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ICDBG-85-III-13 Power DynamicsCecil D. Andrus Governor James V. Hawkins q� Director DEPARTMENT OF COMMERCE July 19, 1991 The Honorable Grant P. Kingsford - Mayor, Ciq, of Meridiem*: 33 E. Idaho Meridian, ID 83642 Dear Mayor Kingsford: 700 west State Street Statehouse Mail Boise, ID 83720-2700 Phone (208) 334-2470 FAX (208) 334-2631 We have been notified that the FY87 audit for your Idaho Community Development Block Grant project(s) listed below has been approved by the Legislative Auditor's Office. ICDBG-85-III-26 $ 50.00 ICDBG-85-III-13 6,517.42 With this approval, you are in compliance with fiscal regulations of the block grant program. Please retain this letter in your project files. Since ely, Ka ces, Administrator Division of Community Development KF:dca aw-m/AuditsFolder/87AuditaAppd.Ltr.7/ 19/91 - , +4- > s . ..�� - oto- a.0& . IDAHO BEgtO� Cecil D. Andrus 700 West State Street Govemor Boise, Idaho 83720 James V. HawkinsPhone (208) 334-2470 Director a ti4� Telex 5106003708 IDCOMRCE �rE 04 Fax (208) 334-2631 DEPARTMENT OF COMMERCE September 26, 1990 The Honorable Grant P. Kingsford Mayor, City of Meridian 33 E. Idaho Meridian, ID 83642 RE: ICDBG-85-III-13 RLF Congratulations on the completion of the Idaho Community Development Block Grant Project referred to above. The only grant stipulation remaining is that all records pertaining to the grant must be retained for three (3) years from project closeout. Enclosed is a Certificate of Completion and a Closeout Agreement for this Idaho Community Development Block Grant. With this Agreement, the grant is officially closed. Sincerely, 7 1�� James V. Hawkins Director JVH:JB/aw Enclosures cc: Wayne S. Forrey aw-17/JBMeridRLF851I113. C/OLtr August 24, 1990 Mr. Jan Blickenstaff Idaho Department of Commerce 700 West State Street Boise, Idaho 83720 Dear Mr. Blickenstaff, Enclosed are two copies of the grant close out report on ICDBG-85- III-13 signed by Mayor Kingsford. Also enclosed is a cashiers check #392177669 in the amount of $18,149.52 that represents the balance of the program income after payment of expense. Sincerely, J k. m n C ty Cler C ty of M ridian, ID. HUB OF TREASURE VALLEY A Good Place to Live OFFICIALS COUNCILMEN JACK NN, City RONALD R. S,TreasurerClerk JANICE GASS, Treasurer NICEGA CITY OF MERIDIAN MYERSTOLSMA J. E. BERT MYERS BRUCE D. STUART, Water Works Supt. ROBERT GIESLER WAYNE G. CROOKSTON, JR., Attorney 33 EAST IDAHO MAX YERRINGTON EARL WARD, waste water sept. MERIDIAN IDAHO 83642 KENNY BOWERS, Fire Chief � Chairman Zoning d Planning BILL GORDON, Police Chief Phone 888-4433 JIM JOHNSON GARY SMITH, City Engineer GRANT P. KINGSFORD Mayor August 24, 1990 Mr. Jan Blickenstaff Idaho Department of Commerce 700 West State Street Boise, Idaho 83720 Dear Mr. Blickenstaff, Enclosed are two copies of the grant close out report on ICDBG-85- III-13 signed by Mayor Kingsford. Also enclosed is a cashiers check #392177669 in the amount of $18,149.52 that represents the balance of the program income after payment of expense. Sincerely, J k. m n C ty Cler C ty of M ridian, ID. M „ i AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915-1968) JOHN O. FITZGERALD, P.A. THIS FIRM INCLUDES WAYNE G. CROOKSTON, JR., P.A. PROFESSIONAL CORPORATIONS WILLIAM J. SCHWARTZ January 2, 1990 Meridian Economic Development Corp. 33 East Idaho Street Meridian, Idaho 83642 LEGAL SERVICES FROM JUNE 6, 1989 -- DECEMBER 31, 1989: MATTERS RELATING TO: TELEPHONE 888.4461 AREA CODE 208 REVOLVING LOAN FUND/POWER DYNAMICS: PROOF OF CLAIM MATTERS; LETTERS AND DISCUSSIONS WITH DEPARTMENT OF COMMERCE; STATUS LETTERS; FINAL CLOSING STATUS LETTER 4.50 COMPUTROL BLOCK GRANT ADMINISTRATION: DISCUSSIONS WITH PROJECT ADMINISTRATOR; CORRESPONDENCE 1.00 GENERAL ADMINISTRATIVE WORK: DISCUSSIONS WITH PROSPECTIVE IRB APPLICANT ATTORNEYS FEE: 6.00 HOURS X $80.00/HR.= COSTS: TOTAL AMOUNT DUE .50 6.00 $480.00 -0- $480.00 OFFICIALS JACK NIEMANN, City Clerk JANICE GASS, Treasurer BRUCE D. STUART, Water Works Supt. WAYNE G. CROOKSTON, JR., Attorney EARL WARD, Waste Water Supt. KENNY BOWERS, Fire Chief BILL GORDON, Police Chief GARY SMITH, City Engineer HUB OF TREASURE VALLEY A Good Place to Live CITY OFM, ERIDIAN 33 EAST IDAHO MERIDIAN, IDAHO 83642 Phone U8-4433 GRANT P. KINGSFORD. Mayor COUNCILMEN RONALD R. TOLSMA J. E. BERT MYERS ROBERT GIESLER MAX YERRINGTON Chairman Zoning & Planning JIM JOHNSON Mr. Jan Blicketistaff, Program Manager ` Idaho Department of Commerce 700 West State` -Street Boise, Idaho 83720 Dear Mr. Bliekenstaff: The City of Meridian is in the process of completing the Final Report and Closeout Documentation for ICDBG - 85 - III - 13. The city is also in the middle of organizing a Local Improvement District (LID) and a final application for our proposed ICDBH East First Street Improvement Project. As soon as we can complete the full application and LID work, we will finish the closeout reports for the 1985 Revolving Loan. Fund (RLF) grant. Our City attorney has prepared a brief progress report regarding the legal status of the loan collection efforts. A copy of this report is enclosed. It is our desire that program income from the RLF be obligated to the proposed East First Street Improvement project. If the city does not receive this proposed grant, the city understands that the program income will have to be returned to your office. We certainly appreciate your understanding and assistance throughout the 1985 RLF project. Thankyou for helping the City o£>MeridiiA Sincerely, Grant P. Kingsford Mayor City of Meridian, ID. AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915-1968) JOHN O. FITZGERALD, P.A. THIS FIRM INCLUDES WAYNE G. CROOKSTON, JR., P.A. PROFESSIONAL CORPORATIONS WILLIAM J. SCHWARTZ December 28, 1989 Jack Niemann Acting Clerk, Economic Development Corporation of the City of Meridian 33 East Idaho Street Meridian, Idaho 83642 Re: Power Dynamics/ Lowell Hodgkins lawsuit and Bankruptcy Dear Jack, TELEPHONE 888.4461 AREA CODE 208 I am writing to you in my capacity as the attorney for the Economic Development Corporation of the City of Meridian and pursuant to your request regarding the above referenced matter and its status. As you know, there were many attempts to collect the loan that Power Dynamics, Inc. owed to the Economic Development Corporation of the City of Meridian (EDC). Funds were collected from Power Dynamics on several occasions and funds were collected from Anvic International pursuant to an assignment of rights by Power Dynamics. The funds ultimately were not collectable other than by means of a lawsuit. Also, at this time Mr. Hodgkins' residence had become unknown as he was no longer residing in San Carlos, California. It was the decision of the Board of Directors of the Economic Development Corporation to go ahead and pursue legal action in the hopes of locating the Hodgkins. I therefore instituted suit against Power Dynamics Inc. and Mr. & Mrs Lowell Hodgkins. This law suit was filed in United States District Court for the District of Idaho. The Complaint was filed November 23, 1988. The complaint requested a judgment in the amount of $306,390.33, which was the amount due and owing at the time of filing the complaint, including interest. I did succeed in determining that the Hodgkins had moved from San Carlos, California, and had relocated in Redwood City, California. Service of the Complaint and Summons was, thus, obtained upon Lowell and Nola Hodgkins and upon Power Dynamics Inc. at the residence of the Hodgkins' at 581 Marlin Court, Redwood City, California on December 27, 1988. After receipt of the Summons and Complaint the Hodgkins contacted an attorney, Gary R. Brenner, in San Mateo, California, and he contacted me. On behalf of the Hodgkins, he ultimately offered to settle the law suit by paying to the EDC the sum of $5,000.00, and he indicated that if that sum was not accepted the Hodgkins would file a Chapter 7 bankruptcy. This offer was forwarded to both the Board of the EDC and to the State of Idaho Department of Commerce. Both entities determined that to compromise a claim of well over $300,000.00 for $5,000.00 was not a wise decision and that it would be best to force the Hodgkins into bankruptcy on the chance that some funds could obtained through the bankruptcy. If, however, no funds were obtained it was better to force the bankruptcy rather than settle for such a ridiculously low amount. I therefore informed Mr. Brenner that the offer was not acceptable and that if was going to contest the lawsuit file an answer to the Complaint or if he was going to file a bankruptcy for the Hodgkins he might as well move ahead on that as the EDC was going to pursue the suit. Shortly thereafter in the end of May, 1989, I did receive a Notice that Mr. and Mrs Hodgkins had filed a Chapter 7 bankruptcy on May 8, 1989, in the United States Bankruptcy Court, Northern District of California. This is a straight liquidation bankruptcy which requests that the debtor be discharged from his debts and the debtor submit his assets, subject to certain exemptions, to the Court to pay what debts can be paid from the assets. Upon the filing of a bankruptcy all legal action is held in abeyance and cannot be proceeded upon. I therefore did not continue with the lawsuit. The Notice was dated May 24, 1989, and informed creditors that they had 90 days after June 21, 1989, to file proofs of claims for the amounts that the Hodgkins owed them. I filed a Proof of Claim with the Bankruptcy Court on June 26, 1989. The amount of the claim was $346,802.53. I did receive an Order from the Bankruptcy Court, dated September 22, 1989, stating that the Hodgkins had been discharged from all dischargeable debts, which includes the debt owed to the EDC. This Order of Discharge does not necessarily mean that there will be no funds forthcoming from the Bankruptcy Court but in all likelihood that will be the case. Based upon the financial information of the Hodgkins that was received as part of the offer of $5,000.00, it appeared that the Hodgkins has no assets that were not exempt property that could be liquidated and the proceeds used to pay unsecured creditors, which is the classification of the debt owed to the EDC. It would appear, therefore, that no further funds will be received from the Bankruptcy Court and that this matter is closed. Certainly no further action can be taken against the Hodgkins, their debt to the EDC having been discharged. The EDC could pursue Power Dynamics, Inc., but that would appear to be 1 • A fruitless as I am quite sure that it never did have substantial assets. If you or any Board Member of the EDC has any further questions, I would be pleased to respond if possible. Very truly yours, "7. WAYN G. CROOKSTON, JR. Cecil D. Andrus Governor James V. Hawkins Director November 17, 1989 DEPARTMENT OF COMMERCE The Honorable Grant Kingsford Mayor, City of Meridian 33 E. Idaho Meridian, Idaho 83642 - Dear Mayor Kingsford: 700 West State Street Boise, Idaho 83720 Phone (208) 334-2470 Telex 5106003708 IDCOMRCE Fax (208) 334-2631 The information submitted to date concerning the loan to Power Dynamics is sufficient to clear the HUD sanction on this project. The next step in the closeout process is to complete the Final Report and closeout papers. The Final Report should address the status of the law suit. The Closeout forms are enclosed. If you have any questions, please call me at 334-2470. Sincerely, e Jan Peter Blickenstaff IV Program Manager Division of Community Development JPB:aw aw-12/JB-Meridian sant clyd AHO 1890- CENTENNIAL- 199 INFORMATION REGARDING CLOSEOUT DOCUMENTS Send to the Department the following: 1 . One signed' original of the Final Performance Report. You should have one signed original for your records. 2. One signed' original of the Final Financial Report. You should have one signed original for your records. 3. Two signed' originals of page C-4: Computation of Grant Balance, Certification of Recipient and Idaho Department of Commerce Approval. We will sign both orginals and return one to you. 4. Two signed' originals of the Closeout Agreement. We will sign both originals and return one to you. If you complete a Closeout Agreement pending receipt of the final audit, call your project manager for instructions as to what audits will be required. 'NOTE: ALL DOCUMENTS MUST BE SIGNED BY THE CHIEF ELECTED OFFICIAL. PERFORMANCE REPORT Grantee: Contract No.: Project Type: ED PF Housing National Objective: LMI Slum/Blight _ Imminent Tht. Date of Report: Prepared by: Phone Number: I. Provide a detailed narrative of completed activities (by budget line items). The discussion should include specific activities accomplished, how they were accomplished, who was involved and how the activity relates to the overall project. For example, the narrative of administration activities should include a description of the procurement process, the environmental review process, steps taken for review of subrecipients, etc. II. Project Schedule Projected Schedule Actual Schedule (from contract or application) Indicate reasons for any variations. III. Project Benefits A. Projected Benefits (taken from application). B. Actual Benefits I a) Provide a detailed narrative of activities completed f or prevention or elimination of slum and blight Cif applicable). b) If actual benefits vary from projected, indicate reasons. 2.a) Provide a detailed narrative of activities completed for benefit to LMI persons (if applicable). b) If actual benefits vary from projected, indicate reasons. 3.a) Total Population Total Papulation Projected to Actually Benefited Be n e f i t Number % of Total b) LMI Projected LMI Actually Population to Benefit Benefited Number % of Total c) Minorities Pro- Minorities Population jected to Bene- Actually fit Benefited d) Projected Actual Direct Jobs Direct Jobs _ e) Actual LMI Jobs Number % of Total Jobs f) Actual Minority Jobs Projected Actual to Date g) Private Investment _ Provide documentation of the jobs listed above including: type of position, salary, sex and minority status of the employee filling the position and whether the employee was unemployed at the time of hire. The Final Performance Report will not be approved without this information. The data in this report is true and correct as of this date. Signature of chief elected official Date DEPARTMENT OF COMMERCE Room 108, Capitol Building Boise, Idaho 83720 FINANCIAL REPORT — REQUEST FOR FUNDS IMPORTANT — Instructions on reverse side should be read before completing this report. Use for contracts and / or grants Name Contract Number Address Contact Person I Phone No. Report Period - Month of Date of Report ❑ INTERIM REPORT ❑ FINAL REPORT (Detailed breakdown of expenditures per budget category must be STATUS OF ICDBG FUNDS BUDGET EXPENDITURES (Report all expenditures and obligations made from beginning of grant to end of reporting period.) 'Only 10% of rota/ Fealeraj---- - - --- - ---- BUOGET 11. Budget 12. Program 13. Project Category Income Totals (ICDBG, State Earned & Local) ICDBG uriv icanis wiawur Urvision approval. OTHER PROJECT FUNDS 18. Other 17. Other Project Funds Project Funds Expended Obligated ICDBG 1. Amount of Contract $ 6. Total expended to date $ 2. Less payments to date $ ICOBG Cash Balance �' (Item 2 minus Item 6) $ 3. Balance of contract $ 8. Program Income- Balance on Hand $ Amount expended — To Beginning 4' of report period $ Unexpended Cash Balance 9. at report end (Item 7 plus Item 8) $ 5. Amount expended during report period $ 10Funds Requested (Line 15 plus or minus Line 9) $ BUDGET EXPENDITURES (Report all expenditures and obligations made from beginning of grant to end of reporting period.) 'Only 10% of rota/ Fealeraj---- - - --- - ---- BUOGET 11. Budget 12. Program 13. Project Category Income Totals (ICDBG, State Earned & Local) • acv WWLW c r ICDBG FUND 14. ICDBG 15. ICDBG Funds Funds Expended Obligated uriv icanis wiawur Urvision approval. OTHER PROJECT FUNDS 18. Other 17. Other Project Funds Project Funds Expended Obligated PROJECT TO DATE 18. TOTAL EXPENDITURES 19. TOTALS Wic: Furnishing false information may constitute a violation of applicable State and Federal Law. CERTIFICATION OF FINANCIAL OFFICER: I certify that the above data is correct, based on the contractee's official accounting system and records, consistently applied and maintained, and that expenditures shown have been made for the purposes of, and in accordance with applicable contract terms and conditions. The funds requested are for reimbursement of actual expenditures during the report period. Typed Name DOCFY86 IL Computation of Grant Balance A. Amount of contract (section I, line 1) B. Total ICDBG funds expended and obligated (section I, line 19, columns 14 C 15) C. Unutilized grant to be cancelled (line A minus line B, above) D. Grant Funds Received (section I, line 2) E. Balance of Grant Payable (line B minus line D, above)" *If line D exceeds line B, enter the amount of the excess on line E as a negative number. This amount must be repaid to the Department of Commerce. III. Certification of Recipient: It is hereby certified that all activities undertaken by the Recipient with funds provided under the contract agreement number , have, to the best of my knowledge, been carried out in accordance with the contract; that proper provision has been made by the Recipient for the payment of all unpaid costs and any unsettled third -party claims; that the Idaho Department of Commerce is under no obligation to make any further payment to the Recipient under the contract in excess of the amount identified in Section II, line E, hereof, and that every statement and amount set forth in this document is true and correct as of this date. Special Conditions: Signature of Chief Elected Official Typed Name and Title of Chief Elected Official IV. Idaho Department of Commerce Date This Certificate of Completion is hereby approved. Therefore, I authorize cancellation of the unutilized contract commitment and related funds reservation and obligation of (from line C) Signature of IDC Authorized Official Typed Name and Title of IDC Authorized Official C-4 Date Contract Number: Attachment B Closeout Agreement This Agreement made by and between the Idaho Department of Commerce (IDC) and the (the Grantee). In reliance upon and in consideration of mutual representations, IDC and the Grantee agree to close Project No. All required audits have been received and approved. Additionally, the Grantee hereby agrees to: 1. Obtain advance written approval from the Idaho Department of Commerce authorizing expenditure of program income received prior to the date of this Closeout Agreement. The amount is 2. Expend this program income received up to the date of the Closeout Agreement pertaining to this project, in accordance with Title I of the Housing and Community Development Act of 1974, as amended. 3. Submit status of program income and compliance with Title I requirements annually starting with and until the $ is expended. Idaho Department of Commerce By: Title: Date: GM:aw Ann -1 The Grantee: By: Title: Date: Attachment B Closeout Agreement This Agreement made by and between the Idaho Department of Commerce (IDC) and the (the Grantee). In reliance upon and in consideration of mutual representations, IDC and the Grantee agree to close Project No. All required audits have been received and approved. Additionally, the Grantee hereby agrees to: 1. Obtain advance written approval from the Idaho Department of Commerce authorizing expenditure of program income received prior to the date of this Closeout Agreement. The amount is 2. Expend this program income received up to the date of the Closeout Agreement pertaining to this project, in accordance with Title I of the Housing and Community Development Act of 1974, as amended. 3. Submit status of program income and compliance with requirements annually starting with until the $ is expended. Idaho Department of Commerce In The Grantee: s Title: Title: Date: Date: GM:aw Ann -1 Title I and Attachment B Closeout Agreement This Agreement made by and between the Idaho Department of Commerce (IDC) and the (the Grantee). In reliance upon and in consideration of mutual representations, IDC and the Grantee agree to close Project No. All required audits have been received and approved. Idaho Department of Commerce The Grantee: By: Title: By: Title: Date• Date: Attachment B Closeout Agreement This Agreement made by and between the Idaho Department of Commerce (IDC) and the (the Grantee). In reliance upon and in consideration of mutual representations, IDC and the Grantee agree to close Project No. All required audits have been received and approved. Idaho Department of Commerce The Grantee: By: Title: By: Title: Date• Date• ORANT L. AMBROSE (19154968) JOHN O. FITZOERALD. P.A. WAYNE O. CROOKSTON. JR., P.A. WILLIAM J. SCHWARTZ AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 THIS FIRM INCLUDES PROFESSIONAL CORPORATIONS JUNE 6, 1990 Meridian Economic Development Corp. 33 East Idaho Street Meridian, Idaho 83642 LEGAL SERVICES FROM JUNE 6, 1989 -- DECEMBER 31, 1989: PREVIOUSLY BILLED JANUARY 2, 1990 MATTERS RELATING TO: TELEPHONE 888-4461 AREA CODE 208 REVOLVING LOAN FUND/POWER DYNAMICS: PROOF OF CLAIM MATTERS; LETTERS AND DISCUSSIONS WITH DEPARTMENT OF COMMERCE; STATUS LETTERS; FINAL CLOSING STATUS LETTER 4.50 COMPUTROL BLOCK GRANT ADMINISTRATION: DISCUSSIONS WITH PROJECT ADMINISTRATOR; CORRESPONDENCE 1.00 GENERAL ADMINISTRATIVE WORK: DISCUSSIONS WITH PROSPECTIVE IRB APPLICANT 50 QUO ATTORNEYS FEE: 6.00 HOURS X $80.00/HR.= $480.00 COSTS: -0- TOTAL AMOUNT DUE $480.00 Cecil D. Andrus Governor James V. Hawkins Director June 3, 1990 DEPARTMENT OF COMMERCE The Honorable Grant R. Kingsford, Mayor City of Meridian 33 E. Idaho Meridian, Idaho 83642 Dear Mayor Kingsford: loo west state street Boise, Idaho 83720 Phone (208) 334-2470 Telex 5106003708 IDCOMRCE Fax (208) 334-2631 This letter relates to your Idaho Community Development Block Grant. We are currently in the process of analyzing all the grants with program income. We ask that you verify this information for corrrectness and help update our records. Listed below are your grants which have program income and the amounts. Please complete and return the enclosed form by June 18, 1990. If you have any questions, please contact me at 334-2470. Thank you for your assistance. Meridian - 85 -III -13 $11.236.74 Sincerely, Ann Marie Funke, Intern Community Development Division Enclosure DEPARTMENT OF COMMERCE, COMMUNITY DEVELOPMENT Please respond to the following questions regarding your grant with program income: oN 17�pv Meridian - 85 -III -13 $11.236.74 AQPr-oX' 1. Are the amounts we have recorded for the grant the same as your amounts for that grant? yes no 2. Do you have other block grants with program income that we do not have listed? yes -X—no 3. If yes, please list the grants and the amount of program income. 4. If some of the Program Income was spent, list what was purchased. (add additional sheets if necessary) Please sign and send in the completed form by June 18, 1990. CHIEF EXECUTIVE OFFICIAL'S SIGNATURE: MAIL TO: Department of Commerce Community Development ATTN: Ann Marie Funke 700 West State Street Boise, Idaho 83720 Fax (208) 334-2631 AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915.1968) TELEPHONE 8884461 JOHN O. FITZGERALD, P.A. THIS FIRM INCLUDES AREA CODE WS WAYNE O. CROOKSTON, JR., P.A. PROIRSSIONAL CORPORATIONS WILLIAM J. SCHWARTZ January 2, 1990 Meridian Economic Development Corp. 33 East Idaho Street Meridian, Idaho 83642 LEGAL SERVICES FROM JUNE 6, 1989 -- DECEMBER 31, 1989: MATTERS RELATING TO: REVOLVING LOAN FUND/POWER DYNAMICS: PROOF OF CLAIM MATTERS; LETTERS AND DISCUSSIONS WITH DEPARTMENT OF COMMERCE; STATUS LETTERS; FINAL CLOSING STATUS LETTER 4.50 COMPUTROL BLOCK GRANT ADMINISTRATION: DISCUSSIONS WITH PROJECT ADMINISTRATOR; CORRESPONDENCE 1.00 GENERAL ADMINISTRATIVE WORK: DISCUSSIONS WITH PROSPECTIVE IRB APPLICANT .50 6 .-00 ATTORNEYS FEE: 6.00 HOURS X $80.00/HR.= $480.00 COSTS: -0- TOTAL 0 - TOTAL AMOUNT DUE $480.00 OFFICIALS JACK NIEMANN, City Clerk JANICE GASS, Treasurer BRUCE D. STUART, Water Works Supt. WAYNE G. CROOKSTON, JR., Attorney EARL WARD, Waste Water Supt. KENNY BOWERS, Fire Chief ROY PORTER, Police Chief GARY SMITH, City Engineer HUB OF TREASURE VALLEY A Good Place to Live CITY OF MERIDIAN November 21, 1988 33 EAST IDAHO MERIDIAN, IDAHO 83642 Phone 8884433 GRANT P. KINGSFORD Mayor Wayne Forrey, Administrator Division of Community Development Idaho Department of Commerce 700 West State Boise, Idaho 83720 Dear Wayne, The Economic Development Corporation of The City of Meridian have funds in the amount of $21,843.50 that were received as Income on the Revolving Loan Fund Grant #ICDBG-85-III-13 from Power Dynamics. COUNCILMEN BILL BREWER RONALD R. TOLSMA J. E. BERT MYERS ROBERT GIESLER WALT MORROW Chalrinan Zoning & Planning At this time we are asking The Department of Commerce for their concurrence and authorization to use $2,500.00 of this Income from the 1985.CDBG Revolving Loan Fund Project, to assist in the downtown Central Business District Redevelopment Planning Project. The planning process will allow Meridian to review blighted conditions in the central business district, identify deteriorating structures and pin point infrastructures necessary for the improvement of downtown redevelopment. We would appreciate your favorable consideration of this request so this project can proceed. Sincerely, Grant P. Kingsford Mayor n Y RO Wayne Forrey, Administrtor Division of Community Development Idaho Department of Commerce 700 West State Boise, Idah683720 We are asking your concurrence and authorization to use $2,500.00 of the Community Block Development Grant program income, resulting from the 1985 CBDG-revolving loan fund project. We wish to use these funds for downtown central business district redevelopment planning. The planning process will allow Meridian to review blighted conditions in the central business district, identify deteriorating structures and pinpoint infrastructures improvement for downtown redevelopment. QO Cecil D. Andrusit, 700 west State Street Governor o Boise. Idaho 83720 J',tames V. Hawkins Phone (208) 334-2470 Director 4� Telex 5106003708 IDCOMRCE Fax (208) 334-2631 DEPARTMENT OF COMMERCE September 7, 1988 The Honorable Grant Kingsford Mayor, City of Meridian 33 E. Idaho Meridian, ID 83642 Dear Mayor Kingsford: In early 1987, the State of Idaho terminated the Revolving Loan Fund portion of the Idahho Community Development Block Grant (ICDBG) Program. This action was due to federal, state and local concerns that a high percentage of participating businesses did not create anticipated employment benefits. During the summer of 1987, officials from the U. S. Department of Housing and Urban Development (HUD), office of Inspector General, assessed the effectiveness of the ICDBG Program. HUD concurred with the Department of Commerce's decision to stop the Revolving Loan Fund (RLF) program and assess the status of previous loans made between 1982 and 1986. During April and July 1988, the Idaho Department of Commerce and HUD met to review the Meridian/Power Dynamics loan and explore reaching an agreement on how to close out this loan project where full compliance with federal regulations had not been achieved. HUD regulations stipulate that the State of Idaho can administratively close the Meridian 1985 grant only when a national objective has been achieved. This means that the City of Meridian must demonstrate that low moderate income (LMn jobs occurred in the Power Dynamics loan to justify financing private business with public grant funds. The review by the state and HUD has established that the required numbers of LMI jobs were not created in the Power Dynamics loan. The difficulty facing the Department of Commerce and the City of Meridian is how to administratively close the City's 1985 RLF grant without expected employment benefits. The outcome of our recent meetings with HUD has given the Department of Commerce the opportunity to pursue closeout of your grant contingent upon meeting certain conditions. The Department of Commerce is now prepared to initiate complete closeout of your 1985 RLF grant if the City of Meridian will comply with the following conditions: a. Provide documentation that the City of Meridian will pursue the personal guarantees of the principals of Power Dynamics for recovery of loan funds (recovered funds may be used to pay City Attorney and other legal fees, including contingent fee arrangements if private counsel is employed); I:IIIII� Y;l1141;IJI_1 �LII� Wayne G. Crookston, Jr. Ambrose, Fitzgerald & Crookston 1530 West State Post Office Box 427 Meridian, Idaho 83642 Re: Old World Arts, Inc./Power Dynamics, Inc./Meridian Development Corporation, Inc. Dear Wayne: Enclosed please find a signed original of the Mutual Release Agreement. You will also find our trust account check in the amount of $14,280.28. Very truly yours, /n YIA- Richard H. Greener RHG/smc Encl. CLEMONS, COSHO & HUMPHREY, P.A. DALE CLEMONS (1911 - 1983) LOUIS H. COSHO COUNSELORS AND ATTORNEYS AT LAW HOWARD HUMPHREY CARNEGIE BUILDING RICHARD H. GREENER OFFICE ADMINISTRATOR R. MICHAEL SOUTHCOMBE 815 WEST WASHINGTON STREET CHERYL L. BREWER STANLEY W. WELSH BOISE, IDAHO 83702 MAX A. EIDEN. JR. RANDALL C. FREDRICKS TELEPHONE FREDRIC V. SHOEMAKER (208) 344-7811 CHRISTOPHER BURKE RORY R. JONES STEPHEN J. GLEDHILL September 19, 1988 SARA M. THORPE JOSEPH M. MEIER DAVID M. PENNY BRIAN D. NICHOLAS Wayne G. Crookston, Jr. Ambrose, Fitzgerald & Crookston 1530 West State Post Office Box 427 Meridian, Idaho 83642 Re: Old World Arts, Inc./Power Dynamics, Inc./Meridian Development Corporation, Inc. Dear Wayne: Enclosed please find a signed original of the Mutual Release Agreement. You will also find our trust account check in the amount of $14,280.28. Very truly yours, /n YIA- Richard H. Greener RHG/smc Encl. F AMBROSE, ,-OvZGERALD 1x)OODOKSTON Attorneys and Counselors P.O. Box 427 Meridian, Idaho 83842 Telephone 8884481 MUTUAL RELEASE AGREEMENT THIS AGREEMENT MADE AND ENTERED into this /h day of 1988, by and between OLD WORLD ARTS, INC. and DALE STILLWELL, parties of the first part, and hereinafter referred to jointly as "STILWELL", and the ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN, party of the second part, and hereinafter referred to as "MERIDIAN", W I T N E S S E T H: WHEREAS, Stillwell entered into a Lease Agreement with Power Dynamics, Inc. for the lease of a parcel of property located within the City of Meridian and under said lease Power Dynamics, Inc. was, and is, in default on lease payments and other payments due to Stillwell; and WHEREAS, Meridian loaned certain funds under an Economic Development Block Grant Loan to Power Dynamics, Inc.; and whereas Power Dynamics, Inc. was, and is, in default of loan payments and obligations under said loan; and whereas Anvic International, Inc., a Georgia corporation, owed sums of money to Power Dynamics, Inc. which were in excess of $22,000.00; and WHEREAS Stillwell and Meridian made DEMAND AND CLAIM against Anvic International, Inc. for all said funds due and owing to Power Dynamics, Inc. and that they be paid to Stillwell and Meridian, and that these funds due and owing are separate claims of Stilwell and Meridian; and CLEMONS, COSHO, HUMPHREY, P.A. REMITTANCE ADVICE ATTORNEYS AT LAW , 9 CARNEGIE BUILDING 815 WEST WASHINGTON STREET BOISE, IDAHO 83702 8596 344-7811 e ," e�2 PAY �` .� t ks.ItI� o6 SI L4 � 3 0 `fi d w i� s OL DOLLARS CHEECCK AM/O�UNT /y �l� '+'DATE'TO TME FIRST INTERSTATE BANK Boise, Idaho /�&AGNS, COSHO, WMK EY, P.A. 111100859611' 1: L 24 1000431: 02 0010 0411' ORDER OF N FIRST INTERSTATE BANK Boise, Idaho /�&AGNS, COSHO, WMK EY, P.A. 111100859611' 1: L 24 1000431: 02 0010 0411' July 12, 1988 Richard H. Greener CLEMONS, COSHO & HUMPREHY, P.A. Counselors and Attorneys at Law Carnegie Building 815 West Washington Street Boise, Idaho 83702 RE: Old World Arts, Inc./Power Dynamics, Inc./Meridian Economic Development Corporation, Inc. Dear Dick: TELEPHONE 8884461 AREA CODE 208 I have once again discussed your portion with the Economic Development Corporation President and he and I do recognize the position we are in, in that we are behind Old World. Arts in the Assignment of the funds. We do, however, still feel that it was our earging that got the funds in the first place, but to settle this matter we are willing to go ahead and have your client paid what is owed him but not your attorneys fees and the balance would be paid to Meridian Economic Development Corporation. If this is agreeable to you and your client, please let me know and if necessary and you desire, I will prepare a very short Agreement pertaining to this matter. Very truly yours, Wayne G. Crookston, Jr. WGC/mks pc: Grant P. Kingsford President Meridian Economic Development Corp. AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915.1968) JOHN O. FITZGERALD, P.A. THIS FIRM INCLUDES ' WAYNE O. CROOKSTON. JR., P.A. PROFESSIONAL. CORPORATIONS WILLIAM L. M. NARY July 12, 1988 Richard H. Greener CLEMONS, COSHO & HUMPREHY, P.A. Counselors and Attorneys at Law Carnegie Building 815 West Washington Street Boise, Idaho 83702 RE: Old World Arts, Inc./Power Dynamics, Inc./Meridian Economic Development Corporation, Inc. Dear Dick: TELEPHONE 8884461 AREA CODE 208 I have once again discussed your portion with the Economic Development Corporation President and he and I do recognize the position we are in, in that we are behind Old World. Arts in the Assignment of the funds. We do, however, still feel that it was our earging that got the funds in the first place, but to settle this matter we are willing to go ahead and have your client paid what is owed him but not your attorneys fees and the balance would be paid to Meridian Economic Development Corporation. If this is agreeable to you and your client, please let me know and if necessary and you desire, I will prepare a very short Agreement pertaining to this matter. Very truly yours, Wayne G. Crookston, Jr. WGC/mks pc: Grant P. Kingsford President Meridian Economic Development Corp. ^ :CONOMIC DEVELOPMENT CORPORATION JUNE 7, 1988 Meeting of the Economic Development Corporation called to order at 8:35 p.m. by President Grant Kingsford: Members Present: Walt Morrow, Tom Hammond, Wally Lovan, Bill Brewer, Others Present: Wayne Crookston, Jack Niemann: President Kingsford: We need this to be our annual meeting and secondly we need to elect a new Vice President, is that correct Counselor: Counselor: First off everybody need to consent to the waiver of notice of the meeting. The Motion was made by Morrow and seconded by Lovan to waiver notice of meeting and consent to this meeting. Motion Carried: All Yea: Kingsford: I will now call for nominations for Vice President. Brewer: I nominate Walt Morrow for Vice President. Lovan: I move nominations cease. icHammond: I move a unanimous vote be cast for Walt Morrow for Vice President, motion was seconded by Brewer: Motion Carried: All Yea: The Motion was made by Morrow and seconded by Brewer to approve the minutes of previous meetings as written: Motion Carried: All Yea: President Kingsford: If the Counselor_ would instruct the Board on the main reason this meeting has been called. Counselor: The main reason for this meeting is that the Power Dynamics Corporation as you know has defaulted on the loan, we have pursued Power Dynamics to try and collect from its president and guarantor of the loan, Lowell Hodgkins, some time ago in regards to our collection efforts assigned to the Economic Development Corporation an account receivable that he had with Anvic International, they took back substantial all the inventory that Mr. Hodgkins had at his business location on East Broadway and in return for that agreed to pay Mr. Hodgkins approximately $55,000.00, prior to our pursuing Mr. Hodgkins, he had become indebted for back rent to Old World Arts Corporation and he had also assigned 40,prior to giving us this receivable had assigned to Old World Arts the marreceivable from Anvic, in the assignment to us he said that we could receive anything over and above what was due and owing and paid to Old World Arts. We pursued Anvic and some monies have dribbled in and a fair amount has gone to Old World Arts in payment of back rent. Power Dynamics still owes Old World Arts approximately $6,000.00. I sent a us and said give this guy the loan. One thing HUD is looking for is whether there was any fraud or not by the applicant in the first place and whether or not there was really any intention to make and economic benefit to the community for which the loan was made, and then how the 1 - EDC CORPORATION JUNE 7, 1988 PAGE # 4 .