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An Ordinance amending and replacing Ordinance No. 203-80, as amended by Ordinance No. 59-81; Ordinance No. 103-86; Ordinance No. 237-93; Ordinance No. 52-94; Ordinance No. 18-96; Ordinance No. 180-2009; Ordinance No. 152-2013; Ordinance No. 160-2014, which amended Ordinance No. 152-2013; Ordinance No. 57-2017, which amended Ordinance No. 160-2014; Ordinance No. 26-2020; and Ordinance No. 142-2022, relating to Industrial Revenue Bonds and the Economic Development Investment Board. [Council Office, Hall]
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BE IT ORDAINED BY THE COUNCIL OF THE LEXINGTON-FAYETTE URBAN COUNTY GOVERNMENT:
Section 1 - Chapter 103 of the Kentucky Revised Statutes authorizes the Urban County Government to issue Industrial Building Revenue Bonds in order to promote local economic development through the introduction, retention, and expansion of business and industry. The Urban County Government will issue Industrial Revenue Bonds only for projects located in Fayette County and encourages the use of local and Kentucky bond counsel, architects, engineers, contractors, and the like in the development of the project.
Section 2 - The Urban County Government will issue said bonds only through the loan agreement format authorized in KRS Chapter 103, rather than by the lease or installment sale format also authorized therein, unless the Urban County Government determines that special and compelling circumstances exist to justify the different format, including, without limitation, significant job creation or evidence of strong economic development resulting directly from the project.
Section 3 - The Urban County Government, as consideration for the issuance of such bonds and the use of the proceeds to finance a qualified project, will enter into a loan agreement with a successful applicant. The applicant will acknowledge its obligations under the agreement by a note which will require payments of principal and interest corresponding in time and amount to the principal and interest payments becoming due on bonds issued to finance such project. Lease arrangements may also be considered if the applicant provides evidence sufficient to the Urban County Government that special and compelling circumstances exist as described in Section 2, above.
Section 4 - Although, pursuant to KRS Chapter 103, Industrial Revenue Bonds do not constitute an indebtedness of the Urban County Government, the merits of each application will be closely scrutinized as to whether any proposed project will benefit the entire community and whether other forms of financing are feasible or desirable.
Section 5 - The Urban County Government may require that applicants for the issuance of Industrial Revenue Bonds arrange for the private placement of the bonds with reputable financial institutions.
Section 6 - A board for review of applications and oversight over the issuance of certain funding related to economic development and related matters is hereby created, which shall be known as the Economic Development Investment Board (“the Board”). The Board shall review matters and applications related to the following, with the recommendation of the Board for any expenditure of funding subject to the final approval of the Urban County Council: (1) Industrial Revenue and Housing Bonds (pursuant to this Ordinance); (2) Lexington Job Fund Program funds (pursuant to Ordinance No. 153-2013); (3) funding from the administrative program currently known as the Lexington Economic Development Partner Agencies program, or its successor; (4) funding from the administrative program currently known as the Lexington Workforce Development Grant program, or its successor; and (5) Lexington Public Infrastructure Program funds (pursuant to Ordinance No. 141-2022).
Section 7 - The Economic Development Investment Board shall consist of thirteen (13) members. The government's Chief Development Officer or his or her designee shall serve as the chairperson of the Board. The Councilmember, who serves as the chairperson of the Urban County Council's Budget, Finance, and Economic Development Committee, or his or her designee from that committee, shall automatically serve as a member of the Board. The remaining eleven (11) members shall be appointed by the Mayor, subject to confirmation by a majority of the Urban County Councilmembers, and shall consist of one additional member of the Urban County Council; one member from either the Lexington Chamber of Commerce or the Lexington-Fayette Urban County Industrial Authority; one from the housing industry; two from the financial investment or banking industry; one from the private equity/venture capital industry; and five shall be at-large members selected by the Mayor.
Section 8 - Applicants shall follow the pre-application and application procedures described in the Policies and Guidelines, including, without limitation, the provision of a letter of inducement, any pre-application meetings required by the Urban County Government, and the completion of an application.
