CCR1993282COMMON COUNCIL - CITY OF MUSKEGO
RESOLUTION #282-93
APPROVAL OF LOAN FUND APPLICATION
Kids Kampus South, Inc.
WHEREAS, the City of Muskego is a participant in the Revolving
Loan Fund (RLF) Plan; and
WHEREAS, a pre-application form was submitted to the City by the
applicant and approved on November 23, 1993 by the Common Council
of the City of Muskego through Resolution #260-93; and
WHEREAS, Kids Kampus South, Inc. has submitted an application
form requesting a loan in the amount of $152,510; and
WHEREAS, the Finance Committee has recommended approval.
NOW, THEREFORE, BE IT RESOLVED that the Common Council Of the
City of Muskego, upon the recommendation of the Finance
Committee, does hereby approve the application form for $152,510
submitted by Kids Kampus South, Inc.
BE IT FURTHER RESOLVED that the Mayor and Clerk are authorized
to sign any documents in the name of the City e DATED THIS 14TH DAY OF DECEMBER , 1993.
SPONSORED BY:
FINANCE COMMITTEE
Ald. Patrick A. Patterson
Ald. Edwin P. Dumke
Ald. David J. Sanders
This is to certify that this is a true and accurate copy of
Resolution #282-93 which was adopted by the Common Council of the
City of Muskego.
12/93jmb
SOUTHEASTERN WISCONSIN REGIONAL PLANNING ,COMMISSION
0 916 N. EAST AVENUE P.O. BOX 1607 b WAUKESHA. WISCONSIN 63187.1607 b TELEPHONE (414) 547.6721 ,,
TELECOPIER (414) 547-1 103
MEMORANDUM
TO City of Muskego Finance Committee and City of Muskego Common Council
FROM, Philip L Cosson, Principal Economic Development Planner
Southeastern Wisconsin Regional Planning Commission
SUBJECT Recommendation on City of Muskego Revolving Loan Fund Project
Kids Kampus South, Inc
DATE December 3. 1993
0
The purpose of this memorandum is to provide a summary of a Commission staff
analysis of a proposed loan to be made by the City of Muskego Revolving Loan Fund
to Kids Kampus South, Inc As you know, consideration of this loan request has
been placed on the agendas for the December 7, 1993, and December 15, 1993,
meetings of the City of Muskego Finance Committee and Common Council,
respectively
Kids Kampus South is requesting that the City provide a $152,510 business loan
As documented in the attached City of Muskego Revolving Loan Fund application,
of the firm's building construction, equipment, eligible closing cost, and
from the City loan fund program This loan would be used to pay for a portion
working capital needs
A description of the business proposal and the findings of a Commission staff
analysis based upon the City Revolving Loan Fund Plan are presented below
Funding Request
Proposal: To obtain $152,510 in financing from the City, $255,500 in financing
from Marquette Savings Bank, and $21,500 in owner's equity from Ms
Sue Krienitz
Analysis The request for $152,510 is within the funding limits of the loan
fund program. The provision of $277,000 in private financing and
equity provides a 2 1 ratio of private sector to City financing, a
ratio that meets the minimum standards for this program, It is
recommended that the $152,510 be provided contingent upon the terms
and conditions described below
7
Memorandum
Page 2
Use of Funds
Proposal: To use the City loan to pay for a portion of the firm's building
needs Eligible working capital expenditures include production
construction, equipment, eligible closing cost, and working capital
payroll and inventory
Analysis: The proposed use of City funds is a permitted loan fund activity
0
Loan Term and Interest Rate
Proposal: To provide a loan term of 10 years I with an interest rate of 4
percent for the first three years and 8 percent for the balance of
the loan term The financing being provided by the Marquette
Savings Bank will be for 25 years Ms. Krienitz will receive no
compensation for her work for the first year
Analysis The financing of building construction, equipment, and working
capital with a 10-year term loan is within the guidelines of the
Marquette Savings Bank in the amount of $255,500 has a minimum term
loan fund program, as long as the financing provided by the
of 10 years It is recommended that the City loan be provided for
a term of 10 years
In accordance with the loan fund plan, the request for a 4 percent
evaluated on the basis of need for the interest reduction using the
interest rate for the first three years of the loan term has been
business plan.
firm's projected profit margin and an analysis of the firm's
Projected Industry
Year Profit Marcin*
1994 -2.6%
Average*
4 0%
1995 5 6%
1996 6 1%
4,0%
4,0%
* the projected profit margin is the earnings before tax as a
Robert Morris Associates, Annual Statement Studies, for Standard
percent of sales, and the industry average is based upon the 1993
Industrial Classification (SIC) Code 8351.