`here was additional discussion on whether to accept the check or proceed with a suit. The Motion was made by Morrow and seconded by Brewer to instruct the Attorney to make an effort to negotiate with the attorney of Old World Arts, using the check as some leverage, if he fails in that respect, that we endorse the check and take what we got and we aggressively pursue driving Mr. Hodgkins to bankrupcty or repayment of the loan, Motion Carried: All Yea: President Kingsford: Two other things that the Board maybe needs to be aware of, we have a request, there has been some work done on this, Hi Micro Tool is wanting to expand and do another Industrial Revenue Bond Issue. The other thing is if we are successful in obtaining a grant from the Department of Commerce on the Nahas property for Computrol, they also are looking at Industrial Revenue Bonds for their building. Being no further business to come before the Board the Motion was made by Hammonds and seconded by Morrow to adjourn at 9:10 p.m.: Motion Carried: All Yea: --IN (TAPE ON FILE OF THESE PROCEEDINGS) ATTEST: Bill Brewer, Secretary pc: Members Atty. File APPROVED: GRANT KINGSFORD, PRESIDENT Richard H. Greener CLEMONS, COSHO & HUMPHREY, P.A. Counselors and Attorneys at Law Carnegie Building 815 West Washington Street Boise, Idaho 83702 RE: Old World Arts, Inc./Power Dynamics, Inc./Meridian Development Corporation Dear Dick: Pursuant to our telephone discussion of Friday, May 27, 1988, please find enclosed the executed release for you to negotiate and endorse the $20,000.00 check. Also, please find enclosed a copy of the letter forwarded to me, which Lowell Hodgkins sent along with the execution and your original letter back. Please forward to me the lease document which we discussed which shows that the inventory of Power Dynamics was assigned to Orl World Arts, Inc., as collateral for the lease payments Power Dynamcis, Inc. was to be making to Old World Arts, Inc. Very truly yours, Wayne G. Crookston, Jr. WGC/mks pc: Grant Kingsford President Meridian Development Corporation n AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS �\ 1530 WEST STATE - P. O. BOX 427 MERIDIAN. IDAHO 83642 GRANT L. AMBROSE (1915-1%8) TELEPHONE 0664461 JOHN O. FITZGERALD. P.A. THIS FIRM INCLUDES AREA CODE 206 WAYNE O. CROOKSTON. JR.. P.A. PROFESSIONAL CORPORATIONS WWLIAM L. M. NARY May 27, 1988 Richard H. Greener CLEMONS, COSHO & HUMPHREY, P.A. Counselors and Attorneys at Law Carnegie Building 815 West Washington Street Boise, Idaho 83702 RE: Old World Arts, Inc./Power Dynamics, Inc./Meridian Development Corporation Dear Dick: Pursuant to our telephone discussion of Friday, May 27, 1988, please find enclosed the executed release for you to negotiate and endorse the $20,000.00 check. Also, please find enclosed a copy of the letter forwarded to me, which Lowell Hodgkins sent along with the execution and your original letter back. Please forward to me the lease document which we discussed which shows that the inventory of Power Dynamics was assigned to Orl World Arts, Inc., as collateral for the lease payments Power Dynamcis, Inc. was to be making to Old World Arts, Inc. Very truly yours, Wayne G. Crookston, Jr. WGC/mks pc: Grant Kingsford President Meridian Development Corporation n LOUIS H. COSHO �\ HOWARD HUMPHREY RICHARD H. GREENER R. MICHAEL SOUTHCOMBE STANLEY W. WELSH MAX A. EIDEN. JR RANDALL C. FREDRICKS FREDRIC V. SHOEMAKER CHRISTOPHER BURKE RORY R. JONES STEPHEN J GLEDHILL SARA M. THORPE JOSEPH M. MEIER DAVID M. PENNY BRIAN D. NICHOLAS n CLEMONS, COSHO & HUMPHREY. P.A. COUNSELORS AND ATTORNEYS AT LAW CARNEGIE BUILDING 815 WEST WASHINGTON STREET BOISE, IDAHO 83702 May 18, 1988 Lowell Hodgkins President Power Dynamics Post Office Box 1424 San Carlos, California 94070 DALE CLEMONS (1911 - 1983) OFFICE ADMINISTRATOR CHERYL L. BREWER TELEPHONE (208) 344.7811 Re-: •Old World Arts, Inc./Power Dynamics, Inc./Meridian Development Corp. Dear Lowell: Enclosed is a copy of the front and back side of a check in the sum of $20,000.00. Please note the endorsement which, in our opinion, provides a full release of Anvic International, Inc., Anvic International Trading Corp., Jes Merrell or Don Faulkner on any claim that you or Power Dynamics, Inc. would have against them. I understand you agree to my endorsing the check and thereby fully releasing and discharging the obligors from any further liability. If you consent to this, please sign in the appropriate spaces and return the signed original of this letter retaining a copy for your files. I believe you should have this reviewed by an attorney of your selection before you make a decision _to agree to the release. This, of course, is your own decision. Please let me know if you have any questions. RHG/smc Encl. cc: Dale Stilwell Very truly c Richard H. yours, F1171M W-14 May 25, 1988 Meridian Economic Development. Cotp. c/o Wayne G. Crookston, Jr. P.O. Box 427 Meridian, Idaho 83642 Gentlemen: Enclosed please find letter from Richard H. Greener which I have signed. Since I have previously assigned all rights to the funds owed by Anvic to the Economic Development Corp., I am returning this signed document direct to you to deal with as you see fit. This is an offer by Anvic to settle for less than the amount actually owed. Considering the difficulty in getting to this point, it may be well advised to accept their offer; however, this is strictly your decision. Continued efforts to sell our products have borne no fruit. Very truly yours, POW R DYNAMICS, INC. Lowell R. Hodgkins President cc: Richard H. Greener 711 C 9 D Rnv CICS • KA—;A— 1.4 +n 47f.A7 • Pk^n o "nQN RStR_97rV) Lowell Hodgkins May 18, 1988 Page Two The undersigned do hereby agree to release International, Inc., Anvic International Trading Corp., Jes or Don Faulkner, from any further liability owed to them and consent to Richard H. Greener 1988 erpendorsingong for thecheck creleas the $20,000.00 daApril DATED this day of4 OUO �-' — , 1988. Power Dynamics, Inc. By Its Presi ent ATTEST: Secretary Lowell Hodgkins Anv is Merrell to da to sum of AMBROSE, FITZGERALD & CROOKSTON May 20, 1988 Richard H. Greener CLEMONS, COSHO & HUMPHREY. P.A. 815 West Washington Boise, Idaho 83702 Dear Dick: TELEPHONE 88&4461 AREA CODE 208 Pursuant to our telephone conversation of May 19, 1988, this letter is to confirm that the Meridian Economic Development Corporation deems it best to go ahead and accept the $20,000.00 check as payment in full of the amounts owed by Anvic International to Power Dynamics, Inc., which amounts have been assigned to your client, Dale Stillwell, and to my client, Meridian Economic Development Corpera tiuii. n On behalf of the Meridian Development Corporation you are therefore instructed to go ahead and endorse that particular check that you have in your possession in the sum of $20,000.00 and place it in your Trust Account, and Mr. Stillwell and the Meridian Economic Development Corporation will have to work out a settlement as to the distribution. Very truly yours, Wavne G. Crookston; Jr. WGC/mks pc: Grant Kingsford, President Meridian Economic Development ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 ORANT L. AMBROSE (19151968) JOHN O. FITZOERALD, P.A. THIS FIRM INCLUDES PROFESSIONAL CORPORATIONS WAYNE O CROOKSTON. JR., P.A. WILLIAM L. M. NARY May 20, 1988 Richard H. Greener CLEMONS, COSHO & HUMPHREY. P.A. 815 West Washington Boise, Idaho 83702 Dear Dick: TELEPHONE 88&4461 AREA CODE 208 Pursuant to our telephone conversation of May 19, 1988, this letter is to confirm that the Meridian Economic Development Corporation deems it best to go ahead and accept the $20,000.00 check as payment in full of the amounts owed by Anvic International to Power Dynamics, Inc., which amounts have been assigned to your client, Dale Stillwell, and to my client, Meridian Economic Development Corpera tiuii. n On behalf of the Meridian Development Corporation you are therefore instructed to go ahead and endorse that particular check that you have in your possession in the sum of $20,000.00 and place it in your Trust Account, and Mr. Stillwell and the Meridian Economic Development Corporation will have to work out a settlement as to the distribution. Very truly yours, Wavne G. Crookston; Jr. WGC/mks pc: Grant Kingsford, President Meridian Economic Development May 12, 1988 Richard H. Greener CLEMONS, COSHO & HUMPHREY, P.A. 815 West Washington Boise, Idaho 83702 Dear Dick: I've discussed the forting of the two Anvic International checks, in the total sum of $22,000.00, to you for negotiation with the President of the Economic Development Corporation. He advises me that we should go ahead and forward these on to you for negotiation to make sure that these checks are good, upon your agreement that you would hold these funds in your trust account until some agreement is reached as to their distribution between your client, Dale Stillwell, and the Meridian Economic Development Corporation. If this is agreeable with you please negotiate the checks in your capacity as Trustee of the checks, which are payable to Old World Art, Inc., Power Dynamics, Inc., and the Economic Development Corporation of the City of Meridian. In that regard please find enclosed the unendorsed checks. very truly yours, Wayne G. Crookston, Jr. WGC/mks pc: Grant P. Kingsford President of the Meridian Economic Development Corporation enclosure of two Anvic International checks n AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 TELEPHONE 888.4461 OKANT L. AMBROSE (1915.1968) A .EA CODE 208 )OHN O. PITZOERALD. P.A. THIS Fl INCLUDES PROFESSIONAL COItPORAT10N5 WAYNE O. CROOKSTON. )R.. P.A. WILLIAM L. M. NARY May 12, 1988 Richard H. Greener CLEMONS, COSHO & HUMPHREY, P.A. 815 West Washington Boise, Idaho 83702 Dear Dick: I've discussed the forting of the two Anvic International checks, in the total sum of $22,000.00, to you for negotiation with the President of the Economic Development Corporation. He advises me that we should go ahead and forward these on to you for negotiation to make sure that these checks are good, upon your agreement that you would hold these funds in your trust account until some agreement is reached as to their distribution between your client, Dale Stillwell, and the Meridian Economic Development Corporation. If this is agreeable with you please negotiate the checks in your capacity as Trustee of the checks, which are payable to Old World Art, Inc., Power Dynamics, Inc., and the Economic Development Corporation of the City of Meridian. In that regard please find enclosed the unendorsed checks. very truly yours, Wayne G. Crookston, Jr. WGC/mks pc: Grant P. Kingsford President of the Meridian Economic Development Corporation enclosure of two Anvic International checks n AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915.1968) JOHN O. FITZGERALD. P.A. THIS FIRM INCLUDES PROFESSIONAL CORPORATIONS WAYNEO. CROOKSTON, JR., P.A. WILLIAM I,. M. NARY April 13, 1988 N. William Pettys Jr. Attorney at Law P.O. Drawer F Acworth, Georgia 30101 TELEPHONE 8884461 AREA CODE 208 RE: Meridian Economic Development Corporation vs Power Dymamics, Inc., Lowell Hodgkins and Anvic International Dear Mr. Pettys: I recently received a check for $2,000.00 payable to Dick Green .in trust for Old World Arts, Power Dynamics and the Economic Development Corporation of the City of Meridian. We certainly appreciate the payment and Anvics endeavor to make some payment on the account. Regarding another matter pertaining to the account, in your November 12, 1987, letter you indicated that Anvic International might be in a position to raise $25,000.00 in payment of the amount it owes Power Dynamics. Your question to me was whether the $25,000.00 would be acceptable as payment in full of the amount Anvic owes Power Dynamics, which debt has been assigned by Power Dynamics to the Meridian Economic Development Corporation. I have received specific authority from the President of the Corporation, in light of the $2,000.00 check and evidence of good faith, that if payment of the $25,000.00 was immediately forthcoming within 10 days from the date of this letter the Corporation would accept that sum as full payment for the amount due from Anvic to Power Dynamics. You should be informed that from the correspondence we have received from Mr. Hodgkins, he determined that Anvic owes Power Dynamics $35,000.00. Any agreement to accept $25,000.00 would therefore be a substantial discount. Also, of the most recent $2,000.00 check the Corporation would likely receive only a small amount, if any. I must inform you that the President of the Economic Development Corporation some _ time ago directed me to file suit i''� against Power Dynamics and Lowell Hodgkins. We later decided to . n hold off on suit to afford Anvic the opportunity to make payment on the assigned debt. While the most recent check is appreciated, it does fall far short of payment projections Anvic has made in the past therefore we must proceed to attempt to collect the amount due the Corporation from all parties. Due to the assignment of Anvics debt to the Corporation, this suit, you know, would necessarily involve Anvic. . I am in the process of drafting the Complaint and plan to file the action on or about April 20, 1988. Therefore, payment by Anvic of the $25,000.00 would prevent its involvement. You should also be informed that the State of Idaho Department of Commerce, from which the initial funds loaned to Mr. Hodgkin were granted, is after the City of Meridian and the Economic Development Corporation to pursue collection immediately. Therefore please consider this letter also as a DEMAND for payment of the account Anvic owes to Power Dynamics Inc., which account, as you know, has been assigned to the Economic Development Corporation by Power Dynamics, Inc. Of course, as stated above, the Corporation would accept the $25,000.00 as payment in full if made within 10 days of the date of this letter. I am also informed by the Idaho Secretary States Office that Power Dynamics, Inc., has forfeited its Corporate Charter. Therefore, the last known Board of Directors become statutory trustee of the Corporation. Donald Faulkner is listed as a director and any suit will also involve him individually as a statutory trustee of Power Dynamics. I hope to hear from you as soon as possible including receipt of a check for $25,000.00. WGC/mks pc: Grant Kingsford President Economic Development Corp of the City of Meridian Richard Greener Very truly yours, Wayne G. Crookston, Jr. t ;00� AMBROSE, FITZGERALD & CROOKSTON DECEMBER 8, 1987 Meridian Economic Development Co. of the City of Meridian 33 East Idaho Street Meridian, Idaho 83642 Previous Billing on 11-3-87 MATTERS RELATING TO: REVOLVING LOAN FUND/POWER DYNAMICS: Review letter from Petti's office and letter to Grant, discussion with Grant .50 x $70.00/hr.= Previous Billing TOTAL DUE TO DATE TELEPHONE SSS -4461 AREA CODE 208 $1,092.00 .50 $ 35.00 $1,092.00 $1,127.00 ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 ORANT L. AMBROSE (1913.1968) JOHN O. PITZOERALD. P.A. PIMA INCLUDES PROFESSIONAL OOQPORATIONS WAYNB O. CROOKSTON, JR., P.A. WILLIAM L. M. NARY DECEMBER 8, 1987 Meridian Economic Development Co. of the City of Meridian 33 East Idaho Street Meridian, Idaho 83642 Previous Billing on 11-3-87 MATTERS RELATING TO: REVOLVING LOAN FUND/POWER DYNAMICS: Review letter from Petti's office and letter to Grant, discussion with Grant .50 x $70.00/hr.= Previous Billing TOTAL DUE TO DATE TELEPHONE SSS -4461 AREA CODE 208 $1,092.00 .50 $ 35.00 $1,092.00 $1,127.00 ORANT I.. AMBROSE (1915-1968) JOHN O. PITZOERALD. P.A. WAYNE O. CROOKSTON, JR. P.A. WILLIAM L M. NARY AMBROSE, FI'f'ZOERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 THIS F(RN INCU"m MWFZM8IONAL CON-ORA710N8 DECEMBER 8,`1987 Meridian Economic Development Co. of the City of Meridian 33 East Idaho Street Meridian, Idaho 83642 TELEPHONE /88-4461 AREA CODE 208 Previous Billing on 11-3-87 1 $1,092.00" MATTERS RELATING TO: REVOLVING LOAN FUND/POWER DYNAMICS: Review letter from Petti's office and letter to Grant, discussion with Grant .50 .50 x $70.00/hr.= $ 35.00 Previous Billing $1,092.00 TOTAL DUE TO DATE $1,127.00 :ECONOMIC DEVELOPMENT. L`Q12�,""`i^.� '. ^.. �'°�.✓ .` . "`�-`"`".' CITY -' OF MERIDI_At F, _SLOCK GRANT f-� -92-25511241 . 728..MERIDIAN STREET " MERIDIAN, IDAHO 83642y �1 - D c: g r... t� . �. e 4 Dp �, J127-00 loider ills Ambrose, Fitz erald & Crookston �t _-: hundred-twent -seven and no/100 OAM F RST NATIONAL SAlpf � r M / ✓ rF� MERIDUW OFFJC:Eeridia)n er 198Statement thru;Novemb _ 0a 10005112 124 25541 1 p�-77 -1a' Cecil D. Andrus oA� sow Statehouse Gouernor Boise, Idaho 83720 James V. Hawkins o Phone (208) 334-2470 Director �+ _ Q4 Telex 5106003708 IDCOMRCE DEPARTMENT OF COMMERCE November 9, 1987 MEMORANDUM TO: Grant Administrators FROM: Carrol Keller, Office Coordinator Community Development Division RE: Contract Amendment Enclosed is your copy of the contract amendment for your Community Development Block Grant project. Please file this amendment with your contract documents. ck Enclosure CONTRACT AMENDMENT NO. CONTRACT NO. ICDBG- 85 -III -13 The contract between the Department of Commerce and the situ of Meridian is hereby amended as follows: Extended to project closeout. Performance and financial reports are due to the Department on the dates indicated below: Progress reports due with each Request For Funds The foregoing contract amendment is hereby accepted with the understanding that all other terms and conditions of the con- tract will remain the same. Dated: S � day of 198 J ie V . Hawkii s , Dir ctor ' De tment of Commerce G• Signature (ch of cted official) Grant P. Kinasford Typed Name Dated: 30-A day okzLL-,, 198 Mayor Title --740-224-7271 / FORM DA -8 Rev. 4-86 WHITE — State Auditor BLUE — Purchasing Copy GREEN — Agency YELLOW — Remittance Advice PINK — State Auditor then Agency GOLDENROD -Agency Copy ` c 7 AGENCY NAME: F -c � PAY 74; Mexidian St. me,ridian, IU $3642 TO Ir L / 1 01wiw1 EXPENDITURE VOUCHER STATE OF IDAHO Office of State Auditor AUDITOR USE Document No. Pre—Audit Date E B 111981 I Warrant No. CHECK ONE: (,Y) MISCELLANEOUS EXPENDITURE ( ) STATE CONTRACT PI�FCSCHA5E0R_DER r umbiance um–Nd. _. "� MISCELLANEOUS ( ) ENCUMBRANCE REQUISITION LINE No. PROGRAM ACCT. CLASS DESCRIPTION (Include Quantity) LINE AMOUNT AGENCY USE Maj Min Ele Maj Min 1 Ul 4U 1!>1 23us g631 contract ICDW*--85. 111-13 6,5171 42 for 5/20/46-1/30/87 � 1 I 1 I 1 ( 1 i 1 i f I 1 1 I I I I I 1 I I NOTE: Final payment must be accompantea by a receiving copy TOTAL I i 4"� TO STATE AUDITOR AUDITOR'S CERTIFICATE Request is hereby made that a warrant be authorized and drawn in payment 1 hereby certify that the above account is in proper form; that totals carried of the item or items described above. I hereby certify that the items described herepn are correct; that receipts when required by law or regulation of the were ordered by proper authority; that they are necessary in the public ser- State Board of Examiners covering items for which reimbursement is asked vice, that the items have been received and accounted for, and that the ac- are submitted herewith; and that there are funds in the state treasury and count as stated is correct and just. balances in appropriation accounts out of which the same may be lawfully paid. I./ l....e 1 f Date Head of Agency or Institution State Auditor AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE -P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915-1968) JOHN O. FITZGERALD, P.A. THIS FIRM INCLUDES WAYNE G. CROOKSTON, JR., P.A. PROFESSIONAL CORPORATIONS March 10, 1987 Jack Niemann City Clerk 728 Meridian Street Meridian, Idaho 83642 Dear Jack: TELEPHONE 888-4461 AREA CODE 208 Please find enclosed a copy of the most recent letter that I have received from Lowell Hodgkins regarding Power Dynamics along with an attachment to that letter. Very truly yours, A 'A Wayn G. Crookston, Jr. WGC/mks enc. z z' A (�J POWER DYNAMICS March 5, 1987 Economic Development Corporation c/o Wayne G. Crookston, Jr. P.O. Box 427 Meridian, Idaho 83642 In reference to your letter dated February 17, 1987, I am enclosing a copy of the agreement with Anvic that was negotiated May 22, 1986 by Richard Greener on behalf Power Dynamics and Old World Arts, our landlord in Meridian. I am very sure that you were made aware of this agreement at the time, but I will go over it to refresh you memory and bring you up to date. As you know, Power Dynamics held inventory and equipment belonging to Anvic and Anvic owed Power Dynamics approximately $55,000.00. At the same time, Power Dynamics owed rent and other expenses associated with the lease of the building in Meridian of approximately $20,000.00. Dale Stilwell refused to release the inventory to Anvic without the enclosed agreement., Richard Greener received in trust a payment of $10,000.00 with the signed agreement and we shipped the inventory and equipment back to Anvic. Old World Arts retained $5,000.00 -out of the initial payment and Power Dynamics received the remaining $5,000.00. Power Dynamics paid the sum of $2,500.00 to the Economic Development Corp, on 7/18/86. The balance was spread around to various creditors. As a result of conversations between Dick Greener and myself, Dick wrote to Anvic demanding payment. The result was the payment of $5,000.00 which he currently is holding in trust. I spoke with Dale Stilwell on Tuesday for the first time since his return from Mexico, where he has spent,. the winter. I asked for an accounting of the current status of PDI's account with Old World Arts. Furthermore, I suggested that the current $5,000.00 be split between Old World Arts and the Economic Development Corp. He agreed to look into the situation and get back to me. I am awaiting a reply. 71.1 E. Broadway • P_0_ Boat 855 • Merkhan, Idaho 83642 • Phan (208).88a-6700 I also spoke to Don Faulkner of Anvic today. He is still in an extremely tight cashf low situation due primarily to an inability to collect funds owed to them in a timely fashion. He agreed to try to send us another $5,000.00 within the next thirty (30) days. As soon as I know more, I will Let you know. Very truly yours, :POWER DY AMICS, INC, Lowell R. Hodgkin President QQ May 22, 1986 N. WILLIAM , J:. Arnam As L►w AwraWs Cown BMWUN 4W Sounams Dain P.O. Danws=1F Acwoare, GsaacL► 30101 (404) 974-7013 Mr. Richard H. Greener, Esq. FEDERAL EXPRESS 1110 First Interstate Bank Building Boise, Idaho 83702 RE: Anvic-Power Dynamics, Inc. Dear Mr. Greener: Enclosed herewith is check in the amount of $10,000.00, being delivered to you in trust, which check is payable to Richard H. Greener, in trust for Old World Arts, Inc. Anvic International, Inc., owes to Power Dynamics, Inc., certain funds; in turn, Power Dynamics, Inc., owes to Old World Arts, Inc., certain funds. The $10,000.00 herewith tendered is a payment by Anvic International, Inc., successor to Anvic International Trading Corporation, on its debt to Power Dynamics, Inc. The funds represented by this check have been advanced to Anvic International, Inc., by Firetrol, of Raleigh, North Carolina, with which company Anvic has contracted to do certain work. Anvic and Firetrol require some or all of the inventory, materials, tools and supplies shipped to Power Dynamics, Inc., by Anvic on or about August 30, 1985, in order that work progress on jobs being performed by Anvic and Firetrol. Anvic International, Inc., agrees that it will pay to Richard H. Greener, in trust for Old World Arts, Inc., an additional $10,000.00, out of proceeds received by Anvic from sale of such materials by Anvic to Firetrol, over and above the $10,000.00 herewith sent. Anvic International, Inc., further agrees that it will pay to Richard H. Greener, in trust for Old World Arts, Inc., and Power Dynamics, Inc., a further amount of $35,000.00, out of its cash flow. The balance of $35,000.00 will be collateralized by Anvic International, Inc.'s contracts with Firetrol, and amounts due therefrom, but subordinated to positions of banks in and to these proceeds. The two $10,000.00 checks, including the one herewith enclosed, will be payable to Richard H. Greener, in trust for Old World Arts, Inc. The third payment, of $35,000.00 will be payable jointly to Richard H. Greener, in trust for Old World Arts, Inc., and Power Dynamics, Inc. i 9mo K WILLIAM PETTYS, Jit. Arrcom AT 1ww AwrnxVs Cown DUUMMG 43.10 SouTwwz Daws P.O. D"wu F Acwoax, GwuiA 30101 (401) 974-7613 Division of these three payments will be as agreed upon by and between Power Dynamics, Inc. and Old World Arts, Inc. The amounts to be paid, $10,000.00, $10,000.00, and $35,000.00, shall have deducted therefrom the value of any of the items shipped by Anvic to Power Dynamics, Inc., used by Power Dynamics, Inc., or missing or damaged. Before the enclosed check may be negotiated Power Dynamics, Inc., will be required, to inventory and crate and prepare for shipping, and ship, freight pre -paid to Anvic International, Inc., at 3800 New McEver Road, Acworth, Georgia 30101, all of the inventory, materials, tools and supplies shipped to Power Dynamics on or about August 30, 1985, by Anvic International Trading Corporation. Further, I must receive your signed consent to this letter, as well as Power Dynamics, Int.'s, signed consent, and you as well must receive Power Dynamics, Inc.'s, signed consent. Payments of the amounts set forth above will constitute a complete accord and satisfaction by and between Power Dynamics, n Inc., Lowell Hodgkins, Anvic International Trading Corporation, Anvic International, Inc., Don Faulkner and Jes Merrell. Anvic International, Inc.'s, consent, appears below. Yours very truly, illiaa Jr. Attorney for Anvic International, Inc. NWP,Jr. /pd The above and foregoing hereby consented to: Anvic International, Inc. resident Attest v11 .-1 Secretary (Corporate Seal) .Poo' N. WILLIAM PE'ii'YS, JA. ATImurT AT Iww AWTUYf CORNU BUILDING 4350 SOU"MIDs Daws P.O. Dsnwss F AcwosTH, Gsoscin 30101 (40l) 974-7813 Power Dynamics, Inc. by President Attest _ Secretary (Corporate Seal) Richard H. Greener, Esq., in trust for Old World Arts, Inc. cc: Power Dynamics, Inc. c/o Lowell Hodgkins P.O. Box 1424 San Carlos, CA 94070 (Federal Express) AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS GRANT L. AMBROSE (1915-1968) JOHN O. FITZGERALD, P.A. WAYNE G. CROOKSTON, JR., P.A. Jack Niemann City Clerk 728 Meridian Street Meridian, Idaho 83642 Dear Jack: 1530 WEST STATE -P. O. BOX 427 MERIDIAN, IDAHO 83642 THIS FIRM INCLUDES PROFESSIONAL CORPORATIONS TELEPHONE 888-4461 AREA CODE 208 February 17, 1987 Please find enclosed a copy of a letter and attachments I received in todays mail from Don Faulkner, President of Anvic International, for your file. Very truly yours, Wayn G. Crookston, Jr. WGC/mks enc. ANVIC INTERNATIONAL 3800 NEW McEVER ROAD ACWORTH, GEORGIA 30101 (404) 974-7182 February, 10, 1487. Mr. W. G. Crookston, Jr., Ambrose, Fitzgerald & Crookston, 1530 West State - PO Box 427, Meridian, Idaho. 83642 Dear Sir: Attached please find a copy of the Agreement between ANVIC International and Power Dynamics. As of this date, $15,000.00 has been paid by, ANVIL. As we were unaware of any arrangements between yourself and Power Dynamics, nor are we party to such an Agreement, we suggest you deal �•. directly with PDT for payments from them. In terms of the future payments from ANVIC to PDI, we are projecting payment of a further $10,000.00 or so in some 35-45 days, and the balance about 60 days thereafter. These payments are contingent upon our customers payments to us and are therefore tentative in terms of time. Attach. I trust this answers your questions. Yours truly, Don Faulkner, President. OFFICES IN: ATLANTA, GA • PENSACOLA, FLA • TORONTO, CANADA N. WILLIAM PETfYS, JR. ATTORNEY AT LAw AWTREY 5 CORNER BUILDING 4350 SOUTHSIDE DRIVE �\ P.O. DRAWER F ACWORTH, GEORGIA 30101 (404) 974-7813 January 30, 1987 Richard H. Greener, Esq. l 1110 First Interstate Bank Building f� Boise, Idaho 83702 RE: Anvic-Power Dynamics, Inc. Dear Dick: Please find enclosed herewith Anvic's check in the amount of $5,000.00, being submitted pursuant to the agreement of May 22, 1986. Copy of that agreement is enclosed. The check is payable to Richard H. Greener, Attorney, In Trust for Old World Arts, Inc. As of this payment, $15,000.00 has been paid by Anvic. NV ;'/pc cr: Anvic Power Dynamics, Inc. n Yours very truly, 4am etty Attorney for Anvic lay 229 1986 N. WILLIE prr �5. jam. At+Clex" AWWWs Comm .iso spm DW" C'MUCI& Mot (j�p/•) V4 M3 . Richard H. Greener, Esq. 1110 First Iate70s2ate Bank Building Mr Boise, Idaho 83 RE: Aynamics, Inc. nvic-power D RECHVED MAY 231986 cmawas Wft& iM FEDERAL EXPRESS Greener: 109000.009 Dear Mr• the amount of 5 check in a able to you in trust, which check is pane. Edeliveredetowyou is World Arts, being in trust for Old Greener. Dynamics* Inc -9 Richard H. owes to Power DY Old World Inc., Inc., owes to Anvic Internation, power Dynamics, certain funds, in turn. certain funds. b Anvic Arts, Inc., merit Y 000.00 herewith tendered is a Pa Y The $10+ successor to Anvic Intern The Trading Inc., power Dynami International on its debt to ' Corporation, to this check have been allo=�he resented by Firetrol, of Raleigh, do certain The funds represented to Anvic International, company Anvic has contracted Carolina, with work. the inventory, by vire some or all 0r Dynamics, Inc., Anvic and Fire trol require shipped to work progress on materials, tools and supplies 1985, 1n order that Anvic on or about Aug Anvic and Firetrol. performed by it will pay to Richard jobs being p that Inc.,a9rees an additional World Arts, Inc., such Anvic Iinetrustofor+Old Anvic from sale of H. Greener, 000.00 10,000.00, out of proceeds received by $ is to Firetrol, over and above the 510, materials by An will pay herewith sent* further agrees that it and Inc., World Arts, Inc., Anvic International, trust for Old 35,Artst , out of its to Richard H. Greener, Inc., a further amount will be collateralized by power Dynamics, 000.00 and amounts flow. The balance of s5contracts with Firetrol, cash Inc*'s of banks in and to Anvic International, due therefrom, but subordinated to p these proceeds. the one herewithorOld ^ checks, including in trust The two $10.000.00 Greener, will be a able to Richard o 000.00 World will be p Y of $35. enclosed. Inc. The third payment, reener, in trust for Old World oiotly to Richard H• Tn�. payable J Anrl pr1wPT AvnAmi c s . y Arta. Tnc•. i' lay 229 1986 N. WILLIE prr �5. jam. At+Clex" AWWWs Comm .iso spm DW" C'MUCI& Mot (j�p/•) V4 M3 . Richard H. Greener, Esq. 1110 First Iate70s2ate Bank Building Mr Boise, Idaho 83 RE: Aynamics, Inc. nvic-power D RECHVED MAY 231986 cmawas Wft& iM FEDERAL EXPRESS Greener: 109000.009 Dear Mr• the amount of 5 check in a able to you in trust, which check is pane. Edeliveredetowyou is World Arts, being in trust for Old Greener. Dynamics* Inc -9 Richard H. owes to Power DY Old World Inc., Inc., owes to Anvic Internation, power Dynamics, certain funds, in turn. certain funds. b Anvic Arts, Inc., merit Y 000.00 herewith tendered is a Pa Y The $10+ successor to Anvic Intern The Trading Inc., power Dynami International on its debt to ' Corporation, to this check have been allo=�he resented by Firetrol, of Raleigh, do certain The funds represented to Anvic International, company Anvic has contracted Carolina, with work. the inventory, by vire some or all 0r Dynamics, Inc., Anvic and Fire trol require shipped to work progress on materials, tools and supplies 1985, 1n order that Anvic on or about Aug Anvic and Firetrol. performed by it will pay to Richard jobs being p that Inc.,a9rees an additional World Arts, Inc., such Anvic Iinetrustofor+Old Anvic from sale of H. Greener, 000.00 10,000.00, out of proceeds received by $ is to Firetrol, over and above the 510, materials by An will pay herewith sent* further agrees that it and Inc., World Arts, Inc., Anvic International, trust for Old 35,Artst , out of its to Richard H. Greener, Inc., a further amount will be collateralized by power Dynamics, 000.00 and amounts flow. The balance of s5contracts with Firetrol, cash Inc*'s of banks in and to Anvic International, due therefrom, but subordinated to p these proceeds. the one herewithorOld ^ checks, including in trust The two $10.000.00 Greener, will be a able to Richard o 000.00 World will be p Y of $35. enclosed. Inc. The third payment, reener, in trust for Old World oiotly to Richard H• Tn�. payable J Anrl pr1wPT AvnAmi c s . y Arta. Tnc•. ,--N Ax mm A: LAW AW=IW/ Cosh Duamm M soot Dern P.O. DRAWU P Acwam Gsoacv► 30101 F (4") 974-7833 Division of these three payments will be as agreed upon by and betMeeA Power Dynamics, Inc. and Old World Arts, Inc. The amounts to be paid, $10,000.00, $10,000.00, and ;35,000.00, shall ntodPower Dynamics, Inc.1,ausedlue obyaPower of the items shipped by Anvic Dynamics, Inc., or missing or damaged. Before the enclosed check may be negotiated Power Dynamics, Inc., will be required, to inventory and crate and prepare for shipping, and ship, freight pre -paid to Anvic International, Inc., at 3800 New McEver Road, Acworth, Georgia 30101, all of the inventory, materials, tools and supplies shipped to Power Dynamics on or about August 30, 1985, by Anvic International Trading Corporation. Further, I must receive your signed consent nc. 8, igned to this lyouaaswwellamustwer receivemPowerl andDynamic:9 Inc.'s, consent, a y signed consent. Payments of the amounts set forth above will constitute a complete accord and satisfaction by and between Power Dynamics, Inc., Lowell Hodgkins, Anvic International Trading Corporation, Anvic International, Inc., Don Faulkner and Jes Merrell. Anvic International, Inc.'s, consent, appears below. Yours very truly, 4 N. s. Atyney for Anvic International, Inc. NWP,Jr./pd The above and foregoing hereby consented to: Anvic International, Inc. b President i Attest Secrety (Corpora a Seal) x _.