Section 9 - Applicants must complete an Industrial Revenue or Housing Bond Application Form, the contents of which shall be determined by the Mayor’s Office of Economic Development, and submit same to the Urban County Government. An application deposit of $2,500.00 must accompany the application. The Economic Development Investment Board may review and increase this application deposit at any time if it determines that the amount provided above is not sufficient to compensate the Urban County Government for necessary expenses incurred during review of the application. Any amount of said application deposit not required to compensate the Urban County Government for necessary expenses incurred during review of the application will be refunded.
Section 10 - Following preliminary staff review based on the letter of inducement and application, including consideration of those factors described in the Policies and Guidelines, the Mayor’s Office of Economic Development may refer the application to the Economic Development Investment Board, if it determines the application and project meets the requirements of the Policies and Guidelines.
Section 11 - Upon its referral from the Mayor’s Office of Economic Development, the Economic Development Investment Board is responsible for reviewing the proposed terms of the bond issuance. An official representative of the applicant, assisted by counsel, is required to be present at Board meetings where the applicant's application is considered.
The Economic Development Investment Board may request additional information if necessary in order to adequately review any project. Following its review of a project, the Board shall vote either to recommend or not to recommend the issuance of Industrial Revenue or Housing Bonds to finance the project and may propose qualifications or reservations to the terms of the bond issuance.
Section 12 - Following receipt of the Economic Development Investment Board’s approval, the Mayor’s Office of Economic Development shall respond to the applicant and may propose additional qualifications or reservations to the terms of the bond issuance.
Section 13 - Following receipt of the Economic Development Investment Board’s approval and any proposed qualifications or reservations provided by the Board or the Mayor’s Office of Economic Development, an inducement resolution and memorandum of agreement, setting forth the general terms and conditions of the loan arrangement and other matters pertaining to the project shall be forwarded to the Urban County Council for consideration. The Council may request any additional information it deems necessary to adequately review the project.
Section 14 - If the inducement resolution is passed, such passage would constitute an expression of the intent of the Urban County Government to issue Industrial Building Revenue or Housing Bonds to finance the applicant's project. Passage of the inducement resolution must precede any expenditures by the applicant for the project in order for such expenditures to be eligible for reimbursement from the proceeds of the bonds issued to finance said project.
Section 15 - The final step prior to issuance of Industrial Building Revenue or Housing Bonds is the passage of a Bond Ordinance by the Urban County Council, the contents of which, if passed, shall include all requirements of relevant law.
Section 16 - The Urban County Government shall not be responsible for any costs, fees, or expenses associated with the review or issuance of these bonds. All issuance fees, in the amounts provided in the Policies and Guidelines, as well as all costs and fees for Issuer’s counsel, shall be the responsibility of the applicant/borrower.
Section 17 - That the revised “Industrial Revenue Bonds Policies and Guidelines of the Lexington-Fayette Urban County Government” (referred to throughout as “Policies and Guidelines”), which are attached hereto and incorporated herein by reference as if fully stated, be and hereby are approved and adopted, and shall replace those Policies and Guidelines previously adopted.
Section 18 - That this Ordinance shall amend and replace Ordinance No. 203-80, as amended by Ordinance No. 59-81; Ordinance No. 103-86; Ordinance No. 237-93; Ordinance No. 52-94; Ordinance No. 18-96; Ordinance No. 180-2009; Ordinance No. 152-2013; Ordinance No. 160-2014, which amended Ordinance No. 152-2013; Ordinance No. 57-2017, which amended Ordinance No. 160-2014; Ordinance No. 26-2020; and Ordinance No. 142-2022, in its entirety.
Section 19 - That this Ordinance shall become effective on the date of its passage.
PASSED URBAN COUNTY COUNCIL:
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Mayor
ATTEST:
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Clerk of the Urban County Government
Published:
0891-25:EPT_4899-5905-9033, v. 1