewed annually. These priorities shall be reviewed at a public meeting folbwing the presentation of the annual report and the Counal and Mayor shali dearly and publicly state priorities for the upcoming funding cyde. Target allocation goals shall be reviewed, as necessary, by the Mayor and Ciry Council. N. Audits - Quality Control A. The City wilt establish a monitoring and �oi system which ensures that loan repaymerrts are made under the terms of each project's agreemerrts. 1. ft will be the responsibil'dy of project developers to provide alt necessary documentation, as determined by the Ciry, for purposes of determining program eligibility and ongang program compliance. � 2. Reports on revoiving loan programs will the project developers to assist in their programs finances. Periodic extemal audits may be required be perialically provided to monitoring of their Page 20 CTIY OF SAINf PAUL Norm Coleman, Nayor `I J � DATE: TO: FROM: SUBJECT January 17, 1995 Council President Thune, City Council Members ,�. . ., . & ECONOMIC DEVELOPMENT Larry D. Buegler, Director 25 West Fourrh Sbeet Saint Paui, .N�' S510? Amy Filice, Joan Trulsen and Donna Drummond STAR Program Coordinators Sales Tax Guidelines with Council Member's Comments 1 elephar.z: 612-? 66-6: 00 facsimrie: 612-??3-3161 Thank you for taking the time to meet with us during the past week. We were pleased with the thoughtful suggestions made regarding the Neighborhood Sales Tax Revitalization (STAR) Program draft guidelines. Attached for your information, is a copy of the STAR Program Draft Guide(ines with additions and deletions suggested by various Council Members. Please keep in mind that the language is not precise and is only staff's attempt at expressing Council Members' comments. It is not our intention to misrepresent anyone's comments and we will gladiy correct any errors. ■ Please note that due to the additions and strikeouts, the page numbers on this draft, compared to the December 7th draft, are slightly different. The December 7th draft guidelines wili be used as a basis for comments at the public hearin� on Wednesday, January 18, ■ The Planning Commission is holding a public hearing January 27th on their recommendation regarding consolidation of the selection process of several city programs, perhaps unrJer the STAR Board. The recommendat+on includes fo�ding CDBG funds fhat have been allocated to the Building Neighborhoods Together (BNT) Program, into the STAR Program. It may make sense to schedule action on the STAR guidelines on February 1st to take advantage of discussion at the Planning Commission hearing. We share your concerns and appreciate your vision and assistance in making the STAR Program a national example of "excelfence in government". Piease call Amy at 66648, or Joan at 66694 if you have questions or comments on this draft. Distribufion of fhis documenf has been limifed fo counci/members and staff. �5 70 l�E1GHBORHOOD SALES TAX REVITALIZATION PROGRAM (Neighborhood �7"AR ProgramJ DRAFT GUlDELINES* ,_ .., ' This is a working document designed to elicit questions, reaction, and recommendations. Please call Amy Filice (266-6648) with comments, suggestions, or questions. Pags 1 b l�- q�= to PART I - Program Description * Purpose and Objectives * Priorities * Program Funding * General Po9icies I. Program Purpose and Objectives Saint Paui neighborhoods are one of the City's most important strengths, and the sales fax proceeds represent an extraordinary opporturaity to revitalize and invest in our neigtaborhoods. The net sales tax proceeds are to be ailocafed for capital projects to further residential, culturaf, commerciai and economic development and the intent of the City Council is that the proceeds be used in such a way that they have significant and positive long term economic impacf. The Neighborhood Sales Tax Revitalization Program was esfablished to meet the following general objectives; A. Improve and /or stabi(ize housing stock B. improve and/or stabilize local commercial and businesses C. Leverage private improvement efforts througf� use of sa(es fax funds D. Fund projects or programs that issult in high visual or economic impact E. F. G. H. within the idenfified project area Promote creative use of coalitions and imaginative d•�velopment of strafegies to address Saint Paui neighborhoods Build comm�nify and neighborhood capacity Build tax base Create fam�7y supporting jobs Provide job �raining I1. Priorities � The City Council and Mayor shall clearly and publicly stafe, and review annual priorifies for the use of sates fax funds in our neighborhoods. Tfie initial priorifies for the use of these funds shall be: A. Communiiv Develooment - projects which are key to promoting healfh and well being of neighborhoods such as diversified housing, and attracfive cc�mmercial business sfrips with ample parlang, and an appealing physical environment B. Business Growth -{^^•:'„ �^^^�-+;^^ '"""`°" t�°'� manufacturin and ��?��4;�,� 9 service sector job growEh. C. Neiohborhood Polluted Land Clean-up - return blighted parcels of real estate to productive uses which enhance the neighborhood and increase the fax base while maximizing use of exisfing funds available for cleanup. �� Page 2 Q5=70 I11 Program Funding d''''"� �' �""� � � A. Fifty (50°!0} percent of the proceeds of #fie 112 cent safes tax, along wifh . its corresponding interest earnings, are dedicated to investment in the neighborhoods (inciuding the downto n eighborhood� of Saint Paul. , � S 4�� bM.