�..._ .. - ti•..r.,.n,....r.-"..--'....+Y.:....'„'r".1��A�;'L"�:�t'�i,YXDr�:. •'s�*�t1.*��7 `,•},�„ _ 'Y-+.._�-.�':�,.,.�:*�. ---- . . • • ar.wUw a r. • & rI )I►. ATmomATIAW ' • �Mtlf�� Comm DunbuIO 4M .SOUTIMM6 Dens ..: P.O. Dr NIM F Acma� , Gomm30101 rr \�/ 974- i"�rirr i Power Dynamics Inc. cc: n Power Dynamics, Inc. c/o Lowell Hodgkins P.O. Box 1424 San Carlos, CA 94070 (Federal Express) by President Attest A4 N'35 (Corporate Seal) Richard H. Greeq., in trust fT,. Old World Arts, 4MEP i D IAN CITY COUNCIL F �Z _-,JARY 2, 1987 PAGE 4 2 Permit requested by the Applicant for the property described in the application subject to compliance with all City Ordinances and Codes, particularly, as they relate to sewer, water, building codes and fire and life saftey codes and that a Building Pe-rmit has to be obtained within one year from this approval date. Motion Carried: Three (3) Yea: One (1) Nay: Item #2: Pre -Termination Hearing: Water/Sewer/Trash Delinquencies: Mayor Kingsford, You have been informed in writing, if you choose to, you have the right to a pre -termination hearing before the Mayor and Council, to appear in person to be judged on facts and defe4d the claim made by the City that your water, sewer and trash bill is delinquent, You may retain Counsel. Is there anyone in the audience who wishes a pre -termination hearing? There was no response. Due to their failure to pay their water bill or to present any valid reason why the bill has not been paid, their water shall be turned off on February 10, 1987. In order to have their water turned back on, there will be an additional fee of $10.00. They are hereby informed that they may appeal or have the decision of the City reviewed by the Fourth Judicial District Court, Pursuant to Idaho Code. Even though they appeal the water will be shut off. The Motion was made by Myers and seconded by Giesler to approve the turn-off list: Motion Carried: All Yea: :Mayor Kingsford, the amount of the delinquencies is $5,217.93: Item #3: Approve the Bills: The Motion was made by Myers and seconded by Tolsma to approve payment of the bills: Motion Carried: All Yea: Department Reports: Mayor Kingsford, the next meeting will be held on Tuesday February 17, 1987 due to Monday the 16th being a Holiday. Mayor Kingsford read a Proclamation declaring the week of February 8-14, 1987 as Vocational Education Week and urged the residents to support the Vocational Education Week. City Attorney, I petitioned the Court for Attorney Fees in the Amyz matter and they granted a $4,000.00.plus some other costs. n MayoSr Kingsford, one other thing, I think the Council is aware of the status of the Lowell Hodgkins, Power Dynamics delinquency and other-- things, we have just ungone a preformance review by the Department of Commerce, I think it is very apparent that we need to proceed with some`action on this and have the Attorney look to what we need to do MERIDIAN t'ITY COUNCIL fEBRU'ARY 2, 1987 PAGE # 3 to try and recover funds from Mr. Hodgkins. If you would Mr. Crookston if the Council agrees, find out what kind of money the City would be spending. We need to proceed on this, if there is no problem with the Council. It was the concensus of the Council that the City should proceed on this item. Being -no further Business to come before the Council the Motion was made by Myers and seconded by Tolsma to adjourn at 7:42 p.m.: Motion Carried: All Yea: i APPROVED: GRANT KINGSFORD, MAYOR ATTEST: n Jac Nieman , City Clerk n pc: Mayo & Council P & Z Commission Atty, Eng, Fire, Police, Ward, Stuart Kiebert, Hallett, Mitich Valley News, Statesman ACHD, CDH, NIMD,ACC, ACZ Mail (1) File (2) PO E ` DY1TAAffCS Meridian Economic Development Corporation c/o Wayne G. Crookston, Jr. P.O. Box 427 Meridian, Idaho 83642 Reference: Progress Report Gentlemen: January 29, 1987 Dining the past thirty days I have tried in vain on four differe t occasions to talk directly to Don Faulkner, president of Anvi International. I have talked to Jesse Merrell, their vice pr sident. He tells me that they have received very little money ( bout $10,000) from Firetrol, and therefore have not have funds tc pay Power Dynamics as scheduled and rescheduled. A meeting between Faulkner and Firetrol was supposed to have taken place within the last several weeks to resolve tkis problem, which is, why I have been trying so hard to get in touch with Faulkner. Since he has not returned any of my calls, I have to assume that he is avoiding me. I further assume at this late date that we are not going to get paid unless we find a way to legally force the issue. In this regard, I have attempted to get in touch with Boise attorney Dick Greener, who drew up the contract on behalf of Dale Stilwell and Power Dynamics with Anvic. This is the contract that spelled out the terms of repayment as a condition for the release,of Anvic inventory last year. I am trying to determine what our legal recourse is at this point. Specifically, I am hoping that we can attach all Firetrol funds earmarked for Anvic until Anvic's obligation to Power Dynamics is satisfied. Unfortunately, Dick Greener was on vacation last week and has been in court all of this week. I have discussed this with another attorney in his office, but their is little hope of getting.this resolved until Dick is free to devote some time to it. Hgpefully, I will know more about our legal position next week. We have shipped ten (10) drives to Drive Technology and been paid $3;000. This is barely enough money to complete another batch fqr shipment, if that is the route that we will take. I am still t lking to Cleveland Machine Controls about taking over the product If this does not work out in the next few weeks, I am going o approach Drive Technology concerning buying out the rights to the product along with all product related inventory for a flat sum of $25,000. I am simply not in a position to produce product myself in any sustained manner. 711 E Broadway 9 P.O. Box 855 9 Meridian. Idaho 83642 • Phone (208) 888-6700 n As usual, I do not have any definitive answers for you. It does appear, however; that even if we get paid in full by Anvic and receive the asking price for our single phase drive, we are still going to come up way short in satisfying our obligation to the Economic Development Corporation. Therefore, I believe that it is time for me to seek legal advice relative to limiting my personal liability in this matter. At my age, unless my earnings improve dramatically, such an obligation could leave me financially destitute right into the age of retirement. I will write again as soon as I hear from Dick Greener. I will also keep you informed as progress relative to the single phase drive. Sincerely, POWER DY ICS, INC. i' z 10 Lowell R. Hodgkin President AMBROSE, FITZGERALD Fl CROOKSTON ATTORNEYS AND COUNSELORS GRANT L. AMBROSE ( 1t415-1968) JOHN O. FITZGERALD. A. WAYNE G. CROOKSTO )R.. P.A. i f Don Faulkner Anvic International 3800 New McEver Road Acworth, Georgia 30101 RETURN RECEIPT REQUESTED 1530 WEST STATE -P. O. BOX 427 MERIDIAN, IDAHO 83642 THIS FIRM INCLUDES PROFESSIONAL CORPORATIONS February 3, 1987 RE: Power Dynamics and Lowell Hodgkins Dear Mr. Faulkner: TELEPHONE 888-4461 AREA CODE 208 I represent the Economic Development Corporation of the City of Meridian which loaned $250,000.00 to Power Dynamics and Lowell Hodgkins. It was my understanding that you were to pay approximately $60,000.00 to Power Dynamics. As an agreement between the Economic Development Corporation and Power Dynamics it was agree that the Economic Development Corporation would receive approximately $30,000.00 of the money that Anvic International was to pay to Power Dynamics. Would you please inform me as to the status of your payments to Power Dynamics and when they may be expected to be sent to Power Dynamics? Your Iooperation in this matter would be greatly appreciated Very truly yours, Wayne G. Crookston, Jr. WGC/mks cc: Gloria Mabbutt Department of Commerce Jack Niemann /0-\ _.--_t�L.'v.Jt-'- _ :—L .:-i—.:.. _�a�— ....i - - '-'� .�.� .� •- � ...._ —.. __..�....� _ 4.i � - - - - .-f:.1...a may._ . �_ _ � .� _ -.� ._, ._. — _ . — — — — — — ; — — -- — — — — — — — — — — — — — — — — — — - — — — — — — — — — — LLA OEg O M or � � C3 ! ----------------- ��- - - - - - - - - - -- 00_cn y 00, 0) corf m, N _ 17 — — — — — — — -� — — — — _ — — — !! — — — _ — — — e LLI W'3 cc n �+ tAj { = Z2Gcm kn 1 { ' 111 U11 �,.1 ,JL- ll N� C'4 f, -- -- ; ----- _ _ _ Is 00 FIs = I (off _ { ; l�1 9 { �ry oo 1 I Quj = IT" ll Ql, d , ! d �It 0 S Ci ! i t�0i{ cx In CICIN Ln G 1 O 3 ma cmm = qi Q(I i l -LA—,= ; ' _ = r -ii!' N = I N rit �o o�m v H�� ¢ v ; f `�i 5 1 1 C,4 1 1 I i 1 1 �1 N I -I —i -NI{ I.- LL. 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VI It illn� • � � Q CQ1 � ! .a � ; U � 1 � � � or low is M au Iv a �r Y cz$ Y � i (own "PS � Y m L at O J b4111- ul N L v 13 D ++ D Cy tL O 0.1 Q ul J A a/ m w D v �o al u U2 u N A a Id o�� un 8 UV CU at O > N Q b L ✓ D 8 1/l L A i O LIU 7 r 1' Ya a'1 aa/ („ = 11 Y C i ✓ N 0 U �~ egg � �$8 �g .c. ti ✓ L Z G q L J LJ '® 'ACV' -A iN,Clty CIOOM a -, • -t r3 I,eas,.rer �r; �: + 0 STUART, Warer WnrksSupt. - r t. c3 CROOKSTON ;O Attorney .PL HARD, Waste Wase Supt. KE 4N+ BOWERS, Fire Chief RONPO;�TER,Police Chlet -- GARY SMIT-+, rlty Engineer illlR OF TRE.40TRE 1'ALUY 4 (-wud Place +o LivP CITY OF MERIDIAN COUNCILMEN BILL BREWER RONALD R TOLSMA J. E. BERT MYERS 728 Meridian Street ROBERTG ESLER MERIDIAN, IDAHO BOB SPENCER 83642 Chairman Zoning d Planning Phone 888.4433 GRANT P. KINGSFORD Mayor January 30, 1987 Gloria Mabbut Department of Commerce State Capital Building Room 108 Boise, Idaho 83720 re: ICDBG-85-III-13 As the Department of Commerce is aware the repayment of the loan funds on this Grant are now in arrears. The City 1_4 of Meridian is in the process of having the City Attorney start proceedings to bring the loan current and recover the loan funds made in conjunction with this Grant. Sincerely, Grant King fo Mayor City of Meridian, ID. 83642 pc: Attorney Fe 10 1 rti January 29, 1987 Mr. Dave Curtis JUB Engineers, Inc. 250 South Beechwood Suite # 1 Boise, Idaho 83709 re: ICDBG-85-III-13 The Economic Development Corporation of the City of Meridian by this letter is asking that the agreement with JUB Engineers, Inc. to administer the above Grant be cancelled. This request is due to the fact that all the funds which were allotted for adminstration have been expended at this time. If it is agreeable with JUB Engineers, Inc. to cancel the agreement, please forward the records you have to the City of Meridian for the Economic Development Corporation. Sincerely, -Fford Grant Kingsford President Economic Development Corporation 728 Meridian Street Meridian, Id. 83642 pc: Attorney Fife A1,.115R0SE, FITZGERALD 6r CROOKSTON AI ORNEYS AND .. jUNSELORS It10 WEST STATE -P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1415-1968) JOHN O. P/TZOERALD. P.A. THIS FIRM 1NC`LUDBS WAYNE 0. CROOKSTON. )R.. P. i. PROPRSSIONAL CORPORATIONS j January $, 1987 Lowell Hodgkins Power Dynamics, Inc. P.O. Box 1424 San Carlos, California 94070 TELEPHONE 888-4461 AREA CODE 208 I RE: Meridian Economic Development Corporation Loan to Power Dynamics and Personal Guarantee by Lowell Hodgkins Dear Mr. Hodgkins: I have been requested by the Development Corporation Board to contact y u pertaining to the above. You hav promised the Board on several occassions to provide the Board anaccountingof the loan proceeds. To date we have not received such. Also, you were to have regular reports to the Board, through me, and I have not received one since November 1, 1986. Please keep these up to date from now on. Additionally, your November 1, report indicated that the Economic Development Corporation would be receiving $2,500.00 in December, $10,000.00 in January, and $15,000.00, in February. The Corporation has not received the $2,500.00 you indicated would be due in December. Please let me know what the status of these payments and your present sales are. You are additionally reminded that you personally guaranteed the Power Dynamics loan and the loan is significantly in default. Your prompt attention to your previous promises would give some assurances to the Board that measures need not -be taken regarding the personal guarantee. Very truly yours, Wayne G. Crookston, Jr. WGC/mks cc: Grant Kingsford David C rtis JI n, CONTRACT AMENDMENT NO. 2 - CONTRACT CONTRACT NO. ICDBG-85-III-13 The contract between the Department of Commerce an 4 UWAMM City of Meridian is hereby amended a An extension to September 30, 1987. Performance and financial reports are due to the Department on the dates indicated below: April 15, 1987 July 15, 1987 October 15, 1987 FINAL The foregoing contract amendment is hereby accepted with the understanding that all other terms and conditions of the con- tract will remain the same. Dated: 12th day of January 1987 James V. Hawkins, Director Department of Commerce .04�v Dated:% day of 198 Signature (chief el ct d official) --1�-- Grant Kingsford Mayor of Meridian Typed Name Title 4 O� John V. Evans State Capitol Building GOVERNORy 0 Room 108 ,_4eorge F. Tway ��* . Q Boise, Idaho 83720 DIRECTOR �,_ _e 14 Phone (208) 334-2470 DEPARTMENT OF COMMERCE December 22, 1986 MEMORANDUM TO: Mayor Grant Kingsford City of Meridian FROM: Gail Atwood, Office Coordinator ,41-0"04L Attached are two copies of an amendment to extend Meridian's Community Development Block Grant contract ICDBG-85-I11-13. Please sign and return both copies as soon as possible and a completed copy will be returned to you. If you have any questions please don't hesitate to call our office. Attachments IDAHO J- U -B ENGINEERS, INC. -50 South Beechwood Avenue, Suite I Boise, Idaho 83709 Telephone: (208) 376-7330 STATEMENT ACCOUNTOF Mr. Grant Kingsford, Mayor City of Meridian 728 Meridian Street Meridian, Idaho 83642 FOR PROFESSIONAL ENGINEERING SERVICES February 10, 1937 Re: Meridian RLF - ICDBG 1985 Statement No. 16 TERMS: Net 10 days; interest will be charged on all amounts unpaid at the maximum applicable rate allowed by law. DATE J -U -B PROJECT NO. SERVICES, EXPENSES, ETC. SUBTOTAL TOTAL 1-31-87 14622 Interim statement regarding administration of the Meridian Revolving Loan Fund. Services were for administration and were performed furing the period of October 25, 1986, through January 31, 1987 67.46 This statement been authorized and approved by: a, vrve David L. Curtis, P.E. If you have any questions regarding this billing, please contact me. Plus: Statement No. 10, dated June 4, 1986 2349.71 Statement No. 11, dated July 1, 1986 811.05 Statement No. 12, dated August 7, 1986 2394.22 Statement No. 13, dated September 9, 1936 592.79 Statement No. 14, dated October 9, 1986 138.96 Statement No. 15, dated November 10, 1936 300.36 7137.09 TOTAL AMOUNT PAYABLE $ 7204.55 I n DATE: November 1, 1986 TO: Economic Development Corp. c/o Wayne G. Crookston, Jr. FROM: Lowell R. Hodgkins At long last I have received some projections and promises from Anvic. (See attached copy.) If these projections are met, we should see $10,000 in December, $15,000 in January, and $20,000 in February. This would clear us up as far as Anvic is concerned. As per our original agreement, EDC will receive $2500 out of the first $10 000. Our further agreement was to pay EDC $25,000 out of the remaining 1$35,000 owed by Anvic. Since it appears that this will come in two (2) payments, we will pay $10,000 out of the first $15,000 and $15,000 out of the final $20,000. I have finally shipped and invoiced the first ten (10) drives to Drive Technology. This only amounts to $3000.00 and I will not be able to pay EDC anything out of these proceeds since I will need the funds to produce more. I sincerely hope that I build this up to a reasonable monthly income. If not, than T will have no other source of funds to repay this loan. I will keep you posted with further developments. n ANVIC INTERNATIONAL ,3800 NEW McEVER ROAD CWORTH, GEORGIA 30101 (404) 974-7182 October 27, 1986. Mr. L. Hodgkins, P.O. Box 1424,; San Carlos, California. 94070 Dear Lowell: Attached please find a for the next twelve months. copy of our projected Cash Flow As you can see, payment of ANVIC debt to PDT (shown as "Shareholder Loans" should be complete by the end of February. These projections are as realistic as we can be, and yet still are dependent upon payments by Firetrol to us for the equip- ments supplied by them. It is worth noting that contrary to previous correspondence, Firetrol did not pay the $10,000 we sent PDT. That money came from ANVIC's normal—cash flow. Other than some labor which we provided to Firetrol, we have not yet received any funds for inventory materials or for production shi ments. Shou d you have any questions on these cash flows, please advise me. Yours truly, Encl. �V 10 Don Faulkner. OFFICES IN: ATLANTA, GA 0 PENSACOLA, FLA • TORONTO, CANADA ` A!)VIC CASH FLOW 1996/87 Rev. ` 'CT:;SEF 1-"VEMEEF DECE":SEF JANUARY FEER.•ARY MARCH APRIL CASH ON H? (37.500.04) ;35,??;.?0) (11.467.94) t',4 „?` „0 1411610.50 $70,441.70 111,116.90 CASF. FECE: Ia)M'c:GGr" __ce,,ve.i $!7, 100. 01) s1'C,?nn,00 i91,00).00 1177.9`_l1.00 3;9.4'0.00 118,400.00 (blaha[f�+?.4Qf 3('.40 l:1.0U,tl±�.�JtO...t�Ltl(a1Q.,:QJik.S)1/ /0.010 /0.00 (c)Fir_tr.; Loan 10. 00 39.00 0110,^n^,00) 1121),01)0.00) (310,000.00) 1M 0 14.00 l+),ntf-, locule l:,t<_0.00 1:.16).00 /1,14(,00 1i, 160.40 fl.160.00 ft,16},0 tI.10,00 (e)?icte =e__ivahle 12f0.00 0 1;:`•:.00 S6`.000.00 S25MO 12`0.00 (eJSani �- ;3 50.0? iSS,GiU.00) 1f 10.000.00) ($?01000.07) (130.000.001 (f 1:.(10(.00} 450.400.00 TOTAL CASH »VAILASLE3`1),?10,;,0 t5?.'84.10 tt02,K2.='0 31'6144`.30 51:0.970.50 575,2".70 t91,016.90 i OPERATINE EXPENSES (a)Materiad 3:.1.5.!0 52,1.5.00 13;;`.00 18,OO-1.CO 16,2`_0.00 37,000.00 $23,150.00 (b)nrces waae5 3^1.13G.00 19,1'4.00 t9, !3^.UU 110.000+.00 47.500.00 17,500.00 17,`00.00 (c)Pavroll Exoenses 34.200.90 1;.200.?0 341"M ,?0 14,605.87 13.791.20 33.791.90 13,181.90 (d)Labor 3'.600.00 13.E00.40 t:, 600.011 $3,960.00 t3,9 --0,U0 11.960.00 $3.960.00 (dd)Outside Libor t4.570.00 13.00 13.000,00 t7,000.00 15,500.00 55.500.00 15.500.00 (eJSuoa1i25 1150.0(1 1150.00 =1`(,,(10 tI54.00 $1`.v.00 CE0.00 $150.00 If)f.eoair=_/Msintenenca j 125.00 325.00 12`_.00 $2:.00 325.00 12`.00 325.00 (gIrGV2fti51ng 30.00 1C. x;0 In.00 $0.00 1;.00 $0.03 /0.00 (h)Autos/Trucks 5380.00 sT80.ri0 1'90.00 $380.00 5324.00 1780.00 - $380.00_ ($)Accounting/legal $0.00 $0.00 14.00 (500.00 $0.00 $0.00 40.00 (j)Telephone s/50.00 5750.00 $7.F0.00 $750.00 5750.00 5150.00 $750.00 M Utilities 3200.00 1250.00 5257,00 t250.00 6250.00 1.50.00 t250.00 (1)Insurance 10.00 $1,400.00 10,00 $0.00 10.00 10.00 11,500.00 (o)Taxes 1500.00 $0.00 10.00 $0.00 10.00 61.000.00 10.00 (n)Interest 11.540.00 52,000.00 111900.00 11,800.00 $1,300.00 11,04.00 f1,1�0.00 (o)Travel i2.000.4xJ 11.250.40 $1,000.00 t2,000,00 12,500.00 14.000.00 53,000.00 p)Coaeissions 10.70 13,000.00 10.00 36,800.00 $0.00 10.00 $0.00 -(q)Rent 17.4`4.00 $3,050.00 13,050.00 (;.050.00 f',,0f0.00 0.0%00 $3.050.00 (rM .zcellaneou5 1500.00 $500.00 (`00.00 3500.00 :500.00 f;00,00 1500.00 5ubtctal 13.,650,90 !34.810.90 129.010.94 $45.771.80 5361196.80 t39.146.80 154,646.80 ($}Note Principal Pav 32,462.00 1_•fl). 00 ="`1.00 121).2`0.00 12`0.00 $250.00 1250.00 (t)Accounts Payable 0 1.473.00 12°.561.00 138.951.00 128,563.00 $13,730.00 114,147.0 121.200.00 ASSET PURCHASES (u)Autos/Trucks t `.4,lA 3^_50.70 1.`.::.00 t?50.00 f,"!.00 t250.04 t2`•0.00 (v)Machinery/Equiwrient t0.^4 10.00 11;. 14.40 $1).90 S2`1).0? 5:.00.00 (w)Furniture/fi�.tur¢s ta.0 1:. C1: 1':.:11 5(•,(•11 4'.„ 0 t%0A to. (10 =_A -X71.9, '-ASF FOSITIO11 i ,i° c ".E^. '31.:E7,ar1) 3'.,2?`_.'_0 111.412.°9 5110.443..10 $211.2116.90 f!4.`?0.10 ESSENTIAL OP. DATA (A)SaleS VGIUMe 3?;.600.00 !?7.(100.00 t1.?.1')44.40 $116.700.00 1.0.'°0.00 5!9.3`_0.00 tA,'`.(:,00 Femvau12 11a77 i, '.; '?4.) 1'4.1)0 t-?(B)Accants ,•;?s,1! 3'•...'=.90 ( Mad Debt 5U. 0; (1 50.00 5:0.00 ;0100 0.00 10.00 14.00 IGJin`:ert�r� 1:'_'1,:100,1, 31251040.00 sl?5,000.00 $122.000.00 3121,000.00 $121.000.00 $120.000.00 000.00 1`?.00.00 (45.400.00 145,000.00 591,000.00. (F)F e-_ t).i%( 30.00 $0,00 10.70 It. 00 50.40 10.00 tG)n�ccu-,:s �avabie 3:44.627.40 1,•,1'1;u.0�1 $121.00:1.00 1.44.000.00 (H)Deer2-iatior, 38;0.,)0 $900.07 3800.)4 1900,00 15::`),00 t?;C.00 i. nAGf� :iGf, ,r. 1,,).�Jl r 4Y:'.i. 5i _, (, ! � .0 ,e., f: ,.G4 ! .. »°": ?0 v' 14,'.00 t4°0.40 Note; 'at=.ri6! C_st = literi31 Caslh eut + Change in Inventory and Work in P.►Dere=_s + iE-x_353 in 11at.rial Acc.ur.te F,r3tle `,�'_=., _ _�.. l: .°_.,(� 3._,?98.40 1-.'7`_.00 !°7.000.00 52.`'.00 $4.`00 40 fi°0.40 ` Uct !, "AY JUNE JULY AUGUST SEPTEMBER TOTALS . s:,0. 4.30 t124,806.`0 $62,369.70 59,:82,50 CASH ON HAND CASH RECEIPTS ;',:J•,��7 $?:^.�Or,,pO s'?,400,0!! '0. 00 f?.6`0.0(1 !1.!3..450.00 W Accounts Received s0.CIt 10.00 $o.00 L�ii95.:0�.Q4i�111�1X�3d0111EdC . 5(1.01 i0.�i 10.00 S'i.0(' (54(+,000,001 lc►Fir:tro! t:ate 31,Io.04 Or 31'.,?20.00 (dll tare=_t lnc3me i2t'.''. 3?°!?,O0 i2`_0,r(, 167.750.04 ie)l;_!e Fe__:aable ..i 1),110.00) 1:. .f,(f`_�,111-(1,440.00) (:)G3,.,- L33G3 .. :. s'S" 65C,�4 3!6'..ci.`_'� 1:_ ...10 32`4.14..50 TOTAL Cr'.=k �':=.lLe5Lc OFERAT!N EYFEWFE-F 1(i 65.574.(14 1'3`.62`.40 � r (W.-terial t7. Cc ; r'." .,r.r #'.` ..°� s7.°04.00 1?,`OO.1)0 39',390.00 (b)Gr_ss Wa es s',781.E0S'.:.7Fi.F? 642.46x.90 (c)Fayra:l ExcenCes $',760.00 3,6,440.00 ld)Lsbar 0(i 3`.5'10.01; 11.,500.00 S5, 500.00 f5,500.00 (!7,500.00 (dd)GutEide Labor (150.00 1!`0.00 51`0.00 6154.00 (1`•0.00 3!,870.00 (e h oplies 32`,10 325..00 #25.00 5175.00 525,00 $300.00 Resairsi!taiatEnance $0.00 50.00 10.90 S0,+,0 10.00 $0.00 lg)Aevartising . 1380.00 $'30!00 1780.04 QP -0.00 1380.00 $4,564.00 (h)AL. taElTru ck.s 40.00 SU'00 $0.00 $0.10 10.00 1800.00 (0.4c:ounting/Legal $/50.00 $'50.00 17`0,(12 175?.04 $75^.00 $9,010.00 1;)Telenhone $2:0.00 12`.(1 00 $2°4.00 $2`0,00 $2.`0.00 1,9`.0.00 M utilities $450.00 $x50:00 1450.00 5,50,00 1350.00 f5,19.0.1 (1)Ir..E-arance 10.00 $1o,000.00 $0.00 $0.00 $10,000.00 (21,500.00 (Wixes 11,150.00 s1,150.00 $1,150.00 $1,150.04 31,150.00 116040.00 (nllnterest $2,500.00 32,500.00 $',000.00 $3,000.00 $4,000.00 $31,550.00 (olTravel $0.00 10.00 6.,500.00 $5,000.00 65,000.00 122,300.00 (o)COAX150011s $3,050.00 $3,050.00 33,050.00 $3,050.00 11",050.00 136,640.04 (q)Fent $500.00 $500.00 1500.00 $00.00 1500.00 $6,000.00 lrlMiscellaneous $40,946.80 $66,046.80 599,446.90 $110,946.80 $103,146.80 $693,568.90 Subtotal i'21M OO 5950.04 3-1,' � 1950.00 118,950.00 $46,012.00 (s)Note Principal Pay sI,00 1500.00 $00,00 (500.00 $500.00 1167,118.00 (tlAccounts Payable ASSET FURCHASES $250,00 $250.00 $.50.00 12`0.00 $250.00 $3,000.00 (u)Autos/Trucks $100.00 $100.00 1!1110.00 :150.00 6900.00 WMichinerv,Equ!OiEnt $0.00 $0.00 10.00 10.00 175.00 (w)Furniture/Fixtures. $43,046.80 167,846.20 1101,24tL 1112,?46.84 112?,796.00 TOTAL CASH OUT 70 S 14,"l�."� 3:..._.... 35 �32,9p it"' ?'5.10 CASH POSITION ESSENTinL CF. DATA .R5 1_90 0.00 +fir •� 5=,.._1.C� .F ''•�i1,41 S �..:,.. ( :j 00 r, i..ti,6 .,44 6 '(ft O1 9., a. 1.1. ' ( li 1,,I1E.1(3.04 C o1 („I.,ales Volume $316,484.00 16',,: .00 $64,ES4.00 $„0,B%. 00 112^x,194.00 (B)Acc.-unts Receiva5le $0.00 $0'o 50.00 10.00 61l2.`.00.00 $1..150,00 (Wad Debt 5120,000.00 $120,000. •0 $112.11M'jo $!12,000.%0 31x;5.000.10 (WInventory 159.000.00 151,000.40 W'1000.00 190,000.00 5.0.000.00 (E)Wark in Progress 50.00 i0.00 $0.00 $0.00 $0.00 (F)R and D S-145,000.00 $217,500.00 116`,000.00 $204,000.00 $104,500.00 (6)Accounts Payable $800.00 SE00.00 5800.00 $800.00 1800.00 $91,600.00 (H)Deprociatien 6450.0:1 5410.0^ 6450.00 s450.00 (5.400.00 M Atcrtization �1 $136.:00.00 ::10,(A 3 At. GGG.:O 17x,.00.00 $25,004.00 $401,1'5.00 NVIC INTERNATIONAL 800 NEW McEVER ROAD hCWORTH, GEORGIA 30101 (404) 974-7182 October 27, 1986. Mr. L. Hodgkins, P.O. Box 1424, San Carlos, California. 94070 Dear Lowell: Attached please find a copy of our projected Cash Flow for the next twelve months. As you can see, payment of ANVIC debt to PDT (shown as "Shareholder Loans " should be complete by the end of February. These projections are as realistic as we can be, and yet still are dependent upon payments by Firetrol to us for the equip- ments supplied'by them. It ig worth noting that contrary to previous correspondence, Firetrol did n t pay the $10,000 we sent PDI. That money came from ANVIC's normal cash flow. Other than some labor which we provided to Firetrol, we have not yet r ceived any funds for inventory materials or for production shi ments. Should you have any questions on these cash flows, please advise me, Encl. Yours truly, Don Faulkner. OFFICES IN: ATLANTA, GA • PENSACOLA, FLA 0 TORONTO, CANADA - ANVIC CASH FLOW 1986/87 Rev. r SC I DSER NPVEMEEF OECE":5E!, JANUARY FEEC_!ARY MARCH APRIL CASH C(t !!- ($'.54x),:�)) ;!`,r25.?0) (3;,46'.c0) 1'4,:?`,?0 $41,610.50 $70.441.70 !21,216.90 CASH RECE: �\la, �^c: ce. . ._ � £.". ... .. !9.40.00 $18,4(10.00 lLl"sha[FG ;cer tains0) ,L 34., 1!1..0.0) ;'xOaL!0110,.;' 10.00 50.00 (c)Fire4r-: Lo an 14!,410 1 ,G0 '$10,`10`.',00) 11214,0C'�,001 1$10,000.00► s).ti0 3.,,00 1:,161,05 si,ici.,00 11.160.00 11,160.00 $;.;6.Q:x S1.tE{1.00 (e) GtE KiIrEF512 1215 0 `hGO 16c:. VGA .0G 5250•20 C`.1, 10 (310.000.00) 4201000101) Mo. OV. 00': (s15,Cr,^,(10 150,!110.00 TOTAL CASu-VAILAKE 0.?10,10 3159.324.10 510" 9__._0 31'6,44`.30 31_0,970.50 515,".5'.70 131,x,,16,90 OPEEATINE EXPENSES (a)Materi.l 3,:25.?0 32.125.00 1,7`,00 $8,000.00 1612`_0.00 $1,0110.00 523,150,00 (06ross Meow l;. l 1.0;1 i?,;'U.QU 19,13',00 114?.000.00 57.500,00 V.EOC.00 11.00.00 } (c)Payroll Exoense=_ 5».2 1»,2G'1,?0 !4.200.,?0 14,606.e1 53.75 MO 13.791.90 13,781.30 (d)Labor i'., E ir;, ; x 5'. 2(1)..0 13, 600, 00 53.960.00 13, 92G, 00 S?.960.00 511.930.00 (dd)Outside Labor 14.`,,11:,;•) 3 G 33,41x.,,00 1',000.01 $5,54x).00 $5,500.00 15.500,00 i; 1 !. 0 0 SU. 1_J $1,,:.01 5..x.00 1..,VA. On SI50.00 If)E'easir_iMalnt2n:'ca 325.00 1=`.00 1==.00 12`_.00 12'.00 12`.0^ 125.02 (a)rxvert +sing 10,00 10.;0 3".00 $0,00 1,.00 €0.00 10.00 th)Autos/Trucks $380.00 3'30.00 £:90.00 1390.00 132!'.00 1780.00 Sie0.00 (:1Accountirg/Lebal $0.00 $0.00 50.00 1v.00.00 $0.00 $0.00 10.00 (j)Telephone $150.00 3750.00 S7.'0.00 6750.00 3150.00 S750.00 $750.00 M Utilities 1200.00 1250. C0 1_5;.00 €250.00 €250.00 1250.00 5250.00 (1)Insurance $0.00 51,400.00 $0.00 $0.00 $0.00 10.00 $1.500.00 (s)Taxes 1500100 10.00 $0.00 $0.00 $0.00 11,000.00 $0.00 (n)Interest 31,540.00 $2,000.00 $1,200.50 31,800,00 $1,500.00 11,300.00 51,150.00 (o)Travel ;"_,000.00 i1.250.00 51.200.00 s?,000.00 1.,00.00 $4.000.00 $3,000.00 (p)Coveissions 50,00 53,000.00 10.00 16.800.00 10.0 0 30,04 10.00 (q)Rent 1:.,!1`_1.00 5;,050.00 37,050.00 11.050.00 $31050.00 $1.050.00 $3,050.00 (r)Mi:cellana us 1550.00 $500.00 1`00.00 1500.00 €500.00 €`00.00 3500.00 Subtotal 13=,650,90 534,810.90 329.010.90 M.771.90 535,19.80 139.146.80 154,645.80 (s))tots Principal Pay 12,462.00 1.5:).00 -"_`111.00 120.2`0. G0 $2`_0,00 1250.00 S2510. 00 (tlAccounts Payable 1211. 473). 00 52°.561.00 f3e.9:;.00 128.56..00 1!3,730.00 114.140.00 521.200.00 ASSET FU&CHASES (u)Autos/Trucks i_ f i'-150. .10 s_•_e,00 3:.00 12CO.01 f29.00 (v)Nachinery/Equioscnt to. tl 31,00 !';.t. 1!.,110 V At;A0.00 (w)Furniture/Fixtures 50, GO $0',0;1 5':.x;, 1(•.110 5;,;^ 5^.00 f0, 00 TOT" CmE IT :, _ l2x�.?11.?, , cr. _. „a ?i s.r;.-...c0 1`.4.0'1.9:1 3'5.;45.84) '-A'-ASF. FO:,TICG r .5,r - 51,,S1 1.?r)•r 3'4,^?.,'11 141.-11-M0 1,0.44;.". 0 $211.411L.90 n1.115.90 f!4.580.10 ESSENTIAL OP. DATA (A)SaleS Volute 5'.6`)0. CC W.000.00 i`_3,100,(10 5116.700.00 $20,'°0.00 $!9.J`_11.00 €:.?`x'.00 (B)Actcunts P2cEivatiie 31dr1,,.4,.x),?.4.0! !;_.;_.,00 11 ;._^'4.,)O 542,,74,1!0 1.., 3..1 (Mad Debt 0,00 SO100 3250.04 s4.00 0.00 30.00 59.00 (D)In:Entor, j 1:' ,:1CG,JG $1135.,!00,00 $125,000,00 $122,000.00 5121.000,00 1121,000.00 $120,000.00 �,,._-: ,��_:: s:: nv nr•, s6^ nM0^ 1`. 000.r1(1 1`^,0'10,00 1d5,O00.00 s4` 000 0n 161 000.00 (F) F D 00 30:30 10.00 1t . x)4 10.00 $0.00 ,,. tb)n�[Gu'::5 'avable ,4), 1146,.827 � 2. r,.1 f,,, 11:+. .l�. •x,011 $1..1.00•. : � ;,nn � 1.»4,.. .VO „�,4.x, S,,_ .�.t.�0 ��a � .00 1 - ,�;C ,- �1 5,_1.,•.0.04 tH1DEer:::_tion $800.90 3940.03 3800.)4 !900,00 11)2.00 546^.^� 3310.00 .. (I)nmcr� ::,cc � r ,� 1»,,0.00 s•;,,O.v. 5 $ .,•1.U!� ,E., 1, x:.00 ,5r, 5» ..?O .!• s,,x.Gix �. 34.0.00 f Note: 'aterial C_st - Materi5l Cash out + Change in Inventory and Work in ProereSs + incr_sse in Mat_risl Acccur•ts Fiva l2 .....00 €..00.00 €1 0.00 n Oct !. "nY JUNE JULY AUEUST SEPTEMBER TOTALS . 11) (:0,:43.30 3124,906.EO 162,369.70 191.582.40 CASH 4'1 HAND CASH RECEIPTS 00 $260, 910.00 S'7, 4(10.01` 159.6cW0, 00 Q? '.6`0.0(1 11.!K.450.00 I of Acceur,ts Received 101.1-1., 10. ;f 3?, (1 i 10.00 i0,0 der WWW i::.: ! 1,!.10 ,7,;' 30,(10 0.01 (W!,000.001 (c)F;rtro! !:ote Ii.1oG.V,; 31.150.00 1iII5f.0r 3(3.?24.00 W lit=rest income 1111j 41(!. �1:) ii. �`ii i%i... �P �('� ^� ��' ,)��G. J41 (?1ti3 ni L3 --ns .9,. ..... $^.GS�.s( . i 3.C1_.� . . me.1.0 .,: :� TOTAL tr=u -•!-Ut-�S OPERAT145 ECFE'(.E. t. X1:.1. .!�i•!-'- :,_I.;i,�°;; 1`7 500� . 00 128`.625.00 Wr:terisl gr,°,:;,... ;'."'1:11';1' 1'._...'� (7,`.04.00 3',`($0.(10 347,390.00 (b)Er:ss ,tares $47,46 .90 (c)Payroll Excer=.es 3,960.00 $',950.00 1»6,444.00 (dllabor iE.r00.0G 1`..`_;11.0` i`_,5CIO (10 35,500.00 x51500.00 3157,500.00 (ddl0uteide Labor $150.00 3:°r;; ':1`(1.00 1150.00 31`0.00 31.800.00 L1SU011105 32`.00 :...00 i^°.00 $.5.00 $25.00 33,00.00 (fl Reciirsir.aintenance $0.00 1.0.00 30.00 $4.0.4 10.00 $0.00 (g)Aevartising 1380.00 1'31.00 $790.0') i1cc0.0 $38^0.00 $4.560.00 (h1A_t3=_iTr:cks $0.00 50.;00 1(1.1)0 $0.00 30.00 $500.00 ( k:uuntinghegal $'50.00 $,50,;04 17`(1,nr 1751,00 3750.00 $4,040.00 (,)Tel w one n_ nC• i $_ 0,00 2E np/. pr 3. =�.:i1 210 � $__!�.�;0 n C• 3.,4 0.00 � OJtilities $450.00 $450(00 $450.00 $-50.(10 1,.0.00 35,150.00 (1)Ic:Urance $0.00 110,000,00 $0.40 $0.44 $10,000.04 (21,500.00 (e)T=xes $1,150.00 51,150{00 $1,150.00 $1,150.00 31.i50.00 $16,940.00 (n)Interest $2,500.00 32,500:00 (3,000.00 33,000.00 $4,000.00 $31,550.00 (o)Travel $4.00 1$0.00 $:,500.00 (5,000.00 $5,000.00 $229300.00 W Coeeissions (3,050.00 $3,050.00 3,050.00 $3,050.00 33,450.00 (36,604.00 (q)Pent $500.00 1500.00 $500.00 $500.00 $1.00.00 $6,000.00 (r)Miscellaneous 140,946.80 $65,046.80 199,446.30 $110,946.80 $10:,7746.80 (6931,568.90 Subtotal $24.00 69`0.00 i=`_^.;i 1950.00 $18,950.00 $46.012.00 (s)Note Principal Pay i1,too. 00 1510.%0 1500.00 $500.00 $500.00 $167,118.00 (t)Accounts Payable ASSET FURCHASES $250.00 1250.00 $250.00 $2=0.00 $250.40 $33,000.00 (u)Autos/Trucks 1100.00 1100.00 $770%nl? 31G0;.Or) 1150.00 1900.00 M r-.3china.►vlEquiozEnt $0.00 $0.00 10.00 10.00 $0,00 $1:.00 W) FurniturelFixtures, $431046.80 167,846.aO $101,245.80 31$2,146.80 3127.796.80 TOTAL Ca5H OUT 170.,' -'..?0 S1^_4.°!:, `_0 ic..__-... $S 632.9032' ,?-6.11 .".ASH POSITION EESENTIAL CP. DATA M0.250.00 rf 3`cn .?^ ,0 600.U%/, 1,500.4(1 I!, IOE. 10G.00 Vo:uwe $316,484.00 3670,,3 .4f: 164,E94.00 1,30,8'».40 1128,794.(10 (81Accaunt5 Rac21vs51e (0.00 $100 $0.00 $0.00 ii2,`.00.00 $12,750.00 (Mad Debt $120,004.00 $120.00,.:0 $1$2,000.`10 3112, 000.f1O 3i4E.0U0.10 (D)1:~;ventary $9,009.00 IS7.001.00 14c,000.0G 190,000.00 1"0.000.00 (E)Work in Progress $0.00 3.00 $4.00 $0.00 (0.04 (F)R and D 1245,000.00 $217,500.00 $165,000.00 $204,000.00 $104,500.00 M Accounts Payable $800.00 $800.40 $800.00 $800.00 $800.00 $9,600.00 (H)Depreciation 6450.0^ i-50,10 $5`4.(1" $450.00 3450.00 $5.400.00 M Ascrtization $136,°00,0,0, :_;0, r;0 1',),000.!,O 3a3,.00.00 $25,000.00 $401,71;.00 �NVIC INTERNATIONAL ARM�i800 NEW WEVER ROAD ACWORTH, GEORGIA 30101 (404) 974-7182 October 27, 1986. Mr. L. Hodgkins, P.O. Box 1424, San Carlos, California. 94070 Dear Lowell: Attached please find a copy of our projected Cash Flow for the next twelve months. As you can see, payment of ANVIC debt to PDT (shown as "Shareholder Loans" should be complete by the end of February. i These projections are as realistic as we can be, and yet still are dependent upon payments by Firetrol to us for the equip- ments supplied by them. it i worth noting that contrary to previous correspondence, Firetrol did n t pay the $10,000 we sent PDT. That money came from ANVIC's normal cash flow. Other than some labor which we provided to Firetrol, we have not yet received any funds for inventory materials or for production shipments. advise me. Encl. 510 Should you have any questions on these cash flows, please t Yours truly, Don Faulkner. OFFICES IN: ATLANTA, GA • PENSACOLA, FLA • TORONTO, CANADA CASH C11 H= - CASH EECE1 ia)Ac�c,r CEli-AJ (c)Fir.trc; Loan (fl lr,te•.:: Inco+le (e)licte =e.?ivehl2 (E)Ein; - s TOTAL CFSN '1VAILABLE AHVIC CASH FLOW 1986/87 Rev.:' 7CTuSEE NnVEMBEF DECEMSEI. JANUARY FEI+VARY MARCH APRIL :t`,;,`.?01 (31.487.20) t7A. M.10 141,610.50 570,447.70 $21,216.94 10 Ii8.0.ni) $1'2,?00.00i91.0U4.40 5°l An f19.4�'0.00 118,440.00 ta)Material r.tlr_14.09G.:VQV r 5 Q�7Q.tlsl!' ;4.5!(7D ol0 10.00 50,44 50.(4 511.,0,.0 0510,,, ,r�n,041 1529.400.001 (110,g00.00) 1•).0 S0.00 11,164.04 00 51,16(,00 t M 60.04 51,1.0.04 11.16('.05 11.116,00 3",!:.•,0 S_..::,: $3,191.90 13,181.80 0.('0 fO.70 ;7.6n ^0 s4. C0 ON. 011111 (110. 000. 00) (S20.004.0)) (130.000,,0(,; (f 15,(110 t. 00 f5O.4(0.00 i`7,?1C.:-0 159,'e4.14 5142.822,20 $176,445,30 31:0.870.54 $75,:5'.70 351,026.90 OPERA.':INE EXPENSES ta)Material 3_.125.04 52,125.00 1375,00 38,000,00 16.2`0,00 $7,000.00 123.150.00 (06ross Wages 1.13(.(10 59.;'.4.00 19,17('.00 510.004.04 57,500.00 17.500.00 51,00,00 (c)Payroll Expenses 3-.24(..90 14,200.710 $4,200,90 $4.605.80 13.761,9O $3,191.90 13,181.80 (Mabor i'..600. 0 ;7.6n ^0 si.XOO.00 s3.c60.04 f3.9;-0100 $7,960.00 $3,960.00 (dd)Outsid: Labor s,.S;;::. :) $3,(44.;0 33,((4.00 13,000.00 $5,540,00 35.500.00 15.500,00 (e)Suzohas s1S6.06 1150,4( 61`.0.00 $15(;.00 $1`.0.00 5 10.00 $150.00 tsnr c -z If1.:e�airE/Miin._ _ � 525.40 6=5.00 12`.40 $1K 00 ..�. =•� r .c_.J) °2: °O ,a. (25.00 (a)kvartiiing 30,00 50'.110 MOO 10.00 1,. 