HomeMy WebLinkAboutPacket - 12/04/2017 - Finance and Personnel Committee McHenr
Finance and Personnel Committee
December 4, 20179 5:30 PM
McHenry Council Chamber
333 S Green Street
McHenry, IL 60050
AGENDA
1. Call to Order.
2. Roll Call.
3. Public Comment: Persons wishing to address the Committee will be asked to
identify themselves for the record and will be asked but are not required to
provide their address. Public comment may be restricted to three-minutes for
each individual speaker. Order and decorum shall be maintained at public
meetings.
4. Motion to approved the September 5, 2017 Finance and Personnel Committee
Report.
5. Review, discussion, and consideration of a Revolving Loan Fund application for
the amount of $20,000 submitted by DIY Barkin Bath Haus, Inc., located at
1126 North Green Street, and direction to place this item on the next available
City Council meeting agenda.
6. Review and discussion of the PACE Suburban Bus Dial-a-Ride Voucher
Program for Seniors, consideration of the McHenry Township Senior Dial-a-
Ride Program, and direction to place this item on the next available City Council
meeting agenda.
7. Staff Reports.
8. Any Other Business.
9. Motion to adjourn the meeting.
Next scheduled meeting is January 2,2017.
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MCHenr
Finance and Personnel Committee
December 4, 20179 5:30 PM
McHenry Council Chamber
333 S Green Street
McHenry, IL 60050
AGENDA
1. Call to Order.
2. Roll Call.
3. Public Comment: Persons wishing to address the Committee will be asked to
identify themselves for the record and will be asked but are not required to
provide their address. Public comment may be restricted to three-minutes for
each individual speaker. Order and decorum shall be maintained at public
meetings.
4. Motion to approved the September 5, 2017 Finance and Personnel Committee
Report.
5. Review, discussion, and consideration of a Revolving Loan Fund application for
the amount of $20,000 submitted by DIY Barkin Bath Haus, Inc., located at
1126 North Green Street, and motion to place this item on the next available
City Council meeting agenda.
6. Review and discussion of the PACE Suburban Bus Dial-a-Ride Voucher
Program for Seniors, consideration of the McHenry Township Senior Dial-a-
Ride Program, and motion to place this item on the next available City Council
meeting agenda.
7. Staff Reports.
8. Any Other Business.
9. Motion to adjourn the meeting.
Next scheduled meeting is January 2,2017.
The City of'McHenry is dedicated to providing its citizens,businesses,and visitors with the highest quality of programs
and services in a customer-oriented,cffcient,and fiscally responsible manner.
McHenry
FINANCE AND PERSONNEL COMMITTEE
SUPPLEMENT
TO: Chairman Curry
Finance and Personnel Committee Members
FROM: Douglas Martin, Director of Economic Development
Carolyn Lynch, Director of Finance
FOR: December 4, 2017 Finance and Personnel Committee Meeting
RE: Revolving Loan Fund Request for DIY Barkin Bath Haus Inc.
ATT: 1. Revolving Loan Fund Approval Criteria
2 Revolving Loan Fund Application
3. Barkin Bath Haus(BBH) Business Plan
4. Financial Analysis from William Busse First National Bank
BACKGROUND:
The revolving loan program provides low interest loans to qualified existing and prospective
businesses within the City of McHenry. Loan proceeds can be used to assist in the startup of a
new business, expand an existing business, and update existing facilities to make the business
more competitive, or provide an incentive for established businesses to relocate to the City. The
primary goal of the program is job creation and the expansion of the sales tax and property tax
base.
The most recent revolving loan fund request was approved by the City Council this year for
$50,000 for the installation a sprinkler system in Smith's Central Garage and recently a request
was reviewed for Plum Garden in the amount of $34,000. This request was subsequently
withdrawn. The attached application is for a revolving loan for $20,000 for a do-it-yourself dog
wash business proposed at 1126 Green Street (River Place).
McHenr
ANALYSIS:
Staff has been working with the applicant for some time. The applicant's product is
manufactured in Australia and was featured on WGN TV: http://wgntv.com/2017/08/22/deluxe-
da �wrshin�station-at-montrose-beach-hailed-as-a-game-changer/. The product can be
viewed on the following website: http://www,k9000dogwash.com/,
Staff has been working with Bill Busse from First National Bank of McHenry, which is conducting
underwriting services for the proposed loan application. The applicant has submitted a business
plan along with her application. The applicant has vast business experience as well as experience
breeding dogs and is self-funding the majority of her business but seeking$20,000 from the City's
revolving loan fund to assist with the buildout of her unit in the River Place building on Green
Street. She anticipates executing a lease in the beginning of the new year and if all goes well can
locate these portable washes in other areas of the County and City, such as McBark Dog Bark.
The Applicant also makes dog treats and vends these as well.
If recommended by the Finance and Personnel Committee and approved by the City Council,the
structure of the loan would be identical to the ones previously approved and include a five-year
term with an interest rate equaling the prime rate.
If the Finance and Personnel Committee concurs it's recommended a revolving loan, in the
amount of$20,000 be recommended for DIY Barkin Bath Haus Inc.with the conditions imposed
by William Busse of First National Bank of McHenry.
McHenry
Revolving Loan Fund Criteria
City of McHenry, Illinois
Goals:
The overall goal is to foster economic development or expansion of an existing business and to
provide incentive for businesses to locate and grow within the City.
1. Assist in the startup of a new business.
2. Expansion of an existing business.
3. Generate/preserve employment.
4. Positive impact on economic development.
Target:
Any businesses located in, or locating to the City.
Eligible Uses:
1. Construction of or addition to a building.
2. Renovation of an existing building.
3. Leasehold improvements.
4. Purchase of new or used machinery & equipment.
Eligibility Requirements:
1. The applicant has demonstrated that a regular commercial loan is not obtainable or
feasible.
2. The applicant has an inability to secure funding through any other sources, personal or
commercial.
3. The applicant demonstrates a minimum assurance of repayment through personal
guarantees sufficient to satisfy the City's loan officer.
4. The applicant provides a net worth statement to the City's loan officer.
Loan Criteria:
1. Amount— Loans can be any amount up to the amount of the current balance in the
fund.
2. Collateral—Adequate collateral must be employed to reasonably secure the loan in the
event of default.
3. Guarantee—a personal guarantee of repayment must be provided.
4. Term—Maximum 5 year term. Rate is no less than the prime rate at the time of the
Finance and Personnel Committee recommendation and if loan is approved loan
documents must be fully executed within 30 days of City Council approval.
McHenr
5. Fee - $100 non-refundable application fee. If approved,the borrower is responsible for
other fees incurred by the City; recording, filing, etc.