=\T i� ees:ae..�l;a\ ccr,,...tiat�.r� savV,� tl � B. A§ tll� �GBITI�7�[."� 4f E�G�3 £�F n� at,� +;,..., ..c ati .,.+.,..c;.,.. .,c �he �•s,. ..._� .. ...... : . ...... ........ :.:: - � =< o�,a..�+ �t,,, ,,.,,.., ++ a ti i . ,,. .,..., c +t, �tfll� �tX ��1�'�#}�Ci]AtfF}f� -::.� :-..... __ ..:................... .:. .u.,a............. r,�fi�dar�:�ea�'s Neighborhood Sales Tax Revifalization Program's-s#�a�e ��+�';; `�.:i,.� �..., .,.,,,.�,..,., wili be determined bv Cifv sfaff. �:`t'�is'.:i�d%i�es: 6� � �� C. Aliocations 1. �(60%) percent of the (50%) neighborhood portion of sales tax proceeds shalf be ailocated to low interest ioans which will return money to the neighborhoods again and again, and will bui�d a long-term, growing fund source for the future. - 2. 3. Ten (10%) percent shail be allocated to the capitai portion of a seed capitalfund. Thirty {30%) percent shall be allocated to direct grants or $950,000 which ever is the higher amount. �� borhoqd fund,�: me _.Esumates suggest tliat neighborhoods wFll -- IV. Genera{ Po{icies A. i'roposa(s must r�#{est-b�<;n�19`��?�'��><�sed projecfs designed with :,. . . .. . �:... _.,;x�<..:�.,�>::< ...,.,..,-�,, �_-.�.,. neighborhood representat'ion to strengthen our neighborhoods and address perceived and actual problems, needs and opportunities. and civic I .. �a�e�+es may be organizations, and Page 3 yeaf- (Councilmember Rettman) � q5=10 [Q businesses. Innovative proposals are encouraged. (Councilmember Megard) In allocating funding for projects; it is the intent of the city fo provide geographic equity of projects and dollars, over time. C. Future sa{es tax proceeds can not be pre-commitfed fo current or future projects or project extensions or expansions. A large project that needs multi-year funding may be presented as a multi phase project. However, each phase must be viabie as a stand-alone project. Applications for future phases must compete on an equal basis with all other applications in that future funding cycie. � E. � �` ��7t"�� y�� - z �,, �'' �;n �! The same or similar proposal can not be submitEed to the CIB Committee or the Culfura! District organization in the same year. Sales tax grant funds shail be matched on at least a 1:1 basis. Sales tax /oans wiil also be expected fo have significant matching participation ��<;��:�'�:: :�F��?��:':: '�:pi�ia�� in the form of equity, privafe fnancing, equipr�enf, or re�operfy. (Councilmember Reftman) PART II - Eligibitity * Eligible Applicants * Eligible Areas * Eligible Activities * Ineligible Activities * Eligible Expenses Eligibte applicants A. . Any public, private, or non-profit entities, which are located within or: do business within the City of St Paul - EXCEPT FoR THE FOLLOWING: Churches and religious organizations. Page 4 Projects considered to be of ins�cient quality or impact will not be recommended for funding, even if funds are available. q5=10 2. Political parties and related political action groups. _ 3. Federal, state, and county agencies and deparfinenfs. c•....ie •.,a�„a.a.��t�. .�.: .. :--:. ,.._,,.m.:,:,::...„...,,.,., ;:.r.::...,.,.>...,,;.-., 4. � Indz+��€a�'�t��a��rs and bt�smesses -.w.�w�.�..� ..�.� : <. (However, programs serving si�{e individuals �o��czv,�ars.a�ic� _ .........:.: ......_.,. _ _.. :: :.- .... _.;.::. �usi�2ss� wiff be ease�aged �ig�le.) (Councilmember Nlegard) ��` d B. City departments or divisions a�eligibie when in partnership wifh or su orted b a�`:.2sia��is�ed nei hborhood rou ��"� �^r�`��^'�%�T'� PP....__.._.._..y_....:.<. ...:.:...::::.:::::...>....:. 9 9 P.E::.<;:::::>,,::;::::;;::r:.:::_..<:;:.;.:_.::::::- �G�urie"��i��ier;I�ega€r3� ��,� , �- \ ... . . y �' J �� 11. Eligibie areas A. Ali areas within the legai limits of the City of Saint Paul. III. Eligible 3CtiVitie5 include any physical components of strategies, progsams, andlor projects which strengthen and/or improves fhe neighborhoods in Saint Paul. �ap�'a7;ii�i�r�vei�i��fs;;h�v�:a%f`""ezp�ed; ff�;�f ��;{�;0� L�rymo��eais Some�examples of eligible acfivitaes are. �� A. Minor public improvements such as: trees and shrubs, benches, play equipment, beautification of public space, decorative lighting, etc. particularly as they relate to a housing or economic development aes�eii�'��tE��: The Program ts not intended or normally sufficient to do major public improvements such as street paving, curb and gutter, sewer and water. Major public improvements should be channeled through the ciiy's C1B process. When additional operation or maintenance costs result from the public improvements, the STAR proposal must identify how this project area will privately pay for their costs. Requests for capital improvements that are defined by City policy as "above standard" will not be considered or reviewed unless accompanied by a tegally-hinding and enforceable plan for maintenance and/or operation over the useful life of the improvements proposed to be funded through the STAR program. The most acceptable method for maintenance and