00 10.00 50.00 (h)Autos/Trucks 5380.00 3'89.00 u 0.00 $380.00 $380.00 C! 90. $380.00 M Accounting/legal ' $0.00 $0.00 14,00 fc.O0.00 $0.00 $0.60 MOO (i)ielephone ! $/50,00 5750.00 $750.00 $750.00 $150,00 6750.00 $750,00 (k)Utilities $200.00 5.50.CIO 1:5;,00 $250.00 11650.00 $250.00 $250.00 (1)Insurince $0.00 $1,400.00 10,00 $0.00 $0.00 1�?.00 11.500.00 (o)Taxes $`40,00 $0.00 50.00 $0.00 $0.00 11.000.00 10.00 (n)Interest 31.540.00 52.000,00 31,80+).40 31,e00.00 $1,500,00 11,340,00 11,150.00 (o)Travel i^.444.04 11.250.00 $1,800.04 12,000.00 $2,90.00 $4.000.04 $3,000.00 (p)Commissions 14100 13.000,00 10.00 $6,800.00 14.0 0 30,00 $0.00 (0)F.ent 17.1050.00 11.050.00 17,054.00 $7.050.04 53.0x4,00 .531050,00 (r)M1icelIanacus 1500.003 $500.00 1`90.00 1500.00 1500.90 f500.00 $500.00 Subtotal 33_,650.90 534,810.90 529,910.90 $;5,711.80 135.156.80 139.146,00 554,645,80 (s)Note Principal Pay 52,462,00 12`9,0x^ 5__x..40 329,:50, OG 12`1.09 $250.9!? $?50,00 (t)Accounts Payable 121.473.00 $.5,551.00 138.K 1.0x3 128,50.00 113,130.40 $14.140.00 $21.200,00 ASSET PURCHASES MMM/Trucks 1.`.0.90 3250.001.`;.010 12`0.04 1'_`.�.CIO 1_'50.01 1250.00 (v)Machinery/Equip:aent 50;1;4 10.04 +^... 1(:.00 $;.0X, 12`4.v!� 3104.00 (w)Furniture/Fi:tureE nn 1n (10 TO?A. Cn:H :'JT 1.......=': ::n,?11.?v 3. .:'.5. s==.3'a,?.) 1.0.-1111.=G S`.d.0?5. e;' 3'6.111.90 ^-ASN. POSITION 541.612.50 170.44;.'O s2^1,^15,90 $)4.teo .10 ESSENTIAL OP. DATA (A)Sales Volume j 1';.6,3:.G0 s?' (1-31.). G(, i_ �. 1 1115..01.00 $,G..,.0.00 5.9.x.,:. 1 _..00 tB)Acccunts necaivatla i ., 3$8'1,,,;4. •0 �,. ;,. f:._.:?4.0, 11'_.,3..0.,0 119.:'4.:)0 . .. $42,134.•.0 .. 1 -..•'?1,^'1 17'.....,:�C (C)Bad Dab' 54.00 V. 00 i2EO.00 30.00 V.00 30,40 14.00 (D)in Entory 1110,4CO,v0 3126.i)00.04 $125,000.00 $122.000.00 $1211000.00 $121.000.00 $120.000.00 [' - --- _ •._ . ��_�_._ t �: i0, ,r, n rn f�(•,0��:,v:' S�,,000.0G 54 rn ;_ ,(Irn,r.00 e 14_.004.40 e 54.,00:0.90 $61,000.00. (F)F _ _ 14,04 50.04 so -,Go 14.40 10.00 60. GO 50.44 (blhCCGu-,.i Favabie c; n, i, _.87 : 2 nnr 00 12.1..:1.3. •, 0111 (121.00. � .. ,:nn 4 1.�r4.:. ,0 (H)DecrE-.,tion 1S"O.40 $600. G, 1800,00 1800.00 191". 1.0 f?VC. i $9110. (1)22 ,. 00.20'. ,cr. C, 1,1.00 , t 4 f„O,i:�, 14,5 :x,40 . V ,, f, •,.00 145!'.20 $4.0.00 53`_0.00 Note; 'it=_rii': C.st = `jlrq it Cas` tut + Chanae in Inventory and )fork in ProCress + lccraasa in Material Accounts Fivitl= t" .29E,40 f2„ ,7`_.04 t'.?.0G 41 00 s2.."5!.90 1;.500.00 6 50.00 r � Uct !. AY JUNE JULY AUGUST SEPTEMBER TOTALS . 51�.5'oi.1G 130.'47.30: 11'4 ?06.`0 ?62,369.70 $9,M.20 CASH 0') HAND CASH RECEIPTS t". 4i7 358. 50,00 f?;?,<.`r..,nn 1,.!9,450.00 ta)Acceunts Received 14.00 3G,;i(; .345.000,9Q� {111.St)dt',;1Q31@r �, 10.00 f'. 0( ($40,040,001 (c)F;rctro! 113te 6(i,nC 19).00 311,3E;,'r 317.920.00 (d)l tareet Income 12 Eli. vOC('.Ci} _..70 ?^`4.7:2.90 TOTAL CAP1:�SLc i aP�=.9T►.�� EC=E'i=�= 7C 17°.5?O.00 3".500.00 12S!.62"..00 (a)!'_teriaI i,, 17,F00.00 397,390.00 (b)Gr:ss hazes 1:. 181. E0 5?,7@1.!?0 $47,463.90 (c)Fivro1:1 _,c=_r,ses 3 _.... :'. _ i',?c4.'C 33,?60.00 3?,?5'?.010 3;6,440.00 (d)labor 1�,EOO,U0 #`_.`_ i`- 500.00 #51500.00 f5, 500.00 3 7,`00.00 (dd) ME ide Labor $150.04 i;°c;(;i +x:,,00 11`0.00 31`0,00 3!,304.00 (2)h1palIEs 51?5.00 $25.00 $,00,00 (r)Re: irs/raintEnance $0.00 a0.00 3�.h0 $4. C0 10,00 30.00 (g1A0vartising f384.00 $: 0.00 3380.0 ;3$(!,09 1380.(10 14,560.00 1,h)Aut_s117rucks $0. G0 $O,'GO $0.40 $0.00 10.00 $500.00 (i)Accounting/Legal 1750.00 $"0.00 ?7!0,0', ;75^.00 $750.00 $9,000,00 (;)Telennone 12Z4.G4 12°0.00 s_`_0.00 3:°0.00 $2`G,,no 11.9`0.00 (Wutilities 1450.00 $450.00 $450.00 WO.40 1;50.00 f5, 1.0.00 (1)lr._arance $0.00 110,000.00 $0.00 $0,00 $10,000.00 $2!,500.00 (a)Taxes 11,150.00 $1,150.40 $1,150.00 $1,150.00 11010.00 $16,940.00 (n)Interest (2,500.00 321540.OG $3,000.00 $3,000.00 $4,000.00 (31,550.00 (o)Travel 10.00 $0.00 f2,500,00 $5,000.00 $5,000,00 $22,300.00 (a)Commissions 13,050.00 $,050;00 3?,G50.00 $3,00.00 13,050.00 136,600.00 (q)Pent $500.00 $500.00 $500.00 $500.00 1500.00 $6,000.00 (r)Mi:cellaneous 140,946.80 365,046.30 $99,446,90 $110,946.80 f1G:,?46.80 (693,568.90 Subtotal $950.00 $18,950.00 (46,412.00 (s)Note Principal Pay $1,500.00 1500:00 $500.00 MOM M $500.00 1167,118.00 (f)Accounts Payable ASSET PURCHASES $250.00 $.50}00 QSO.i+0 f_=0.00 $250.00 $3,000.00 (u)Autos/Trucks $100.00 $100.00 11$1.14 315V.v0 f150.00 1900.00 W rIa0inerv/EquipzEnt $0.00 $0.00 10.00 10.00 10,00 17.00 W Furniture/Fixtures. $43,046.80 167,84680 11101,246.20, 3,1:,746.00 11:?,796.80 TOTAL CASH OUT 130.3=3.70 fl^_4,?06.`_U is:.:c=.''' ?4.6?:,90 11":1.045.iO CASH F"ITION EESENTiAL CP. DATA f2?0.°50.00 3_,!50.00 S E 6 . 7 0.00 f3 604.00 $9,,600.00 1,,10E.100.00 tAlSales Volume (316,484.00 363,?3 .OG $64,ES4.00 $330,8:-.00 3128,)84.00 (B)Accnunts Receiva5le $0.00 3 .00 30.00 10.00 ti_It.10.00 $1:.?50.00 (Mad Debt $120,000.00 $1.4,401.:10 $112,OGG,00 $,1112,000.00 $1r:5.iOO.v0 (Dllaventory 159,003.00 #x),000.00 140,000.00 190.000.00 f20.000.00 (Elt(ark in Progress $0.00 3C. (l0 $0.00 30.00 $0.00 (F)R and D (245,000.00 $211.500.00 $!65,000.00 $204,000.00 $104,500.00 (G)Accounts Payable $800.00 3806.00 $800.00 $800.00 $800.00 $9,600.00 (H)Depreciaticn $,50.00 s=`_0.00 $450.0^ 1450.00 1;50.00 15.400.00 (I)Ascrtization 1(J6.°00.00 fE40.G�i } $30,000.40 183,.04.00 (.5,000.00 $401,731.00 DATE: August 16, 1.986 TO: Economic Development Corp. FROM: Lowell Hodgkins A recent conversation with Don. Faulkner of Anvic informedime that the secon( payment of $10,000 will not be forthcoming until about Setember 15th., si) weeks later than originally scheduled. I sincerely hope that this is not the beginning of a ,giant collection problem now that they have their inventory back. I will be on vacation from August 21st til September 6th. As soon as 1 return, I will be back in touch with Faulkner. Hopefully, this will result in another payment in September. During our last conversation, he did not feel that the final payment of $35,000 would be delayed as badly as thi: second payment. Time will tell. The final payment is du'e September 30th. Cleveland' Machine Controls is completing the retrofits, on twelve of the single phase drives. Ten are for Drives Technology, one is for their owr evaluation, and one is for me to retain as a model for future production. Progress is slow, but there is progress. John V. Evans, GOVERNOR n David O. Porter DIRECTOR August 1, 1988 MEMORANDUM DEPARTMENT OF COMMERCE State Capitol Building Room 108 Boise, Idaho 83720 Phone 12081 334-2470 TO: ICDBG Grantees and Administrators FROM: Jan P. Blickenstaff, Program Manag Idaho Community Development Slock ant Program SUBJECT: New Request for Funds form The Department is implementing a faster Request for Funds process in the Idaho Community Development Block Grant (ICDBG) program. Requests will be processed weekly, eliminating three days time in approving payments. A new form will be used, making requests easier and simpler. The firm of Ashby -Armstrong and Company, a Denver, Colorado CPA firm, through a HUD technical assistance grant, reviewed the Department's ICDBG accounting and fiscal procedures. The Department, by implementing to recommendations contained in Ashby -Armstrong's report, has been able to streamline its ICDBG grant payment processing. Currently, requests for funds from city and county grantees are processed every ten (10) days or three times monthly. The new system, which includes Department drawdowns from the U.S. Treasury through the Idaho Treasurer's Office and to the State Auditor's Office, eliminated three days from the process. This allows processing of payments on a weekly basis. The new process allows a grantee to mail a Request for Funds (RFF) form anytime. The RFPs will be reviewed as received by the project manager in the Division of Community Development. Those RFPs approved by Thursday noon will be processed by the Department's fiscal section for payment. They will then be sent to the State Auditor's Office for checks to be cut and mailed on Wednesday. Depending on mailing time, a RIFF mailed on a Monday should result in a check received on the Friday of the following week. That assumes, of course, all the grant paperwork is current and correct. -*O� n Processing Schedule Thursday 12:00 noon All -approved RFF's sent to Fiscal section for processing Monday RFF's sent to State Auditor's Office Wednesday State Auditor's Office mails check. The new design of the Request for Funds form reports ICDBG funds only. Any matching funds will be reported as part of the Quarterly Report. The form also accounts for any program income the grant may have earned. HUD has issued guidance on program income from revolving loans. This has been incorporated on the form (rules have been drafted concerning program income). The form is designed to allow grantees to submit requests weekly and account for earlier requests for which a check has not yet been received. The new RFF form is effective immediately. Please begin using the new form for your next drawdown. If you have any questions concerning the process or form, do not hesitate to call me at 334-4715 or your project representatives: Gloria Mabbu t t Donna Batch JPB:ga Enclosures 334-4720 (Regions I, II and III) 334-4717 (Regions IV, V and VI) F n ,IBROSE, 1"%C ERALD OKSTON "nays and .msalo1% Bu■ 421 bin. Wahu WA2 ,no W 4461 A G R E E M E N' T 'PHIS AGREEMENT, Made and entered into this 30th day of July, 1985, by and between the CI'T'Y OF MERIDIAN, party of the first part, hereafter referred to as the CITY, and the ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN, party of the second part, her. k,�a f ter referred to as CORPORATION, W I T N E S S E T H: WHEREAS, the City has applied for and received an Idaho Community Development Block Grant; WHEREAS, the application for the Block Grant was submitted by the City as a Single Purpose Application for the purpose of ultimiately having the funds lent to Power Dynamics Incorporated; WHEREAS, the initial application was prepared for the City by Ida -Ore and which application required that the Grant funds be ultimately granted to a local development corporation which was to be Ida -Ore and then subsequently loaned by Ida -Ore to Power Dynamics Incorporated; WHEREAS, Ida -Ore has indicated they do not wish to serve as the local development corporation and whereas the Corporation has the authority to administer federal and state grant funds pursuant to Title 50, Chapter 27, Idaho Code; and n _tBO5E, ^,EMALO �OK6TON ,rnays and m W91ora Box 427 .]Ian, Idaho kLW2 ,,n* 8864461 WHEREAS, the corporation is willing to administer the grant funds and the subsequent loan to Power Dynamics; NOW THEREFORE, It is hereby agreed and understood as follows: 1. That the Corporation shall act as the local development corporation under the application as submitted by the City for the Idaho Community Development Block Grant and the Corporation shall be substituted for all purposes and effects and in the name, place and stead of Ida -Ore; that the Corporation shall be and act as the Sub -Grantee of the Grant funds and shall be the local development corporation. 2. That the Corporation hereby accepts the duties and responsibilies of the local development corporation under the Idaho Community Development Block Grant which Grant was given to the City for the purpose of funding the Power Dynamics Incorporated loan. 3. That the document titled "Single Purpose Application for The Idaho Community Block Grant Program", hereafter referred to as "Application", which was submitted by the City is incorporated herein as if set forth in full hereat; that the Corporation agrees to replace Ida -Ore in each and every facet of the application and in the administering and loaning the Grant funds just as if Corporation had been the original local development corporation. 2 BROSE, /'GERALD ASTON rnayaand ,nation Box 427 an, Idaho ,3642 no 8684461 4. That the Corporation hereby agrees to accept the Grant funds in the sum of $250,000.00, to administer them in accordance with the Grant terms and conditions, to loan them to Power Dynamics, and be bound by all the responsibilities involved in the Program. 5. That the City has entered into a contract with the State of Idaho pertaining to said Grant; that said contract is attached hereto as Exhibit "A" and is by this referrence incorporated herein as if set forth in full; that under the contract with the State of Idaho the City has certain duties and responsibilities; that Corporation agrees to perform all those duties and responsibilities or see that they are performed as part of the administration of the grant the same as if Corporation were the original Grantee and not the Sub -Grantee, provided however, the City shall perform those duties and responsibilities that are clearly the City's sole responsibility under the Grant terms and conditions and are not delegable; in particular, the Corporation agrees to meet and be bound by the terms and conditions of the Grant, the Management Plan, the Budget, the Pay Back Plan, the Scope of Work, and the the Corporation shall comply with the Assurances given by the City to the State of Idaho. 6. The Corporation is hereby given the authority to loan the Grant funds to Power Dynamics Incorporated and it 3 is agreed that Corporation shall enter into and obtain all necessary and proper documents regarding said loan including a loan agreement, promissory note and a personal guarantee, it being understood that the loan to Power Dynamics is basically an unsecured loan. DATED This 30th day of July 1985. ATTEST: r�JAC IEMAN --CITY CLERK GIMNT P. KINGSHORD"PeRESI DENT BILL BREWER--SECREATRY ROSE, 'f.RAID OKSTON 4nove and un"twe Mpa 42t nul, k1MD rLW2 :_.no ld44"I STATE OF IDAHO ) ss. County of Ada ) On the BOK day of 7(4 IV ,in the year 1985, before me o r a Notary Public in and for the State of Idaho, persona ly appeared Grant P. Kingsford and Jack Niemann, known to me to be the Mayor and the City Clerk, respectivel; of the City of Meridian, Idaho, that they executed the above and foregoing instrument, and acknowledged to me that the City of Meridiz executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my o£f-iei41 seal, the day and year in this certificate first above written, (SEAL)_- Nota y Public for Idaho Residing at: Meridian, Idaho STATE OF IDAHO ) ss. ounty of Ada ) On this 36� h day of 73�(K in the year 1985, before me at,j T i. �-�Q - , a otary Public in and for the State of Idaho, personally ap eared Grant P. Kingsford and Bill Brewer, known to me to be the President and Secretary, respectively, of the Economic Development Corporation of the City of Meridian, Idaho, that they executed the above and foregoing instrument, and acknowledged tc me that the City of Meridian executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year in this certificate first above wr.it`ten., (SEAL } AURO {E, -'—"f EFIALD ,OKB70N an.y end ,unMlofi j Box 427 , I,rn. Ida" 03642 ,on@ 886 4M1 Notaity Public for .bsIdaho 7Ri ing at: Meridian Idaho 5 n SECOND ADDENDUM TO LOAN AGREEMENT AND PROMISSORY NOTE It is hereby agreed by and between the Economic Development Corporation of the City of Meridian, an Industrial Development Corporations of the City of Meridian chartered under Title 50, Chapter 27, Idaho Code, Party of the First Part and Power Dynamics, Incorporated, an Idaho Corporation, Party of the Second Party, as follows: W I T N E S S E T H: WHEREAS, the parties on or about July 31, 1985, entered into a Loan Agreement and SECOND PARTY signed a promissory note all relating to a loan from FIRST PARTY to SECOND PARTY in the sum of TWO HUNDRED FIFTY THOUSAND AND N0/100 DOLLARS ($250,000.00); WHEREAS, said Loan Agreement and Promissory Note required that SECOND PARTY to repay said loan in monthly installments of $2,535.00, principal and interest, beginning September 1, 1985 and to continue until September 1, 1991, at which time the entire balance owing by SECOND PARTY is due in full; WHEREAS, SECOND PARTY, has indicated that lump sum payments will be forthcoming which payments will be a distribution of money received by SECOND PARTY from Anvic International Corporation which are represented by Anvic to be as follows: AMBROSE, `,05'�ZGERALO OOKSTON Attorneys and Counselors P.O. Box 427 Meridian, Idaho 83642 Telephone 8884181 A $10,000.00 on July 1, 1986 $10,000.00 on August 1, 1986 $35,000.00 on October 1, 1986. WHEREAS, Second Party desires that interest not accrue on the outstanding balance during the grace period. NOW, THEREFORE, it is hereby agreed as follows: 1. That when SECOND PARTY receives the first $10,000.00 from Anvic it shall pay FIRST PARTY $2,500.00; when SECOND PARTY receives the second $10,000.00 from Anvic it shall pay FIRST PARTY $2,500.00; when SECOND PARTY receives the final $35,000.00 from Anvic it shall pay FIRST PARTY $25,000.00. 2. That so long as the above payments are made if funds are received by SECOND PARTY from Anvic, interest on the principal balance shall accrue up to January 10, 1986; that interest shall cease to accrue January 10, 1986; that interest shall begin to accrue on the outstanding balance as of January 1, 1987. 3. That it is understood that SECOND PARTY may be requesting additional concessions on interest and monthly payments but that this Second Addendum Agreement shall not be treated as FIRST PARTY'S consent thereto but each consent shall have to be individually considered and agreed to by FIRST PARTY. DATED this !_ day of JUL-y ,1986. AMBROSE, /4,TZGERALD 'OOKSTON Attorneys and Counselor P.O. Box 427 Meridian, Idaho 83642 Telephone 886-4481 AMBROSE, ,—.F,ITZGERALD ROOKSTON Attorneys and Counselors P.O. Box 427 Meridian, Idaho 83842 Telephone 888-1481 POW RD CS s LOWELL HODGK -PRE DINT Economic Development Corporation of the City of Meridian rOG4P. eKingsford-President B 1 Brewer --Secretary STATE OF 64/ F. ) G/y '/ &P vty ss. On th17 play of in the year 1986, before me .Ti Y DUI. —Re --65e7 a Notary Public in and forthe State personally appeared LOWELL HODGKINS known to me to be the President of Power Dynamics, Meridian, Idaho, that rney executed the above and foregoing instrument, and acknowledged to me that the Power Dynamics executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my offical seal, the day and year in this certificate first above writte OFFICIAL SEAL, JAY DAVID IREESE L URLIC - CALIFORNIASEAL UWTY OF SAS FUWJSC0Expires lune 20, 1986 STATE OF IDAHO, ) G" of y Public for ss. County of Ada, ) ,n On this day of k�----__,in the year 1986, before me a Notary Public in and for the State of Idaho, personally appeared Grant P. Kingsford and Bill Brewer, known to me to be the President and Secretary, respectively, of the Economic Development Corporation of the City of Meridian, Idaho, that they executed the above and foregoing instrument, and acknowledged to me that the City of Meridian executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year in this certificate first above written. Notary Public for Idaho SEAL Residing at Meridian, Idaho AMBROSE, -.EITZGERALD 'ROOKSTON Attorneys and Counselors P.O. Box 427 Meridian, Idaho 83842 Telephone 888.4481 OFFICIALS SACK NIEMANN. CityCNfll A M KIEBERT TrvsaWm RtCNARD D. NICHOLS. CMM M Police BRUCE D STUART. WWr Work*. Svot. W AYNE G CROOKSTON. JR.. Anornvy EARL WARD, Waste WOW Satri. KENNY BOWERS, Fin CKIM HUB OF TREASURE VALLn' A Good Place to Uve CITY OF MERIDIAN COUNCILMEN BILL BREWER RONALD R TOLSMA 728 Meridian Street i E BERT MrERS ROBERT GIESLER MERIDIAN, IDAHO BOB SPENCER 8360 Chairman Zoning 8 Planning Phone 888.443 GRANT P. KINGSFORD Mayor July 7, 1986 Mr. Lowell Hodgkins, President Power Dynamics Corporation P. 0. Box 1424 San Carlos, CA 94070 Dear Mr. Hodgkins: Thank you for submitting your recent progress report dated June 15, 1986. The Economic Development Corporation of the City of Meridian is pleased to learn that Power Dynamics has reached a payback agreement with Anvic Cor- poration. In accordance with your request for a decision regarding deferral of interest on the outstanding balance of your loan, the Economic Development Corporation of the City of Meridian has agreed to waive all interest from the date of your last payment to January 1, 1987. This action was taken by the Economic Development Corporation of the City of Meridian on June 25, 1986 and included the understanding that you could request additional interest waivers for extended periods in the future- Your uture. Your last payment to the Economic Development Corporation of the City of Meridian was made on January 10, 1986. From this date until January 1, 1987, there will be no interest considered in the repayment schedule. Approval of this interest waiver is contingent upon receipt of a signed agreement between Power Dynamics and the Economic Development Corporation of the City of Meridian stipulating that the corporation will receive $2500 from the first Anvic payment of $10,000; $2500 from the second Anvic payment of $10,000; and $25,000 from the final Avic payment of $35,000. The Economic Development Corporation of the City of Meridian would not have waived the interest on this loan unless the corporation felt it was necessary to allow repayment of the indebtedness. If you have any questions, please feel free to contact my office at any time. Respectfully, ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN Grant P. Kingsford, President GPK:jw Enclosures n AMBROSE, FITZGERALD A*—"IDOKSTON Attorneys WW Gounsetore P.O. Box 127 Mtrldlen, RJOW 83612 Tetephone 866.1461 i SECOND ADDENDUM TO LOAN AGRE ENT AND PROMISSORY NOTE It is hereby agreed by and between the Economic Development Corporation of the City of Meridian, an Industrial Development Corporations of the City of Meridian chartered under Title 50, Chapter 27, Idaho Code, Party of the First Part and Power Dynamics, Incorporated, an Idaho Corporation, Party of the Second Party, as follows: W I T N E S S E T H: WHEREAS, the parties on or about July 31, 1985, entered into a Loan Agreement and SECOND PARTY signed a promissory note all relating to a loan from:FIRST PARTY to SECOND PARTY in the sum of TWO HUNDRED FIFTY THOUSAND AND N0/100 DOLLARS ($250,000.00); WHEREAS, said Loan Agreement and Promissory Note required that SECOND PARTY to repay said loan in monthly installments of $2,535.00, principal and interest, beginning S+tember 1, 1.985 and to continue until September 1, 1991, at which time the entire balance owing by SECOND PARTY is due in full; WHEREAS, SECOND PARTY, has indicated that lump sum payments will be forthcoming which payments will be a 'distribution of money received by SECOND PARTY from Anvic International Corporation which are represented by Anvic to be as follows: $10,000.00 on July 1, 1986 $10,000.00 on August 1, 1986 $35#000.00 on October 1, 1986. WHEREAS, Second party desires that interest not accrue on the outstanding balance during the grace period.' NOW, THEREFORE, it is hereby agreed as follows: 1. That when SECOND PARTY receives the first $10,000.00 from Anvic it shall pay FIRST PARTY $2,500.00= When SECOND PARTY receives the second $10,000.00 from Anvic it shall pay FIRST PARTY $2*500.00; when SECOND PARTY receives thefinal $35,000.00 frofa Anvic it shall pay FIRST PARTY $25,000.00. 2. That so long as the above payments are made if funds are received by SECOND PARTY from Anvic, interest on the principal balance shall accrue up to January 10, 1986; that interest shall cease to accrue January 10, 1986; that interest shall begin to accrue on the outstanding balance as of January 1, .. 1987. 3. That it is understood that SECOND, PARTY may be requesting additional concessions on interest and monthly payments but that this Second Addendum Agreement shall not be treated as FIRST PARTY'S consent thereto but each consent shall have to be individually considered and agreed to by FIRST PARTY. DATED this day of _11986. AMBROSE, -" RALD TON AttanWIS 04 i counselom P.O. Boa, 127 M�rldW,, ldadw !3642 T.NohOno�1161 a AMBROSE, GERALD KSTON Attorneys and Counselors P.O. Box 427 Meridian, idtlro 63642 Telephone 8084461 SECRETARY Bill Brewer --Secretary STATE OF IDAHO, ) ss. County of Ada, ) POWER DYNAMICS LOWELL HODGKINiS-PRESIDENT Economic Development Corporation of the City of Meridian Grant P. Kingsford -President On the day of , in the year 1986, before me —, a Notary Public in and f orthe State of Idaho, personally appeared LOWELL HODGKINS and known to me to be the President and the Secretary, respectively, of Power Dynamics, Meridian, Idaho, that they executed the above and foregoing instrument, and acknowledged to me that the Power Dynamics executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my offical seal, the day and year in this certificate first above written. SEAL STATE OF IDAHO, ) ss. County of Ada, ) Notary Public ,for Idaho Residing at Meridian, Idaho I( 1 On this day of _ -,in the year 1986, before me , a Notary Public in and for the State of Idaho, personally appeared Grant P. Kingsford and Bill Brewer, known to me to be the President and Secretary, respectively, of the Economic Development Corporation of the City of Meridian, Idaho, that they executed the above and foregoing instrument, and acknowledged to me that the City of Meridian executed the same. IN WITNESS WHEREOF, I have my official seal, the day and above written. SEAL AMBROSE, FyTZGERALO `�OKSTON Attorneye and Counsel" P.O. Box 427 Meridien, IAMo SW2 Telephone 0!64101 hereunto set my hand and affixed year in this certificate first Notary Public for Idaho Residing at Meridian, Idaho DATE: June 26, 1986 TO: Economic Development Corp. c/o Wayne Forrey, JUB Engineers FROM: Lowell Hodgkins Enclosed please find my one and only copy of our original business plan. As per our discussion, please copy and return. The following is a breakdown of Power Dynamics expenses from July 1, 1985 thru March 31, 1986, which I have derived by running through the check registers. The payrolls shown are gross before taxes; therefore, I have multiplied these payrolls by 9.5% to approximately cover the matching contributions made by Power Dynamics. All insurance, including workman's compensation, health, life, liability, and building insurance are lumped together. Utilities include telephone. Business & Travel Expenses include a minor amount of entertainment, mostly associated with the debenture offering. Taxes include last year's year end taxes plus some back taxes and penalties. Payroll taxes are included in the payroll figures and have been paid except for about $1000.00. Advances to Anvic includes all direct advances for which we have recently come to terms for repayment. PRODUCT DEVELOPMENT - OUTSIDE SERVICES $ 17,700.00 PRODUCT DEVELOPMENT - SALARIES $ 28,643.66 PRODUCT DEVELOPMENT - MATERIALS & EQUIPMENT $ 1,371.90 RENT $ 31,717.96 UTILITIES $ 12,019.59 ADMINISTRATIVE SALARIES $ 46,593.08 ENGINEERING & PRODUCTION SALARIES $ 34,465.28 BUSINESS & TRAVEL EXPENSES $ 30,392.87 LEGAL & ACCOUNTING $ 19,836.00 INSURANCE $ 5,809.78 OFFICE & SHOP EQUIPMENT $ 5,658.12 TAXES $ 2,386.67 SUPPLIES & MISC. EXPENSES $ 5,541.10 INTEREST $ 816.76 ADVANCE TO ANVIC $ 57,346.81 MOVING OF INVENTORY FROM ACWORTH, GA. $ 2,875.00 LOAN REPAYMENT $ 6,104.04 ECONOMIC DEVELOPMENT CORP. $ 8,136.95 ACCOUNTS PAYABLE $ 38,508.23 TOTAL EXPENDITURES $355,923.80 I will continue to keep you informed as additional progress is made. J -U -B ENGINEERS, INC. 250 South Beechwood Avenue, Suite I — Boise, Idaho 83709 TO: Meridian RLF-ICDBG File - Project No. 14622 FROM: Wayne S. Forrey, AICP C DATE: June 16, 1986 SUBJECT: Telephone Conversation with Mr. Lowell Hodgkins on June 13, 1986 I commented that Mr. Hodgkins had not submitted a progress report for nearly a month and that the City of Meridian needed to know his status. I also indicated that the Economic Development Corporation would be meeting in the near future and would near assurance from him regarding the outcome of the Anvic discussions. Mr. Hodgkins indicated that he had received $10,000 from Anvic International and released his Meridian inventory to that firm. Mr. Hodgkins has paid $5,000 to Mr. Dale Stillwell for past building rent and release of this inventory. He is now in a position to pay the Meridian Economic Develop- ment Corporation $2,500 but needs a decision regarding the amount of interest he should be paying in the future. Mr. Hodgkins indicated that the Anvic agreement called for an additional $10,000 payment in July 1986, and a $25,000 payment in September, 1986. Mr. Hodgkins indicated he has modified and tested the single-phase drive for Drive Technology Company. Also, Drive Technology Company has an additional customer that is interested in the Power Dynamics single-phase n drive. This is a positive sign for additional orders. Mr. Hodgkins did not go into specifics, but he indicated that he was now personally solvent and was considering putting $10,000 of his personal funding into Power Dynamics Corpora- tion to shore up the company and try to complete additional projects. I reminded Mr. Hodgkins that he has accounting of Power Dynamics' expenditures. this statement and mail it to me by Tuesday, J He will also include a progress report and the mailing. I informed Mr. Hodgkins that the Corporation would be meeting within the next do progress report and financial statements prio reduce his interest payments. WSF:ss not yet submitted a detailed ie indicated he would prepare me 17, 1986, via Express Mail. original business plan in this Meridian Economic Development D weeks and they would need his - to acting on his request to DATE: June 15, 1986 TO: Economic Development Corp. FROM: Lowell Hodgkins I have finally reached an agreement with Anvic. I have returned their inventory and received the first payment of $10,000. Dale Stilwell has been paid $5000 in back rent (necessary in order to get the inventory released). I am holding $2500 earmarked for the Economic Development Corp. pending a decision on the interest on this loan as requested in my last report. Another $10,000 is due by the end of July, and the balance of $35,000 is due by the end of September. Again, $2500 is earmarked for EDC out of the first payment and $25,000 from the final payment. I would appriciate a decision on the interest issue so that I can make a determination as to whether or not it is worth the effort of trying to carry on with my attempt to repay the endebtedness that faces Power Dynamics. I am presently seeking legal advice as to how either I or others could invest in the continued development and production of both the single and three phase drives so as to protect such an additional investment while also securing the position of PDI's creditors. As it stands now, these products are sitting dorment. They are the property of PDI, but there are no funds available to further development or finance production. Such funds might be made available if the investment could be protected from being pulled into the financial woes of Power Dynamics. One way of doing this would be to purchase the rights to these products for a cash down payment and then to pay a royality to Power Dynamics based upon revenues received from the sales of these products up to some maximum limit. More about this as we investigate the possibilities further. I have begun working on a distribution of expenditures from July 1, 1985 thru March 31, 1986. I am having to go through every check since I cannot find the general ledger that was kept. This should be completed by the end of the week and will be sent under seperate cover. AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE-P. O. BOX 427 GRANT L. AMBROSE (1915-1968) MERIDIAN, IDAHO 83642 JOHN O. FITZGERALD. P.A. TELEPHONE 888-4461 THIS FIRM INCLUDES WAYNE G. CROOKSTON, JR., P.A. _ PROFESSIONAL CORPORATIONS AREA CODE 208 May 7, 1986 MERIDIAN ECONOMIC DEVELOPMENT CORP. OF THE CITY OF MERIDIAN 728 MERIDIAN STREET MERIDIAN, IDAHO 83642 MATTERS RELATING TO: 1. REVOLVING LOAN FUND/POWER DYNAMICS: BOARD MEETINGS REGARDING POWER DYNAMICS; DISCUSSIONS WITH LOWELL HODGKINS, WAYNE� r FORREY, JACK NIEMANN AND BOARD MEMEBERS; PREPARATION OF NOTICES OF MEETINGS 11.35 HOURS/$70.00 AN HOUR .............. .$794. 0"� 2. GENERAL CORPORATE REPRESENTATION: AUDIT OPINION AND RESEARCH; REVIEW NEWBERRY INSURANCE COMPLIANCE; RESEARCH LIABILITY QUESTION 4.15 HOURS/$70.00 AN HOUR.................$290.5011 TOTAL DUE............................................$1,085.00 ,,'_.J -U -B ENGINEERS, Inc. TO: File 250 South Beechwood Avenue Suite t — Boise, Idaho 83709 FROM: Wayne S. Forrey, AICD w 5 �►. DATE: May 7, 1986 SUBJECT: Telephone Conversation with Mr. Lowell Hodgkins, President of Power Dynamics on April 25, 1986 Mr. Hodgkins explained that his April 18 progress report was rather grim, although he now had good news regarding his financial condition as follows: 1. Redesign has been completed on the Drive Technology units. 0 Testing is underway and delivery should start within ;ten days. Note: I contacted Drive Technology (201.329.6830) reWding Power Dynamics contract. I was instructed to call back on May 7, 1986 and speak with Mrs. Meg Dosher regarding .;the Power Dynamics contract. On May 7, I spoke with Mrs. Dosher and she 0 indicated that there was a contract between Drive Technology and Power Dynamics for approximately 180 slip energy drive systems. This represents about 15 units each month. 