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* CONFIDENTIAL BUSINESS PLAN
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Sleeping Bear Newfoundland's, LLC; d/b/a
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* DIYBarkin Bath Haus
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* Kim Kolodzik— Owner and CEO
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Target Open: November 1, 2017
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Business Plan -August 2017
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* BBH CONFIDENTIAL
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* 1. EXECUTIVE SUMMARY
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* 1.1 Product
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* Barkin Bath Haus(BBH)will provide its customers with a cost-effective, environmentally safe,Do it yourself(DIY)
* pet wash experience.BBH will initially install(2-3)innovative self-contained washing units that provide the
* ability for pet owners/caretakers to personally wash their pets. BBH's plan is to also install an ADA compliant
unit for their customers who may need additional assistance. The units support coin-op,token,credit card types of
* payment and are time bound,e.g.much like a coin-op laundry. The units provide the customer the ability to wash,
* condition, flea and tick protection,rinse,and blow dry.The units also contain a final sanitization stage. Each unit
* will be fenced for safety purposes. The picture(s)below demonstrate a typical set up,us , d examples: **
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Examples of Units installed outside the US (hundreds to date):
* K9000.com
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✓ Units installed and opJerati in I is:
* ➢ Business Open: ul 17.
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,*t Montrose Dog Beach—Chicago,IL-MuttJackson.Com
** WGN Special Feature 8/22/2017: 4 http•//wgnty com/2017/08/22/deluxe-dog-washing-station-at-montrose-beach-
* hailed-as-a-game-changer/
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Tru Blu has recently hired their U.S. Distributor and I am working closely with him. He also owns Mutt Jackson
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* BBH CONFIDENTIAL
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** and is currently washing upwards of 200 dogs each weekend day at the beach. He has also recently sold several
* machines-Two in Virginia,and One to a residential high rise in Chicago,etc.
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BBH will also locally manufacture,sell, and dispense(via freezer type vending machines)natural Pet treats,e.g. *
* pet cookies/ice cream. BBH will also provide vending offerings for non-alcoholic drinks and snacks targeted to
* pet owners/customers. *
* *
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* In addition to stand alone location(s), BBH's plan is to partner with other business types to install and support BBH
units,e.g. car washes,kennels,via revenue share agreements or the like.
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* 1.2 Customers *
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�* A macro list of proven BBH type Customers'is provided below. Certainly,with ex on,the re several other
�* options for lease-hold installations as well.
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* ✓ Apartment dwellers
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* ✓ Homeowners with limited pet bathing options
* ✓ Visit local dog park(s) ,*
* ✓ Have difficulty washing their dogs -back strain,disability,si dog, facili et
✓ Appreciate efficiency and convenience
* ✓ Would rather care for their pet(s)personally
✓ Can achieve multiple objectives,e.g.wash dog whil ar a (reve a sharing units)
* ✓ Love the full-service options,e.g. wash,conditio a/tic e, and unit sanitization
* ✓ Like flexible payment options,e.g. credit card,c Apple Wa subsc on(s),and/or tokens
* ✓ Take Pets home sparkling clean without havin to c fter ng pets at home,and
✓ Seek less expensive options than"big bo ormal groo ing options,e.g. PetSmart. Petco,private
* businesses.
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,*r 1.3 What Drives Us (Me)
* *
* I grew up in a family business,t ore,hav ong nding of what it takes to be successful,as well as ,*
what can trigger failure. Pos ami usi ,I ' ed corporate world that spanned from working in industries
* such as: Legal,Banking Cons g, sulting, ,for the majority of my career,Pharmaceutical R&D IT.
* I've also owned, and se nova an partment building in St. Charles, IL.As well as owned/managed
* others.
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The career/bac exp ' nce or,and ensures,that I will consider,plan,provide,and meet the
* necessary requ en a -up an on-going operations,and growth. The renovation experience allows me
* to manage mos pairs,pai g, myself without having to call a service. I also have the benefit of young
* profess' n areas of c truc ion,plumbing,electrical,etc.
As my ther passe ng, gularly think of him telling me to continue to ask myself,"Are you doing what
* makes y happy?" Sa answer has been"no"for far too long. What continually has made me happy...MY
* dogs. Thi why I this is a perfect fit for me. **
* *
* Although, I to ork,corporate America was not personally satisfying.Thus, I have been searching for a new
* and innovative business to open for many years; I could not find the right fit,until now. Not only has my father's �*
* question continually resonates with me; I needed to think about what would make customers happy. Provided
* below is a short list of observations of people with their pets. Several provide a potential"wash"opportunities: *
* *
* ✓ Post-Visiting dog parks ,*
* ✓ Reduce the need for expensive groomers,e.g. Petsmart estimate to wash and groom one of my dogs: $150.00 ,*
* ✓ Weather conditions
* ✓ Local Newfoundland puppy owners from my litters who support this effort and would like it to open now—+/-
* 30 dogs.
✓ Twenty-seven pet friendly apartments located above the targeted business space.
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* BBH CONFIDENTIAL
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Combining my Business objective(s),along with the proven customer experience from current installations,
* manufacturer conversations,owner discussions,etc.,is when I knew this venture,as well as the timing is right to
** move forward. #*
* Note: If I take my 1901b dog to a local big box store for washing,the estimated cost is$150 vs.the mess,multiple **
* towels,and potential safety issues with bathing at home. Conversely,the DIY units provide for greater safety for
* the pet and owner,without the nasty clean-up of bathing a pet in your home. E.g. towels, shampoo,walls(shaking),
* etc.
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* The units BBH will install,and promote for external leases,will provide fenced area(s)to contain the unit and the
pets for everyone's safety.
2. COMPANY DESCRIPTION
Articles of incorporation have been issued by the State of Illinois under the corpor me: ing Bear
* Newfoundland's,LLC.This new business will be identified as Sleeping Bear New 's,d "DI arkin
* Bath Haus". **
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,*t BBH will provide its customers an innovative,friendly,easy,and inexpe e o wa re heir pets. **
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* 2.1 MISSION STATEMENT
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* BBH's mission is to ensure every 2 and/or 4 legged customer/frie njoy th IY wa ing experience whether
within a stand-alone location,or at a revenue sharing leased
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* 2.2 PRINCIPLE MEMBERS
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Ms. Kim Kolodzik-Owner and CEO
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* ➢ Overall Start-Up,Development, and O ons
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* ➢ Potential family members
2.3 LEGAL STRUCTURE
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* Ms. Kim Kolodzik,Owner and of Sle i ear s,Limited
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* ➢ DB/A DIY Barkin Bath Ha
* ➢ Exclusively Woma
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* Ms. Kolodzik's d:
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Ms. Kolodzik h spent her eer 0+years working in large corporations that include Legal(litigation),
* Barkin lti Pharmac ical-R&D IT—Abbott and Astellas,Information Technology consulting at EDS
* (now .While a ificant ount of Ms.Kolodzik's career has been working within large corporations, she
,* also bri to this Bus re growing up,and working within,successful family businesses founded by her
* Father.
