Rock Island City Council met Dec. 11.
Here is the minutes provided by the Council:
Present: Mayor Mike Thoms, Alderman Ivory D. Clark, Alderman Virgil J. Mayberry, Alderman James Spurgetis, and Alderman Stephen L. Tollenaer
Alderman Dave Geenen arrive at 5:41 p.m. Alderman Dylan Parker arrived at 5:42 p.m.
Absent: Alderman Joshua Schipp
Staff: City Manager Randy Tweet, City Attorney Dave Morrison, City Clerk Judith Gilbert, and other City staff
12/11/2017 - Minutes
COMMUNITY AND ECONOMIC DEVELOPMENT: PROPOSED CHANGES TO CIRLF (COMMERCIAL INDUSTRIAL REVOLVING LOAN FUND)
Community and Economic Development Director Chandler Poole stated he would like to update the CIRLF or Commercial Industrial Revolving Loan Fund Program that is administered through his department. He wants to reduce the amount of money per employee that an applicant can receive from $10,000 to $7,500 and reduce the maximum amount of the loan from $100,000 to $75,000. Mr. Poole explained that by reducing the amount of money, it will make the fund last longer. Alderman Mayberry asked if the funds were from Gaming. Mr. Poole replied the funds are CDBG funds.
The program has been around since the 1980s. Alderman Geenen asked about term limits. Mr. Poole said currently there are no term limits for board members. Some have been on the board since the inception and some no longer reside in the city. Alderman Mayberry asked how many current board members there are.
Mr. Poole explained that currently the applicant and his banker cannot attend the loan meeting. He would like to change that so that both the applicant and their banker can attend the meeting to tell the story of the business. Alderman Mayberry asked if the program is governed by local rules or by CDBG rules. Mr. Poole said it is our rules so the City can change the rules.
Currently, the City can invest up to 50% of the funds for the project; Mr. Poole said they want to change that to 30%. Additionally, the applicant has not been required to put any equity or their own money into the project. Mr. Poole wants that changed to a requirement of 10% equity in the project.
Alderman Spurgetis asked for clarification of the $7,500 per employee versus the applicant. Mr. Poole said the applicant takes out the loan. The program loan amounts are a factor of the number of employees. Alderman Clark asked if the City is requiring the 10% before the loan is made. Mr. Poole said yes; it will be required on the application.
Alderman Geenen asked if the equity must be paid up front or if it is part of the loan. Mr. Poole replied that 10% equity must be paid upfront. The applicant should have money at risk as well as the investors. Mayor Thoms said it often was the practice to use the CIRLF money as equity to take to the bank.
Alderman Spurgetis asked how the number of employees is verified. Mr. Poole said there is an application form, a site visit, and annual paperwork that provides verification. There is a substantial intake process and a monitoring process for three years after the loan.
The interest rate for the program is currently 4%. Mr. Poole wants to change the interest rate to prime plus 0.25% and the rate reviewed annually in January. This should not be the only program the applicant is utilizing.
Alderman Mayberry asked if an alderman can apply for a CIRLF loan. City Attorney Dave Morrison said that would have to be looked into to see if it is possible.
Mr. Poole next discussed board changes he would like to make. He wants only five board members with three-year non-consecutive terms. One alderman should sit on the board. Alderman Clark asked if the aldermen would rotate on the board. Mr. Poole replied yes, every two years. Alderman Geenen said Chuck Austin was on the board and his position hasn't been filled since. Two members should be from the financial industry and two members should be from the community. The Mayor and the representative from Rock Island Economic Growth would both be non-voting members of the board. Alderman Spurgetis asked why they would be non-voting members. Mr. Poole said it would be hard for the Mayor to vote yes or no and Rock Island Economic Growth often puts money into the deal, so it would be a conflict of interest for them.
Mr. Poole explained they want the Small Business Development Center at Western Illinois University involved with the CIRLF Program. They want all new applicants to meet with the SBDC for assistance with the CIRLF application, business plan basics, and a banking review. At six months, another meeting would entail a review of the business and their business plan among other topics. The third meeting will be a one-year check-up and a review of specific business topics. If the SBDC signs off after the applicant has participated in the three meetings, the applicant would get a $500 reduction in their principal amount. Alderman Geenen asked if the SBDC services are free to applicants; yes. Alderman Mayberry asked where the SBDC is located. It is on the WIU campus in Moline. Mr. Poole said the assistance provided will give the business more strength. Alderman Geenen asked if it was optional but with an incentive. Mr. Poole replied the first meeting is not optional, but the rest of the program is optional. Alderman Geenen commented that these requirements are less strict than what non-profits are required to receive grants from a foundation. Mr. Poole said not every business will succeed, but that's ok. Alderman Tollenaer said they are high risk. Mayor Thoms added restaurants would be scrutinized more since they are a very high risk business. Mr. Poole said operating loans will not be given, but loans for equipment or assets that would remain if a business does not make it.