2. Don Faulkner of Anvic International contacted Power Dynamics and asked for a portion of the inventory in return for $3,750.00 in cash. Mr. Hodgkins said "No way". Anvic International made a subsequent offer as follows: a. Power Dynamics ships all inventory to Anvic International. b. Anvic International pays Power Dynamics $10,000 cash immediately. �] C. Anvic International pays Power Dynamics an additional \u'I $10,000 cash on July 30, 1986. d. Anvic International pays Power Dynamics an additional $35,000 on September 30, 1986. e. Dan Faulkner will pay the first $10,000 in cash with a note for the second $10,000 which is due July 30, 1986. f. The $35,000 which is due on September 30, 1986 is already secured with a note. g. Firetroll (identified as fire control in April 18 Power Dynamic memo) and Anvic International have agreed to split profits 50/50. Profits have been assigned to guarantee the two $10,000 payments to Power Dynamics. h. This is a 180° turn from previous conversations between Anvic International and Power Dynamics. That is two $10,000 payments first and then $35,000. Not $35,000 first and then the balance of two $10,000 payments after- wards. J U -B ENGINEERS, Inc. `l File n 250 South Beechwood Avenu@, Suite t — Boise, Idaho 83709 -2- May 7, 1986 3. Mr. Hodgkins proposes the following repayment schedule to the Meridian Economic Development Corporation regarding the Anvic International revenue. a. Payment of $2,500 to the Meridian Economic Development Corporation upon receipt of the first Anvic payment of $10,000. b. Payment of $2,500 to the Meridian Economic Development Corporation upon receipt of the second Anvic payment of $10,000. C. Payment of $25,000 to the Meridian Economic Development Corporation upon receipt of the third Anvic payment of $35,000. d. Power Dynamics presently owes $30,000 in addition to the RLF repayment debt. So balance of Anvic payments will go to other creditors. Other items discussed include the following: o Mr. Hodgkins home has been sold. Closing of sale will occur first week of May, 1986. The Hodgkins family is now renting. Oo There is a possiblity that Power Dynamics could represent - Cleveland Machine Controls Company and get paid for some sales work. Mr. Hodgkins is currently negotiating with Mr. Ed Schroeder at Cleveland Machine Controls Company regarding commission sales. Note: I contacted Cleveland Maching Controls Company (CMCC) (216.524.8800) and tried to speak with Mr. Ed Schroeder regarding Power Dynamics negotiations. The secretary indicated (� there is no one at CMCC with the name of Ed Schroeder. I finally was able to IIJ� speak with the Office Manager, Mrs. Nadeen Bltsh, on May 6 and she indicated she never heard of Power Dynamics. She suggested I contact their subsidiary in California (415.328.2640). I ended up talking to Mr. Fred Reames who knows Mr. Lowell Hodgkins. He indicated there is no Ed Schroeder but that Lowell Hodgkins is doing some contract work with his firm. NOTE: In all telephone conversations I have stated that the Meridian Economic Development Corporation has extended credit to Power Dynamics Corporation and that I have been asked to verify all data submitted to the Economic Development Corporation by Power Dynamics. I- - _.e .k AMBROSE, FITZGERALD & CROOKSTON 10-N, ATTORNEYS AND COUNSELORS 1530 WEST STATE -P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915-1968) JOHN O. FITZGERALD, P.A. THIS FIRM INCLUDES WAYNE G. CROOKSTON, JR., P.A. PROFESSIONAL CORPORATIONS April 21, 1986 Jack Niemann 728 Meridian Street Meridian, Idaho 83642 Dear Jack: TELEPHONE 888-4461 AREA CODE 208 Please find enclosed a copy of the Memo from the Economic Development Corporation. Please distribute this to the Board of Directors. Very Truly Yours, A.6r4t Wayn G. Croo WGC/mks Enclosure DATE: April 18, 1986 TO: Economic Development Corp. FROM: Lowell R. Hodgkins SUBJECT: Progress Report Bad news on two (2) fronts. First, a last minute design change instituted by the customer has delayed shipping and billing of the first twenty-five (25) units to Driye Technology. Hopefully, this will be worked out within the next few days. Of much greater importance; however, is the situation with Anvic International. I was informed this week that their buyout as originally outlined has fallen through. Fire Control, the company that was supposed to purchase Anvic has backed off of the original deal and has, instead, agreed to build the jobs for Anvic and pay Anvic a percentage of the profits. At best, this will tremendously delay any repayment by Anvic to Power Dynamics. I am seeking legal advice to determine if there is anything else that can be done to secure Power Dynamics position in this matter. Nothing else has changed since the last report which �as presented at your meeting. DATE: April 1, 1986 TO: Board Members Meridiajn Economic Development Corp. FROM: Power Dynamics, Inc. Lowell R. Hodgkins, President SUBJECT: Progress Report The following discusses progress or lack thereof in five (5) critical areas: COLLECTION OF FUNDS OWED BY ANVIC: Anvic owes Power Dynamics over $57,000. They are selling their business to a company in North Carolina who they tell me has agreed to pay the original $35,000 note. I made the following offer to Anvic which was verbally accepted, but so far not acted upon. I agreed to release their inventory which is being held in Meridian in return for a payment of $10,000, a written guarantee from their purchaser of payment of the $35,000 note upon closing of their sale, and $10,000 note from the principals of Anvic to be paid from future income no later than June 30, 1986. After agreeing to this, I was offered $3750 as a partial payment in return for the release of a substantial portion of the inventory. I refused based upon the theory that to do as requested would seriously delute their incentive to pay the balance. I will be talking to an attorney on Thursday to see if their is anything to do prior to the sale of their company to assure payment. POWER DYNAMICS ON-GOING BUSINESS: We have one order which is being built on an independent contracter basis by an ex -employee. This order is on-going and should be worth about $20,000 annually in gross pro 6ts. We have no other on-going business at this time and are 'ot soliciting any simply because we do not have the physical J financial where -with -all to produce anything. PAYMENTS FOR BUSINESS SOLICITED FOR OTHERS: I have been asked to provide a marketing survey to Cleveland Machine Controls with the intent that Power Dynamics might act as sales agents for this company in specific marketplaces. This offers the potential for reasonably substantial future income. I PAYMENT FOR PRODUCT TECHNOLOGY: In this area, we have had the least amount of success to date. After a great deal of consideration, Cleveland Machine Controls has decided not to buy into our drive technology, primarily because they have already made a significant investment in similar technology of their own. However, it may turn out that they have embarked on a technologi- cal path that may be entirely too expensive for the marketplace. In the meantime, I am looking for other avenues to market this technology. The big problem is that it is not complete; there- fore, anydne buying in has to do a certain amount of betting on the come. The cost to complete this product design ready for production its $30,000 - $50,000. OTHER ASSETS: The balance of our potential assets are limited. We have two (2) accounts receiveables totalling about $14,000 that we are having a hard time collecting. We have furniture, test equipment, and a very small inventory that might be on the books for about $25,000, but would not bring $10,000 if we attemped to sell. 1 am investigating the possibilities of a cause for legal n action against the CPA and attorney that I feel are responsible for our present predicament. Whether or not this is a potential asset is not yet determined. r"� REPORT NO.: POWER DYNAMICS, INC. PROGRESS REPORT PERIOD: From � / f �/(�i�(; To I. DESCRIPTION OF WORK ACCOMPLISHED THIS PERIOD: _ l Z. �� '• ' �G �r LL" II. WORK ANTIC ATED TO BE CQMPLETE NEXT PERIOD Al i III. CHANGES IN SCOPE OR COMPLEXITY OF WORK; PROBLEMS WHICH MAY CAUSE DELAYS: �l Chi IV. INFORMATI,N REQUIRED FROM MERIDIAN ECONOMIC DEVELOPMENT CORPORATION OR OTHERS TO AV✓OJID DELAYS: CC: Submitted by: POWER DYNAMICS, INC. 1-01 Signature J -U -B ENGINEERS. INC. 250 South Beechwood Avenue, Suite I — Boise, Idaho 83709 TO: Meridian Economic Development Corporation FROM: Wayne S_ Forrey, AICP 0 DATE: February 20, 1986 SUBJECT: Power Dynamics/Revolving Loan Fund Results of Telephone Conversation Between Wayne S_ Forrey and Lowell Hodgkins, Power Dynamics: o Mr. Hodgkins was traveling February 13 and 14. He was unable to receive telephone messages and regretted missing the Meridian Economic Development Corporation meeting on February 14. o Mr. Hodgkins reaffirmed his commitment to the City of Meridian and payment of his revolving loan fund obligations. He further stated that $150,000 was the minimum amount needed from the debenture sale to meet current expenses. Unfortunately, there was little interest in the debenture sale in either Idaho or Georgia up to the present time_ o Mr_ Hodgkins stated that he is seriously considering joining forces with an established business in order to raise sufficient capital to meet expenses and CDBG obligation_ He is pursuing the following options: a. Cleveland Machine Controls Company - Mr. Hodgkins will meet with the company's President in San Francisco on February 25 to discuss merger. b. Burton Industries - Mr. Hodgkins is a former employee of Burton Industries, and this firm has expressed an interest in purchasing all or a portion of Power Dynamics. C. An unknown investor has expressed an interest, through a stock broker, regarding purchase of Power Dynamics Corporation stock. o Mr. Hodgkins stated that he is in favor of "allowing a viable company to buy us out" to meet financial commitments and provide new sales outlet. He further stated that he is trying to stay in Meridian and is including the Meridian location in his negotiations - 0 Mr. Hodgkins discussed his current work orders. These are as follows: a. Slip Recovery Drive - $43,000; will be shipped by March 7, 1986. b. Variable Speed Drive - $13,500; will be shipped by mid-March, 1986- c_ Ray Chem Order — $12,715; will be shipped late March, 1986. J -U -B ENGINEERS, INC. 250 South Beechwood Avenue, Suite I — Boise, Idaho 83709 Meridian Economic Development Corp_ -2- February 20, 1986 o Mr. Hodgkins also indicated that he currently has approximately $200,000 out on quote (this is certainly speculative, but indicates his business development efforts). o Mr. Hodgkins indicated he will attend the Meridian Economic Develop- ment Corporation meeting on Friday, February 21, at 4.00 p.m. o After reviewing the situation with the State of Idaho, Department of Commerce, their recommendation is to secure the RLF payment first, retain Meridian industrial location second. Also, I recommend the following actions be taken at the February 21 meeting of the Meridian Economic Development Corporation: WSF:ss 1*1_*N1 a. Request a current financial statement for both Power Dynamics and/or Lowell Hodgkins, if necessary. b. Request Mr. Hodgkins to sign a document which will authorize United First Federal Savings & Loan Company to release the status of all accounts held by Power Dynamics and/or Lowell Hodgkins to the Meridian Economic Development Corporation. c_ Request Mr. Hodgkins to establish the date and location of the next Board of Directors meeting to allow the City Attorney to attend and monitor corporate activity- r*N POWER DYNAMICS February 10, 1986 Mr. Wayne Forrey JUB Engineers, Inc. 250 S. Beachwood Ave. Suite 1 Boise, ID 83709 Re: Meridian Block Grant Loan Dear Wayne: As you know, it has been essential that Power additional funding in order to carry through business plan. I have tried everyway I know funding on a local basis, and to date I have unsuccessful. U - ��i�_, iJr'�i•iO Dynamics raise its original how to raise this been completely As it became more and more obvious that local funding was not going to be forthcoming, I started working towards a second option. This was to find a company either in the same business or a closely aligned business with Power Dynamics that would be interested in investing in us on some basis. We are presently talking to one such company very seriously and have initiated a similar dialog with a second company. However, nothing has been firmed up with anyone as of this date. Without an influx of capital from either local sources or some similar company as mentioned above, our third option is to cut expenses to the core, hang on to enough money in order to produce several jobs that will be coming in shortly, and hope that we can keep a thread of business going until additional funding becomes available. I honestly do not believe that we can carry on in this mode indefinitely and ever meet the obligation of the block grant without some influx of funding from some source. We definitely cannot meet that obligation at this point in time. I have cut the payroll back to zero, put the telephone on an answering serivice, and I am doing everything I possibly can to work my way out of this mess. There is, of course, a fourth option. I could simply throw up my hands and shut the door on the whole thing once and for all. This is not a pleasant thought or choice and I have no intention of doing this until all other options are totally exhausted. Of course, there are a number of things beyond my control which could force me into this situation. As of tomorrow, I will be in 711 E. Broadway 0 P.O. Box 855 0 Meridian, Idaho 83642 • Phone (208) 888-6700 n Mr. Wayne Forrey Page -2- default of my February payment against the block grant loan and the Economic Development Corporation could choose to call the loan. The company could not meet this obligation and would be immediately forced into a position of insolvency. Since my wife and I do not have assets anywhere near sufficient to cover this loan, it could well mean that we also would be forced into a position of insolvency. We have an obligation for the rent on the property at 711 E. Broadway until June 30, 1986; however, our landlord is well aware of our situation and I do not believe that he sees any benefit to himself in forcing either Power Dynamics or my wife and I into positions of insolvency. Beyond these two major obligations, the company is relatively current in its accounts payables and is negotiating actively with Anvic International in getting a portion of its investment in that company back. Given sufficient time, and I am not exactly sure just how much is required, it is possible that Power Dynamics can work its way out of this financial hole we have dug for ourselves. I can only suggest that it is probably in everyone's best interest that such latitudes be extended to us at this time. Thank you for your indulgence and consideration in this matter. Very truly yours, POWER DYNA�ffCS, INC Lowell R. Hodgkins President LRH:gb W Ida -Ore Planning and Development Association (208) 549-2411 P.O. Box 311 Weiser, Idaho 83672 July 15, 1985 Grant Kingsford, Mayor City of Meridian 728 Meridian Street Meridian, Idaho 53642 Dear Mayor Kingsford: It is with regret that we must info m yo that IDA -ORE Planning and Development Association will not be able act as the Administrative Agency to administer the City's Revolving oan Fun Project. As you are aware, we have contacted the agencies and pri cipals volved in this project in an effort to properly fund the loan. a have en untered numerous obstacles to funding the project within the prog am guide of the Idaho Community Development Block Grant Program, an the IDA -ORE olving Loan Fund Management Plan. follows: 1) The Power Dynamics, Inc. p general and administrative in Idaho. This first year new AC and DC Variable e R&D phase of product dev manufacturing fi IDA -01 venture ca i pro ect; the problem encountered are as of fu ing for the firm's n es for a firs %ad r of oper tion my f research de t of es. ince this pc is for the irm relatively new in t only sider this project as a 2) Since the funds will be uti i inly for company expenses, we have att -ted to c llatera ize loa with additional assets. The princ al, Mr. well H dgkins, wi provide only his signatu e and personal guaran for s curity on th loan. He has refused t provide as c llater the f llowing item for the reasons indicat a) Residence - we requested to utilize his California residence as collateral and transfer that Deed of Trust to his Idaho residence upon the sale of the California house --refused by Mr. Hodgkins since he intends to utilize the proceeds of the sale to reduce a personal note to Benkiser Electric; and MEMBER COUNTIES (Including Municipalities) Ada Adams Boise Canyon Elmore Gem Harney Malheur Owyhee Payette Valley Washington Grant Kingsford, Mayor City of Meridian v Page two July 15, 1985 b) Accounts receivable and inventory of Power Dynamics, Inc. - refused by Mr. Hodgkins since he anticipates a future need to finance his receivables through a local bank. He wishes to reserve that collateral for that need. After reviewing the personal financial statement of Mr. Hodgkins, adjusting for his residence and interests in Power Dynamics, Inc. and the complete lack of additional collateral, we consider his financial strength totally inadequate relative to the loan request. 3) After IDA -OBE's selection as the Administrative Agency for the City of Meridian, we contacted Mr. Hodgkins for information concerning his business operations. These requests concerned financial statements, questions concerning his business plans and both current and future operations. Until July 8, 1985, he has refused to provide tax returns or current financials, stating that he was advised previously, by others, that he had provided all the necessary information. As we consider financial statements as standard requirement for any loan application, we were puzzled by his adamant refusal to provide the data. 4) During a meeting on July 8, 1985 between Mr. Hodgkins, Mr. Bob Bolinder (principal's financial consultant) and our staff, Mr. Hodgkins responded to questions directed to him in our letter of July 5, 1985 (copy attached). He agreed to provide the requested financials but was very vague regarding his future corporate structure, the possible sources of equity investment he will require for his second year of operations, the movement of key personnel to Idaho, and notes payable indicatedonhis personal financial statement. 5) Refusal of permission to contact Benkiser Electric and Northrup, ect. - Since we encountered the above, we attempted to resolve those problems through staffing and recommendations of both the Idaho Department of Commerce and professional organizations familiar with the Block Grant Program. On July 1, 1985, Paul Schneider and I met with Dr. David Porter, Director, Idaho Department of Commerce and discussed our reservations regarding this project. He indicated that the Administrative Agency was responsible to ensure that the loan was consummated within program parameters including reasonable and prudent lending guidelines. On July 8, 1985, a meeting took place between Lowell Hodgkins, Bob Bolinder (principal's financial consultant) and our staff, Paul Schneider, Bob Kelly, and myself. This meeting, as noted in Section 4 above, basically left us with more concerns regarding those items noted and a promise by Mr. Hodgkins to respond to our letter of July 5, 1985 in writing. Grant Kingsford, Mayor City of Meridian Page three July 15, 1985 On July 9, 1985, Paul Schneider, IDA -ORE staff, discussed the project with Mr. John Finke, National Development Council (NDC), Seattle, Washington. As you may be aware, the NDC is a nationwide organization that specializes in public financing programs. Mr. Finke reinforced our position that this loan should not be funded under the existing circumstance. In Mr. Finke's opinion, Community Development Block Grant funds are an inappropriate source for such financings. On July 10, 1985, Paul Schneider and I discussed this project with the IDA -ORE legal counsel, Mr. Lee Dillion of Chandler, Dillion and Ness, Chartered. Mr. Dillion again reinforced our position that the collateral position being offered, i.e. signature and personal guaranty, offered little security in the event of a default on the loan. He further advised that improperly structured or documented loans or loans for projects outside program guidelines could be and have been called by the Department of Housing and Urban Development. This, in turn, has historically resulted in serious legal and financial problems for those involved. Finally, we consulted the President and Vice President of IDA -ORE to share our findings and seek additional policy guidance. These consultations resulted in IDA -ORE leadership endorsement of staff findings and conclusions. After complete review of the project, the type of funding involved, the intense resistance of the principal to provide requested financial data, the complete lack of any available collateral and after consultation with a financial expert employed by the National Development Council and on advice of legal counsel, IDA -ORE Planning and Development Association must decline to manage this project. If you should have any questions or would like to discuss the matter further, please do not hesitate to contact Mr. Schneider or me. We will, of course, forward to you all information and documentation concerning this project that we have prepared to date at your request. In addition, we will set aside staff time to review our files as necessary. Sincerely, P. M. Choate Executive Director PMC: Ib cc: David Porter, Administrator, Idaho Department of Commerce Arnold Howard, President, IDA -ORE Dick Butcher, Vice President, IDA -ORE Ida -Ore Planning and Development Association In the Business Resource Center July 5, 1985 Power Dynamics Incorporated Attention Mr. Lowell Hodgkins P.O. Box 1424 San Carlos, California 94070 Dear Mr. Hodgkins: As per our phone conversation of this date. I have listed below the documentation and clarifications that I currently require to continue processing your loan application. 1) Corporate tax returns for the last two fiscal years; 2) Interim financial statement, both Balance Sheet and Profit and Loss State (less than 60 days old); 3) Names, addresses, and phone numbers of three suppliers; 4) You advised that you have obtained an order from Northrup for approximately $1,000,000.00. Please provide a copy of that purchase order; 5) Corporate structure - I understand that 100% of the stock is owned by both yourself and your wife, but that the structure will change. Please advise if and how the ownership will change. 6) Reference page 61 of Business Plan: 1985, Power Dynamics, Inc. - you state that for the second phase of funding you will require funding in the amount of $1,500,000 in the form of equity investment and in addition that it will be necessary to receive a long-term commitment through the Division of Economic and Community Affairs, State of Idaho for 90% financing of capital investments. Please advise as to the progress that you have made to date to obtain such financing; 7) Have the past due payroll taxes been paid to the IRS (as per our phone conversation, I understand that this is paid); 8) You advised that you would be selling your firm in California. Has this sale transpired? If so, are there any non -compete clauses? 9) During your meeting in Meridian earlier this month you advised that you can be operational and manufacturing (for Northrup contract) within two weeks of arrival in Boise and that you would have your rep organization in place in approximately 90 days. Is this still feasible? 1lember Counties Ada, Adams, Boise. Carron, Elmore, Gem. Hames :Malheur. OwNhee. Payette. Valley, Washinglon Business Resource Center, 7270 Potomac Drive, Boise, Idaho 83704 (208) 322-7033 or P. O. Box 311, Weiser, Idaho 83672 (208) 549-2411 Power Dynamics Incorporated Page two July 3, 1985 10) You advised that Bill Erdman will head your R & D section, but will not be moving to Idaho for several months. How will this impact your time schedule for development? 11) Do you feel that your projected Profit and Loss Statement and cash flow analysis for the first year of operations (start-up phase) are still accurate or can you foresee any adjustments necessary at this time? 12) Your personal financial statement indicates a note payable to Benkiser Electric @ $20,000.00. Please advise the particulars of this loan. 13) Your projection indicates salary for the President at $52,000 while your write-up indicates $60,000. Please advise as to correct figure. 14) To emplace our employment program we will require the following: a) Tentative schedule of hiring; b) Job descriptions; c) Description of training program. An Employment and Training Specialist from IDA -ORE will contact you for this information. While the above information is not all inclusive, it should provide the bulk of the information required to process your loan application. Sincerely, Paul J. Schneider Economic Development Specialist PJS:1 b John V. Evans, State Capitol Building GOVERNOR l O Room 108 David O. Porter Boise, Idaho 83720 DIRECTORr ti4 Phone (208) 334-2470 9pE { 04 DEPARTMENT OF COMMERCE IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT Date: August 2, 1985 MEMORANDUM TO: Mayor Grant Kingsford City of Merl Ian 728 Meridian Street Meridian, Idaho 8364 FROM: The Department of Commerce SUBJECT: Notice of Removal of Grant Conditions and Release of Funds on Grant No.ICDBG-85-III-13 ACTIVITY• Power Dynamics, Inc. Revolving Loan AMOUNT: $275,000 On July 31, 1985 this office received your Request for Release of Funds and Certification. We have reviewed your Finding of Exemption and concur with that finding. This memo removes the environmental conditions on Grant No. ICDBG-85-III-13 and constitutes the authority to use the ICDBG funds provided under Title I of the Housing and Community Development Act of 1974 for the above listed activities and amounts. (Authority is limited to current proaram year for multi. year grant. Please attach to contract). August 2, 1985 Authorizinq Officer Effective Date David O. Porter, Director Typed Name and Title cc: Wayne Forrey IDAHO John V. Evans, GOVERNOR David O. Porter DIRECTOR DEPARTMENT OF COMMERCE August 9, 1985 State Capitol Building Room 108 Boise, Idaho 83720 Phone (208) 334-2470 ICDBG ADMINISTRATIVE DIRECTIVE NUMBER 6: SUBJECT: ICDBG BID SOLICITATION S RY FOR MINORITY BUSINESS ENTERPRISES (MBE'S) AND WOMEN BUSINESS ENTERPRISES (WBE'S) The ICDBG Bid Solicitation Summary has been developed to promote increased contracting opportunities for MBE's and WBE's for supplies, equipment, construction and services provided in conjunction with ICDBG projects. One of the purposes of this form is to provide a shared source of information for the Department and the Minority Business Assistance Center (MBAC) to enhance Affirmative Action and Equal Opportunity objectives. The Department will utilize the form as one source of documentation of local efforts to solicit MBE's/WBE's. The grantee is still required to take other actions which may increase MBE/WBE participation in the bid process. The MBAC provides a wide range of services for MBE's/WBE's both in Idaho and along its borders. Accordingly, the center will utilize the information to contact appropriate businesses which are registered with the Idaho Transportation Derartment and other State and Federal agencies. Local grantees are responsible for submitting this form to the Department of Commerce and the Minority Business Assistance Center simultaneously. It is necessary to do this as soon as appropriate bid specification documents have been prepared to allow sufficient time for distribution and preparation of bids. IDAHO N ICDBG BID SOLICITATION SUMMARY n Grantee: Address: Contact Person: Phone: Date Submitted: Brief project description or list of activities: Type of commodity or service for which bids will be solicited: Est. $ Range Bid Date Please submit form on the same date to: Minority Business Assistance Idaho Department of Commerce Center Statehouse, Room 108 P.O. Box 3026 Boise, Idaho 83720 Boise, Idaho 83703 June 1985 � o� John V. Evans, State Capitol Building GOVERNOR y 0Room 108 ,",-,David 0. Porter M . Boise, Idaho 83720 DIRECTOR r ti4 Phone [208) 334-2470 DEPARTMENT OF COMMERCE September 9, 1985 Mayor Grant Kingsford City of Meridian 728 Meridian Street Meridian, Idaho 83642 Dear Mayor Kingsford: Enclosed is a signed original of the City's contract with the Department of Commerce. Also enclosed are the new Financial Report - Request for Funds forms. If you have any questions, please feel free to call. Sincerely,) ® Gail Atwood Office Coordinator Enclosures cc: Wayne Forrey n IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM TITLE: City of Meridian CONTRACT NO.: ICDBG-85-III-i3 This CDBG- -III- This contract is made and entered into between the Department of Commerce as of July 1, 1985, hereinafter called the DEPARTMENT, and the City of Meridian , hereinafter called the GRANTEE. TERMS AND CONDITIONS Article I - Period of Performance The project work required to be completed hereunder shall be accomplished from the effective date of May 10, 1985 and shall continue up to and including December 31, 1986 , unless otherwise amended. Article II - Grant Amount and Payments The maximum amount of Idaho Community Development Block Grant (ICDBG) assistance hereby awarded is $275,000 The GRANTEE hereby agrees to provide -0- in the form of local match (i.e., local, state, or other federal contributions) for the purposes of completing this project. The GRANTEE shall adhere to the budget as outlined in Attachment A. The GRANTEE shall deposit all ICDBG funds for financing the project in a non-interest bearing account. The GRANTEE shall periodically request payment up to 100% of the value of work performed up to the total sum of the ICDBG grant assistance minus the budgeted audit line item. If the DEPARTMENT is satisfied with the request, the DEPARTMENT will pay the amount requested within 30 days of the receipt of the request. The GRANTEE shall certify that all work is complete as billed and shall be liable for any discrepancy in documentation. Requisition of the budgeted audit line item shall be submitted in conjunction with the audit report and shall be paid upon acceptance of the audit by the DEPARTMENT. The use of ICDBG funds for administrative costs is limited to a maximum of 10% of the total ICDBG funds awarded by this contract. Article III - Work Performance The project activities to be accomplished under the conditions of this contract are outlined in the Scope of Work, as described in Attachment B. ' •i Article IV - Financial and Progress Reports In the performance of this contract the GRANTEE shall keep books, records and accounts of all activities related to the provisions of this contract. The GRANTEE will certify each interim request for funds (financial report) that is submitted to the DEPARTMENT. The GRANTEE shall also submit a final financial report which details costs incurred by line item as described in the project budget. This report shall be submitted upon completion of the project funded under this contract. The GRANTEE shall submit interim progress reports as specified in the Reporting Schedule, Attachment C. A detailed written final report with documentation of the activities carried out shall be submitted to the DEPARTMENT, as stated in Attachment C, at the conclusion of the project. Article V - Amendments The DEPARTMENT may amend this contract on its own initiative or at the request of the GRANTEE to reflect changes in the scope of work or design of the project. Such changes shall be mutually agreed upon. In no case shall the nature or purpose of the project be amended from what generally described in the application and was the basis for selecton of the project. And further, in no case shall the budget be amended to exceed the ICDBG dollar amount originally granted in the contract. The GRANTEE shall be responsible to pay out of its own funds any costs above the original ICDBG sum granted by this contract. No scope of work costs or services shall be changed unless approved in a written contract amendment signed by both parties. Article VI - Subcontracts The GRANTEE shall notify the DEPARTMENT and forward for approval any subcontracts under this contract. Upon a showing that the contract has complied with the prerequisites and requirements, the DEPARTMENT shall issue its approval to proceed with the subcontract. All contracts and subcontracts must comply with all applicable state and federal laws and regulations. Article VII - Audit and monitoring The GRANTEE shall provide the DEPARTMENT with an annual financial audit in accordance with Attachment P of OMB Circular A-102 and the new circular that will supersede it. The audit shall be completed by a certified public accountant during the regular annual audit cycle. Audits shall be provided annually until the completion of the project. The DEPARTMENT may monitor and make periodic inspections and evaluations of the project, its books, records and amounts of the project. The GRANTEE shall make available the books and records to the DEPARTMENT during regular working hours. These books and n records shall be maintained for at least three years following the final audit of the project. Each GRANTEE that provides a portion of their Idaho Community Development Block Grant in any fiscal year to a subrecipient such as a Council of Government (COG) or some other non-profit organization, shall require the subrecipient to meet the audit and monitoring requirements of Attachment P of OMB Circular A-102 and the new circular that will supersede it, or Circular A-110. The GRANTEE shall be responsible for monitoring any subrecipient for compliance with all federal and state laws and regulations including the audit requirements. Article VIII - Termination The DEPARTMENT shall have the right to terminate this contract in whole or in part, at any time before the date of completion, whenever it is determined that the GRANTEE has failed to comply with the conditions of the contract. The DEPARTMENT shall promptly notify the GRANTEE in writing of the determination and the reasons for the termination, together with the effective date. The DEPARTMENT may terminate this contract in whole or in part for the convenience of the DEPARTMENT when both parties agree that the continuation of the project would not produce results commensurate with further expenditure of funds. The two parties shall agree in writing upon termination conditions, an effective date and a fair and reasonable payment, as determined by the DEPARTMENT for all n work completed. Article IX - Special Warranty The GRANTEE warrants that nothing of monetary value has been given, promised or implied as remuneration for entering into this contract. The GRANTEE further declares no improper personal, political or social activities have been used or attempted in an effort to influence the outcome of the competition, discussion or negotiation leading to the award of this contract. Article X - Relationship of Contracting Parties Contracting parties warrant by signature that no employer-employee relationship is established between the DEPARTMENT and the GRANTEE by the terms of this contract, and further indemnifies the State and hold it harmless against any and all suits, actions, claims or losses of every kind, nature and description, including costs, expenses, and attorney fees, that may be incurred by reason of any act or omission, neglect or misconduct of the GRANTEE which may arise out of this agreement. Article XI - Conflict of Interest No official or employee of the GRANTEE or the DEPARTMENT shall have any direct or indirect financial interest in the project. n Article XII All grant recipients will erect a sign for all major construction projects identifying the project's funding source after notice to proceed is issued; location as directed. Maintain in good condition; remove when directed. Note: Except for the project sign, there shall be no signs or advertisements of any kind erected on the site. Project sign shall be constructed according to the following requirements (or to equal or better requirements): 41x8' of 3/4" exterior grade MDO plastic sealed plywood, framed with suitable metal edge moldings for prevention of delamination. Paint with three (3) coats of exterior trim or sign enamel; colors as selected. Also, employ sign painter approved by architect, to apply additional graphics and lettering, as directed, over the three coat finish. At least two (2) additional coats are required for the graphic and lettering work. Employ sign painter approved by architect to letter names of the project, architect or consulting engineers, contractor, and principal subcontractors. Secure sign to nominal 4"x4"x12' pressure treated wood posts set 41- 0" into ground with concrete surrounding each post. In addition, the sign will give credit to the Department of Commerce and to the Governor for the funding. Article XIII - Federal Regulations and Assurances All conditions and assurances required of the DEPARTMENT by Title I of the Housing and Community Development Act of 1974, P.L. 93-383 as amended, are binding on the GRANTEE as outlined in Attachment D, Assurances. GRANTEE shall comply with all terms and conditions of Federal Grant Number B -85 -DC -16-0001 and all applicable federal laws and regulations as stated in the Idaho Community Development Block Grant Handbook. Additionally, both paries shall adhere to statutes and regulations of the State of Idaho. APP ED: ALL- Sitnafure David O. Porter Typed Name 85 Date Director Department of Commerce DO nature Date Grant Kingsford Typed Name (chief elected official) Mayor _ Title ATTACHMENT A BUDGET n COMMUNITY DEVELOPMENT PROJECT Applicant: City of Meridian Project: ICDBG-85-III-13 n AMOUNT ICDBG Other Line Items Grant Fed State Local Total Administrative Expense* 24 OOC 24 Project Planning & Design* Land, Structures and rights-of-way Architectural/engineering base fees Project inspection fees Relocation Expenses Relocation payments to individuals & businesses Demolition & removal Construction & project improvement Venture Capital Loan 250,000 250 Audit 1,000 1 Total Costs** 275 00 Remarks: Me ,00 ,00 ,00 *Administrative expenses and project planning design costs when totaled shall not exceed 10% of the total ICDBG amount. **Grantees allowed to shift up to 10% of total ICDBG funds between line items without requesting budget amendment. Therefore there is no n contingency line item. ATTACHMENT B SCOPE OF WORK AND SCHEDULE The City of Meridian will contract with J -U -B ENGINEERS, Inc. for grant administration and the Economic Development Corporation of the City of Meridian as their Revolving Loan Fund Agency with the basic terms and scope of work as follows: A. The project will be to establish a Revolving Loan Fund to assist businesses in the City of Meridian. The first project to be funded will be as follows: Power Dynamics, Inc., Meridian, Idaho 83642 - this project will be to provide $379,000.00 for start-up expenses and first year operating capital for the business at the Meridian site as follows: Use Source ICDBG BANK EQUITY Working Capital $235,000 $ $129,000* Equipment 15,000 TOTAL $250,000 $ -0- $129,000 *Equity injection to be provided from profits of first year operations. B_ Provide Administrative Management Plan. C. Provide Revolving Loan Fund Management Plan. D. Provide Re -Use Plan. E. The benefits of this project will be as .follows: This project will allow for up to 23 additional jobs in the Meridian area within the first year of operation. Scope of Work (continued) ICDBG-85-III-13 Of those positions, 3-4 will be for people of low -to -moderate income. The balance of the jobs will be created as and if required over the remaining 10 months. Given projected growth, the company predicts job creation exceeding 300 positions by the tenth (10th) year of operations. Employment will be tracked according to low -to -moderate income and by minority. F. Article XII of contract between Idaho Department of Commerce and the City of Meridian will not be complied with as there is no outside visible construction that will take place on the above referenced project. G. The time phasing of the project will be as follows: May 2, 1985 - Grant award August 1, 1985 - State/City of Meridian contract signed Aug 1, 1985 - City of Meridian/Administrative Agency contract signed Aug 1, 1985 - Admin. Agency/Power Dynamics, Inc. loan agreement completed Jul 1, 1985 - Power Dynamics, Inc. project initiated Sep 30, 1986 - Power Dynamics, Inc. project completed Dec 30, 1986 - Audit complete/Grant closed H. Establish Environmental Review Record. I. Submit Needs Assessment/ Community Development Plan. ATTACHMENT C REPORTING SCHEDULE Contract Number: ICDBG-85-III-13 A. Performance and Financial Reports are required as indicated below: Period Due 1st Quarter August 15, 1985 2nd Quarter November 15, 1985 3rd Quarter February 15, 1986 4th Quarter May 15, 1986 5th Quarter August 15, 1986 6th Quarter November 15, 1986 FINAL January 15, 1987 B. FINANCIAL: Request for payment should be received by the following dates of each month on either the 5th, 15th, or 25th. no ATTACHMENT D e-4�1 Community Development Block Grant Assurances 1. Nondiscrimination Under Title VI of the Civil Rights Act of 1964 This agreement is subject to the requirements of Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and HUD regulations with respect thereto including the regulations under 24 CFR Part 1. In the sale, lease or other transfer of land acquired, cleared or improved with assistance provided under this Agreement, the Grantee shall cause or,require a covenant running with the land to be inserted in the deed or lease for such transfer, prohibiting discrimination upon the basis of race, color, religion, sex or national origin, in the sale, lease or rental, or in the use or occupancy of such land or any improvements erected or to be erected thereon, and providing that the Grantee is undertaking its obligation in carrying out the program assisted hereunder, agrees to take such measures as are necessary to enforce such covenant and will not itself so discriminate. 2. TITLE VIII This Agreement is subject to the requirements of Title VIII of the Civil Rights Act of 1968 (P.L. 90-284), and HUD regulations with respect thereto, providing that it is the policy of the United States, within constitutional limitations, to provide fair housing, and prohibiting any person, in the sale, rental, financing, or brokery of housing, from discriminating or in any way making unavailable or denying a dwelling to any person because of race, color, religion, sex or national origin. In the implementation of Title VIII, HUD is guided by Executive Orders 11063 and 12259, and 24 CFR parts 100 through 115, particularly Part 107. 3. Section 109 This agreement is also subject to the provisions of Section 109 of the Housing and Community Development Act of 1974 (P.L. 93-383), as amended. Section 109 prohibits the use of criteria based on race, color, national origin or sex to exclude any person from participating in or benefiting from any program or activity funded in whole or part with community development funds made available pursuant to the Act. Section 109 further incorporates the prohibitions against age discrimination contained in the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), and against handicapped discrimination contained in Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). n M 4. Labor Standards r� Except with respect to the rehabilitation of residential property designed for residential use for less than eight families, the Grantee and all contractors engaged under contracts in excess of $2,000 for the construction, prosecution, completion or repair of any building or work financed in whole or in part with assistance provided under this Agreement, shall comply with the requirements of the Davis -Bacon Act, as amended (40 U.S.C. 276a - 276a-5) and the Contract Work Hours and Safety Standard Act (40 U.S.C. 327 et seq.), as well as HUD requirements pertaining to such contracts and the applicable requirements'of the regulations of the Department of Labor under 29 CFR Parts 3 and 5.5, governing the payment of wages and the ratio of aprpentices and trainees to journeymen: Provided, that if wage rates higher than those requried under such regulations are imposed by state or local law, nothing hereunder is intended to relieve the Grantee of its obligations, if any, to require payment of the higher rates. The Grantee shall cause or require to be inserted in full, in all such contracts subject to such regulations, provisions meeting the requirements of 29 CFR 5.5. No award shall be made to any contractor who is at the time ineligible under the provisions of any applicable regulations of the Department of Labor to receive an award of such contract. 5. Environmental Standards This Agreement is subject to the policies contained in the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), and related laws, as furthered by HUD regulations contained in 24 CFR Part 58. The Grantee hereby assumes responsibility for environmental review, decision-making, and other action under NEPA and related laws, in accordance with Part 58. 6. Section 3 This Agreement is subject to the employment and contracting requirements of Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u). Section 3 requires that, to the greatest extent feasible, opportunities for training and employment be given to lower-income persons residing within the unit of local government or the metropolitan area or nonmetropolitan county in which a covered project is located; and that contracts for work in connection with such projects be awarded, to the greatest extent feasible, to eligible business concerns which are located in, or owned in � substantial part by, persons residing in the same metropolitan area or nonmetropolitan county as the project. HUD regulations contained in 24 CFR Part 135 contain guidelines ,.� relating to Section 3 objectives. 7. Lead Based Paint Hazards The construction or rehabilitation of residential structures with assistance provided under this Agreement is subject to the HUD Lead -Based Paint regulations, 24 CFR Part 35. Any grants or loans made by the Grantee for the rehabilitatio of residential structures with assistance provided under this Agreement shall be made subject to the provisions for the elimination of lead-based paint hazards under Subpart B of said regulations, and the Grantee shall be responsible for the inspections and certifications required under section 35.14(f) thereof. 8. Conflict of Interest of Members, Officers, or Employees of Grantee, Members of Local Governing Body, or Other Public Officials: No member, officer, or employee of the Grantee, or its designees or agents, no member of the governing body of the locality in which the program is situated, and no public official of such locality or localities who exercises any functions or responsibilities with respect to the program during his tenure or for one yea thereafter, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the program assisted under the Agreement. The Grantee shall incorporate, or cause to be incorporated, in all such contracts a provision prohibiting such interest pursuant to the purposes of this section. 9. Prohibition Against Payments or Commissions The assistance provided under this Agreement shall not be used in the payment of any bonus or commission for the purpose of obtaining HUD approval of the application for such assistance, or HUD approval of applications for additional assistance, or any other approval or concurrence of HUD required under this Agreement, Title I of the Housing and Community Development Act of 1974 or HUD regulations with respect thereto; provided, however, that reasonable fees or bona fide technical, consultant, managerial or other such services, other than actual solicitation, are not hereby prohibited if otherwise eligible as program costs. 10. Conflict of Interest of Certain Federal Officials No member of or Delegate to the Congress of the United States, and no Resident Commissioner, shall be admitted to any share or part of this Agreement or to any benefit to arise from the n same. 11. Historic Preservation Act of 1966 � Historic Preservation Act of 1966, as amended (16 U.S.C. 470 et seq.) . 12. Additional Assurances The Grantee shall remain fully obligated under the provisions of the Agreement notwithstanding its designation of any third party of parties for the undertaking of all or any part of the program with respect to which assistance is being provided under this Agreement. The Grantee shall comply with all lawful requirements of the Grantor to insure this Agreement is carried out in accordance, and with the obligations and responsibilities of the Grantor to HUD. 13. Requirements for Units of General Local Government A. Certifications Section 106 (i) of the 1983 Amendments added section 106 (d)(5) to the Act which requires units of general local government to make certain certifications to the State. The certifying official must have sufficient authority to make such certifications on behalf of the unit of government. The State may not distribute funds unless the unit of government has submitted certifications providing essentially that: 1. it will minimize displacement as a result of activities assisted with CDBG funds; 2. it will conduct and administer its program in conformance with Title VI and Title VIII, and affirmatively furthering fair housing; 3. it will provide oppportunities for citizen participation comparable to the State's requirements (those described in Section 104(a) of the Act, as amended); 4. it will not use assessments or fees to recover the capital costs of CDBG-funded public improvements from low and moderate income owner occupants. 0% Power Dynamics Incorporated October 8, 1985 Economic Development c/o Wayne Forrey Loan Administrator J -U -B Engineers 250 S. Beechwood Suite #1 Boise, Idaho 83709 Corporation RE: Repayment Schedule for Block Grant Loan Gentlemen: As per our conference call yesterday between Wayne Forrey, Wayne Crookston and myself, it was agreed that Power Dynamics should be making payments only on the portion of the funds actually received, but on the same basis as the agreed-upon payment schedule once the loan has been fully funded. The terms of the loan, once fully funded, would result in payments of $2535.00 per month. This is based on a 15 -year amortization of the $250,000 at 9% annual interst. Since we have received to date only $125,000, it appears the payment should be based on that amount as amortized over 15 years at 9% annual interest. This results in a monthly payment of $1267.83. Two months payments would amount to $2535.67. It is quite logical that the payment on $125,000 is just one-half of the payment on $250,000. My check in the amount of $2535.00 is short 67�. I suspect this is the result of rounding off the cents when the payment schedule was determined. Since the funds were received approximately September 6, this should pay us through November 6, 1985. Since we have requested a second drawdown which will be funded somewhere between the 15th and 20th of October, the November payment wi],l have to be recalculated based upon the new total POWER DYNAMICS J -U -B Engineers rin arp BOISE, IDAHO November 71, 1985 Economic Development Corporation c/o Wayne Forrey, Loan Administrator JUB Engineers 250 South Beachwood Suite No. 1 Boise, Idaho 83709 Re: Repayment Schedule for Block Grant Loan Gentlemen: I have made out a check this date in the amount of $1,397.28, which represents my November payment against the block grant loan. The above is calculated as follows: $1,267.83 on the $125,000 that was in force for the full amount of the month, $129.45 as interest on the $75,000 for seven days which was made available to -us October 25, 1985. We are delivering this check directly to City Hall for deposit. If there are any questions, please do not hesitate to contact me. LRH:gb Enclosure Very truly yours, POWER DYNAMICS Lowell R. Hodgkins President -71-11! 0-4.. . nn M, ncC . �A-..f,d1_... LJ _l. n1r4n . n4._.. .. /In0A 000c7nn Mr. Wayne Forre -2- October 8, 1985 Y Y amount and the time the two portions of that amount have been outstanding. I can certainly do this and will accompany a letter with the breakdown with the November payment. Thank you very much for your cooperation in this matter. Very truly yours, POWER DYNAMICS , INC. Lowell R. Hodgkins President LRH: kb cc: Wayne Crookston 6 �' Power Dynamics Incorporated October 8, 1985 Economic Development c/o Wayne Forrey Loan Administrator J -U -B Engineers 250 S. Beechwood Suite #1 Boise, Idaho 83709 Corporation RE: Repayment Schedule for Block Grant Loan Gentlemen: As per our conference call yesterday between Wayne Forrey, Wayne Crookston and myself, it was agreed that Power Dynamics should be making payments only on the portion of the funds actually received, but on the same basis as the agreed-upon payment schedule once the loan has been fully funded. The terms of the loan, once fully funded, would result in payments of $2535.00 per month. This is based on a 15 -year amortization of the $250,000 at 9% annual interst. Since we have received to date only $125,000, it appears the payment should be based on that amount as amortized'over 15 years at 9% annual interest. This results in a monthly payment of $1267.83. Two months payments would amount to $2535.67. It is quite logical that the payment on $125,000 is just one-half of the payment on $250,000. My check in the amount of $2535.00 is short 67�. I suspect this is the result of rounding off the cents when the payment schedule was determined. Since the funds were received approximately September 6, this should pay us through November 6, 1985. Since we have requested a second drawdown which will be funded somewhere between the 15th and 20th of October, the November payment will have to be recalculated based upon the new total P.O. Box 1424, San Carlos, California 94070 (415) 591-4390 Mr. Wayne Forrey -2- October 8, 1985 amount and the time the two portions of that amount have been outstanding. I can certainly do this and will accompany a letter with the breakdown with the November payment. Thank you very much for your cooperation in this matter. Very truly yours, POWER DYNAMICS, INC Lowell R. Hodgkins President LRH: kb cc: Wayne Crookston IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM TITLE: City of Meridian CONTRACT NO.: ICDBG-85-III-i3 This CDBG- -III- This contract is made and entered into between the Department of Commerce as of July 1, 19859 hereinafter called the DEPARTMENT, and the City of Meridian , hereinafter' called the GRANTEE. TERMS AND CONDITIONS Article I - Period of Performance The project work required to be completed hereunder shall be accomplished from the effective date of May 10. 1985 and shall continue up to and including December 31, 1986 , unless otherwise amended. Article II - Grant Amount and Payments The maximum amount of Idaho Community Development Block Grant (ICDBG) assistance hereby awarded is $275,000 The GRANTEE hereby agrees to provide -0- in the form of local match (i.e., local, state, or other federal contributions) for the purposes of completing this project. The GRANTEE shall adhere to the budget as outlined in Attachment A. The GRANTEE shall deposit all ICDBG funds for financing the project in a non-interest bearing account. The GRANTEE shall periodically request payment up to 100% of the value of work performed up to the total sum of the ICDBG grant assistance minus the budgeted audit line item. If the DEPARTMENT is satisfied with the request, the DEPARTMENT will pay the amount requested within 30 days of the receipt of the request. The GRANTEE shall certify that all work is complete as billed and shall be liable for any discrepancy in documentation. Requisition of the budgeted audit line item shall be submitted in conjunction with the audit report and shall be paid upon acceptance of the audit by the DEPARTMENT. The use of ICDBG funds for administrative costs is limited to a maximum of 107. of the total ICDBG funds awarded by this contract. Article III - Work Performance The project activities to be accomplished under the conditions of this contract are outlined in the Scope of Work, as described in Attachment B. M Article IV - Financial and Proqress Reports i� In the performance of this contract the GRANTEE shall keep books, records and accounts of all activities related to the provisions of this contract. The GRANTEE will certify each interim request for funds (financial report) that is submitted.to the DEPARTMENT. The GRANTEE shall also submit a final financial report which details costs incurred by line item as described -in the project budget. This report shall be submitted upon completion of the project funded under this contract. The GRANTEE shall submit interim progress reports as specified in the Reporting Schedule, Attachment C. A detailed written final report with documentation of the activities carried out shall be submitted to the DEPARTMENT, as stated in Attachment C, at the conclusion of the project. Article V - Amendments The DEPARTMENT may amend this contract on its own initiative or at the request of the GRANTEE to reflect changes in the scope of work or design of the project. Such changes shall be mutually agreed upon. In no case shall the nature or purpose of the project be amended from what generally described in the application and was the basis for selecton of the project. And further, in no case shall the budget be amended to exceed the ICDBG dollar amount originally granted in the contract. The GRANTEE shall be responsible to pay out of its own funds any costs above the original ICDBG sum granted by this contract. No scope of work costs or services shall be changed unless approved in a written contract amendment signed by both parties. Article VI - Subcontracts The GRANTEE shall notify the DEPARTMENT and forward for approval any subcontracts under this contract. Upon a showing that the contract has complied with the prerequisites and requirements, the DEPARTMENT shall issue its approval to proceed with the subcontract. All contracts and subcontracts must comply with all applicable state and federal laws and regulations. Article VII - Audit and Monitoring The GRANTEE shall provide the DEPARTMENT with an annual financial audit in accordance with Attachment P of OMB Circular A-102 and the new circular that will supersede it. The audit shall be completed by a certified public accountant during the regular annual audit cycle. Audits shall be provided annually until the completion of the project. The DEPARTMENT may monitor and make periodic inspections and evaluations of the project, its books, records and amounts of the project. The GRANTEE shall make available the books and records to !� the DEPARTMENT during regular working hours. These books and records shall be maintained for at least three years following the final audit of the project. Each GRANTEE that provides a portion of their Idaho Community Development Block Grant in any fiscal year to a subrecipient such as a Council of Government (COG) or some other non-profit organization, shall require the subrecipient to meet the audit and monitoring requirements of Attachment P of OMB Circular A-102 and the new circular that will supersede it, or Circular A-110. The GRANTEE shall be responsible for monitoring any subrecipient for compliance with all federal and state laws and regulations including the audit requirements. Article VIII - Termination The DEPARTMENT shall have the right to terminate this contract in whole or in part, at any time before the date of completion, whenever it is determined that the GRANTEE has failed to comply with the conditions of the contract. The DEPARTMENT shall promptly notify the GRANTEE in writing of the determination and the reasons for the termination, together with the effective date. The DEPARTMENT may terminate this contract in whole or in part for the convenience of the DEPARTMENT when both parties agree that the continuation of the project would not produce results commensurate with further expenditure of funds. The two parties shall agree in writing upon termination conditions, an effective date and a fair �-� and reasonable payment, as determined by the DEPARTMENT for all work completed. Article IX - Special Warranty The GRANTEE warrants that nothing of monetary value has been given, promised or implied as remuneration for entering into this contract. The GRANTEE further declares no improper .personal, political or social activities have been used or attempted in an effort to influence the outcome of the competition, discussion or negotiation leading to the award of this contract. Article X - Relationship of Contracting Parties Contracting parties warrant by signature that no employer-employee relationship is established between the DEPARTMENT and the GRANTEE by the terms of this contract, and further indemnifies the State and hold it harmless against any and all suits, actions, claims or losses of every kind, nature and description, including costs, expenses, and attorney fees, that may be incurred by reason of any act or omission, neglect or misconduct of the GRANTEE which may arise out of this agreement. Article XI - Conflict of Interest No official or employee of the GRANTEE or the DEPARTMENT shall have �� any direct or indirect financial interest in the project. Article XII All grant recipients will erect a sign for all major construction projects identifying the project's funding source after notice to proceed is issued; location as directed. Maintain in good condition; remove when directed. Note: Except for the project sign, there shall be no signs or advertisements of any kind erected on the site. Project sign shall be constructed according to the following requirements (or to equal or better requirements); 4'x8' of 3/4" exterior grade MDO plastic sealed plywood, framed with suitable metal edge moldings for prevention of delamination. Paint with three (3) coats of exterior trim or sign enamel; colors as selected. Also, employ sign painter approved by architect, to apply additional graphics and lettering, as directed, over the three coat finish. At least two (2) additional coats are required for the graphic and lettering work. Employ sign painter approved by architect to letter names of the project, architect or consulting engineers, contractor, and principal subcontractors. Secure sign to nominal 4"x4"x12' pressure treated wood posts set 41- 0" into ground with concrete surrounding each post. �-� In addition, the sign will give credit to the Department -of Commerce and to the Governor for the funding. Article XIII - Federal Regulations and Assurances All conditions and assurances required of the DEPARTMENT by Title I of the Housing and Community Development Act of 1974, P.L. 93-383 as amended, are binding on the GRANTEE as outlined in Attachment D, Assurances. GRANTEE shall comply with all terms and conditions of Federal Grant Number B -85 -DC -16-0001 and all applicable federal laws and regulations as stated in the Idaho Community -Development Block Grant Handbook. Additionally, both paries shall adhere to statutes and regulations of the State of Idaho. :PPR VED: S natur David O. Porter Typed Name Mirlature Grant Kingsford Typed Name (chief elected official) F - 06- Y5 Date Director Department of Commerce Mayor Title ATTACHMENT A BUDGET COMMUNITY DEVELOPMENT PROJECT Applicant: city of meridian Project: ICDBG-85-III-13 AMOUNT ICDBG Other Line Items Grant Fed State Local Total Administrative Expense* 24 OOC 24,( Project Planning & Design* Land, Structures and —rights-of-way Architectural/engineering base fees Project inspection fees Relocation Expenses Relocation payments to individuals & businesses Demolition & removal Construction & project improvement Venture Capital Loan 250,000 250 Audit 1 00C 1 Total Costs** 275,OOC 275 Remarks: M me IKI ,0C *Administrative expenses and project planning design costs when totaled shall not exceed 108 of the total ICDBG amount. **Grantees allowed to shift up to 108 Of total ICDBG funds between line items without requesting budget amendment. Therefore there is no contingency line item. ATTACHMENT B SCOPE OF WORK AND SCHEDULE The City of Meridian will contract with J -U -B ENGINEERS, Inc. for grant administration and the Economic Development Corporation of the City of Meridian as their Revolving Loan Fund Agency with the basic terms and scope of work as follows: A. The project will be to establish a Revolving Loan Fund to assist businesses in the City of Meridian. The first project to be funded will be as follows: Power Dynamics, Inc., Meridian, Idaho 83642 - this project will be to provide $379,000.00 for start-up expenses and first year operating capital for the business at the Meridian site as follows: Use Source ICDBG BANK EQUITY Working Capital $235,000 $ $129,000* Equipment 15,000 TOTAL $250,000 $ -0 $129,000 *Equity injection to be provided from profits of first year operations. B. Provide Administrative Management Plan. C. Provide Revolving Loan Fund Management Plan. D. Provide Re -Use Pian. E. The benefits of _this project will be as follows: This project will allow for up to 23 additional jobs in the Meridian area within the first year of operation. Scope or Work (continued) ICDBG-85-III-13 Of those positions, 3-4 will be for people of low -to -moderate income. The balance of the jobs will be created as and if required over the remaining 10 months. Given projected growth, the company predicts job creation exceeding 300 positions by the tenth (10th) year of operations. Employment will be tracked according to low -to -moderate income and by minority. F. Article XII of contract between Idaho Department of Commerce and the City of Meridian will not be complied with as there is no outside visible construction that will take place on the above referenced project. G. The time phasing of the project will be as follows: May 2, 1985 - Grant award August 1, 1985 - State/City of Meridian contract signed Aug 1, 1985 - City of Meridian/Administrative Agency contract signed Aug 1, 1985 - Admin. Agency/Power Dynamics, Inc. loan agreement completed Jul 1, 1985 - Power Dynamics, Inc. project initiated Sep 30, 1986 - Power Dynamics, Inc. project completed Dec 30, 1986 - Audit complete/Grant closed H. Establish Environmental Review Record. I. Submit Needs Assessment/ Community Development Plan. ATTACHMENT C REPORTING SCHEDULE Contract Number: ICDBG-85-III-13 A. Performance and Financial Reports are required as indicated below: Period Due 1st Quarter August 15, 1985 2nd Quarter November 15, 1985 3rd Quarter February 15, 1986 4th Quarter May 15, 1986 5th Quarter August 15, 1986 6th Quarter November 15, 1986 FINAL January 15, 1987 B. FINANCIAL: Request for payment should be received by the following dates of each month on either the 5th, 15th, or 25th. ATTACHMENT D Community Development Block Grant Assurances 1. Nondiscrimination Under Title VI of the Civil Rights Act of 1964 This agreement is subject to the requirements of Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and HUD regulations with respect thereto including the regulations under 24 CFR Part 1. In the sale, lease or other transfer of land acquired, cleared or improved with assistance provided under this Agreement, the Grantee shall cause or,require a covenant running with the land to be inserted in.the deed or lease for such transfer, prohibiting discrimination upon the basis of race, color, religion, sex or national origin, in the sale, lease or rental, or in the use or occupancy of such land or any improvements erected or to be erected thereon, and providing that the Grantee is undertaking its obligation in carrying out the program assisted hereunder, agrees to take such measures as are necessary to enforce such covenant and will not itself so discriminate. 2. TITLE VIII This Agreement is subject to the requirements of Title VIII of the Civil Rights Act of 1968 (P.L. 90-284), and HUD regulations with respect thereto, providing that it is the policy of the United States, within constitutional limitations, to provide fair housing, and prohibiting any person, in the sale, rental, financing, or brokery of housing, from discriminating or in any way making unavailable or denying a dwelling to any person because of race, color, religion, -sex or national origin. In the implementation of Title VIII, HUD is guided by Executive Orders 11063 and 12259, and 24 CFR parts 100 through 115, particularly Part 107. 3. Section 109 This agreement is also subject to the provisions of Section 109 of the Housing and Community Development Act of 1974 (P.L. 93-383), as amended. Section 109 prohibits the use of criteria based on race, color, national origin or sex to exclude any person from participating in or benefiting from any program or activity funded in whole or part with community development funds made available pursuant to the Act. Section 109 further incorporates the prohibitions against age discrimination contained in the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), and against handicapped discrimination contained in Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). 4. Labor Standards Except with respect to the rehabilitation of residential property designed for residential use for less than eight families, the Grantee and all contractors engaged under contracts in excess of $2,000 for the construction, prosecution, completion or repair of any building or work financed in whole or in part with assistance provided under this Agreement, shall comply with the requirements of the Davis -Bacon Act, as amended (40 U.S.C. 276a - 276a-5) and the Contract Work Hours and Safety Standard Act (40 U.S.C. 327 et seq.), as well as HUD requirements pertaining to such contracts and the applicable requirements'of the regulations of the Department of Labor under 29 CFR Parts 3 and 5.5, governing the payment of wages and the ratio of aprpentices and trainees to journeymen: Provided, that if wage rates higher than those requried under such regulations are imposed by state or local law, nothing hereunder is intended to relieve the Grantee of its obligations, if any, to require payment of the higher rates. The Grantee shall cause or i require to be inserted in full, in all such contracts subject to such regulations, provisions meeting the requirements of 29 CFR 5.5. No award shall be made to any contractor who is at the time ineligible under the provisions of any applicable regulations of the Department of Labor to receive an award of such contract. 5. Environmental Standards This Agreement is subject to the policies contained in the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), and related laws, as furthered by HUD regulations contained in 24 CFR Part 58. The Grantee hereby assumes responsibility for environmental review, decision-making, and other action under NEPA and related laws, in accordance with Part 58. 