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3. MARKET ARCH
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3.1 INDUSTRY—ANIMAL/PET SERVICES
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* DIY(Do it yourself)Coin-Op Dog wash with proven stainless steel self-contained pet washing units. **
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* While professional dog washing/grooming is readily available from small business to big box stores,there are
** little,if any,DIY options within a 40 mile radius of the proposed location in McHenry,IL. The few existing DIY
* options in Illinois overall are typically make-shift,and don't provide the versatility/convenience of the units this **
* business is planning for.The self-contained units are patented,manufactured, and distributed outside the US, and
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* BBH CONFIDENTIAL.
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are now on the cusp of being introduced in the US.They are growing very rapidly in the country of origin,as well a
* few recently introduced and thriving in a few US locations. **
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* 3.2 CUSTOMERS *
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* Note: Current McHenry County Dog registration(s)for 2016: 15,400 Dogs,largely the heaviest concentration
within and surrounding the City of McHenry.
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Target customers for Pet washing and Lease-hold options are provided below and are not,by any way,limited to:
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* ✓ Pet Owners
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* ✓ Pet Walkers/Caretakers
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** ✓ Kennels (potential revenue sharing leaseholds)
** ✓ Pet Trainers
* ✓ Residential complexes,e.g.retirement homes,apartment complexes,hig 'se bui g enti nue ,*
* sharing leaseholds)
* ✓ Car Washes (potential revenue sharing leaseholds)
* ✓ Home Improvement Stores,e.g. Home Depot(potential revenue easeho
✓ Veterinary Clinics/Hospitals (potential revenue sharing leas s)
* ✓ Dog park visitors
* ✓ Puppies/Dogs procured from Sleeping Bear Newfound LL eding am
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* ✓ Etc...
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3.3 COMPETITORS
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There are no other establishments within the a th ption of essional (more expensive)grooming
** services;however,this is a very different b ss m are IY locations like this within a 60 mile
** radius of McHenry,IL. I am working with th S Distri r r o exclusivity.
* 3.4 COMPETITIVE ADVAN E
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* Competition is rather inexistent i s spac as is concept in terms of self-contained and coin-op.
* Additional benefits are outh Belo
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* ✓ Provides for a mu c e e o to groom pets
* ✓ No appointment(s)ne alk
✓ Care for pet ly
* ✓ Socializati of pets o lot of straction,e.g. shelves of treats and toys
* ✓ Quick,eff1 t,and co nie �*
* ✓ Fre al tural pet t is in de on premises
* ✓ Col
o fined are and t nits safely benefit patrons from"special"pets **
✓ Ex ded flexible en high volume is anticipated,and
** ✓ DIY it yours ..
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* 3.5 REGUL (S)
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* None. The City of McHenry has cleared any special use requirements. The Business conforms to all zoning and
* business map requirements.
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4. PRODUCT(S)/SERVICE(S)
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4.1 DIY SELF-CONTAINED STAINLESS STEEL DOG WASHING UNITS:
The units are raised,have a slip-free tub bottom,ramps,three stage filter system, etc.The units include wash,rinse,
* flea and tick protection,conditioner,and blow drying capabilities.There is a final sanitation phase of the unit post-
* *
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* BBH CONFIDENTIAL
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** use at customer expense. In addition, customers can by-pass a stage as they wish,e.g. flea and tick protection. The
** overall washing areas will be protected by a secured fence providing Customer's the freedom to manage their pets
* with ease. BBH will also:
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* ✓ Install one ADA compliant machine
* ✓ Have personnel available to train and assist customers,and
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✓ Offer customers the option of having BBH personnel wash their pet for them—each wash$25.00. As an
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* example, a customer may want to dine at Buddyz's, or are picking up take out.
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Note: Units are fully warranted for two years. *�
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4.2 PET TREATS:
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�* BBH will produce on-site and sell in-house high-quality KodieBear Kookies(pet c as w Kod ear
* Kream(pet ice cream). Treats are made with fresh ingredients (no preservatives),as as life,
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* unless frozen and/or refrigerated.Therefore the Products will be made avail via zer g or combo ,*F
* vending machine(s). Cookie and Vending machine examples are provid to
KODIEBEAR KOOKIES
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* FREEZER/REFRIGERATOR BO VE E:* *
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* Deliver It all from one machine
** New patent pending design features next generation air flow architecture.Dispense
refrigerated AND frozen foods from the same machine using a common delivery fall
* space. �
* • Two machines in one with refrigerated foods from the top.Ice cream and *
* other frozen foods from the bottom
* - Sell more In less space,only 22"wide *
Glass front design reduces shopping and provides always full appearance
* LED lighting enhances product presentation,requires no service for minimum
* of S years and reduces lighting energy costs by 40%over fluorescent
* equipped models
�} Convertible in the field to fully refrigerated or fully frozen l'
* New USD connectivity
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5.0 PRI STR TURE(S) and PAYMENT OPTION(S)
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5.1 DIY SELF-C TAINED STAINLESS STEEL DOG WASHING UNITS:
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Each wash is time-bound,e.g. 10 minutes for$20.00.
* ✓ Data exists from the Mutt Jackson facility that the majority of customers complete their pet wash in 5-8
minutes. I can confirm the data as I personally witnessed several uses when I visited,July 2017.
5.2 PAYMENT OPTIONS:
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Credit cards; debit cards; cash; apple wallet; tokens; and subscription based options will all be available.
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* 5.3 PET TREATS•
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* 6 Pa +
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Pet treats will be sold by package. BBH will provide the following three package sizes: small;medium; and large.
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* Type #of Cookies Customer Cost Production Cost Profit* *
* Small 6 $2.50 $1.50 $1.00
* Medium 12 $4.50 $3.00 $1.50
Large 18 $6.50 $4.50 $2.00
** o Production cost: $.25 per cookie-includes packaging.
* *
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* ATM(automatic teller machine):
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* BBH will also provide an ATM machine for customer convenience. This addition has be pproved by the
prospective Landlord. ,*
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* ILLINOIS LOTTERY MACHINE:
BBH will work with the Illinois Lottery to install a"scratch off ticket"mach' to bo re ition has
* been approved by the prospective Landlord.
* *
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* 5.0 PRODUCT LIFECYCLES
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,* The K9000 DIY Units are quickly building momentum.While the e thes es of b e ses in the US, they
atypically appear as human/agriculture bathing equipment r o-fitt be uh for pe s. ,*t
*
* *
With the above stated the life cycle of the units has not bee wever,provided below is feedback
* from an owner that has units in service since 2009.
*
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* - ZW 1& 0 V 0 IM01 FA W02YA VIA rZJAM - *.