Mr. Poole reported that in the last five-year period, 36 loans have been made for a total of $1,469,299.00. Alderman Geenen asked how much has been paid back. Mr. Poole did not have that answer; the loan term varies. Alderman Spurgetis asked how many loans and business are still operating. Mr. Poole did not have that information.
Alderman Tollenaer stated the program is still needed even though the loans are high risk. Mr. Poole said they will be bringing these changes back to Council in January. Alderman Spurgetis suggested it would be worthwhile to look at the current success rate and then after the changes are implemented, evaluate the success rate again. Mayor Thoms said he is already considering potential board members.
Alderman Parker said residents have asked him if it is a conflict of interest for aldermen to sit on boards and commissions, for example, sitting on the Parks board. An alderman's mind would be made up before an item comes to Council for approval. Mr. Morrison said it depends on the nature of the board and what decisions are being made. He will look into the matter. Mr. Tweet said he would provide the list of boards and commissions that have aldermen as members. Alderman Tollenaer recalled an issue with Vince Thomas years ago. Mr. Morrison said if he remembers correctly, Mr. Thomas had no legal standing in that case.
Alderman Parker asked about requiring a quota or preferential consideration to minority or disadvantaged businesses. Alderman Geenen suggested diversity for the board. Alderman Parker said for board members and applicants. Mr. Tweet responded it gets very tricky if you have any type of goal like that; Mayor Thoms can appoint whatever mix he wants for the board. Mr. Tweet said no two applicants are equal; their applications must be looked at on their own merit. Alderman Spurgetis posed the question if it was a conflict of interest when aldermen vote on property tax increases when they own property.
Mayor Thoms announced Ryan Berger received his AICP or American Institute of Certified Planners certification. Mr. Berger explained that to receive certification, he needed a master's degree in regional and urban planning, professional experience, and successful passage of a rigorous exam.
COMMUNITY AND ECONOMIC DEVELOPMENT: CITY-OWNED RESIDENTIAL PROPERTY DISPOSITION
Community and Economic Development Director Chandler Poole and Planning and Redevelopment Administrator Ryan Berger presented a map showing 150 residentially zoned City-owned parcels. Mr. Poole said there are too many City-owned residential parcels; they need to be put back into circulation. Alderman Mayberry asked how many total parcels the City owns. Mr. Poole will get that information for Alderman Mayberry. Mr. Poole explained the question is what is the best use for each parcel. City staff drove to each parcel to look at them.
Mr. Poole said they are recommending to sell 72 parcels (in red on the map). Homes could be built on some of them. Some lots may not be large enough to build a home; the question is what to do with those. Alderman Mayberry asked if they had buildings on them. Mr. Poole replied the parcels are vacant. They have been acquired through donation, CDBG, other programs, and tax sales.
Mr. Poole next presented a group of 45 parcels that they are recommending the City retain (blue on the map). These sit next to commercially zoned areas or are multiple lots together that perhaps a developer could build a multi-family project on the site. He gave an example of a parcel next to the Solomon building; there potentially could be a parcel with 3/4 of the block, so a bigger vision is needed for that site.
There are 33 parcels of 25 sites that are green on the map. Mr. Poole said these sites will become community gardens until a future use can be determined or they will be permanent community gardens. This will be discussed at the study session next week. The gardens will have raised beds with multiple persons renting plots in a parcel. Alderman Mayberry said he learned at the IML Conference that cities with community gardens are broke and poor communities. Developers don't like to see community gardens or farms in town. Alderman Mayberry stated there should be less community gardens, not more. Mr. Poole responded that some of these sites are not developable; he showed one that sits next to the interstate at 9th and 3rd. Randy Tweet, City Manager, said no one is interested in that site; there is no water near the site and it would cost thousands to bring water to the site.
Mr. Poole said they would be coming back to Council in January with a more detailed plan for the sites they want to sell and how they will be marketed. There is a specific process for disposing of City-owned property.
Alderman Tollenaer asked about the greenhouse. Mr. Tweet said the hoophouse is not the City's, but it is on a City-owned site.
Alderman Tollenaer asked about the greenhouse. Mr. Tweet said the hoophouse is not the City's, but it is on a City-owned site.
Mr. Poole said the majority of the parcels are concentrated on the north and west sides of the city. Alderman Geenen asked if the proposal next week will be less community gardens space. Mr. Poole and Mr. Berger replied that it will be for less parcels, but more efficient gardens with raised beds and more amenities. Alderman Geenen asked if the community will object to less community gardens. Mr. Poole said they don't rent out all of the community gardens they have now.
The study session concluded at 6:05 p.m.
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