HomeMy WebLinkAbout1992 Resolution No. 081•
RESOLUTION NO . J.j_
SERIES OF 1992
A RESOLUTION AMENDING THE APPROVED 1992 BUDGET APPROPRIATING
MONIES FOR THE ENGLEWOOD SMALL BUSINESS •EVELO PME NT
CO RPORATION .
WHEREAS , the Englewood City Council has previou , ; indicated strong support for the
propo sed Englewood Small Bu si ne ss Development Co rpor,Uon ; ond
WHEREAS , the Greater En glewood Chamber of Commerce, the Englewood Downtown
Development Authority ond the City of Engel wood h ave committed to support a non -profit
corp oration to mak e loans up to $30 ,000 ta small and medium sized businesses in
Englewood ; and
WHEREAS , the Small Bu si ness Deve lopm ent Corporation will be totally indepen,
from the City ond other organizations and will have a 5 member board , appointed and
elec ted according to the by-la ws ; and
WHEREAS, there is a great need for small business financing in Englewood; and
WHEREAS, in the City of Englewood 1991 buainess survey 59% of the respondents felt
that existing financial reaources did not meet their requirements ; and
WHEREAS, funds are available from the fund balance reserv e, the fiscal impact will be
grants of $62,500 from the 1992 Budget;
NOW , THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ENGLEWOOD, COLORADO , THAT:
Sfwlm._]. The City of Englewood 1992 Budget is herehy am ended a s follow s:
Source of Funds
Fu nd Balance Re!erve $62,500
Use of Fu nds
Sma ll Busin ess Development Corp oration $62,500
~-The City Manag er i, hereby authorize d to pay $62,500 to th e Englewood Smoll
Bu siness Development Corporat ion (ESB DC) fo r the purpose of making loon s to Engl ewood
I JSinesses in acco rdance wi th ESBDC By-laws .
ADOPTE D AND APPR OVED thi s 5th day of October, 1992.
AT E T :
-&£~ w & ,HA.(
Patricio H. Crow, City Clerk
I, Patricio H . Crow, City Clerk fo r the City of Englewood , Co lorado, h ereby certify the
above is a true copy of Re solution No.Li., Series of 1992.
,ifat;;'d-~ ( ,iJ. fL4
Patricia H. Crow
Date
Octobe r 5, 1992
INITIATED BY
Agenda Item
11 a
Community Development
Subject Small Business
Development Corporation
STAFF SOURCE Lee Merkel, Director of Community Development
ISSUE/ACTION PROPOSED
City Council is requested to consider funding for the development of the Englewood Small
Business Development Corporation. The total amount requested from the City of
Englewood is $125,000 . If approved, half of the funding (562,500) will be made from 1992
funds and half will be requested from 1993 funds, based upon anticipated cash flow and
need.
PREViOUS COUNCIL ACTION
This matter was presented to Council at their study session on July 6, 1992 .
BACKGROUND
The City Council has indicated s trong support for the proposed Englewood Small Business
Deve lopment Corporation (ESBDq. This organizatim , would make loans to Englewood
businesses that have been unable to find bank financing . The Articles of lncorporatlon hav e
now been filed with the state, establishing the non-profit corporation (copy attached). City
Council is now requested to mai<.e the necessary grant to formally establish a loan program.
At the presentation before Council in Jul y, a request was made for a total of $125,000 from
th e City. Th e City Attorney's office has s uggested that half of the funding be made in 1992,
and once the organizati o n has established a track reco rd and has a ne ed for the second half,
Council would make the second ha lf of the funding avail a ble in 1993.
The Gred ter Englewood Chamber of Commerce, the Englewood Dov·ntown Deve lopment
Autho rity, a nd the City of Eng'ewood ~ave a il m ade a preliminary commitment to establish
th is no n-p ro fit corporation to make loan s up to $30,000 to small and m ediu m sized
"
bL·slnes!lft in Englr wood . The Corporation will Ix :oially independent from the City and
the other founding or• anizations and will have a 5 member Board, appointed and elected
according t the by-laws. The Board will report to the establishing or ,anizations quarterly.