operation of above- sfandard public improvements is assessments on the property taxes of those receiving the benefit from the improvements, though proposals that commit private or non-profit organizations to operate and maintain above-stanctard public improvements will be considered, depending upon (at the City's judgement) the viability of the organization and the enforceabi]ity of the legal agreement. Page 5 Q 5 �t� B. Improvements to property such as rehabilitation, construction or other capital improvements to residential, commercial and indusfrial properiy. Examples include: 1. Mosf fixed improvements induding construction; repair and/or decoration of wails, ceilings, floors, lighting, windows, doors, enfrances, elecfrical, plumb+ng, mechanical, air-condifioning, architectural change, energy and security improvemenfs, handicapped accessibility, code requirements, efc. For example, eligible improvements shall incfude, but not be limited to the following: a. Cleaning, painfing and staining of exferior surfaces. b. Masonry repairs. c. Repairing or replacing of cornices, entrances, doors, windows, decorative details and awnings. d. Sign removal, repairing or repiacement. e. Parking lots, including lighting, surFacing and landscaping. f. Sife preparation, such as demolition, environmental cleanup g. Garages and retainirtg walis h. Expansion of a commercial strucfure will be allowed if it meefs all City requirements such as zoning, parking, permit and license requirements, etc, i. Health and safety required by City buiiding codes. 2. C. Economic development efforts such as new housing or business develcpment or expansion, incfuding but not limifed to: 1. Acquisition costs including purchase options 2. Demolition costs 3. Commercial parking development. Acquisition (by lease or purchase), demolitiori, relocation, and construction 4. Cosfs of developing commercial parking facilifies are etigible activities. If the parking is to be privately-owned, the STAR investment must be in the form of a loan, secured by a lien on the property. If the parking is to be publicly-owned, fhe STAR investment may be in the form of a grant, matched by capital and operating assessments over the useful life of the improvemenf. 5. Utility relocation and construction as it relafes to a project. 6. Clearance: acquisition of land a building for ciearance will only be undertaken when �� '� �^,° M�-'-^� °.^�+� �. �;��. �€ � "" �i��V,'"�'�'"��'�:_ t�� r�iec� =,�� 7. Construction costs including loan interest and fees � � � , � p � ` Page 6 � �•.-.1�-.�. �s�,�,,,� o �i,...:.... . �-.�.r-�_ �� _�,� o�� •.,,�jC� q�=�o IV. Ineligibie activities A. Projects that substifute safes tax fund'+ng for other funding. - B. Any activify not leading directly to the completion of a capifal project. C. Planning or sfudy acfivities. D. Use of STAR funds to deveiop a STAft proposal or to organize an entity to manage an STAR proposal. E. Pt�blie service programs sr�eh as crime prevention, block nursing programs, child care, and similar efforts thaf do not resuft in direct physical improvemenfs. These activities may be included in your tofai projecf description/strafegy, but they are not eligibie for sales fax funding. They wili be directed to other City programs, if possibie, or private funding for these activities can be part of the project match. F. Refinanci�g existing debts exce�atu�en ifire��ts:i�i��ru�i�ie� _ ............... _....... G. Non-fixed improvements �� H. Working capita{ p�l. General administrative expenses are nof eligible for sales tax funding. examples inciude rent and utilities. J. Activities located oufside the city limits. K. Major pubiic improvement projects, i.e., street repaving, sewer work, L. M. recreation center, etc. � Sweat equity - payrnent for the appiicanYs own labor and performance for construcfion or improvements. Pro�ects within the Saint Pau( Cultu�al District, as long as the Cuitural portion of the sales #ax is targetinq that district. V. Eligible eXpel7Se ' c(ude any legal direct project cost thaf specifically p e execution of the capital project. Definition: Explicit cosfs that are expended to carry the capitai project to compietion. Examples are dependant on the type of projecUprogram being implemented: • building permits; • design, engineering, soil, environmental, inspection fees; �� • general contractor's charges (must be in �� i� ^. � vvY ` l Note: legal, financing, licensing and �� line with indusfry standards); d�� +h�4 io nnnrr�r��i.�+e +.�. ihe Y��J�� .� 7.. li..., ...�ih 7...l��t.,. ..i...,A.,..�..� ��ouncilmember Rettman) direct costs of S+t� stafF to manage the :project. �`y� � �-*,.�,.�— . Persons receiving the benefif of the pcojecf/program are not eligible for developers fee. Example: business owner rehabilitating his/Mer business site. Page 7 a5=�o PART !11 - Application Proc�dure * Timeline * Procedural Guidelines * Pre Application Contents * Final Appiication Contents This su¢eestedtuneline couidnaraTfeT. tiie (`TR r,rr,P1,nP -= pio 2�: Thi Cit pro = pro - - There ° neces: aIs either ta the C3B process oi 1 >ordmation supports a comprehei I'he.CIB commitfee woutd recei� Y and.the SaIes.TaxBoazd:won]< :ted-officials wouId be able to con� 'eots at rouehly tha same tune __On iing of tfie sales tax-pro�ects woulc 'about tuio fuadmg cycles per qear more realistic and:efficienf Y� con§ : process. ve capital invesfrnent F timely. infomiauon. a6i eceive time]y informaf' made I. Timeline su6ulit . t.