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r <br /> City of Blaine <br /> September 19,2005 <br /> Page 4 <br /> What are the limitations? <br /> As stated above, the city could originate a loan 10 times the unencumbered amount in their capital account. If <br /> the city were to originate a $1 Million loan that required a reserve of 20% ($200,000), and they used the capital <br /> account for the reserve requirement,another loan could not be originated until the loan reserve was released. <br /> The city's role will be to market the program with businesses and lenders in Blaine. All loans need to be <br /> approved by the city's identified authorized representative. However, the final approval of every loan will be <br /> contingent on a sale of that loan to the secondary market. The loans will initially be closed in the name of <br /> TCCCF,and immediately assigned to the secondary lender(CRF). <br /> The City should adopt a policy for the originating of this type of a loan, to cover specific goals and outcomes. <br /> This policy could address the amount of risk the City is willing to incur, such as covering the credit reserve <br /> requirement, or requiring the borrower to do so. A requirement of TCCCF does include community impact <br /> criteria. Specifically, each loan will need to meet a minimum of one criteria identified by TCCCF. Included in the <br /> criteria categories are job creation, revitalization of low-moderate income communities, projects in targeted <br /> business development areas (based on prior use or current conditions within the area), serving disadvantaged <br /> populations or non-profits as business owners, or other community impacts identified by local, regional or state <br /> initiatives. <br /> The above information is contained within TCCCF membership documents, including Member Disclosure Statement, <br /> Participation Agreement,and Loan Fund Escrow Agreement and further is based on conversations with Scott Martin, <br /> President of TCCCF. <br /> Please feel free to contact us if you have any follow-up questions or need clarification.We appreciate the opportunity <br /> to provide this feedback to the City of Blaine. <br /> 6 �G' <br /> �--LZ-j4<_it-C-1 <br /> Public Sector Advisors <br />