Given the sound design,qualit ns n and m facturing, I would anticipate a minimum of 10 years. Of
** course,the Manufactur con a to ovate and improve;therefore any sunset date(s)would be determined
** by variables like: new fu fit n and future upgrade plan,legacy maintenance costs,and the like. �*
* *
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* 6.0INTELL U R R GHTS
* *
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* ➢ BBH Own rights fo e p ashing units; I intend to purchase units outright from the Manufacturer via ,*t
* the stn r,as req d. **
➢ I p /will ha right r the natural pet snacks that will be produced and sold at the site.
7.0 RES CH A DEVELOPMENT
While this qu s itself to business R&D,that doesn't really apply here. Therefore,BBH states,that I have
* spent a considerab a amount of time researching this business venture(and many others over time)this one makes
* the most sense given my vast Family and Corporate Business experience as well as my profound love for fur babies.
* With that said,I am also a Newfoundland dog breeder. That part of my business fits nicely within this model.
* *
After significant efforts researching and working directly with the Manufacturer over the past year,the DIY Dog
** wash stations have a very strong potential to achieve huge growth throughout the US.Additionally,while this �*
* particular option is experiencing significant growth in other Countries,the manufacturer continues to install �*
* >Five units per week. Further,as of July,2017,the US distributor has sold and will be delivering one unit in a
* downtown Chicago high-rise for residents to utilize for their pets as well as two in Virginia. Currently,there are
* *
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* 7 1 P age
,*t BBH CONFIDENTIAL
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Itonly two operational units in IL: Mutt Jackson at Montrose Dog Beach in Business for a few months.
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* I will also be researching/pursuing stand-alone revenue sharing leasehold opportunities to add to BBH's business *
,*t portfolio targeting veterinary clinics,car washes,etc.
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8.MARKETING& SALES
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8.1 GROWTH STRATEGY
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It ➢ Additional Location(s)expansion(s). Open new location(s)within 24-36 Months
* ➢ Revenue sharing by leasing stand-alone units to other types of businesses,e.g.vet cli car washes, It
* residential communities,etc. It
*
* ➢ Engage my children to open location(s)where they live,e.g. Missouri and Flo It
*
,* ➢ Gain certain US territory exclusivity agreement(s)from the Manufacturer and r.
*
* *
* *
8.2 COMMUNICATON(S) Itt
*
➢ Utilize manufacturers marketing start-up kit **
* ➢ Inform and hold a grand opening with Newfoundland puppy b s( ntly,> h lly support)as well
* as Personal friends,family,former colleagues,and Business le s
* ➢ eMail campaigns
* ➢ Text updates/reminders/offers
➢ Website/social media,e.g. Facebook *
* ➢ Subscription options.
*
*
** ➢ Post signs at dog park(s),business windows,etc.
*
** ➢ Post Flyers on area cars,business window al ox cente etc.
* ➢ Vehicle skins It
*
* ➢ Business Cards
*
,* ➢ Drawings for free stuff via electrom enu ch as boo ,Web Sites,etc.
* *
* *
It 8.3 PROSPECTS
*
It STOREFRONT: Targ spa al McHenry.
S ecifi cats High ghted in yellow in the picture below.
* *
* The River Place Retait Spaces for Lease!
*
* 1104-1130 N.Green Street•McHenry,IL 60050
Jr
* *
* Lease Overview *
* *
*
It Available SF: 1,111-5,283 SF **
It
Lease Rate: S23.00 SF/yr(NNN) *
*
It „k Traffic Count: 23.000 VPD
It i
*, Year Built: 2008
It
* *
* Market: Chicago *
It
It Sub Market: Far Northwest Suburbs It
*
It
It Cross Streets: Route 120 It
* The following will drive customers/prospects:
It ✓ DIY is highlighted in the building signage,and associated materials
* ✓ Easy to use
Ar
* ✓ Typically 10 Minutes or less to complete wash
It
* ✓ Sanitary
It ✓ No mess in personal residence
* ✓ No towels needed
*
* 8 Pa c
It BBH CONFIDENTIAL
* *
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*
* ✓ Aprons
* ✓ Clothes stay dry
* ✓ I/or employees will be on-site to engage return and new customers,and
*
,* ✓ Will install stand-alone revenue-sharing units in several other business types.
*
* *
* *
* ADDITIONAL OWNER INFORMATION—BREEDING/BOARDING CUSTOMER FEEDBACK
*
* *
* *
htti)s://www.facebook com/p /Q SleepinaBearNewfoundlandDogs/reviews/?ref=page internal
*
*
* Kristy Mauer revoewed Sleep"Bear Ne ndland Dogs--4
*
What an unexpected blessing!V%are new to the Newfoundland breed and have
complek�yf fallen in lave!Our Zoey(aka ZoZo)a from Stella and Blackhawk'S litter
* this past fall.Having had large dogs over the years,the size and FUR did not
* intimate us.And t have to say,trim's calm nature,genuine spirit,organization and
* her vvtidehearted lave of the breed rttarfe our decisiori even easier,well except we
* wanted to yet bmal Our ZoZo is heiVw,happy and LOVES to go to trim's for visits-
* might he her cookies!
Sleeping Bear Newfoundland Dogs
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*
* *
* Leslie Read Merton revievxA Sleeping Bear Newforrtdland Dogs—
4D 'k
* trim is a fantastic person who truly ktves Newfie's!They are part of her family not
* list dogs to her.She is so knowledgeable about the treed aid so helpful.we
* couldn't have been happier when we found her and our"We"puppy.
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* the babies go Mo great families*a the Gdrs!
*
* Like Reply June 28 at 11 14am
*
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*
Jennifer Pinner Vftg mm reviewed Sleeping Bear Newfoundand Dogs
Ntwfes bread with love.If ytwr thinl t of geftV a Newfie sleeping bear is
* sedously the best.
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* Jason GO reuiewed Sleeping Bear Newfoundland Dogs--4D ,*t
* June
* There is nottrng bMw than a"gooW,and no betMx place to find one than Steeping
Bear_These dogs are truly fanny to Kum even after they have left the nest!