=, =.. tan wirhin the: uT sales tas : - - on aboat CIB =_ .nd 3ales .Tax . -. aget process. : iw t�me -' Early January Notification of funding availability, and request for pre- applications Early February STAR Board evaluation of pre-app(ications resulting in: (1) redirection of ineligibie projects, areas, applicanfs; (2) request for rework and resubmission of application in next cycle; or, (3} invitation for final applipfion along with request for project spec�c informafion fo be included. Early March Final applications due six weeks after preapplications. March Review of;�T°}��,Z'�mall �grants Prog: Councii approval March/April STAR Board�Committees, Planning Commission, CIB Commiftee, and sfaff review of applications Eariy May Recommendations to Mayor May Review by Mayor artd City Council Eariy June Adoption by Cify Councii June Comm"ifinent letters with specific requirements and timelines for acfions to be completed, sent to those recommended for funding. July Contracfs negofiated assuming sfipu(ations and fimefines have been met. (Note: The 1995 timeline is subject to passage of guidelines and may be adjusted.) Page 8 Q5 �o II. Procedural Guidelines A. A complete pre-appiication must be submitted, on time, for a proposal to be considered during a funding cycle. B. A complete finai application must be submitted, on time, for a proposal fo be considered during a funding cycle. C. City stafF will make available for interested parties, copies of the pre- applications and final applications for comment and review. D. Cify stafF wili organize a workshop at the beginning of each cycle to provide program application in#ormation to prospective app{icants. Attendance at the orientation workshop is strongly recommended. Staff may be calied upon to assist applicants in developing preapplications and final applications, based on availability of staff. E. App4ications may not be changed or modified once submitted. It is the applicanYs responsibility to thoroughly develop the proposal before submission. However, applicants may be asked to provide additional information to the STAR Board in the course of its review. Iil. Pre-Application Purpose and Contents Pre-applications will be used to determine eligibility and completeness of proposal. Those ineligible wili be notified as soon as possible. Some may be redirected to other programs. AI{ pre-appiications must be submitted on the Neighborhood Sales Tax Revitalization Program pre-application form and contain the following information: A. A brief description of the projec# proposal. B. An estimate of the amount and type of funds (combination requests including grants, loans, and or seed capital are also eligible) being requested from the Sales Tax program along with an estimate of private or other kinds of contributions. C. Name of the organization�ndividual that. will develop, imp(ement and operate the project proposaL D. Up to three letters of support from neighborhood groups located in the area affected by the proposed project/program. (The preapplication inciudes a standardized form for these letters of neighborhood support.) Page 9 � 5-�0 N. Final Appiication Contents Final application forms will be sent to eligible applicants following the preapplication re�iew and approvat process. The forms wiit be accompanied by requests for additional project-specific information that must be addressed in the fina! appiication. Staff, if available, wi11 be identified fo provide technical assistance at eligable applicant's request. All applications rr�ust be submitted on the Sales Tax application form and contain the following information, induding but not limited to: A. Describe the purpose of the proposal including: 1. Neigfiborhood problems or needs which ihe proposal addresses. 2. Documentation of the above problem or needs - such as demographic data, statistics, and district, city and neighborhood pfans, priorifies, strategies and poficies. �avai�a��;_fa�;�evierv ____-.__. 3. Detas7ed descri ion o activities or elements. 4. Neighborhood impact and projected results. B. Level of ne+ghborhood support and participation. 1. Three (3) additional letters of neighborhood support if the letters clarifj+, add to, or strengthen the proposal. 2. Description of neighborhood participation C. Applicant's management experience and capability, including past experience with similar programs. Please provide a board membership list, if appiipbfe D. Requested amount and type(s) of Sales Tax funding (grant, toan, and/or seed capita�j E. Budget 1. Level and source of private commitment 2. Sources and uses statement for all project funds 3. Additional elemenfs such as: a project proforma, sources of private lender financing, three years of financial data, and other information, may be required as it pertains to #he proposal. F. Time line for project that is specific and lists milesfones. G. Map indicating project location and street boundaries. , <-, �J' Page 10 q5=�d J. K. tf above-standard public improvements are proposed for