It is recommended that the requested interest rate of 4 percent in
the first three years be reduced to two years, with the interest
rate for the balance of the loan term fixed at 8 percent In
addition, it is recommended that the owner receive no compensation
during the first year of the loan term
.
Attachment A
CITY OF MUSKEG0
Revolving Loan Fund Pre-application
1 Business Name Kids Kampus South, Inc.
Address 17612 W. National Avenue
New Berlin. Wisconsin
Contact Person: Sue Krienitz
Telephone No.: (414) 679-0870
2 Brief Project Description: Kids K~DUS South, Inc.. is pro1 losine. to - cc Instruct - a
new children's daycare facility in the Muskego Industrial Park. The President of
Kids Kampus South, Sue Krienitz currently owns and operates the Kids Kampus
Daycare center in New Berlin. The new Muskego daycare facility will employ a
minimum of seven full-time people and two part-time people and will have an
enrollment of approximately 80 children (this does not include after-school
children). The financing structure for the proiect can be found in the sources
and uses statement. 0
RLF Bank Equity
3. Source and Use of Funds Financinq Financing Financing Total
a) Land Purchase . $0 $40,000 $0 $40,000
b) Building Construction .. 109,500 215,500 0 325,000
c) Play Ground Equipment . 10,000 0 0 10,000
d) Furniture & Fixtures . 10,000 0 0 10,000
e) Working Capital ... . 21,500 0 21,500 43,000
f) Eligible Closing Costs . 1,510 0 0 1.510
TOTAL PROJECT COSTS . $152,510 $255,500 $21.500 $429,510
4. RLF Assistance Requested
a) Loan Amount ... $152,510
b) Interest Rate (percent) 4% for 3 Yrs/P+2 for 7 Yrs
c) Loan Term (years) . _._ . 10 Years a
3
CITY OF MUSKEGO REVOLVING LOAN FLTND
PROJECT DOCUMENTATION
Please include the following supporting documentation along with each economic
development loan fund application All information must be signed and dated
1. A current business plan that includes 8 detailed description of the
proposed expansion or start-up project (see Note 1 for business plan
requirements)
2 Financial statements for the past three years and a current interim
financial statement, including balance sheets and profit and loss state-
ments that are compiled by an independent accountant in accordance with
generally accepted accounting principles (GAAP) and include a discussion of
all significant assumptions (see Note 2 for business credit guidelines to
be used in evaluating loan fund projects).
3 Financial projections for the first three years of the project, including
balance sheets and profit and loss statements that are prepared by an
all significant assumptions (officers' compensation and direct labor costs
independent accountant in accordance with GAAP and include a discussion of
should be listed separately) In addition, start-up businesses should
provide quarterly financial projections for the first two years (see Note
projects)
2 for business credit guidelines to be used in evaluating loan fund
4 Personal financial statements for the principals of the business
5 A statement of the anticipated benefits to be derived from the proposed
without funding from the loan fund program.
loan fund project and the reasons why the project will not take place
6 A letter of commitment from the financial institution or other source of
debt financing for the amount of debt financing that is a part of the
project
7 Documentation of the availability of funds for the private equity injection
that is a part of the loan fund project
8 A letter from the chief executive officer committing the business to the
proposed project
9 Cost estimates for all machinery and equipment purchases, land and building
acquisition, and building construction or renovation that is a part of the
loan fund project
10 A lease or pre-lease agreement for rental property or an offer to purchase
for fixed assets that are a part of the project
11 A schedule of the jobs to be created and/or retained, with job titles and
a description of the qualifications required for the new jobs