Sleeping Bear Newtoundland Dogs
*
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* *
* Newks bread with love.If yow thinking of getting a New!fe steeping bear is
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* *
* *
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11 � Pa +ge
* BBH CONFIDENTIAL
*
*********************************************************************************************
* 6.FINANCIAL PROJECTIONS
* *
* *
* 6.1 PROFIT AND LOSS
*
* Year 1 ($) 2($) 3($)
*
*
* Sales 60,060 121,680 218,400
*
* *
** Costs/Goods Sold 6,000 8,000 10,000 *
*
* GROSS PROFIT 54,060 113,680 208,400
* *
* *
OPERATING EXPENSES
*
Salary(Office&Overhead) 10,000 20,000 0
* Payroll(taxes,etc.)(1099) 0
*
* Outside Services 1,000 0 1,
*
*
* Supplies(Office&Operation) 1,000 000 00 *k
* *
Repairs&Maintenance 1,50 1,
Advertising 1,000 1,000 1,00
Car,Delivery&Travel 00 000
** Accounting&Legal 2, 2,000
*
Rent 2 000 24,00 24,000
Telephone 1200 00 1,200
* Utilities 00 2,200 2,400 r*t
* (water included'n le ,*t
*
* Insurance 5,000 5,000 5,000
*
Taxes( state) 0 0 0 �*
Intemst 6,000 6,000 6,000
Other ense 1,000 1,000 2,000
** N 65,700 80,900 97,100
* *
* FO (11,640) 27,780 111,300 **
In e 2,140 11,346 13,0 88
*
NE OFIT AFTER TAX (13,780) 25,184 98,232
*
* er Draw/Dividends 0 01 0
*
ADJUSTED TO RETAINED (13,780) 25,184 98,232
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*� 12 Pae
* BBH CONFIDENTIAL
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6.5 Financial Assumptions
* *
6.5.1 Assumptions for Profit and Loss Projections
* *
* DIY DOG WASH PROJECTIONS:
* *
't YEAR # WASHES P/DY # DYS P/WK # WKS P/YR # P/WASH $ NET INCOME $
* 1/2018 7 6 52 20.00 43,680
*
* 2/2019 14 6 52 22.50 98,280
* 3/2020 21 7 52 23.50 179 634
4/2021 25 7 52 24.50 222,950
*
* 5/2022 27 7 52 25.00 24 700
*
* TOTAL $567 294
*
*
*
* VENDING PRODUCTS—PET PRODUCTS:
* *
* *
* *
* YEAR(#) PKGS P/DY(#) DYS P/WK(#) WKS P/YR(#) P/PACAVERA NET 1 E( *
1/2018 7 6 52 9,82
* 2/2019 10 6 52 4. ,040
*
* 3/2020 15 7 52 qhih2o Ilk,1 2wo
*
* 4/2021 17 7 52 27, 46
** 5/2022 20 7 52dff 1 32,760
* TOTAL $109 044
*
4 NOTE: Vending Product Assu ns \DDRI
de p ntial internet/external sales. Those
* assumptions will not be include rojec e.
*
VENDING PRODUCTS—NO C O SAND SNACKS:
* YEAR(#) SNACK P/DY(#) YS P (#) R(# P/SNACK NET INCOME($)
** AVERAGE $
* 1/2018 7 6 52V 3.00 6,552
,* 2/2019 10 52 3.00 9,360
* 3/2020 13 52 3.00 14,196
* 4/2021 52 1 3.00 16,380
5/2022 1 W18 7 52 1 3.00 19,656
* TOTAL $66144
*
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* VENDING PRODUCTS—ILLINOIS LOTTERY MACHINE:
* *
* *
* *
* TBD
*
* *
* TICKET
* YEAR(#) TCKTS P/DY(#) DYS P/WK(#) WKS P/YR(#) REVENUE NET INCOME($)
* AVERAGE $ yr
* 1/2018
* 2/2019
*
* 3/2020
*
4/2021
* 5/2022
*
TOTAL TBD
*
*
* *
VENDING PRODUCTS—ATM:
YEAR(#) TRANS P/DY(#) DYS P/WK(#) WKS P/YR(#) T NET IN ($
* AVE $
1/2018
* 2/2019
3/2020
* 4/2021
*
y*t 5/2022 *.
* TOTAL TBD **
* *
* *
Overall assumptions excluding those ex NOPET XT NAL OTHERYEAR(#) DIY WASH($) pRODU $ ASEHOLDS LOTTERY ATM) NET INCOME($) **
1/2018 43,680 %6,53%k, 60,060
* 2/2019 98,280 1 0 0 121,680 **
* 3/2020 179,634 4,5 141 218,400
* 4/2021 222,950 46 16,386 267,176 **
* 5/2022 245,700 2, 19,656 294,840
* FIVE YEAR PROJECTION TOTALS $952126
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14
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City of McHenry Revolving Loan Presentation (City of McHenry Guaranty):
DIY Barking Bath Haus, Inc. Kimberly A. Kolodzik(Guarantor)
(an Illinois Corporation) z00%principal shareholder
1126 North Green Street 3714 Dutch Creek Lane
McHenry, Illinois 6005o Johnsburg, Illinois 60051
Amount requested: $20,000
Terms: 4.25%per annum (fixed)
Full amortized over 6o month term with no prepayment penalty
Estimated monthly payment of$370.56 per month (principal+ interest)
Purpose:
DIY Barkin Bath House (BBH) is planning to be a new local business designed to provide
pet owners with a do-it-yourself facility to personally wash their pets. The applicant
intends to install and maintain up to seven self contained, stainless steel units in
strategic locations thereby providing pet owners with a cost-effective, environmentally
safe, pet washing experience including wash, condition, flea and tick protection, rinse
and blow dry similar to a coin operated laundry or coin-op car wash. Units are
supported by coin operation, token, apple-wallet, subscriptions or credit card
payments. Each wash experience will be time-bound, e.g. 10 minutes at a cost of
$zo.00. BBH will also locally manufacturer, sell, and dispense natural pet treats at their
machine locations, along with vending offerings for non-alcoholic drinks and snacks
targeted to customers.
Initially, the applicant intends to locate three machines in a stand-alone retail space
located in the River Place building, 1126 North Green Street, McHenry. She is currently
negotiating lease terms with the landlord and does not have a signed lease at this time.
Other potential off-site locations include a seasonal unit at the City of McHenry dog
park and partnering with other pet friendly businesses/locations in the area.
The corporation will be t00%owned by Kim Kolodzik. Kim will be President/CEO of the
company. Kim has previous experience in her family's business, as well as management
experience in the corporate marketplace and management of an investment property.
She is also a large dog breeder with extensive personal knowledge of the economics
and needs of pets and pet owners.
Ms. Kolodzik provided the City and the underwriter with a multi-year business plan with
her loan application. The business plan includes anticipated usage, estimated revenues
and likely expenses. While the business plan does not expect to produce a positive cash
flow or profit in the first year, the business plan is well documented. She expects to
break-even in the second year. Kim derives her revenue/expense projections and user
experiences from the owner/operator of similar units in Chicago at the Montrose Dog
Beach. The underwriter was unable to locate any available industry data on usage,
pricing, costs, or expected rates of return. In her business plan, Kim intends to purchase
up to seven machines at a cost of approximately $14,000 per machine. She indicates
there is a pricing advantage to initially buying a larger quantity of machines at one time.
The balance of the project funds (approximately $20,000) will be used for buildout of
the leasehold improvements at the Green Street location, working capital, and
miscellaneous start-up costs. According to the business plan, no owner draw or
dividends are expected to be paid to any shareholder in the first three years of
operations. Purchase terms are currently being negotiated with the machine
manufacturer's U. S. Distributor. The machines are manufactured in Australia
requiring 45 to 6o days from the time of order placement to delivery in the continental
U.S. Shipping costs are included in the machine cost.