funding, describe the legally-binding and enforceable plan for operating and maintaining them aver the useful lifie of ihe improvemenis. Evaluation criferia, including expected oufcomes and a description of how they will measured. Application Fee: A non-refundable appiicat�on fee f$ 00 must accompany finaf application forms ;� r�ed f�'��iisia�i YsF d�` 2 If a proposal is incomplete or does not appear to be sufficiently developed to allow for reasonable review, the STAR Board may refurn the proposal to the applicant for further work with the suggestion that the proposal be resubmitted during the next funding cycie. :. It �s hope '= Fees ivilI s will encourage. wf � defray the.costs ot' �sals and seiions applicants: _. : PART IV - Project Selection * Neighborhood STAR Board * Selection Process * Evaluation of Applications The Neighborhood Sales Tax Revitalization (STAR) Board is appoirited� by the Mayor and approved by the City Council. It serves as the formal review body for proposals requesting the neighborhood portion of sales tax funds_ The Board recommends prop osais to #he Mayor and Cify Councii. : - . ,. ;. - - .. -The Board shall be govemed by standuig mles (to be develo�cf) which: wtll_ define committee -°: : ,.: : - ' sfructure vohngprinleges� attendance ieqwrements, aumber:ofvotes oonsfrtuting a ma�bnty,---- °. . : ..: ; , ,. , :.._ . -• co�Iscf�of ax�est:`etc. ;. - , . il, SeleCtian P1'oCess - the selection process for proposals will be competitive and the Board wiil defermine the qualify of the proposals. The number of applicants to be funded is dependent on the size and quality of the proposals and the. availability of funding. A. Pre appiications wili be reviewed by the STAR Board and will either: 1. Be rejected as ineligible, or directed to other City programs if possibie Page 11 Q5= �� IQ 2. Be accepted for review. The appiicant will be asked to submit a final application with additional supporting maferials as requested by the STAR Board. Final Applications, upon submission; will be reviewed and summarized by staff. Applications will: Be rejecferl by the STAR Board if incomplete or if insufficiently developed, fhe appficant will be invifed to resubmif the proposal during the next funding cycie. 2. Be accepfed and ail information will be presented to the STAR Board. An astimate of city staff project management costs will be added #o tt� proposal. Addifional informafion wiI( be provided by the following advisory bodies: a. The PED Credit Committee wili review the apptications for fiscal responsibility, risk evaluation and appropriateness of inferesf rafes, ferms and conditions, and provide this information fo the STAR Board to assist them in making recommendations.to the Mayor and City Council. b. The Planning Commission will review proposals for comp6ance with the eity's Comprehensive Pian and Cap'�al Allocation Policy. Comments will be forwarded fo the STAR Board, Mayor and City Covncii within the established timeline. c. information on all proposa(s will be forwarded fo the CIB committee for informational purposes to allow for �.�..�...T .,�..� �.. ' ' L' .i f.. ; - . r.r<o ..��i:Tivi-rinarcm�sv� �Q��= N.a.a..u.. s.,a..a �.a;;a� comrrient, and review. Comments will forwarded to the STAR Board, Mayor and City Council within the esfabfished timeline. C. If other entities war�t to review and make comments on applications, they are encouraged to �i� s�ti'�t� these comments in wrifing to the - .'ti".iii�}N.'W'.�A STAR board witfiin the time frame of board action. The applications wiii •- �� . W.. .� be available __r��:��r�n a cenfral locafion�,s` "�i�:as;��"�`�P�r�� D. The STAR Board v�nll review th� guidelines, CIB Cammittee and credit committee guidance, anc Mayor and City Councit. : applications based on program Planning Commission comments, and make funding recommendafions to the Page 12 q5=�o E. The Mayor wiil present #is-recommendations, along with the STAR Board recommendations and the CIB Committee and Planning -_ Commission comments, to the City Council. F. The Ci Council wilE`_revieifit;re��i�z�i�afio�s:�a�d, by resolution,::'[i�ak� ��nal;se�4�ans.��selee� STAR project proposals�and approve their � budgets. (Counciimember Rettman) III. EV81UatiOn Of 2ppliCatlo�s: Proposals will be reviewed for the following eligibility and additional selection criteria. A. Proposal supports City Council priorities for the use of the Neighborhood Sales Tax proceeds as approved in a City Councii resolution B. Proposal meets the minimum leveraging ratio. (See Leverage section.) C. Proposal is an eligible program activity. (See Eligibfe and fneligib{e Activities sections.) D. Proposal is not a duplication of an exisfing private or public program or replacement funding for an existing program. Funding can be provided for the expansion portion of an"existing program. E. Proposal is not in conflict with any city comprehensive plan element, small area pian, capital allocation policy or adopted City ordinances and policies. F. Proposal is financially feasible. Requested STAR funds together with other. project resources are adequate to meet the identified need. G. Managing organization has the capability to successfully manage and impiement the project. H. Project effectively addresses a previously identified or otherv,rise clearly documented neighborhood need or goai; � �y�� r�� Page 13 q5 �o 1�; Proposats may receive bonuses for the foilowing additional selection criteria if: f� Project has the following: 1. a positive impact on tax base 2. a positive impact on �ei��I�nr��aa�T::;businesses; � 3. a posifive impacf on the��side�tiat�'neighborhoods :�.,._„�;�.:�:� (Councilmsmber Megard) � �, � `+ • � r--�.