The City Council will appoint one Board member to the Englewood Small Business
Development Corpcration Board . The in t,,11 ',; to have the loan organization in operation
by November. Therefore, the Board appointment should be made as soon as possible. Th e
Englewood Downtown Development Authority (EDDA) has named Gary Oxman to serv e
on the Board , and the Chamber has named Teri Holland . The other two Board members
will be appointed according to the ESBDC bylaws .
STAFF ANALYSIS
There is a great need for small business financing in Englewood . In our 1991 business
survey, 59 % of the respondents felt that existing financial resources did not meet their
requireme nts . This view has also been expressed during our business breakfasts and our
on e-o n-one interviews. Banks cannot be totally relied upon, and are reluctant to engage in
new fi nancing activities like community development corporations (CDC's). If anything,
loan criteria for banks are becoming more stringent. The City has a very small revolving
loan fund which makes up to four loans per year of $10,000 each . This program would
complement and enhance the existing effort.
The Small Business Committee of the Greaier Englewood Chamber has championed this
idea before the Chamber, the EDDA, and the City. In addition to support from the
Chamber, EDDA, and the City, support has also been expressed by the Economic
Development Coalition and the Finance Task Force, an ad hoc group that included three of
the major banks in the community. The task force has tried unsuccessfully to get one of the
banks interested in establishing a loan fund under the CDC guidelines. With the City's
donation added to the $75,000 pledged by the EDDA and the Chamber, the ESBDC will
have an initial funding commitment of $200,000 . The EBSDC plans to use some of these
fund s to leverage funds from other sources, creating a much larger investment in the
community.
FINANCIAL
Fund s are available from the City's fund balance reserve. The fiscal impact for 1992 will be
$62,500, and another $62,500 will be requested from the 1993 budget. The City has offered
to provide the finan ci al accounting and billing for the ESBDC. However, the final
determination on accounting i:,rocedures is the responsibility of the new Board . The City
Attomry ha s d e termined that it is important to es tabli sh suffici ent checks and balances to
avoid any potential liability the City might in cu r.
BILAlYS
OF ENQJ,EWOQD 5MAJJ. BUSINESS DEVELOPMENT CORPORATION
1.0 PURPOSE : The purpose of the Englewood Small Bu1ine11 Development Corporation
(ESBD) is to foster the development of ,mall to merlium sized busine11es in the City of
Englewood , thereby increasing employment opportunities, promoting the creation of a
diverse and broad tax base, and stimulating economic growth . The Corporotion is operated
exclusively for nonprofit purposes, and no part of the income or assets of the ESBD
Corporation shall be dist ributed to or inure to the benefit of any individual.
2.0 lllll]ES: The primary duty of the Englewood Small Busine11 Development
Corporation (ESBD) is to establish and administer a revolving loan fund for small to
medium sized businesses lo cated in the City uf Englewood, including the adoption of
policies and procedures for making loans.
3.0 OfDCES: The principal office of the ESBD Corporation shall be located within the
territorial boundories of the City of Engle..,ood.
4.0 BOARQ OF DIRECTORS AND TIJEffl MEETINGS ·
4.1 Q•o•ml Pgwgrs : The business and affairs of the ESBD Corporation shall be
managed by its Board of Direct.ors, in accordance with the Colorado Nonprofit
Corporation Act .
4.2 ~.lliudw: The number of Direct.ors of the ESBD Corporation shall be
five . Each Direct.or will serve a two (2) year term of office provided that
initially 2 members will be elected for a term of one (1) year and 3 members
will be elected for a term of two (2) years. A Direct.or may not serve on the Board
for more than 6 consecutive years.
A,
4.3 $•l•ctioo pf Djmtgrs: Five Directors shall be appointed or elected. Each
organizotion , the Englewood City Council , the En.•lewood Downtown
Development Authori ty and the Grea~r Englewcoa Chamber of Commerce ,
shall oppoint one person to the Boord .°l'he three (3 ) appointees shall serve as a
nominating committee and shall name a slate of at least thJ'\e (3) Englewood
bu sines!:i persons wi11ing to serve on the Board of Directors.""Each person
se rving as o member of the City Council, as a member of the Board of Directors
of EDDA , and as a member oflhe Board of Directors of the Greater Englewood
Chambe r of Comm erc e sh all cast one (1) vote for two (2) members to be elected at
large. An y person ser.'i ng in more than one (1 ) capacity shall be limited to on e
(I ) vol e. In the event of a tie th e appointees will continue voting until the vote is
brok en .