Approximately sloo,000 of the start-up funding (83%) will be provided by the
applicant/owner. The balance of the funds required ($20,000) will be provided by the
City of McHenry Revolving Loan fund.
Financial Analysis:
Typical of a new business, there is no historical financial information available to
analyze or from which to measure debt service coverage for BBH's proposed
borrowing. The primary source of repayment will be the revenues generated by
operations and customer demand for services supplemented by the applicant's
personal funds. In the first year of operation, the enterprise expects combined
revenues of s6o,o60, and a gross profit of $54,060. Projected first year expenses are
forecast at s65,700. Revenues are expected to double in year two and the company
expects a profit in the second year. Whether the applicant attains the business plan's
revenue targets or not remains to be seen. Successful operations will largely be
determined on yet to be known customer demand. The applicant has provided the
underwriter with her personal financial statement reflecting sufficient financial
resources available from which to make the investment. Also, the proposed monthly
payment of $370.56 should not be a significant factor compared to her other income
sources.
FICO Credit Score: (Kimberly Kolodzik, Guarantor):
TransUnion (range from a low of 309 to a high of 839): 25th percentile
Comments, Observations and Recommendation:
Using generally accepted, commercial loan underwriting standards, this request most
likely would not be approved on its own merits by a federally regulated lender primarily
due to the fact the company has no existing revenue stream or established cash flow
from which to convincingly measure an ongoing ability to repay the obligation. Even if
approved, banking regulators would likely argue the loan be initially classified as a
substandard credit, requiring additional monitoring and oversight. However, more
than 8o% of the investment will be provided by the applicant/owner. The guarantor's
personal financial resources mitigate well-defined weaknesses characteristic of any
new business venture with no or limited initial revenue stream. Personal financial
resources also support the venture in the event additional capital and liquidity are
necessary. In her unaudited personal financial statement, Ms. Kolodzik has sufficient
financial resources available to support the requested loan payment at this time.
The underwriter would recommend the loan based on the borrower's personal financial
resources. However, as a condition of the approval, the City's Revolving Loan fund
distribution of $20,000 should be delayed from distribution until certain terms have
been finally negotiated. The City's portion of the venture (1&7%) might best be
distributed once a signed lease of the premises has been negotiated with the landlord,
the company has been incorporated, machine purchase terms have been negotiated
and mutually agreed upon in writing, and the applicant's personal funds are assured to
be committed to the venture.
Here are some considerations the City may wish to evaluate and incorporate into the
loan agreement:
• Securing the loan with a first lien purchase money security interest in the
acquired business assets(including equipment, inventory, accounts
receivable, intangibles,trademarks, etc.);
• Disbursement of the City's loan funds will occur after a signed lease of the
premises has been negotiated with the landlord,the company has been
incorporated, machine purchase terms have been negotiated and mutually
agreed upon in writing, and the applicant's personal funds are assured to be
committed to the venture;
• An unlimited and unconditional personal guarantee of the loan balance from
Kim Kolodzik;
• Personal & business financial statements to be submitted annually at the
close of every tax year;
• Loan to be repayable monthly over a five year term, 4.25%fixed rate
(current prime rate); no prepayment penalty;
• City to buy back(we would assign) loan(by debit offset to demand deposit
account)should loan become delinquent by more than 6o days.
FINANCE AND PERSONNEL COMMITTEE
MEETING REPORT
Monday, September 5, 2017
Municipal Center Classroom, 5:30 PM
In Attendance at Roll Call: Chairperson Alderman Curry, Alderman Schaefer and Alderman
Mihevc, and Mayor Jett.
Also in Attendance: Director of Finance Carolyn Lynch, Human Resources Manager Ann
Campanella, Director of Economic Development Douglas Martin and City Clerk Lynzi Nevitt.
1. Call to Order: The meeting was called to order at 5:30 pm.
2. Public Comment: None.
3. Motion to approve July 17, 2017 Revolving Loan Committee Meeting Report
Motion made by Schaefer, second by Mihevc, to approve the July 17, 2017 Revolving
Loan Committee Meeting Report. All voting aye, motion carried.
4. Motion to approve March 6, 2017 Revolving Loan Committee Meeting Report.
Motion made by Mihevc, second by Schaefer to approve the March 6, 2017 Revolving
Loan Committee Meeting Report. All voting aye, motion carried.
5. Review of Revolving Loan Program Application, Process, and Proposed
Amendment to Municipal Code.
Chairperson Curry reported as discussed at the last meeting, he reviewed information
from Marengo, made comments, and distributed a list of Revolving Loan Fund Criteria to
the Committee. Director Martin also provided information in the supplement.
Chairperson Curry opened the floor for comments.
Alderman Schaefer said he had a few ideas and thoughts based on the information
received from other areas and asked Director Martin if the information included in the
packet was the existing city policy. Director Martin answered yes, and there is a draft
application included in the packet. Alderman Schaefer said he would like to see the
example in the packet with all the logos on it pared down a bit to make it less
complicated for the applicant to complete. In addition, as discussed at the last meeting, if
there was some way of knowing if there was a substantial previous investment, i.e.
Smith's Central Garage and Plum Garden, it should be weighted heavily. Alderman
Schaefer then asked if an applicant could get a loan elsewhere and why should it matter if
they come to the city. Director Martin referred to page 3 and asked if this was the type of
information Alderman Schaefer was seeking or did he want more.
Chairperson Curry said he thinks it matters if an applicant can get a loan elsewhere
because the city is not in the banking business and if an individual has gone to a bank and
is unable to obtain a loan that is when they should come to the city. The city is just an
ability to fund for people who do not have access to the funds otherwise.
Finance and Personnel Committee
September 5,2017
Page 2
In the past, some of the materials indicated that this process was designed for business
owners who do not necessary qualify for a commercial bank loan. In addition, we would
not know that unless we ask.
Alderman Schaefer said the bank would tell us and perhaps we should not involve a bank
in this process if the applicants are people who cannot get a loan at a bank.
Alderman Curry responded that the city relies on the bank to provide their opinion
outside of the commercial lending criteria as to how much risk the city would be taking
on. Banks are black and white — if you do not comply, you do not get the loan.
However, he does want the city to know we are loaning public money to someone who
can stand on his or her own without our assistance. What is the purpose otherwise?
Alderman Schaefer noted he disagrees stating most business owners will receive a loan
these days unless they are mortgage to the hilt.
Director Martin said he agrees that money is cheap but he does not agree anyone can get
a loan. When someone is approved for a Revolving Loan and there is an article in the
newspaper, he receives a call the next day from a business owner requesting funds from
the city for various reasons. He believes there is a perception that this is a path of less
resistance, less red tape. Director Martin said the Committee should determine the
purpose of the Revolving Loan program. Is it a TIF standard, is this to supplement or
replace a conventional loan?