�. ,-.�r..�=� .,,� A�.�b �i�.� . �� Project is part of a well-defined, broad strategy for neighborfiood � developmenf or mainfenance: �d: Activities are su�ciently concentrated within an identified geographic area to result in a high visual or economic impact; Bx� Suffcient planning or feasibility analysis i�dicates a high probabilify of A � success; and �y� �ead'm�aeighborhood support is documented - ^ '��-^^�^ ;Q a�i appropnate mix of residents, property owners and/or business people relevant to the project included in the planning, development and implementation of the proposal... �:�1A- . Proposals include direct coordination with other city, private, or non- profit programs and projects - — �>�P1: Project teverages additianal funds or resources which exceed fhe ::.:�: required match. �� Percenfage of the mafch that is direct cash or capital investtnent, is high �;!? All ad'minisfrative expenses are funded through ofher sources .. u�- Proposa(s are recommended ""'::: :ts � w. _�».�... >. . . _..,.., ,�� ;f��:::�.. ;,r, �r��€€��e�zs�sr� ��; in an adopted smait area plan, or through anofher similar neighborhood planning process. (Councilm Megard) i or erw:�.e v.� c�lar�cw�r, 11�9 OT 8 SI(2@t, O� Guerin) Page 14 PART V- LOANS, GRANTS AND SEED CAPITAL * Amount of funds allowed per project " Leverage * Additional Information Regarding Program or Project Proposals * Loan Rates, Fees, Terms and Colfateral z Program Development and Implementation I. Amount of funds allowed per proposal: �_a� � Regular STAR 1. I�e�ria�i 2. The minimum for the regular program is $15,001. Request for funds of $15,000 or less will go to the Small STAR Grant program. 3. Proposals will be funded 1�ased on their merits and funds available. B. Smali STAR Grant Program - requests for small funding amounts wiil be in the form of a grant. The application and setection process will be reduced. Funding approvat may be concluded several months before the regular STAR program process completion. 1. Five (5°/o) percent of the total funds availabfe per round will be alfocated to the Smal{ Grant STAR Program. 2. ' Minimum grant for the Small STAR Grant Program is $5,000. 3. Maximum grant for the smail STAR Grant Program is $15,000. 4. A preapplication will not be required, instead a abbreviaied finai appiication form will be used 5. Any proposals (loan or grant) for $15,OOO:or less will automaticaliy be designated to the Small STAR Grant program. 6. Within three (3) months of the selection approval date, a standardized contract will be signed with fhe city. il. Leverage A. A minimum required match of one ($1) dollar for every one ($1) received as a grant is required. Loans wifl afso be expected to have significant matching participafion. �5=�c� =- � 1 Page 15 program. (Councilmember Megard) q 5 �Q B• �;a�%��5rr:;Pri?�ate: State and Federal funds can be used as a match. � C. Other City money can not be used to match STAR funds. For purposes of this program CDBG money from Cify sources cannot be used as a match, (an exception is listed under D). D. Other city funds that are provided as loans may be used as a match. This includes deferred foans as long as the loan is eventuaAy paid. E. Matching funds must be directly related to the project or program in the applicant's proposal. F. Applicants are encouraged to fund their STAR administrative expenses with outside privafe resources, i.e., foundation grants, cash donations, etc. and to use these funds as part of the match. G. Eligible matching contributions'may include: 1. Direct financial resources �uch as privafe expenditures for commercia! or residertfial physical improvements, contributions or funds raised from wifhin the neighborhood, foundation and corporate grants, and locai lender commifinents or operating assessments estimated over the useful life of the improvements. 2. (ndirect contribufions can incfude: in-kind services from ' residents and businesses such as personnel, professional services, office space, supplies, volunfeer labor, and sweat equity for physical improvements. The value of sweat equity and/or volunteer labor may not exceed 30% of the total match. H. Ineligible matching contributions include: i. Volunteer meefing time. 2. !n-kind service donations from STAR applicants such as already existing office space, phone service, etc. In-kind donations from parties other than the applicant are,eligible. 3. Volunteer ►abor and sweat equity over 30% of required match. (Higher sweat equity matches will be considered for the smali grant program.) 