4.4 Remgya} From '"'i..e: A Direct or is subj ect to removal fr om the Bo ard, by tl-e
Boa rd ifhe or . misses th r ee (3) consec utive mee tings in a row.
4.5 Resignation : An y Director may resign at any time by givin g wr itten n oti ce to
th e Board of Di r ect or s wh o will info rrr, the three orga n iza tio n s .
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4.6 Y.w:wl.cill; Vaca nci ea will be filled in the som e manner aa Directors are
selec te d, unless th ere is an alterna te .
4.7 Comoeosetion . No Dire ct.or shell re ceive comp ensation for th ei r se rvi ce as a
Dir ector.
5.o MEETINGS :
5.1 Beculor Mertinrs : In addition to the annual meeting the Direct.on will meet as
often as needed to tak e action on loan requirements at least every second
month . The Board of Dir ec tor& may hold these meetings at such time■ as
decid ed by the Board. Written notic e stating the time and place of a meeting
,hall be delivered not Jess than ten (10) days before the date of the meeting by the
S ec retary to each Director.
5.2 .Qiumim: A majority of the members of the Board of Directors will constitute a
quorum for the transaction of business at any meeting of the Board, but if le1&
than such majority is present, a majority of the Directors present may acljoum
the meeting.
5.3 Actigp of Board jg General : No action shall be taken by the Board unleu a
quorum is present and the action is approved by a majority of those members
pres ent.
5.4 Meetjpgs open to the Puhljc: The meetings of the Corporation shall be open to the
public . The Board may elect to hold executive seuiona of ill meetings to
consid er loans where the information of the applicant may be considered
confi~ ?ntial.
5.5 Action without meeting : Any action which is required to or which may be taken
at any meeting of the Board of Directors of the Corporation may be taken without
a meetini: if the consent in writing, aetting forth the action 10 taken, ah all be
signed by all the Directors entitled lo vote with respect lo the subject matter
thereof.
5.6 :w.iii=. Attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting and a written waiver of notice or manner of calling an y
meeting of the Board of Directors signed by the Trustees entitled to such notic e,
wh ether before , at or after the time slated therein, shall be the equivalent lo
giving of such notice. The signatures of the Directors subscribed to the minutes
of any mee ting shall con stitute such a written waiver of notice .
6.0 QFFJCERS :
6 .1 liu.m.lw:: Th e offi cers of the Corporati on shell be the President, a Vic e
President, a Trea s urer, a Secretary and s uch oth er officers as may from tim e to
ti me be a pp oin ted by th e Board of Directors .
6.2 E!e ctjo n and Removal : Th e Presi dent shall be elected from th e Directo rs at th e
regula r annual meetin g ther eof, end a ll s uch other offi ce r s shall be el ect ed or
appointed by th e Boa rd of Directo rs at such meeti ng or fr om time to time as th e
occasi on req uir es . Each offi ce r shall co ntinu e in oflic e until hi s suc cess or
sh all have bee n d ul y electe d a nd qualifi ed , or until he shell h ave r esigned or
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been remo ved by the Board of Directors by the affirm at ive action of a two-thirds
m ajority of the th en members of th e Board of Directors.
6 .3 fawlwU : The Presi dent shall be the Chi ef Executive Officer of the Corp ornt io n
end sh a11 have general s upervision ove r its business and affa irs subject,
h oweve r , to the direc tion and control of the Board of Dir ectors . He/s h e shall
sign and execute in the name of the Corporation all d eeds, contracts and oth er
in struments authorized by the Board of Directo rs, and in general , perform all
duties incident to the office of President and such other duties as may from time
to time be ossign ed t o him/her by th e Bo ard of Directors . No Director shall
serve in the capacity or Pres ident for more than two co nsecutive years.
6.4 Vic e President : At the reques t of or in th e abse nce or disability of the Presid ent,
the Vi ce Preaident shall, in s u ccessi on, perform all duties of the Presi dent and
such other d•:tie a aa may from time to time be assi gned to him by the Board of
Directors or by the Presid ent. No Director shall serve in the capacity of Vice
Presi dent for mor e than t wo consecutive years.