A discussion ensued on clarifying application item #4 regarding the applicant's recent
capital investment.
Alderman Schaefer suggested it would be beneficial to know what other sources of
funding the applicant has pursued. Although he does not believe the city should act as a
bank as the bank will give us an idea of the risk for an individual however, the city
should determine how deep we want to get into the applicant's financial status.
Alderman Mihevc noted it would be beneficial to know where the city stood in relation to
the applicants possible outstanding loans.
Chairperson Curry stated he thinks the city should ask for verification of some sort that
the application tried and failed to obtain a commercial loan. The city should determine if
the applicant has demonstrated that a regular commercial loan is not attainable or
feasible. Not just because it is not feasible to pay 7%when the city charges 5%. The city
is charged with the task of selecting applicants that are not too big of a risk because when
the money is all loaned, someone will be denied who may be a good candidate. A
discussion ensued on the language for the application regarding this point.
Alderman Mihevc noted that underwriting standards might be different for example if it
is not feasible to get a bank loan, but knowing the explanation, the city may be willing to
make the loan. The application should request an explanation. A verbal explanation
could suffice, as Mr. Busse would follow up on it.
Finance and Personnel Committee
September 5,2017
Page 3
Alderman Schaefer commented that perhaps business owners could only apply if they
have first applied for a bank loan.
Chairperson Curry said maybe we should just verify on the application that the applicant
has applied and been denied a commercial loan for this specific project.
Alderman Schaefer noted Mr. Busse said the city could charge whatever rate they choose,
not just prime. Director Martin said this is the x-factor for why the city gives these loans.
A business owner may not be able to qualify for a bank loan and high interest rates.
Alderman Schaefer said the perception is that the city giving money free when in reality
it is a loan.
Chairperson Curry asked the Committee if they had any questions regarding the goals of
the Revolving Loan Program. As an example, Director Martin provided the Committee
with a copy the Economic Development Strategy adopted by the Council in 2011, which
contains criteria for submitted an Economic Incentive Agreement.
Chairperson Curry said he would not make a decision to approve a loan based on the
amount of income or sales tax the city will receive based on retail sales of the applicant.
Director Martin said a goal could be as simple as business expansion, retention, and
attraction.
Alderman Schaefer asked if the city would want to target specific areas or projects for the
loan program. Director Martin said that is why he included the Assessment on page 4 of
the application, which included underutilized buildings or land, brownfields, downtown
district, etc. Alderman Schaefer said if we used a point system of some kind, the criteria
would be helpful.
Chairperson Curry asked the Committee if there was any additional information to
include in the overall goals of the program.
Alderman Schaefer said something should be included regarding property and sales tax.
Chairperson Curry referred to the Criteria distributed at the meeting; goal #4 is "Positive
impact on economic development." Therefore, if a loan is approved for a business that
results in a positive impact for the city, we should not be concerned with how much sales
or income tax is generated from the business.
Mayor Jett added this is not different then a bank asking a loan applicant how much
revenue is expected, what are your expenses, what is your profit.
Director Martin stated the city should have a diversified tax base. When the economic
downturn occurred in 2008, sales taxes were down and the city had always relied on sales
taxes for revenue. However now the city has health care facilities such as Centegra, retail
on North Richmond Road, and manufacturing. A diversified economy is a healthy
economy.
Finance and Personnel Committee
September 5,2017
Page 4
Director Martin further stated one consideration of the loan program should be to grow
our local economy and to keep it strong.
Chairperson Curry was not in favor of having this as a goal stating it should be in the
evaluation.
City Clerk Nevitt left the meeting at approximately 5:40 PM.
The Committee continued to review the Criteria provided by Chairperson Curry and the
draft application provided by Director Martin.
Chairperson Curry asked each member of the Committee to contact Director Martin with
any additional thoughts or question they may have regarding the proposed revisions
suggested today. Based on the input, Director Martin and Finance Director Lynch were
directed to compile the information and present the Revolving Loan Program Criteria,
and Application as revised, and an Ordinance amending the Municipal Code authorizing
review of Revolving Loans under the scope of the Finance and Personnel Committee to
the full City Council subsequent to review by the City Attorney.
6. Staff Reports
Director Lynch provided the Committee with a copy of the FY 2017/2018 budget report
through August 31, 2017. Nothing significantly changed from last month. Water/Sewer
sales are caught up and the new rates went into effect.
7. Any Other Business.
None
8. Motion to Adiourn:
Alderman Schaefer made a motion, second by Alderman Mihevc, to adjourn the meeting
at 6:55 pm. All ayes,motion carried.
Respectfully submitted by Marci Geraghty, Executive Assist/Deputy Clerk.
Reviewed and approved this day of 2017.
Alderman Scott Curry, Chairperson
.r
McHenr
FINANCE AND PERSONNEL COMMITTEE
SUPPLEMENT
TO: Chairman Curry
Members of the Finance and Personnel Committee
FROM: Douglas Martin, Director of Economic Development
Carolyn Lynch, Director of Finance
FOR: December 4, 2017 Finance and Personnel Committee Meeting
RE: Free Pace Suburban Bus Dial-A-Ride Voucher Program
BACKGROUND:
In 2001,the City of McHenry was awarded a $153,000 grant from the State of Illinois Department
of Commerce and Community Affairs. The two primary aspects of the grant dealt with monies
awarded to the police department for the DARE Program, radio,video and computer equipment,
ballistic vests, and $20,000 was included in the grant for use to fund a senior bus voucher
program.
The original grant time was from 7/1/00-6/30/02 however,the grant was subsequently extended
twice for spending down all the money originally received. The last grant extension expired on
December 31, 2003. The focus of this supplement is on the $20,000 received for use on a senior
bus program to "augment limited transportation for senior citizens living within the corporate
boundaries of the City of McHenry."
At the time the grant was awarded, the senior bus program centered on the establishment of a
voucher program to be used in conjunction with the Pace Suburban Dial-A-Ride service. Pace
Dial-a-Ride is a demand response service defined as curb-to-curb pickup and drop-off. The
vouchers were intended for residents ages 55 and older to travel using the dial-a-ride service at
no cost. Vouchers were issued to residents, collected by Pace and the City reimbursed Pace for
the costs associated with the vouchers collected through the program. As previously stated,the
program was extended until December 31, 2003 so the entire $20,000 could be expended
however;the City continues to administer the program.
In 2011 the City Council approved an Intergovernmental Agreement with the City of Crystal Lake,
City of Woodstock and McHenry County for dial-a-ride transit services to begin in 2012; and, an
Intergovernmental Agreement with Pace for the McHenry Service Integration and Coordination
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Project. On November 18, 2013,the City Council approved the extension of this program through
2014. As part of these agreements,the City is responsible for funding 25%of the total operating
deficit associated with the program. The operating deficit to each community is based on the
total costs of trips with an origin and destination in the City after fares collected are deducted.