4. Any dor+aSon not directty related to the STAR project. I. Under no circumstances wifl any match be reimbursed with STAR funds. Page 16 �� o �� Q a �. �� III. Additional Information Regarding Pro9ram or Proj�ct Proposa�s A. Program Proposals 1. Complete program guidelines must be part of the proposal application and must�be approved by the Cify Gouncil 2. If a program, such as a revoivirx� loan fund, is established by the applicant using grant dollars, repayments accrue to the app(icant for reuse in the program fo� wtice� the grant was approved 3. If a program is established by an appiicant using:loan dollars, the loan firom the Neighborhood Fund must be repaid in fuli and on time. Any excess funds accrue fio the applicant 4. Incentives for fund recipients which increase their success in maximizing the use of the moneg may be ineluded in the proposal (i.e. wifh a revolving loan fund, tE�e recipient may be allowed to • keep a portion of the payments, or excess funds due to higher interest rates.) B. Ail legal requirements of the City of Saint Paul must be met such as: 1. the property must be appropriatebj zoned, meaning the property must conform to use under the City Zoning Ordinance. 2. for new construction, properties must be on legal buildabie lots 3. prior to pesforming leasehald improvements, the tenant must obtain writfen permission from;the building owner for the improvemenfs 4. Pi�o€ �a � �teet,�r�i�laine�t��n.:'�'��ssa ��`� �ust"� �'` "°°�``" � p p rtymust meet, all �� :�i�louve�;:a??t�t�te ro e ... :>.w��..��,.,__.w permi# and requirements_ F�.�nal�<;;:tti�;E �.�::;�...::..:. �� pe�y<�;i�s;pe�t� and must have a current C� Page 17 J. The STAR board has the discretion to recommend approval of other matching contrihutions on a case by cxse basis. q5=10 5. � �� C. Projects and proposals must ��? with a�l adopted plans and policies u€ #�� C�y af Sa��F 1?� (Counciimember Megard) y D. Seed Capital Loans: The Seed Capital funds will provide long term financing fo �ea�g growing businesses that are not developed enough to interest other venture capital injecfion. Businesses that promofe sfabi(ity in neigf�borhoods are of particular interest. 1. the seed capital funds,must be used for capital expenditures that will free up the business's funds fo be used for development of an idea, producf or service. " 2. seed capifal loans will us�ally be paired with technical assisfance in such areas as financial management and marketing. 3. seed capital loans s#�st�l� ir�� trigger other third party financial participation. (Councilmemb� Megard) IV. Loan Fees, Rates, Terms, Collateral, and General Servicing A. Rafes: will be determined by the appiicant, the STAR Board and the Credit Committee's analysis of appCication. The PED Credit Commiftee wilf analyze the housing, economic developmenf, and seed capital loan requests and rate fhem based on ir�dusfry and cify standards. B. Terms: terms and conditions - witl be negotiated and customized for each individual proposal. Occupancy upon completion, if applicabfe. (Councifinember Rettman) An applicant must have the ability to repay if requesting a.loan and be an acceptable credit risk as determined by a bank or the cify. (See underwriting standards). Funds wiil be released on a reimbursement basis upon receipt of documentation of eligible e�tense. �—� �''`^� � �""" � o oa Page 18 q5=�o �. � Coilateral may be required: The city shall file for any liens required on collateral. Operating Assessments: If STAR capital funding is to be matched by the operating assessmenf, no funding can be sa�t+#ed c#�5��rsec� until finai ratification of the matching operating assessment. (Councilmember Megard) . .: ,., _ _ . Centrat Ioaa servicing is essential for sound fiscal mana�ement of thi§ prograzn.':' Ari ':accounting sysfem is being desi�ed .to provide the. most accessible informatioit manaQement. As a public proa am; _funded with taY dollazs,. it is criticat fhaY the use o€these funds be monifored and that reportin� and analvsis of their use provide the Siate, Mayor, Council, fund recipients, and the public with information and evaIuauon that �ives a cIear picture of the SaIes TaY program. E. Loan Origination and Servicing 1. Individual payments for single projects in programs will be processed through individual loans through programs will program operators '- and ail payments for loans PED accounting. be originated by the 2. Servicing Fees — a. Loans originated through PED (programs or singie projects) will be charged a loan ciosing fee equal to 1 1/2% to 3% of the loan amount, before any disbursements. (An approved origination fee may be charged by p�ogram operators for each loan originated.) b. a fee of �5 to $10 will be collected with each loan payment • c. a charge of 5% of the monthiy payment wiil be assessed on late payments over 15 days delinquent. d. if another party (approved by PED Credit Committee) assumes the mortgage, a 1 1/2% to 3% assumption fee on the outstanding principal balance wiil be charged. 3. A sub-accounting system wiil be used to monitor the total loan amount and to provide periodic reports to: a. the group(ndividual implementing the loan program; b. project managers c. ��e��"i "ys:��." , � : .i�u�i�> ° :��€i:il�erriE3e��te#�ina�i' a.A»:,:�:�>�.�:a<.:n..�.��Y<,.�:.:,:fi:>,:,;��<,.r< �x�.:tr,:,x.��t:.x��..�„�:,,;,.:.<:��:.r.�.