6 5 ~: The Secretary ah all keep the minutes of a ll meetings of the Board of
Directors, shall be the cu stodian of the reco rds and of the se al of the Corporation
and affi x the seal to all documents requiring the aame , ahall aee that all notices
are duly given in accordance with the provision, of the Bylaws and as required
by law, and that the books , reports, statements, and other documents and record s
of the Corporation are properly kept and filed, and in genera l shall perform all
duties incident to the office of Secretary and such other duti es as rnay from tim e
to time be a 11ign ed to him/her by the Board of Director& or the Pres ident.
6 .6 '.Inaa!IIu.: The Treasurer shall have the charge and custody and be
responsible for all funds and securitiea of the Corporation, shall deposit all su.ch
funds in the name of the Corporation at s uch depo sitories as shall be d esignated
by the Board of Directors, shall keep book s of account and records of the
finan ci al transactions and condition of the Corporation and shall submit
r eports thereof monthly, or as the Board may from time to time r equire and, in
general, sh all perform all the dut ies incid~nt to the office of Treas urer and such
other duties as may from time to ti me be a ssign ed to him by th e Board of
Directors or the Presi den t.
6.7 Co mp ensa tio n. No offi cer shaJI receive com pen sation fo r th eir service e s an
offi cer .
7.0 NEGOTIABLE INSTRJJMENTS DEEDS AND CONTRACT$: All ch eck s, drafts,
n ote s, be nds and orders for paymen t of the Corporation : all written contracts and
agreements to whic h th e Corp oratio n shall be a party; and all other doc um ents n ecessary
fo r carryi ng out th e busin ess of the Corp or ation shall un less oth erwise directed by the
Boa r d , be sign ed by the President or by a ny two offi ce r s wh o are different person s. The
Boa rd of Director s may, how ever, author ize any offi cers to sign any in strume nts on be half
of th e Corporation with out a countersignature: may design ate oth er agent s of th e
Co r po r at io n wh o m ey, in th e nam e of th e Corporatio n , sign s uch in strument.
8.0 IN]JFMNIFJCATION OF DIBECTQRS ; In addition to the immun ity granted to
di recto r s under Secti on 13-21 -11 6(2)(b ) of the Colorad o Revi sed Slalutes, as am ended , n o
directo r sh all h a ve per sonal liabili ty to> th e Co rp orati on or to it s membe rs fo r monetary
da mages fo r breach offi d uciary d uty as a Director exce pt for (I ) any breach of th e
Di rec tor's duty of loya lty to the co rporatio n or to its mem be r s: (2) act s or om iss ions not in
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good fa ith OT which involve intentional misconducts or a knowing violation of 1,,w; (3) acts
spec ifi ed in Sec tion 7-24 -111 of th e ColoTado Revi se d Statutes, 0 1 amended, or (4 ) any
transac tion from which the Director derived en improper persona) ben efit .
9.o CONFJJCTS OF JNIEBESI ·
9.1 lli.wA1iw:: If a "conflict of interest" wh ich is defined as conflict between the
private inteTest s of a Director and the official Te1pon 1ibilities of that penon as a
Dir ec toT occun , it is th e duty of each DirectoT to conduct them selve s in a
manneT that will prevent the conflict from affecting h is OT h eT judgement as a
Di TectoT . Wh en a Dirt :toT Teco g11ize a a situation in which he/she hBI a conflict
of interes t the Directo r shall disclo se that fact to the BoaTd .
9.2 Abiwlilwl : At the Tequ os t of the BoaTd ofDiTecton, a Director ahall abstain
from voting on an y matteT with respect to which h e/she has a conflict of interest.
Furthermore, if the Directors decide that it is in the best interest of the
Corporation that such Director not participate in matters Telating to the conOict,
it sha II be t 's or her duty to abstain . Any Directo r may abstain fr om voting on
or participating in any ma tter with respect to which he/she feels a cooOict of
inte r est .
10.0 CORPORATION FINANCES :
10.l Sguue• pf Fundjng : The Corporation wi ll be funded by contributions !Tom the
City of Englewood, the Enelewood Downtown Development Authority and th e
Greater Engl ewo od Chamber of Commerce, and such other source s u may be
obtain ed.
