CCR1993144COMMON COUNCIL - CITY OF MUSKEG0
RESOLUTION #144-93
APPROVAL OF LOAN FUND APPLICATION
(Country Wetlands Nursery)
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 April 27, 1993 by the Common Council
of the City of Muskego through Resolution #127-93; and
WHEREAS, Country Wetlands Nursery L Consulting, Ltd. has
submitted an application form requesting a loan in the amount of
$20,000; 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 $20,000
submitted by Country Wetlands Nursery L Consulting, Ltd.
BE IT FURTHER RESOLVED that the Mayor and Clerk are authorized
to sign any documents in the name of the City
DATED THIS 25TH DAY OF MAY , 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 #144-93 which was adopted by the Common Council of
the City of Muskego.
a 5/93jmb
SOUTHEASTERN
916 N. EAST AVENUE
WISCONSIN
P.O. BOX 1807
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 k-T
SUBJECT, Recommendation on Ciry of Muskego Revolving Loan Fund Project
Country Wetlands Nursery & Consulting, Ltd
DATE May 19. 1993
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 Xuskego Revolving Loan Fund
to Country Wetlands Nursery E. Consulting As you bow, consideration of this
loan request has been placed on the agendas for the May 19, 1993, and May 25,
1993, meetings of the City of Muskego Finance Committee and Common Council, 0 respectively
As documented in the attached City of Muskego Revolving Loan Fund application,
Country Wetlands Nursery is requesting that the Village provide a $20,000
business loan from the City loan fund program This loan would be used to pay
for a portion of the firms 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 Reouest
Proposal To obtain $20,000 in financing from the Cicy, $17,500 in financing
from Ms JoAnn Gillespie. and $2,500 in owner's equity
Analysis The request for $20,000 is within the funding limits of the loan
fund program The provision of $20,000 in private financing and
equity provides a 1.1 ratio of private sector to City financing, a
ratio that meets the minimum standards for this program It is
and conditions described below
recommended that the $20,000 be provided contingent upon the cerms
Use of Funds
Proposal To use che Cicy loan to pay for a portion of the firm's working
capital needs. Eligible working capital expendicures include 0 production payroll and inventory
Memorandum
May 19, 1993
Page 2
Analysis: The proposed use of City funds is a permitted loan fund activity
Loan Term and Interest Rate
Proposal To provide a loan term of seven years, 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 Ms. Gillespie would
be for a minimum of seven years Ms Gillespie is currently
receiving no compensation for her work on behalf of the firm.
.~
Analysis: The financing of working capital with a seven-year term loan is
within the proposed guidelines of the loan fund program, as long as
the financing provided by Ms Gillespie in the amount of $17,500 has
be provided for a term that matches the-term of the private sector'
a minimum term of seven years It is recommended that the City loan
loan, which is seven 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 firm's
interest rate for the first three years of the loan term has been
projected profir margin
Year Profit Margin*
1993 4.4%
1994 4 4%
1995 4.4%
Projected Industry
Average*
4 4%
4 4%
4 4%
* the projected profit margin is the earnings before tax as a percent of
Associates, Annual Statement Studies, for Standard Industrial
sales, and the industry average is based upon the 1992 Robert Morris
Classification (S'IC) Code 0781
It is recommended that the requested interest race of 4 percent in the
first three years and 8 percent for the balance of the loan term be ap-
proved In addition. it is recommended that the owner continue to receive
no compensation during the first three years of the loan term.
Collateral
Proposal To accept a second general business security agreement, along with
an unlimited personal guarantee from the business owner--%.
Gillespie
Analysis The collateral is within the proposed guidelines of the loan fund
program and should be adequate to secure the requested Ciry funds
IC is recommended that the City accept the collateral that has been 0
offered
Memorandum
May 19, 1993
Page 3
Job Creation/Retention
Proposal To create two new part-time jobs which eeuals one new full-time
equivalent (FTE) job The positions created would be made available
a minimum of 12 months
to low- and moderate-income persons The jobs would be retained for
Analysis: The proposed job creation/retention component of this project meets
the requirements of the loan fund program It is recommended that
the job creation/retention proposal be approved.
At this time, there are no contingencies and the Commission staff recommends that
memorandum Commission staff is available to answer any questions the Finance
the loan application be approved based on the information provided in this
Committee or Common Council may have regarding this matter
TRC