� d.e: the Mayor e.d: City Council f.c� Citizens of Saint Paul Page 19 q� �o 4. Revolving Loans: a. a percentage of the loan repayments, (up to 10%), may be kept by the revolving loan operafor, the remainder (90%) is refurned to the City's sales tax €und for reinvestment in capital projects b. the program operator is responsibte for handling delinquencies of loans they have originated. F. Loan Loss Rafio - in order to address loan needs which can not be met through standard financial instifution lending programs, wiil have a loan (oss rafio which may at times reach 20%. The risk rating sysfem will be used to help assure that the program operates within this range. V. Project Development and Implementation A. Upon sefection by the City Councii, the STAR project applicant will receive a letter of commitment which specifies a period of time during which the applicant must refine ifs project or program, secure its privafe mafch, meet ofher requirements as spec�ed in the letter of commifinent and enter into an agreement with the City for the use of the Star funds. Failure to act within the period of time specifed in the commifinenf letter may resuit in cancellation of the.commitment. Proposals should be completed or self-sustaining within fhe period of time approved by the STAR Board specified in fhe agreement. B. Implementation Contract Prior to the implemenfation of an applicant's project, a contract will be entered into between the Cify of St. Paul and the selected applicant. The contract will contain, at minimum, a scope of services to be performed by ail parties, a private match section and a budget section outlining all funding sources, and an implementation timeline. The contracf wiH be signed � ' }�'^ hn.,. +e.� ar��,.�� afx.� ozn tt —• - y � v'' ' �,Q � lmplementation contracts require: 1. that the project applicant has appropria#e liability insurance which insures the Cify of St. Paul. 2. adherence, where applicabfe, to Federal, State and Locai regulations, and policies pertaining to the use of funds such as prevailing wage standards, relocation requirements, affirmative action, targeted vender programs, and the First Source prog[am. The nature of the project (ie. residential vs commerciai) determines which regulations apply. Sfaff will hold a compliance meeting prior to imp[ementation of the contract to identi{y regulations applicable to project activ'�ty. Page 20 f � q 5 �o Sales Tax applicants are cautioned not to make anv neighborhood commifinents untii they fullv undersfand _ Qofentia( compliance and fundinq requlations. 3. impiementation must progress as projected in applicafson, lack of progress is grounds for withdrawing funding. C. Sales Tax Fund Distribution - Sales Tax Fund allocations will generaily be on a reimbursement basis. Final paymenf will be made upon completion of the project and receipt of the final project report and evaluafion. Af the 6me of completion of all activifies contained in the agreement or upon expiration of the agreement, any remaining project fund bafances wil{ be returned to the STAR Fund. PART VI - Review and Evaluation * Project Evaluation _ __. * Annual Report to the City Councii and Mayor * Annuai Review of Priorities * Review of Allocation Goals * Audits - Quality Control I. Project Evaluation A. Semi-annual status reports will be required for each project, which will provide an ongoing monitoring process. The reporf will include project expenditures, status of match commitments, and progress toward meeting expected project outcomes (as identified in the origina! application). This wi11 allow for timely adjustment of individual projects if B. A final evaluation of each project will be required to determine the extent to.which the project has been successful. Project success wili be _ measured against expected project outcomes and the overall objectives of the STAR Program. This final evaluation must be received before the final reimbursement request wiil be paid. Page 21 q 5 �o IL Annual Report to City Council and Mayor The annual report should be presented in September of each year and shouid include: A. Progress report on all projects to date, their locations, and costs B. Percenfage loans, granfs, and seed capi#al funds awarded C. Fiscal analysis of overa(I program D. Effectiveness in supporting priorities. E. Estimated funds available for the nexf funding cycle F. Evaluation of the program process and suggested revisions 111. Annual Review of Priorities Priorities for the use of sales tax funds in our neighborhoods must be reviewed annualiy. These priorities shall be reviewed at a public meeting following the presentation of the annual report and the Couna! and Mayor shall cieariy and public(y state priorities for the upcoming funding cycle. Target altocation goals shall be reviewed, as necessary, by the Mayor and City Council. . IV. Audits - Quality Control — A. The City will establish a monitoring and controi system which ensures that loan repayments are made under the ferms of each project's agreements. 1. If will be the responsibilify of projec# developers to provide all necessary documenfation, as determined by the City, for - purposes of determining program e�"�gibiliiy and ongoing program compliance. 2. Reports on revolving loan programs wili be periodically provided to fhe project developers to assist in fheir moniforing of tfieir programs finances. B. Periodic external audits may be required. � Page 22 .