10.2 Fjnancja) B•pgrlli : Financial statements shall be pre pared monthly OT moTe
frequ ently at the disc retion of the Board ofDin,cton and shall be made
av ailable to the public upon req ue st. Financial reports shall be made at least
quaTtoTly to the funding organizations .
l 1.0 DISSOLUTION : If, for any reason the BoaTd de te rm ine s that it is appropriate to
di sso lve the Corporation , all assets will be dis tributed back to the conlTibuting
organizati on s in proportion to thei r contribution s.
12.0 LOAN PROYJ5JON5 :
12.1 Percentages Granted to EDDA : No les s than twe nty fi ve percen t (25%) of the
outstan ding loans or $50 ,000, whicheve r is less sh al l be loaned in1ide th e
En glewoo d Downtown Deve lopm ent Authority Distric t .
12 .2 Percentage Ljmjlat jo ns: No loan which exceds fi fl.ee n perce nt (15 %) of th e
n ew cap italiuition of the fund will be mad e t.o any one business organization.
12.3 Loa n Criterja · Lo ans will be interest beari ng at rates to be establi shed by th e
Board . Loan rat<!S may vary dependi ng on the abil ity of the bu si ne ss to Tepny
Lh t:! loan . Th e Board shall obt.n in an eq uity interest in the business which will
not excee d ten perc ent (10 %) of the loan . Thi, equ ity inte res t will be bought back
with in three (3) y ears an er 10 111 , maturity. No loans will be mad e in exce ss of
te n (10 ) years .
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12.4 Lonn APPliCRtioos : No loan will be mad e without a comprehensive business
plan and cash now projeclions to shuw how the loan is ex pec ted t.o be repaid. Th e
bu sinP.s S must add t.o the empl oy ment and econom ic base of the community.
12 .5 Loan CoyenanLs : A loan cannot exceed four hundred percenl (400%) of the net
capitalization of the business (owners capital less existing loans). Loan
agre ements may contain personal guarantees, key man insurance, periodic
reporting requirements and any other provisions de emed prudent by the Board
to ensure loan repayment.
13 .0 AMENQMENTS : The se rul es may be amended by th e Board end will require e two-
thirds vote to pa ss. Two of the three sponsoring organization s must concur in the
ame ndment prior to its taking effect.
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ARTICLES OF INCORPORATION OF
ENQJ,Ewoop SMAJ,J, UJJSINESS PEYEI.QPMENT CORPQRATION
Th o und onignod pcnon 1, 0 1 ln corporaton of a corporation under the Colorado Nonprofi t
orporntlnn Act , •11111 nnd ••kno wl edge the following Article s of Incorporation :
~
Th e nn m of tho corporn tlon is the Englewood Small Busin ess De velopment Corporat io n .
ARTICI,EII
Th o period of duration of the Co rporation shall ba perpetual.
ABDCLEW
Th e pu rpo1e1 for wh ich the Corporation i• form od are as follo ws:
I . Th e pur po oe of the Englewood Small BusineH Development Corporation (ESBD) is to
fo ster the dev elopment of s mall to medium oized busineaaes in the City of En11lewood ,
th ereby increasing employme11t opportunities, promob ,g the creation of a d iverse
and broad tax baoe , and ot imulating economic growth . The Corporation i1 operated
exclusi vely for nonprofit purpooes, and no part of the income or u oets of the ESBD
Corporation shall be di stributed to or inure to the benefit of any individual.
2. To take and hold, by bequest, dev ioe, gift, purchaoe, leaoe or otherwise, either
absolutely or in truot, for any ofito purpooes, any property, real , personal or mixed,
without limitation as to amount or value; to own, and while the owner of any stocks,
bond s , oe ,urities, notes or other evidences of indebtedn eBB created or iuued by any
co rporatio n or a ssoci ation organized under the laws of any state, country, nation or
gov ernment , to exer cise and enj oy all of the righ ts, powers and privilege s now or
hereinafte r co nferred upon cor porotion s organ ized under the laws of Colorado and to
designate a party for that purpose, from time to time, to the so me extent that natural
persons mi gh t or could do, and to oper ate, use, e njoy, ma n age improve , mortgage,
pl edge, lease , a ssign, oell or otherwioe dispose of any suc h prop erty; to change and
vary the in vestme nts of the Corporation fro m t ime lo ti me and to in vest and reinvest
it s fund s in any sec urit ies or property dee med pro per by it s Directors for such
in vestm ents: and, in ge n er al, to deal with and expen d the property and fund s of th e
co r poration fo r th e purposes thereo f in suc h o manner as in the j udgment of its
Directors ~~11 best prom ote its purposes.
