LANCASTER CITY COUNCIL SPECIAL MEETING PROCEEDINGS
The Lancaster City Council met for a Special Meeting to review 2 revolving loan applications on Thursday, May 8, 2014, at 5:00 P.M. in the Lancaster City Hall Meeting Room. Members present were Mayor, Michael Olson; council members present were Jim Hilman and Luke Nordin. Mary Barron and John Stenquist were absent.
Mike Whitlock met with the council to request a $25,000.00 loan from the City Revolving Loan Fund for repairs and improvement to his storage/showroom building in Lancaster. The request is for a $25,000.00 loan for a period of 10 years (monthly payments) at 1% interest per year and the city would take 1st position on all equipment and 30 hp tractor with loader. The loan was reviewed by the Northwest Regional Development Commission and the loan reviewer also suggested that the city require Mike to add the city as a named insured on his personal life insurance to the extent of the amount owed to the city including interest, also that the promissory note serves as a personal guarantee. Council discussed that spouses need to be added on loans to comply with good lending practices. Hilman moved to loan Michael & Molly Whitlock $25,000.00 for a period of 10 years (monthly payments) at 1% interest per year and the city would have 1st position on all equipment and 30 hp tractor with loader and that the city pays attorney fees; loan recipients pay 1% loan origination fee and any recording & UCC fees and that Mikes’ spouse, Molly Whitlock is to be included as a signing party, second by Nordin and carried.
Donald Burton, representing Agri-Sports, Inc. met with the council to request a $50,000.00 loan from the City Revolving Loan Fund for working capital for the business. The request is for a $50,000.00 loan for a period of 10 years (monthly payments) at 1% interest per year and the city would take 1st position on all used inventory belonging to Agri-Sports, Inc. The loan was reviewed by the Northwest Regional Development Commision and the loan reviewer check the UCC filing submitted and informed the council due to wording in the UCC filing that the city could only receive a 2nd position on the used inventory. The wording on the Polaris Industries UCC doesn’t specify that their position is on new inventory only. This UCC filing by Polaris would need to be amended to new equipment only before the city could be assured that they would have a first position on the used inventory. Due to this complication the NWRDC reviewer recommends that the city charge 3% interest and also suggests that the city require Donald Burton to sign a personal guarantee and name the city as an additional named insured on his personal life insurance policy to the extent of the amount owed to the city including interest. Nordin moved to loan Agri-Sports, Inc $50,000.00 for a period of 10 years (monthly payments) at 3% interest per year and the city would have 2nd position on all used inventory and that the city pays attorney fees; loan recipient to pay 1% loan origination fee; special meeting costs; and any recording & UCC fees, second by Nordin and carried. Olson suggested that if Agri-Sports provided the city with proof that Polaris Industries has released their 1st position on Agri-Sports used inventory the council would at that time review the interest rate to see if a lower rate could be extended on this loan. The clerk reported that the loan fund guidelines would need to be amended in order for the council to reduce an interest rate for a loan.
Meeting Adjourned 6:00PM
Carol Johnson, Clerk/Treasurer Approved: Mike Olson, Mayor
Other links: Lancaster Riverside Golf Course | Lancaster Public School