The City of McHenry then pays the additional costs associated with the free voucher program.
Since the expiration of the grant funding,the issuance of these free bus vouchers has somewhat
evolved over time and expanded beyond a program simply for seniors to also include people with
disabilities. In terms of cost of providing this service to residents, between 2004 and 2012, the
annual cost of the program averaged $10,074. Additionally, the City spends about $1,200/year
to have the vouchers printed and mailed to many residents who utilize the program.
The manner in which the program is administered, is seniors (60 years and better), as well as
physically and/or mentally disabled residents, who may be under the age of 60, are eligible to
receive up to 40 vouchers/month was reviewed in 2013. The City prints 750 packs of vouchers
every three months. Ten vouchers are included in each pack. Each voucher can be utilized for a
one-way trip using the Pace dial-a-ride service within the City of McHenry. In order to receive
the vouchers City residency must be proven and the age of the person requesting the vouchers
must be verified. In 2013, after review by the Finance and Personnel Committee and City Council
the program was revised to limit the free vouchers to City of McHenry residents, 60 years of age
and better.
ANALYSIS:
Since 2013 staff has evaluated the program in conjunction with its participation in the McRide
Program, which offers paratransit service to any City resident, and the City's 2018 cost will be
approximately $33,000. Recently staff learned the City was not being charged for the free
vouchers by the County, who administers the entire service, for several reasons including how
the McRide program is administered and how this has changed over time,the fact the City prints
and uses its own vouchers, and Pace drivers often confuse City vouchers with McRide vouchers.
In doing so staff also learned there are approximately 10-20 regular users of the City's free
voucher program, which means the City is administering a program whereby 10-20 people can
receive up to 40 free one-way rides/month.
McHenry County has been extremely accommodating but has requested that this practice be
resolved moving forward. The City has met with representatives from the McHenry County
Highway Division and spoken with Craig Adams, McHenry Township Supervisor to evaluate
options. Based on these discussions, Staff does not believe it is in the City's best interest to keep
administering the current program. Even with 10 riders at 40 free vouchers,the County would
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have the City begin using its$3 countywide vouchers, instead of its own voucher. The County is
willing to sell these to the City at a discounted rate however, even at a rate of$2 per voucher,
with 10 riders a month, 40 vouchers would cost the City $9,600/year for 10 riders and the City
will be paying $33,000 for the entire City in 2018. Using data from 2016, the City gave out 40
vouchers to 172 residents, most of which are not unique riders. Therefore, at $2 a voucher this
equates to $13,760 annually plus the cost of administering the program, purchasing vouchers
from the County and distributing them.
As another option, the City could partner with McHenry Township, which participates its own
dial-a-ride program and offers transportation for seniors and people with disabilities utilizing
their own buses. Their service only operates from 8:30 a.m.to 3:00 p.m. Monday through Friday
and it is only for McHenry Township residents-which pay$1 for the service-which is door-to-door
and outside of their hours people in McHenry Township, just as people in the City in McHenry
can call and utilize the Pace dial-a-ride service.
Staff spoke to Craig Adams, the McHenry Township Supervisor, and Mr. Adams stated that his
bus service is covered by a grant, which runs from December 1, 2017 to December 1, 2018. He
stated that he had four buses and about 50 unique riders and he was willing to pickup all of the
City of McHenry riders who utilize the voucher program, which utilizing the past two-year's data
is between 12-20 unique riders. This includes people in McHenry and Nunda Townships and will
include door-to-door service from 8:30-3:00 p.m. Monday thru Friday however, McHenry
Township will need to hire an additional driver to provide this service.
To facilitate the transition to this option,the Township would request that the City subsidize the
additional riders for one year until the next grant cycle in December 2018. After which the
Township will absorb the additional riders into its next grant cycle and the City will no longer have
to administer a program other than the citywide dial-a-ride program it normally contributes to.
Staff is proposing in October 2018, a letter be sent to all voucher users, stating the City of
McHenry will be discontinuing the free voucher program as of December 2018 but City residents
will have the option of utilizing the Pace dial-a-ride service at $1.25 (base fare for seniors and
persons with disabilities) and $2.50 (base fare for general public) and .$25/five miles as well as
the McHenry Township Bus Service for$1.00/ride (seniors and people with disabilities only).
If the Committee and Council are amendable, until December 2018, the McHenry Township bus
tickets are$1.00/ride however,the township will sell books of ten tickets to the City for$5.00 or
$.50/ride and after one-year McHenry Township will administer the program, therefore the City
will no longer have a free voucher program. Given past history it is anticipated the City will not
spend more than $5,000 if it maintains the 40 free vouchers/month for City of McHenry residents
age 60 years and better and this figure will most likely be less than$4,000 based on the 172 riders
at 40 vouchers/month/$.50/voucher= $3,440. Residents could pick up the township bus tickets
at the Municipal Center or have them mailed to their address once their residence and age have
been verified.
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If the Finance and Personnel Committee concurs, it is recommended the following be
recommended to the full City Council:
• City agrees to pay McHenry Township $5.00 for a 10-ride pack on the McHenry
Township Bus good for seniors and people with disabilities, serving all City of McHenry
residents 60 years and better from City Council approval through approximately
December 3,2018(up to 40 free vouchers/month-seniors only). City residents,who are
seniors and who have a disability may purchase Township tickets at the Municipal
Center for$1.00/ride however for purposes of this supplement the voucher program is
solely for seniors 60 years and better;
• As of a date in early 2018, pending City Council approval, the City will still be issuing
free vouchers for seniors 60 years and better(maximum of 40/month)as well as a letter
stating in October 2018 the City of McHenry will be discontinuing the free voucher
program as of December 2018 but City residents will have the option of utilizing the
Pace dial-a-ride service at$1.25(base fare for seniors and persons with disabilities)and
$2.50 (base fare for general public) and .$25/five miles as well as the McHenry
Township Bus Service for$1.00/ride(seniors and people with disabilities only);
• Vouchers will be issued to seniors already registered with the City or those who provide
proof of age and residency in the corporate limits in the City of McHenry as well as a
letter stating in October 2018 the City of McHenry will be discontinuing the free voucher
program as of December 2018 but City residents will have the option of utilizing the
Pace dial-a-ride service at$1.25 (base fare for seniors and persons with disabilities)and
$2.50 (base fare for general public) and .$25/five miles as well as the McHenry
Township Bus Service for$1.00/ride (seniors and people with disabilities only);
• As of December 2018 the City of McHenry will no longer will issuing FREE Pace or other
(Township) bus free-ride vouchers (senior or otherwise);