3 . To m 1.1ke , enter into and pe rform co nt rocls of every t1., •• d a nd description , which e re
necessary, a dvi sable, desirabl e or e xpedi e nt in ca r rying out th e purpose of the
Co r po ration with any pe r son, firm , as soci ation , corporati on, municipa lity, body
po liti c, co umy, st a t e or go vernm ent.
,i . To ha ve and maintain one or more offi ces , and LO co nduct and carry on a ny of it s
bu siness in any st a t e. territory, di strict , or po ssession of the United Stoles of
Am e r ica .
5 . In generol. to cnrry on an y buslne1& not conlr•ry to the laws of th e State of".:olorado
rein ting lo nonproflt co rporations , and to have and exercise all the powers now or
hereoncr conferred upon or permitted to such corporations, and to do any or all of the
things hdreln befor e specified to the same extent as natural person s could do , as
prindpn l tru1tco, agent or otherwise and either alone or in association with others;
provi ded, 11lwny1, that no bu•,ness shall be carried on and no powers shall be
co·,fe rrcd upon or exercised by the Corporation unless the same shall be such as shall
bE ,n rried on by o corpo ration under the Colorado Nonorofit Corporation Act.
6. Thi a orcnn lz ntion is organized exclusively for purpos,s under the Colorado
Nonprofit Corpo r ation Act . No pert of the net earnings of the Corporation shell inure
to th be nefit of, or be distributable to its members, trustees, officarB, or other private
poraon,, except that :he corporation shell be authorized and empowered to pay
reasonable compensation for services rendered end to make payments and
dis tri bution s in furtherance of the purposes set forth . No substantial part of the
activities of th e corporation shall be t he carrying on of propaganda, or otherwise
attempting to influ~nce legislation , and the corporation shall not participate in, or
interve ne in (includi ,,g the publishing or distribution of statements) any political
campaign on behalf of the candidate for public office .
ABDGJ.EIY
The address of the initial registered office of the corporation in Colorado is:
Loren Shepherd
333 West Hampden Av enue, Suite 401
Englewood, Colorado 80110
ARTICLEY
The Directors constituting the initial Board of Directors of the Corporation are:
Clyde Wiggin s 3400 S. Ela ti Street, Englewood , Co. 80110
Bob McIntyre 701 West Hampden Avenue, Englewood , Co . 80110
Gordon Close 3333 S. Sherman , Suite #480, Englewood , Co. 80110
ARDCJ.EYJ
In a ddi tio n to th e immunity granted to directors under Section 13-21 -116(2)(b) of th e
Colorado Revised Statutes, as amend ed, no director shell have personal liability to the
Corporation or to its n:embers for monetary damages for breach of fiducia ry du ty es e
Director except for (1 ) any breach of the Director's duty of loyalty to the corporation or to its
membe rs; (2 ) acts or omissions not in good faith or which invo lve intentional mi sconduct s
or a kno.,ing viola tio n of low : (3) acts specifie d in Section 7-24-111 of th e Colorado Revised
Statutes , as amende d, or (4) any tran sac tion fr om which the director derived an improper
pe rsonal benefit.
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ABDCIEYU
Ir, for any reason th e Board determin es that it is appropriate to dissolv e the Corporation , all
asse ts will be di stribu te d back to th e contr ibuting organizations in prop ortion to th ei r contribut ions.
ARTICJeEYIU
Th e name and address of each incorporator is :
Loren Shepherd
333 West Hampden Avenue, Suite 401
Englewood , Colorado 80110
Loren Shephenl
Stai,, Of Colorado )
)so.
County or Arapahoe )
Acknow led ge d before me thi s __ day of ____ ,_ __ , 199_, h
My co mmi ssion expir es :
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Notary Public
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