6. Section 3 This Agreement is subject to the employment and contracting requirements of Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u). Section 3 requires that, to the greatest extent feasible, opportunities for training and employment be given to lower-income persons residing within the unit of local government or the metropolitan area or nonmetropolitan county in which a covered project is located; and that contracts for work in connection with such projects be awarded, to the greatest extent feasible, to eligible business concerns which are located in, or owned in substantial part by, persons residing in the same metropolitan area or nonmetropolitan county as the project. HUD regulations contained in 24 CFR Part 135 contain guidelines relating to Section 3 objectives. 7. Lead Based Paint Hazards The construction or rehabilitation of residential structures with assistance provided under this Agreement is subject to the HUD Lead -Based Paint regulations, 24 CFR Part 35. Any grants or loans made by the Grantee for the rehabilitatio of residential structures with assistance provided under this Agreement shall be made subject to the provisions for the elimination of lead-based paint hazards under Subpart B of said regulations, and the Grantee shall be responsible for the inspections and certifications required under section 35.14(f) thereof. 8. Conflict of Interest of Members, Officers, or Employees of Grantee, Members of Local Governing Body, or Other Public Officials: No member, officer, or employee of the Grantee, or its designees or agents, no member of the governing body of the locality in which the program is situated, and no public official of such locality or localities who exercises any functions or responsibilities with respect to the program during his tenure or for one yea thereafter, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the program assisted under the Agreement. The Grantee shall incorporate, or cause to be incorporated, in all such contracts a provision prohibiting such interest pursuant to the purposes of this section. 9. Prohibition Against Payments or Commissions The assistance provided under this Agreement shall not be used in the payment of any bonus or commission for the purpose of obtaining HUD approval of the application for such assistance, or HUD approval of applications for additional assistance, or any other approval or concurrence of HUD required under this Agreement, Title I of the Housing and Community Development Act of 1974 or HUD regulations with respect thereto; provided, however, that reasonable fees or bona fide technical, consultant, managerial or other such services, other than actual solicitation, are not hereby prohibited if otherwise eligible as program costs. 10. Conflict of Interest of Certain Federal Officials No member of or Delegate to the Congress of the United States, and no Resident Commissioner, shall be admitted to any share or part of. this Agreement or to any benefit to arise from the same. 11. Historic Preservation Act of 1966 Historic Preservation Act of 1966, as amended (16 U.S.C. 470 et seq.). 12. Additional Assurances The Grantee shall remain fully obligated under the provisions of the Agreement notwithstanding its designation of any third party of parties for the undertaking of all or any part of the program with respect to which assistance is being provided under this Agreement. The Grantee shall comply with all lawful requirements of the Grantor to insure this Agreement is carried out in accordance, and with the obligations and responsibilities of the Grantor to HUD. 13. Requirements for Units of General Local Government A. Certifications 6 Section 106 (i) of the 1983 Amendments added section 106 (d)(5) to the Act which requires units of general local government to make certain certifications to the State. The certifying official must have sufficient authority to make such certifications on behalf of the unit of government. The State may not distribute funds unless the unit of government has submitted certifications providing essentially that: 1. it will minimize displacement as a result of activities assisted with CDBG funds; 2. it will conduct and administer its program in conformance with Title VI and Title VIII, and affirmatively furthering fair housing; 3. it will provide oppportunities for citizen participation comparable to the State's requirements (those described in Section 104(a) of the Act, as amended); 4. it will not use assessments or fees to recover the capital costs of CDBG-funded public improvements from low and moderate income owner occupants. IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM DEPARTMENT OF COMMERCE REQUEST FOR RELEASE OF FUNDS AND CERTIFICATION (Exempt Activities) (Pursuant to Section 104 (h) of Title I of the Housing and Community Development Act of 1974 and 24 CFR 58) ENVIRONMENTAL 1. Name of Grantee City of Meridian, Idaho 2. Address ( include street, 728 Meridian Street city, state, and zip Meridian, Idaho 83642 code) 3. Grant number 4. Date of Request/ Certification 5. REQUEST FOR RELEASE OF FUNDS. Release of approved grant funds is requested for the following project(s): PROJECT Meridian Revolving Loan Fund AMOUNT $250,000 Loan 25,000 Administration $275,000 Total ICDBG 6. CERTIFICATION. With reference to said project it is hereby certified: That the City/AJ2xmft has fully carried out its responsibilities for environmental review, decision-making and action pertaining to the projectW named above. That the projects is/A3UM exempt from environmental requirements of 24 CFR 58 because all activities funded by the grant meet the definitions of section 58.34 Exempt Activities. City of Meridian That the undersigned officer of (x@ji4aF� (mss is authorized to, and does, consent to assume the status of responsible federal official, under the National Environmental Policy Act of 1969, insofar as the provisions of said Act apply to the Department responsibilities for environmental review, decision-making and action assume and carried out by the (City) *tic that by so consenting, the undersigned officer of (City) (fig* assumes the responsibilities where applicable, for the conduct of environmen- tal review, decision-making and action as to environmental issues, preparation and circulation of draft and final environmental impact statements, and assumptions of lead agency responsibilities for preparation of such statements on behalf of Federal agencies other than the Department when such agencies consent to such assumption; That the undersigned officer of (City) (Rt.10 is authorized to consent, personally, and on behalf of the (City) Gni to accept the jurisdiction of the Federal courts, for the enforcement of all the aforesaid responsibilities; and that the undersigned does so consent, on behalf of (City) MV904" and of the under- signed, in the official capacity of the undersigned. Honorable Grant Kingsford, Mayor Si ature 1 7 Name, Title 728 Meridian Street Meridian, Idaho Address officer of City WARNING - Section 1001 of Title 18 of the United States Code and Criminal Procedures shall apply to the foregoing certification. Title 18 provides, among other things, that whoever knowingly and willfully makes or uses a document or writing containing any false, fictitious or fraudulent statement of entry, in any matter within the jurisdiction of any department or agency of the United States, shall be fined not more than $10,000 or imprisoned not more than five years or both. O J -U -B ENGINEERS, INC. 30 South Beechwood Avenue, Suite 1 • Boise, Idaho 83709 • Telephone (208) 376-7330 September 3, 1985 Mr. Jan Blickenstaff, Director Idaho Community Development Block Grant Program Idaho Department of Commerce, n Room 108 II►� Statehouse "vn Boise, ID 83720 Dear Mr. Blickenstaff: � Thank you for providing copies of the Minority Business Enterprise and till Women Business Enterprise Reporting Form. Enclosed are two interim MBE/WBE forms pertaining to the following block grant projects. 1. Rupert Senior Citizens' Project 2. Meridian Revolving Loan Fund Project Mn Please note -that the Rupert Senior Citizen Center Project will be bid after September 20, 1985 and we are unable at this time to identify any construction contracting activity. When contracts are awarded in the Rupert and Meridian projects we will provide an updated copy of the MBE/WBE form. Both the City of Meridian and the City of Rupert will comply with procurement Mregulations for minority and business enterprises. lu( If you need additional information, please call me at any time. Respectfully, J -U -B ENGINEERS, Inc. i Wayne S. Forrey, AIC Head, Urban Planning Department WSF:jw Enclosure ADMINISTRATIVE MANAGEMENT PLAN FOR ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN, REVOLVING LOAN FUND ICDBG 85 III 13 AUGUST, 1985 �\ The Administrative Management Plan establishes the duties and responsi- bilities of each of the parties involved in the Economic Development Croporation of the City of Meridian Revolving Loan Fund Project. Key parties and organi- zations are identified below: STATE OF IDAHO CITY OF MERIDIAN Grant Kingsford, Mayor ICDBG ADMINISTRATION J -U -B ENGINEERS, Inc. Wayne S. Forrey I ECONOMIC DEVELOPMENT CORP. OF THE CITY OF MERIDIAN E_ IDAHO FIRST NATIONAL BANK FINANCIAL/LEGAL w MONITORING Terry Smith City Attorney a Wayne Crookston z 00, 0 a POWER DYNAMICS, INC. Lowell Hodgkins Idaho First National Bank will serve as depository for the ICDBG drawdowns and loan repayments. The Economic Development Corporation of the City of Meridian (EDCM) will function as the Local Development Corporation and revolving loan fund agency. Overall ICDBG administration will be provided by J -U -B ENGINEERS, Inc. The City Attorney, who will serve on the Power Dynamics board of directors, will be responsible for financial monitoring of Power Dynamics. Specific administrative duties are as follows: 1. The City of Meridian will grant all ICDBG funds to the Economic Development Corporation of the City of Meridian. 2. The Economic Development Corporation of the City of Meridian shall function as the Local Development Corporation and revolving loan fund agency. 3. All revolving loan payments shall be paid to the Economic Development Corporation of the City of Meridian. 4. J -U -B ENGINEERS, Inc., will ensure compliance by all borrowers, their contractors and subcontractors with all applicable Federal Regulations and processes. 5. J -U -B ENGINEERS, Inc., will ensure compliance by all contractors and subcontractors with the following Acts: a. Davis -Bacon Act; b. Copeland "Anti -Kickback" Act; and c. Contract Work Hours and Safety Standards Act. 6. J -U -B ENGINEERS, Inc., will provide data to City and/or complete all paperwork required by City for compliance with ICDBG rules and regulations. 7. J -U -B ENGINEERS, Inc., will conduct an Environmental Review for each project undertaken under the Grant period. This Review will include all research and preparation of all paperwork required by State, Federal or local agencies. In addition, J -U -B ENGINEERS, Inc., will ensure that all requirements for such Environmental Reviews will be completed in accordance with any State, Federal or local laws and regulations. 8. J -U -B ENGINEERS, Inc., and the City Attorney will follow the management guidelines as set forth in the Revolving Loan Management Plan during the Grant administration period. 9. J -U -B ENGINEERS, Inc., is responsible for administration of the ICDBG portion of the Revolving Loan Fund. J -U -B will track all funds during the grant period and prepare and provide all required bookkeeping informa- tion for City records. J -U -B will also provide the City with a complete duplicate set of all bookkeeping records. The City Clerk will keep and maintain a copy of all ICDBG records. 10. The City Attorney will hold a position of the Board of Directors of Power Dynamics, Inc., and he will be responsible for financial monitoring of the company. 11. J -U -B ENGINEERS, Inc., will establish a filing system for records as noted in Program Overview and Administration, Volume I, FY 184, pages 7, 8and 9. 12. The City of Meridian will contract with an independent Certified Public Accountant for an audit(s) of the Grant according to Federal and State program audit requirements. Selection of auditing firm must meet with the approval of both City and Idaho Department of Commerce. 13. City agrees that it will implement the attached Grantee Section 3 Affirma- tive Action Plan. CITY OF MERIDIAN Grant Kingsford, Mayor ECfRM�j4EgpLREfflqAfiORPORATION OF Officer, Title Date: Date: REVOLVING LOAN FUND MANAGEMENT PLAN FOR ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN AUGUST, 1985 ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN 728 MERIDIAN STREET MERIDIAN, IDAHO 83642 As officers undersigned, have become a party to Signature and representatives of _ read and fully agreed to the full implementation this Affirmative of this program. Title: Date: , we, the Action Plan, and GRANTEE SECTION 3 AFFIRMATIVE ACTION PLAN The City of Meridian agrees to implement the following specific affirmative action steps directed at increasing the utilization of business concerns located within the Section 3 covered area or owned by Section 3 area residents: A. To ascertain from the local HUD program official the exact boundaries of the Section 3 covered project area and, where advantageous, to seek the assistance of the State in preparing and implementing the affirmative action plan. B. To identify eligible business concerns for ICDBG-assisted contracts through: the Chamber of Commerce; local advertising media including public signage; project area committees; citizen advisory boards; lists available through the State Community Development Representa- tive; regional planning agencies; and all other appropriate referral sources. C. To maintain a list of eligible business concerns for utilization in CDBG-funded procurements, to insure that all appropriate project area business concerns are notified of pending contractual opportun- ities, and to make available this list for general city procurement needs. *D. To insert this Section 3 Plan in all bid documents, and to require all bidders on contracts to submit a Section 3 affirmative action plan including utilization goals and the specific steps planned to accomplish these goals. *E. To insure that contracts which are typically let on a negotiated rather than a bid basis in areas other than Section 3 covered project areas, are also let on a negotiated basis, whenever feasible, when let in a Section 3 covered area. F. To maintain records, including copies of correspondence, memoranda, etc. which document that all of the above affirmative action steps have been taken. G_ To appoint or recruit an executive official of the City as Equal Opportunity Officer to coordinate the implementation of this Section 3 plan. *Loans, grants, contracts and subsidies for less than $10,000 will be exempt. I. PURPOSE OF THE REVOLVING LOAN FUND PROGRAM The main purpose of the Revolving Loan Fund (RLF), to be administered by the non-profit Economic Development Corporation of the City of Meridian (EDCM), shall be to foster economic development in the City with special emphasis on stimulating investment, creating employment, and creating development capital. Specifically, loan funds shall be used to finance capital improve- ments; new business ventures and expansion of existing businesses; acquisition and assembly of land for commercial, industrial and related uses; acquisition of surplus government property; provide working capital loans; development of real estate including redevelopment and rehabilita- tion of buildings and plant for industrial and commercial use; and make other investments with promise to accelerate job creating activity such as assistance to industrial and business firms who may desire to locate branches of their operations in the City. The long-term goal shall be to help stabilize and diversity the Meridian economy by providing permanent long-term employment and growth in the private sector. II. RLF LOAN TERMS A. LOAN TERMS AND CONDITIONS 1. LOAN AMOUNT: DOLLAR LIMITS Loans shall not be made in amounts than $500,000 to any one company affiliated group in one year, nor than $500,000 in credit outstanding at one time. Benefits to Meridian created or retained, fiscal base diversification. 2. EQUITY REQUIREMENTS a. FIXED ASSET LOANS less than $5,000 or more organization, entity or shall the EDCM have more with any one such entity must be measured in jobs improvements, and positive The applicant shall provide in the form of equity a minimum of 10; of the total cost of the project or as specified by the EDCM. b. WORKING CAPTIAL LOANS The applicant shall have existing net working capital of at least 10% of the applicant's total working capital needs or as specified by the EDCM. /--� 3. LEVELS OF LOAN PARTICIPATION The EDCM will make loans in tandem with participating institu- tional lenders for program qualified borrowers. Levels of participation for loans may vary according to the proposed use for loan proceeds, the expected impact on the City of Meridian and the applicants' ability to repay. In general the EDCM will seek to supply no more than 50% of the capital required for fixed asset or other financing up to $500,000 per applicant. 4. INTEREST RATES The annual rate of interest shall be 2% below the rate deter- mined from time to time by the Secretary of the Treasury (Treasury Bills) or as specified by the EDCM. Participating lenders shall be allowed to charge prevailing interest rates. The effective annual interest rate shall be determined by the weighted averaging of the rate of the participating lender and the EDCM loan participation. Most EDCM loans shall be established with fixed interest rates for the term of the note. However, if long-term financing cannot be arranged on a fixed rate basis the interest rate for participating lenders may float on an annual basis while the interest rate applicable to the EDCM Loan Participation shall remain fixed for the term of the loan participation. 5. TERMS OF LOANS The term of a fixed asset loan shall ordinarily not be greater than the weighted average useful life of the fixed assets of the project. In no case may a fixed asset loan or loan guar- antee be made for a term of more than twenty-five (25) years unless specified by the EDCM. The participating lender shall make the determination of appropriate term based upon the applicant's ability to repay the loan. 6. SECURITY Security shall be required as determined necessary by the lender and the EDCM. In the case of fixed asset loans, security may be in the form of liens on the assets thereby financed. Liens upon other, non -project assets of the applicant may also serve to secure the loan, including but not limited to leasehold interest, income and accounts receivable inventory, marketable securities, and motor vehicles. Collateral may also be provided by certificates of deposit. It is also an EDCM policy to require personal guarantees by the applicant's major sharehold- ers, secured as appropriate by liens on personal assets. Additional collateral may be requested at periodic reviews if business operations indicate the need for such additional security. 7. LIEN SUBORDINATION The lien position of the EDCM may be subordinated to a lien or liens securing other loans made in connection with the project. Provided, however, that such subordination shall apply only in regard to such indebtedness or contractual obligations are incurred by the borrower specifically to acquire tangible assets upon which the lender shall have a lien_ EDCM shall rely upon standard liquidation procedures followed in coopera- tion with the first lienholder for recovery when the borrowers is in default. 8, LOAN FEES Loan fees, if required, will be determined by the EDCM_ Generally successful borrowers will be charged a 2% loan fee to be collected at closing, plus all attorneys' fees, escrow or closing agent fees as required. The EDCM may charge in the form of points or service fees for administrative costs associ- ated with the Idaho Community Development Block Grant Program. 9. DEFERRAL OF REPAYMENT In order to encourage financial participation in a direct fixed asset loan project by other lenders and investors and to the extent necessary, the EDCM may negotiate a deferral of repayment of principal, of interest, or of both. The deferral of repayment shall be scheduled as necessary to accomplish the objective of fostering a successful business venture, but in no case shall commencement of principal repayment be deferred beyond 10 months after startup of project operations unless approved by the EDCM. 10. PREPAYMENT Prepayment of principal may be made by applicant (unless other special provisions have been agreed upon) at any time, without penalty. B. LOAN GUARANTEE TERMS AND CONDITIONS The EDCM may in certain circumstances (for example, in the event of a refusal by SBA to guarantee a bank loan for what the EDCM considers to be a good project) offer a loan guarantee either alone or in conjunction with a subordinated loan. /1—\ 1. GUARANTEED LOAN AMOUNT: PERCENTAGE LIMIT In general, the loan guarantee is to be considered a flexible tool and, when offered, should not cover a higher percentage of the loan than necessary to induce the lender to make the loan. In any case no loan guarantee shall at any time exceed 70% of the amount of the outstanding unpaid balance of the loan (principal and interest) made by the private lending institution. 2. EQUITY REQUIREMENTS The same applicant equity requirements apply as in the case of direct loans from EDCM. 3. INTEREST LIMITATION The EDCM reserves the right to limit its coverage of interest. 4. GUARANTEED LOAN TERMS The same loan term maxima apply as in the case of direct loans from the EDCM. 5. LOAN GUARANTEE FEE The EDCM reserves the right to charge the successful borrower a fee for provision of a loan guarantee. 6. GUARANTEED LOAN RESERVES As a reserve against contingent liabilities created through loan guarantees, the EDCM will deposit. in escrow for this purpose with the lending institution not less than 200 of the loan amounts guaranteed by EDCM (interest on the escrow account shall be negotiable)_ C. ELIGIBILITY 1. ELIGIBLE APPLICANTS Public and private non-profit organizations; and public and private, for-profit firms, including corporations, partnerships and sole proprietorships, which may be included in the SBA definition of small business. 2. INELIGIBLE APPLICANTS Entities and organizations other than those described above. 3. ELIGIBLE PROJECTS AND ACTIVITIES Revolving fund loans and guarantees shall be available to support the start-up or' expansion of business (1) that shall help to diversify the economy in Meridian and (2) that hold promise for saving or creating significant long-term permanent employment in Meridian. Broad types of activites that may be under taken include the following: o Assistance to new and expanding business shall be the primary focus of the EDCM program. o Short and long-term loan assistance shall be given on favorable terms to qualified borrowers. Primary considerations shall be job retention and creation plus total economic impact upon the City of Meridian. It is anicipated that most loans shall be approved for long-term plant and fixed assets for start-up businesses and for expansion of existing businesses. This strategy shall help Meridian overcome the most significant financial problem identified, i.e., severe limitations on the availability of venture and long-term capital. o Short-term loans, two years or less, may be made to eligible borrowers for acquisition of suitable land for industrial or commerical use. o Development of industrial or commercial land o Short-term loans for two years or less may be made to the City of Meridian to provide the local matching share where grants are available to construct water and swere lines and access raods into the industrial area to encourage the location of industry there. The City of Meridian must schedule repayment in accordance with mutually agreed upon terms and time frames. o Industrial buildings, equipment and working capital o Short and long-term loans may be made to qualified borrowers in conjunction with conventional lenders for construction of buildings, purchase of land and equipment, and to provide working capital to the firm that will occupy the building and utilize the equipment. 0 Loans may be made to qualified applicants to rehabili- tate and renovate usable empty buildings for indus- trial or commercial reuse. Redevelopment may include clearnace, clean-up, construction, renovation, rehabilitation, and restoration. Purchase of equip- ment can be included in the project where it is necessary for job creating activity. D. INELIGIBLE PROJECTS AND ACTIVITIES Projects and activities not previously indentified shall be consid- ered ineligible unless approved by the EDCM. E. ELIGIBLE COSTS The following costs are eligible in the EDCM REvolving Loan Fund Program: o Land costs, including engineering, legal, grading, testing, site mapping, and related costs associated with acquisition and preparation of land; o Building costs, including real estate, engineering, architectural, legal, and related costs associated with acquisition, construction, and rehabilitation of buidlings; o Machinery and equipment costs, including delivery, instal- / -1.1 lation, engineering, architectural, legal, insurance, and related costs associated with acquisition and installation of machinery and equipment; o Other costs contributing directly to the value of project fixed assets, such as sales and use taxes, and interest on interim construction financing; o Adequate contingency reserves; o Working and start-up capital; o Infrastructure costs; and o Relocation costs as per Uniform Relocation Assistance Act. The foregoing is intended as a general guide and does not necessarily include all categories of eligible costs. In any case, all proposed uses of revolving loan funds will be subject to approval by the management of the EDCM on the basis of research and information contained in individ- ual loan applications. /_1*11 F. INELIGIBLE COST Revolving Fund loans ordinarily shall not be used to finance leased fixed assets or construction undertaken prior to EDCM approval of the loan application. G. LOAN EVALUATION CRITERIA Each loan application will be evaluated to ;;--'det_mine)D financial soundness. Loans which are found to be financiS1-1T_s6und shall be further evaluated against the following criteria. 1. NUMBER OF JOBS Number of permanent, full-time jobs that will be created or saved for City residents. EDCM dollar investment per job created or saved will be considered in loan evaluations. Commercial revitalization projects may be considered without regard to the job creation criteria. 2. TYPES OF JOBS CREATED As evidence of good faith commitment to hire and train persons from low to moderate income areas the applicant must file an "Employment and Training Plan" with the EDCM before a Loan Participation Commitment is issued to the participating lender. The contents of the Employment and Training Plan are listed below: o Identify number and types of occupations committed to project. o Describe training and employment programs and identify those which can be best linked with this project. o Estimate the number of jobs that will be made availa- ble to the long term unemployed. o Estimate the percentage of jobs for the long term unemployed which may be filed directly with federally funded training activities. o Provide evidence from a job training provider of willingness to participate in the program if applica- ble. o Define the timetable for implementing the components of the employment program - 0 Disclose starting wages for each position. /1_�_ o Disclose method of calculating number of jobs. Applicant must submit employment and training reports to the EDCM Office for up to 12 months following the commencement of operations affecting said employment opportunities. 3. PRIORITY High priority will be assigned to projects involving manu- facturing or processing, or exports generated. Projects' which contribute to economic diversification of the City of Meridian are more desirable. Projects which promote energy efficiency will be more favorable considered. All projects must comply with state and Federal environmental regulations and local growth management policy (properly zoned and meet building codes). Forecast of growth in both absolute number and percent of new jobs will aid in the EDCM decision. The more investment leveraged, the better (within limits of sound financial practice), and generally a sound business proposal which includes: o Demonstrated ability to repay loan; o Quality of collateral and sufficent value to secure lender's investment (percent coverage will vary); o Character, credit and experience of owners and manager, as appropriate. o Availability of necessary financial commitments, licenses, permits and other evidence of project readiness, including financial and managerial account- ing capacity. 4. MINORITIES Minority involvement in any project, as owners, employees or both is a priority of the EDCM. 5. REVENUES TO CITY The amount of tax revenues generated for the City of Meridian should be described in the loan application and is an important issue in the EDCM investment decision. H. EDCM LOAN PROGRAM ADMINISTRATION 1. BOARD OF DIRECTORS OF EDCM The Board of Directors of EDCM will be responsible for routine policy and administrative matters including loan review. The Board will also be responsible for the following: o Approves and amends revolving loan fund management plan. o Appoints and/or replaces members. o Approves working arrangements with third parties, i.e., the lending institutions, attorneys, and auditors, etc - 0 Gives final approval or disapproval for all loans. o Coordinates final term arrangements with the lending institutions/agencies then forwards to bank/agencies. o Provides for periodic RLF reports to City Council members. o Provides program administration in accordance with agreements with the State or Federal government. o Is responsible for the management of the RLF program. o Reviews and approves RLF performance and may initiate changes in RLF structure and management if poor performance is reported. o Reviews and forwards reports Jrequired by. City, State and Federal agencies. o Develops strategy to increase capital base for the RLF program by identifying new funding sources and soliciting investments and donations by local finan- cial institutions and corporations; o Coordinates and publicizes all EDCM loan information throughout the City to explain fund objectives, qualifying criteria, procedural requirements and place where applicants can obtain further information and apply for loans; o Recommends industrial development targets or strat- egies for targeted industrial recruitment; o Participates in industrial recruitment business development efforts by the Merdian Chamber of Com- merce; o Identifies potential loan applicants for RLF program assistance where appropriate. o Conducts initial review and screeing of all preappli- cations; o Assesses economic potential of proposed undertaking; o Evaluates proposed undertaking in terms of RLF objectives and requirements; o Requests review of credit worthiness by the servicing bank or other credit research institutions; o Holds conference with applicants if necessary; o Works with applicant to identify -and negotiate all possible private and public lending sources to minimize RLF exposure; o Reviews and negotiates terms consistent with loan criteria with applicant; o Consults with the fund attorney for legality of loan; o Determines approval or rejection and notifies appli- cant; o For approved loans, ensures proper execution of documents and compliance with all appropriate regula- tions; o Monitors loan recipients' on-going operations. 2, LOCAL LENDERS Provides loan services to include the following functions: o Provides loan and credit screening review on all eligible RLF borrowers; o Provides loan closing services when 'requested by the EDCM Management; o Provides loan disbursement services; o Provides loan servicing; o Provides loan collection services; o Provides delinquent account listing; o Provides financial reports to EDCM of RLF and of individual account status; o Provides coordination of loan recalls and default procedures as required. 3. LOAN PROCESSING FORMS AND PROCEDURES The EDCM will develope standardized loan processing forms for use in proper and efficient completion of an individual loan request. This form will be made available to the public. Copies can be obtained at the Meridian City Hall. ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN PAYBACK PLAN FOR PROGRAM INCOME The Economic Development Corporation of the City of Meridian, Revolving Loan Fund (RLF) account, will yield a program income which can provide for small reinvestment opportunities annually and will be added to and coordinated with other public and private financing as funds become available. 1. 2. Estimates of Program Income Program income from the Power Dynamics Corporation loan yield estimates of program income as follows: Years 1 - 5: $215,090 Years 6 - 10: $239,186 Total repayment (this financing): $454,276 These estimates include balloon payments scheduled in accordance with the terms and conditions of proposed loan agreements, and assumes the fund will be invested in a money market checking account yielding at least 8.0% per annum. Proposed Uses of Program Income Program income based upon current priorities will be used to provide new financings in tandem with other public and private financings - essentially a revolving loan fund program for The Economic Development Corporation for the City of Meridian (EDCM). The priorities for financing will be: To stabilize existing local firms to position them for growth; To assist healthy growing firms to expand and create new employment; and To use as financial incentives to attract new industrial locations. A well managed revolving loan fund should result in two to three times the initial investment over the first five years and four times the original investment in 10 years. 3. Management Mechanisms The City of Meridian received an Idaho Community Development Block Grant (ICDGB) in August, 1985. These funds were granted by the City to the Economic Development Corporation of the City of Meridian which functions as a Local Development Corporation. The Revolving Loan Fund is managed by the EDCM. Funds provided by the City of Meridian to the EDCM will be marketed and managed in accordance with the RLF Management Plan. The delegation of authority for the Meridian Revolving Fund account is graphically displayed below. Support Technical Staff Idaho Department of Commerce ICDBG Funds I The City of Meridian EDCM a� Cd 0. aif Loan Applicant Participating I Lenders Administrative expenses are included in the ICDBG program borrowers in the first round of financing. Administrative expenses can be charged to borrowers and the interest earnings of the EDCM Revolving Loan Fund acccount. The EDCM Revolving Loan Fund account may be reinvested in new debt financing in accordance with program priorities. Unobligated funds will be accumulated in an account to be established for deposit, accounting and management by the EDCM in a Meridian full service bank. The EDCM will be accountable under an agreement with the City of Meridian to account for and prepare progress reports on the RLF account and loan activity on a quarterly basis. Such accounts shall be .minimally "money Market" style interest bearing accounts with interest accruing at prevailing rates. Changes in this Re -Use Plan can be made City of Meridian and EDCM. in consultation Department of Commerce and in accordance regulations governing eligible Community Programs. Such plan changes will be the public hearing for which the public has according to Idaho law. t the discretion of the with the State of Idaho with applicable Federal Development Block Grant subject of at least one been properly notified The EDCM Revolving Loan Funds (in the rollover phase) will be available for business development anywhere within the confines of the City of Meridian or within the greater Meridian area. Projects funded must achieve a 51% or geater low to moderate income benefit. Chief Elected Official City of Meridian Officer/Title Economic Development Corporation of the City of Meridian Date Date REVOLVING LOAN FUND BORROWER AUTHORIZATION FORM AND ASSURANCES ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN (EDCM) The undersigned understands and agrees to the following in regard to the EDCM Revolving Loan Fund Program: 1. If applicable, the lender will be asked to forward a copy of the loan agreement to the EDCM. The EDCM is to hold these documents under the same rules of confidentiality as apply to the lender. Such documents will be open to inspection by officials of the various state or Federal agencies which participate in the RLF program. 2. The lender will report on the status of any loan made jointly with the EDCM. 3. i, the undersigned, have reviewed and understand the docuemnt dated entitled "Revolving Loan Fund Management Plan for EDCM", and accept the terms and conditions therein. 4. I agree where applicable, to make monthly Employment and Training Reports to the EDCM for a period of up to 12 months following commencement of business operations. 5. I further understand that any inspection made by the EDCM, or its representatives under this program is for purposes of determining my eligibility and compliance with this program and it is not intended to represent or warrant the condition of the premises or remove any obligation for satisfying codes and ordinances which may be in effect and applicable at the time this project is implemented. 6. I agree to comply with all required applicable rules and regulations of the Idaho Community Development Block Grant program and EDCM. APPROVAL SIGNATURES ON FOLLOWING PAGE. LENDER: Name, Title BORROWER: Name, Title Other Signatures as Necessary: Name, Title Name, Title Name, Title /0-�" APPROVAL SIGNATURES Financial Institution Date Company Date Date Date Date REVOLVING LOAN FUND MANAGEMENT PLAN ` FOR ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN APPROVED BY THE FOLLOWING: CITY OF MERIDIAN: Economic Development Corporation of the City of Meridian: Idaho Department of Commerce: Date Name, Title Date Name, Title Date Name, Title HUB OF TREASURE VALLEY A Good Place to Live °""M" CITY OF MERIDIAN 8�L81'�E0 LACK NI[MANN. GMCMIM PONALO R. TOISMA i1CMAR0 0. NICMoI[. CMMN PMM 7Z8 Meridian Str[et E BEAT wrrERS BRUCE 0. STUART.WSW A, SOLFi0[ERT GiESIER WAYMICRoo" oN.11L.Ane-Z MERIDIAN, IDAHO EARL WARD. MMS WSW $VO . &MI Bo[ SPENCER KENNY WW[R[,PINI CMM Phone Et64M Cna,rman LOmnp & Planning GRANT P. KINGSFORD warar July 31, 1985 Mrs. Gloria Mabbutt Community Development Specialist Idaho Department of Commerce Room 108, STATEHOUSE Boise, ID 83720 Dear Mrs. Mabbutt: The City of Meridian sincerely appreciates all of the hard work you have done in behalf of our Revolving Loan Fund project in Meridian. As you know, we have had to restructure our grant administration due to the exit of the Ida -Ore organization from this project. After the July 30th coordination meeting in your office, the Economic Development Corporation of the City of l� Meridian met and agreed to function as the Local Development Corporation in place of the Ida -Ore organization in our project. The City•now has in place all of the necessary parties to successfully administer and complete the revolving loan fund project. Enclosed for your review and use in .preparing the State/City contract, are three copies of the Project Scope of Work, Project Schedule, Project Budget, and Request for Release of Funds and Environmental Certification. Please consider July 1, 1985, as the effective date of the Meridian Community Development Block Grant project. J -U -B ENGINEERS, Inc. and the City attorney are currently reviewing the Administrative Management Plan, Revolving Loan Fund Management Plan, and Pay- back Plan, and these documents will be submitted later this week. Thank you for your deep concern and willingness to process the request for funds so promptly. If you need any additional material, please do not hesitate to contact my office, or J -U -B ENGINEERS, Inc. Once again, thank you for your assistance. - Respectfully, r. Grant P. Kingsford, Mayor City of Meridian GPK:cm Enclosures DIVISION OF ECONOMIC AND COMMUNITY AFFAIRS Room 108, Capitol Building Boise, Idaho 83720 FINANCIAL REPORT — REQUEST FOR FUNDS IMPORTANT — Instructions on reverse side should be read before completing this report. Use for contracts and /or Qrants. .ame Contract Number Citv of -Meridian. Idaho LCD 88 —$S- ILI - 13 Address o P on Phone No. 728 Meridian Street — Meridian, Idaho�'ngineers Report Period - Month of Date of Re j ' 1985 376-7330 July 1 to August 1, 1985 Augus por1 l]ANTERIM REPORT El FINAL REPORT (Detailed breakdown of expenditures per budget category must be submitted with each report.) STATUS OF ICDBG FUNDS BUDGET EXPENDITURES (Report all expenditures and obligations made from beginning of grant to end of reporting period.) *only 1n% of tntai Forinrai it r)Rr: r/ n_ n .. Lu eL;"-,4 Lew., BUDGET ICDBG err• OTHER PROJECT FUNDS ICDBG 1. Amount of Contract $275, 000 6. Total expended to date $ 125, 000. 2. Less payments to date $125,000 2 Cash 7. teahBIee tm $(Im ZERO 3. Balance of contract $ 150,000 8. Program Income - Balance on Hand $ ZERO 4 Amount expended — To Beginning of report period $ 9 Unexpended Cash Balance $ ZERO at report end (Item 7 plus Item 8) ZERO 5. Amount expended during report period $ 125,000 10 Funds Requested (Line 14 plus or minus Line 9) $ 125,000 BUDGET EXPENDITURES (Report all expenditures and obligations made from beginning of grant to end of reporting period.) *only 1n% of tntai Forinrai it r)Rr: r/ n_ n .. Lu eL;"-,4 Lew., BUDGET - - -- - --- -- -- KDBG FUNDS err• OTHER PROJECT FUNDS PROJECT TO DATE Budget Category 12.13. Program Income Earned Project � Totals (ICDBG, State & Local) 14. ICDBG Funds Expended 15. ICDBG Funds Obligated 16. Other lett C Cash Expended 17. In -Kind Contribution Made 18. TOTAL EXPENDITURES Venture Capital Lon ZERO 275,000. 125,000. ZERO ZERO ZERO 125,000. 1s. TOTALS ZERO 275,000 125,000 ZERO ZERO ZERO 125,000. NOTE: Furnishing false information may constitute a violation of applicable State and Federal Law. CERTIFICATION OF FINANCIAL OFFICER: I certify that the above data are correct, based on the contractee's official accounting system and records, consistently applied and maintained, and that expenditures shown have been made for the purposes of, and in accordance with applicable contract terms and conditions. The funds requested are for reimbursement of actual expenditures during the report period. Typed Name S, Grant P. Kingsford Signatu9�� K/`" f' /" /1 — y Title Mayor of Meridian. Idaho DECAFY83 SCHEDULE FOR AUDIT ICDBG GRANT NO.: ICDBG-85-III-13 NAME OF CONTRACT: City of Meridian Revolving Loan Fund ADDRESS: 728 Meridian Street CITY/COUNTY: Meridian, Idaho 83642 CONTACT PERSON: Mayor: Grant Kingsford Administrator: Wayne S. Forrey TELEPHONE: Mayor: 888-4433 Administrator: 376-7330 CERTIFIED PUBLIC ACCOUNTANT RESPONSIBLE FOR THIS AUDIT: (Optional, if not available at this time.) Alexander Grant & Company, Auditors TELEPHONE: 344-2527 CONTACT PERSON: Mr. Jerry Bartell, CPA �� Inclusive dates of your audit cycle: October 1, 1986 to December 1, 1986 SCHEDULE FOR AUDIT ICDBG GRANT NO.: NAME OF CONTRACT: ADDRESS: CITY/COUNTY: CONTACT PERSON: TELEPHONE: CERTIFIED PUBLIC ACCOUNTANT RESPONSIBLE FOR THIS AUDIT: (Optional, if not available at this time.) TELEPHONE: CONTACT PERSON: Inclusive dates of your audit cycle: John V. Evans, State Capitol Building GOVERNOR Room 108 lavid O. Porter Boise, Idaho 83720 DIRECTOR *0 Phone (208) 334-2470 DEPARTMENT OF COMMERCE August 5, 1985 Mayor Grant Kingsford City of Meridian 728 Meridian Street Meridian, Idaho 83642 Dear Mayor Kingsford: Enclosed are three copies of the contract between the City of Meridian and the Department. Please sign all three copies and return them for David Porter's signature as soon as possible. A completed con- tract will be returned to you.* Also enclosed is an Audit Schedule form. Please fill it out and return as soon as possible. If you have any questions or concerns., please don't hesitate to call. Sincerely, 'k dz�� Gail Atwood Office Coordinator Enclosures / cc: Wayne Forrey ✓ IDAHO t_ IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM TITLE: City of Meridian CONTRACT NO.: ICDBG- -III- This contract is made and entered into between the Department of Commerce as of July 1, 1985, hereinafter called the DEPARTMENT,.and the City of Meridian , hereinafter called the GRANTEE. TERMS AND CONDITIONS Article I — Period of Performance The project work required to be completed hereunder shall be accomplished from the effective date of May 10, 1985 and shall continue up to and including December 31, 1986 , unless otherwise amended. Article II - Grant Amount and Payments The maximum amount of Idaho Community Development Block Grant (ICDBG). assistance hereby awarded is $275,000 The GRANTEE hereby agrees to provide -0- in the form of local match (i.e., local, state, or other federal contributions) for the purposes of completing this project. The GRANTEE shall adhere to the budget as outlined in Attachment A. The GRANTEE shall deposit all ICDBG funds for financing the project in a non-interest bearing account. The GRANTEE shall periodically request payment up to 100% of the value of work performed up to the total sum of the ICDBG grant assistance minus the budgeted audit line item. If the DEPARTMENT is satisfied with the request, the DEPARTMENT will pay the amount requested within 30 days of the receipt of the request. The GRANTEE shall certify that all work is complete as billed and shall be liable for any discrepancy in documentation. Requisition of the budgeted audit line item shall be submitted in conjunction with the audit report and shall be paid upon acceptance of the audit by the DEPARTMENT. The use of ICDBG funds for administrative costs is limited to a maximum of 10% of the total ICDBG funds awarded by this contract. Article III - Work Performance The project activities to be accomplished under the conditions of this contract are outlined in the Scope of Work, as described in Attachment B. Article IV - Financial and Proqress Reports In the performance of this contract the GRANTEE shall keep books, records and accounts of all activities related to the provisions of this contract. The GRANTEE will certify each interim request for funds (financial report) that is submitted to the DEPARTMENT. The GRANTEE shall also submit a final financial report which details costs incurred by line item as described in the project budget. This report shall be submitted upon completion of the project funded under this contract. The GRANTEE shall submit interim progress reports as specified in the Reporting Schedule, Attachment C. A detailed written final report with documentation of the activities carried out shall be submitted to the DEPARTMENT, as stated in Attachment C, at the conclusion of the project. Article V - Amendments The DEPARTMENT may amend this contract on its own initiative or at the request of the GRANTEE to reflect changes in the scope of work or design of the project. Such changes shall be mutually agreed upon. In no case shall the nature or purpose of the project be amended from what generally described in the application and was the basisfor selecton of the project. And further, in no case shall the budget be amended to exceed the ICDBG dollar amount originally granted in the 'contract. The GRANTEE shall be responsible to pay out of its own funds any costs above the original ICDBG sum granted by this contract. No scope of work costs or services shall be changed unless approved in a written contract amendment signed by both parties. Article VI - Subcontracts The GRANTEE shall notify the DEPARTMENT and forward for approval any subcontracts under this contract. Upon a showing that the contract has complied with the prerequisites and requirements, the DEPARTMENT shall issue its approval to proceed with the subcontract. All contracts and subcontracts must comply with all applicable state and federal laws and regulations. Article VII - Audit and Monitoring The GRANTEE shall provide the DEPARTMENT with an annual financial audit in accordance with Attachment P of OMB Circular A-102 and the new circular that will supersede it. The audit shall be completed by a certified public accountant during the regular annual audit cycle. Audits shall be provided annually until the completion of the project. The DEPARTMENT may monitor and make periodic inspections and evaluations of the project, its books, records and amounts of the project. The GRANTEE shall make available the books and records to �� the DEPARTMENT during regular working hours. These books and records shall be maintained for at least three years following the final audit of the project. Each GRANTEE that provides a portion of their Idaho Community Development Block Grant in any fiscal year to a subrecipient such as a Council of Government (COG) or some other non-profit organization, shall require the subrecipient to meet the audit and monitoring requirements of Attachment P of OMB Circular A-102 and the new circular that will supersede it, or Circular A-110. The GRANTEE shall be responsible for monitoring any subrecipient for compliance with all federal and state laws and regulations including the audit requirements. Article VIII - Termination The DEPARTMENT shall have the right to terminate this contract in whole or in part, at any time before the date of completion, whenever it is determined that the GRANTEE has failed to comply with the conditions of the contract. The DEPARTMENT shall promptly notify the GRANTEE in writing of the determination and the reasons for the termination, together with the effective date. The DEPARTMENT may terminate this contract in whole or in part for the convenience of the DEPARTMENT when both parties agree that the continuation of the project would not produce results commensurate with further expenditure of funds. The two parties shall agree in writing upon termination conditions, an effective date and a fair and reasonable payment, as determined by the DEPARTMENT for all work completed. Article IX - Special Warranty The GRANTEE warrants that nothing of monetary value has been given, promised or implied as remuneration for entering into this contract. The GRANTEE further declares no improper personal, political or social activities have been used or attempted in an effort to influence the outcome of the competition, discussion or negotiation leading to the award of this contract. Article X - Relationship of Contracting Parties Contracting parties warrant by signature that no employer-employee relationship is established between the DEPARTMENT and the GRANTEE by the terms of this contract, and further indemnifies the State and hold it harmless against any and all suits, actions, claims or losses of every kind, nature and description, including costs, expenses, and attorney fees, that may be incurred by reason of any act or omission, neglect or misconduct of the GRANTEE which may arise out of this agreement. Article XI - Conflict of Interest No official or employee of the GRANTEE or the DEPARTMENT shall have �� any direct or indirect financial interest in the project. Article XII All grant recipients will erect a sign for all major construction projects identifying the project's funding source after notice to proceed is issued; location as directed. Maintain in good condition; remove when directed. Note: Except for the project sign, there shall be no signs or advertisements of any kind erected on the site. Project sign shall be constructed according to the following requirements (or to equal or better requirements); 41x8' of 3/4" exterior grade MDO plastic sealed plywood, framed with suitable metal edge moldings for prevention of delamination. Paint with three (3) coats of exterior trim or sign enamel; colors as selected. Also, employ sign painter approved by architect, to apply additional graphics and lettering, as directed, over the three coat finish. At least two (2) additional coats are required for the graphic and lettering work. Employ sign painter approved by architect to letter names of the project, architect or consulting engineers, contractor, and principal subcontractors. Secure sign to nominal 4"x4"x12' pressure treated wood posts set 41- 0" into ground with concrete surrounding each post. In addition, the sign will give credit to the Department of Commerce and to the Governor for the funding. Article XIII - Federal Regulations and Assurances All conditions and assurances required of the DEPARTMENT by Title I of the Housing and Community Development Act of 1974, P.L. 93-383 as amended, are binding on the GRANTEE as outlined in Attachment D, Assurances. GRANTEE shall comply with all terms and conditions of Federal Grant Number B -85 -DC -16-0001 and all applicable federal laws and regulations as stated in the Idaho Community Development Block Grant Handbook. Additionally, both paries shall adhere to statutes and regulations of the State of Idaho. APPROVED: Signature David O. Porter Typed Name Signature Grant Kingsford Typed Name (chief elected official) Date Director Department of Commerce Date Mayor Title ATTACHMENT A BUDGET COMMUNITY DEVELOPMENT PROJECT Applicant: City of Meridian - Project: ICDBG-85-III-13 AMOUNT ICDBG Other Line Items Grant Fed State Local Total Administrative Expense* 24,0 C 24,( Project Planning & Design* Land, Structures and rights-of-way Architectural/engineering base fees Project inspection fees Relocation Expenses Relocation payments to individuals & businesses Demolition & removal Construction & projec`t improvement Venture Capital Loan 250,000 250 Audit 1 00C 1 Total Costs** 275 r 00 Remarks: MUs *Administrative expenses and project planning design costs when totaled shall not exceed 10% of the total ICDBG amount. **Grantees allowed to shift up to 10% of total ICDBG funds between line items without requesting budget amendment. Therefore there is no n contingency line item. ATTACHMENT B SCOPE OF WORK AND SCHEDULE The City of Meridian will contract with J -U -B ENGINEERS, Inc. for grant administration and the Economic Development Corporation of the City of Meridian as their Revolving Loan Fund Agency with the basic terms and scope of work as follows: A. The project will be to establish a Revolving Loan Fund to assist businesses in the City of Meridian. The first project to be funded will be as follows: Power Dynamics, Inc., Meridian, Idaho 83642 - this project will be to provide $379,000.00 for start-up expenses and first year operating capital for the business at the Meridian site as follows: Use Source ICDBG BANK EQUITY Working Capital $235,000 $ $129,000* Equipment 15,000 TOTAL $250,000 $ -0- $129,000 *Equity injection to be provided from profits of first year operations. B. Provide Administrative Management Plan. C. Provide Revolving Loan Fund Management Plan. D. Provide Re -Use Plan. E. The benefits of this project will be as follows: This project will allow for up to 23 additional jobs in the Meridian area within the first year of operation. Scope of Work (continued) ICDBG-85-III-13 Of those positions, 3-4 will be for people of low -to -moderate income. The balance of the jobs will be created as and if required over the remaining 10 months. Given projected growth, the company predicts job creation exceeding 300 positions by the tenth (10th) year of operations. Employment will be tracked according to low -to -moderate income and by minority. F. Article XII of contract between Idaho Department of Commerce and the City of Meridian will not be complied with as there is no outside visible construction that will take place on the above referenced project. G. The time phasing of the project will be as follows: May 2, 1985. Grant award August 1, 1985 - State/City of Meridian contract signed Aug 1, 1985 - City of Meridian/Administrative Agency contract signed Aug 1, 1985 - Admin. Agency/Power Dynamics, Inc. loan agreement completed Jul 1, 1985 - Power Dynamics, Inc. project initiated Sep 30, 1986 - Power Dynamics, Inc. project completed Dec 30, 1986 - Audit complete/Grant closed H. Establish Environmental Review Record. I. Submit Needs Assessment/ Community Development Plan. ATTACHMENT C REPORTING SCHEDULE Contract Number: ICDBG-85-III-13 A. Performance and Financial Reports are required as indicated below: Period Due 1st Quarter August 15, 1985 2nd Quarter November'15, 1985 3rd Quarter February 15, 1986 4th Quarter May 15, 1986 5th Quarter August 15, 1986 6th Quarter November 15, 1986 FINAL January 15, 1987 B. FINANCIAL: Request for payment should be received by the following dates of each month on either the 5th, 15th, or 25th. ATTACHMENT D 1011-\ Community Development Block Grant Assurances 1. Nondiscrimination Under Title VI of the Civil Rights Act of 1964 This agreement is subject to the requirements of Title VI of the Civil Rights Act of 1964 (P.L. 88-352) and HUD regulations with respect thereto including the regulations under 24 CFR Part 1. In the sale, lease or other transfer of land acquired, cleared or improved with assistance provided under this Agreement, the Grantee shall cause or require a covenant running with the land to be inserted in the deed or lease for such transfer, prohibiting discrimination upon the basis of race, color, religion, sex or national origin, in the sale, lease or rental, or in the use or occupancy of such land or any improvements erected or to be erected thereon, and providing that the Grantee is undertaking its obligation in carrying out the program assisted hereunder, agrees to take such measures as are necessary to enforce such covenant and will not itself so discriminate. 2. TITLE VIII This Agreement is subject to the requirements of Title VIII of the Civil Rights Act of 1968 (P.L. 90-284), and HUD regulations with respect thereto, providing that it is the policy of the United States, within constitutional limitations, to provide fair housing, and prohibiting any person, in the sale, rental, financing, or brokery of housing, from discriminating or in any way making unavailable or denying a dwelling to any person because of race, color, religion, sex or national origin. In the implementation of Title VIII, HUD is guided by Executive Orders 11063 and 12259, and 24 CFR parts 100 through 115, particularly Part 107. 3. Section 109 This agreement is also subject to the provisions of Section 109 of the Housing and Community Development Act of 1974 (P.L. 93-383), as amended. Section 109 prohibits the use of criteria based on race, color, national origin or sex to exclude any person from participating in or benefiting from any program or activity funded in whole or part with community development funds made available pursuant to the Act. Section 109 further incorporates the prohibitions against age discrimination contained in the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), and against handicapped discrimination contained in Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). 4. 5. Labor Standards Except with respect to the rehabilitation of residential property designed for residential use for less than eight families, the Grantee and all contractors engaged under contracts in excess of $2,000 for the construction, prosecution, completion or repair of any building or work financed in whole or in part with assistance provided under this Agreement, shall comply with the requirements of the Davis -Bacon Act, as amended (40 U.S.C. 276a - 276a-5) and the Contract Work Hours and Safety Standard Act (40 U.S.C. 327 et seq.), as well as HUD requirements pertaining to such contracts and the applicable requirements*of the regulations of the Department of Labor under 29 CFR Parts 3 and 5.5, governing the payment of wages and the ratio of aprpentices and trainees to journeymen: Provided, that if wage rates higher than those requried under such regulations are imposed by state or local law, nothing hereunder is intended to relieve the Grantee of its obligations, if any, to require payment of the higher rates. The Grantee shall cause or require to be inserted in full, in all such.contracts subject to such regulations, provisions meeting the requirements of 29 CFR 5.5. No award shall be made to any contractor who is at the time ineligible under the provisions of any applicable regulations of the Department of Labor to receive an award of such contract. Environmental Standards This Agreement is subject to the policies contained in the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), and related laws, as furthered by HUD regulations contained in 24 CFR Part 58. The Grantee hereby assumes responsibility for environmental review, decision-making, and other action under NEPA and related laws, in accordance with Part 58. 6. Section 3 This Agreement is subject to the employment and contracting requirements of Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u). Section 3 requires that, to the greatest extent feasible, opportunities for training and employment be given to lower-income persons residing within the unit of local government or the metropolitan area or nonmetropolitan county in which a covered project is located; and that contracts for work in connection with such projects be awarded, to the greatest extent feasible, to eligible business cohcerns which are located in, or owned in substantial part by, persons residing in the same metropolitan area or nonmetropolitan county as the project. HUD regulations contained in 24 CFR Part 135 contain guidelines relating to Section 3 objectives. .7. Lead Based Paint Hazards The construction or rehabilitation of residential structures with assistance provided under this Agreement is subject to the HUD Lead -Based Paint regulations, 24 CFR Part 35. Any grants or loans made by the Grantee for the rehabilitatio of residential structures with assistance provided under this Agreement shall be made subject to the provisions for the elimination of lead-based paint hazards under Subpart B of said regulations, and the Grantee shall be responsible for the inspections and certifications required under section 35.14(f) thereof. 8. . Conflict of Interest of Members, Officers, or Employees of Grantee, Members of Local Governing Body, or Other Public Officials: No member, officer, or employee of the Grantee, or its designees or agents, no member of the governing body of the locality in which the program is situated, and no public official of such locality or localities who exercises any functions or responsibilities with respect to the program during his tenure or for one yea thereafter, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the program assisted under the Agreement. The Grantee shall incorporate, or cause to be incorporated, in all such contracts a provision prohibiting such interest pursuant to the purposes of this section. 9. Prohibition Against Payments or Commissions The assistance provided under this Agreement shall not be used in the payment of any bonus or commission for the purpose of obtaining HUD approval of the application for such assistance, or HUD approval of applications for additional assistance, or any other approval or concurrence of HUD required under this Agreement, Title I of the Housing and Community Development Act of 1974 or HUD regulations with respect thereto; provided, however, that reasonable fees or bona fide technical, consultant, managerial or other such services, other than actual solicitation, are not hereby prohibited if otherwise eligible as program costs. 10. Conflict of Interest of Certain Federal Officials No member of or Delegate to the Congress of the United States, and no Resident Commissioner, shall be admitted to any share or part of this Agreement or to any benefit to arise from the same. 11. Historic Preservation Act of 1966 Historic Preservation Act of 1966, as amended (16 U.S.C. 470 et seq.). 12. Additional Assurances The Grantee shall remain fully obligated under the provisions of the Agreement notwithstanding its designation of any third party of parties for the undertaking of all or any part of the program with respect to which assistance is being provided under this Agreement. The Grantee shall comply with all lawful requirements of the Grantor to insure this Agreement is carried out in accordance, and with the obligations and responsibilities of the Grantor to HUD. 13. Requirements for Units of General Local Government A. Certifications Section 106 (i) of the 1983 Amendments added section 106 (d)(5) to the Act which requires units of general local government to make certain certifications to the State. The certifying official must have sufficient authority to make such certifications on behalf of the unit of government. The State may not. distribute funds unless the unit of government has submitted certifications providing essentially that: 1. it will minimize displacement as a result of activities assisted with CDBG funds; 2. it will conduct and administer its program in conformance with Title VI and Title VIII, and affirmatively furthering fair housing; 3. it will provide oppportunities for citizen participation comparable to the State's requirements (those described in Section 104(a) of the Act, as amended); 4. it will not use assessments or fees to recover the capital costs of CDBG-funded public improvements from low and moderate income owner occupants. John V. Evans, o " State Capitol Building ' ; O Room 108 GOVERNOR David O. Porter s Boise, Idaho 83720 DIRECTOR rq ♦q Phone (208) 334-2470 rF o� DEPARTMENT OF COMMERCE IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT Date: August 2, 1985 MEMORANDUM TO: Mayor Grant Kingsford City o Merl ian 728 Meridian Street Meridian, Idaho FROM: The Department of Commerce SUBJECT: Notice of Removal of Grant Conditions and Release of Funds on Grant No.ICDBG-85-III-13 ACTIVITY• Power Dynamics, Inc. Revolving Loan AMOUNT: $275,000 On July 31, 1985 this office received your Request for Release of Funds and Certification. We have reviewed your Finding of Exemption and concur with that finding. This memo removes the environmental conditions on Grant No. ICDBG-85-III-13 and constitutes the authority to use the ICDBG funds provided under Title I of the Housing and Community Development Act of 1974 for the above listed activities and amounts. (Authority is limited to current program year for multi year grant. Please attach to contract). l/✓ August 2, 1985 Authorizing Officer Effective Date David O. Porter, Director Typed Name and Title cc: Wayne Forrey Department of the Treasury Internal Revenue Service 28470784 ECONOMIC DEVELOPMENT CITY OF MERIDIAN S 8038 728 MERIDIAN STREET MERIDIAN If you inquire about your account, please refer to this number or attach a . copy of this notice CORPORATION ID 83642 paegt-T'e= g?Ce Employer Identification Number JUN-mb�r3 217 Tax Period Ended NOTICE OF NEW EMPLOYER IDENTIFICATION NUMBER ASSIGNED Thank you for your Form SS -4, Application for Employer Identification Number. The number as- signed to you is shown above. This number will be used to identify your business account and related tax returns and documents, even if you do not have employees. Please keep a copy of this number in your permanent records. Use this number and your name, ex- actly as shown above, on all Federal tax forms that require this information, and refer to the number on all tax payments and tax -related correspondence or documents. If your business is a partnership which must obtain prior approval for its tax year, the tax year you entered in Block 3 of your Form SS -4 does not establish a tax year. For guidance in determining if you must request prior approval and the method of doing so, see IRS Publication 538, Accounting Periods and Methods, available at most IRS offices. Please note that the assignment of this number does not grant tax-exempt status to nonprofit organi- zations. For details on how to apply for this exemption, See IRS Publication 557, Tax -Exempt Status for Your Organization, available at most IRS offices. For Exempt Organizations, please see the message on the reverse side. 575 9hank you for your cooperation. Form 5372 (Rev. 10-84) • CITY OF MERIDIAN R L F PROJECT SCOPE OF WORK PROJECT SCHEDULE AND BUDGET FOR IDAHO DEPARTMENT OF COMMERCE • JULY, 1985 SCOPE OF WORK AND SCHEDULE The City of Meridian will contract with J -U -B ENGINEERS, Inc. for grant administration and the Economic Development Corporation of the City of Meridian as their Revolving Loan Fund Agency with the basic terms and scope of work as follows: A. The project will be to establish a Revolving Loan Fund to assist businesses in the City of Meridian. The first project to be funded will be as follows: Power Dynamics, Inc., Meridian, Idaho 83642 - this project will be to,provide $379,000.00 for start-up expenses and first year operating capital for the business at the Meridian site as follows: Use Source ICDBG BANK EQUITY Working Capital $235,000 $ $129,000* Equipment 15,000 TOTAL $250,000 $ -0- $129,000 *Equity injection to be provided from profits of first year operations_ B. Grant administration will be provided according to the procedures outlined in the Administrative Management Plan. C. Revolving Loan Fund Management will be in accordance with the Revolving Loan Fund Management Plan. D_ The Payback Plan that was submitted in the 1985 ICDBG application will be utilized for re -use of program income. E. The benefits of this project will be as follows: �•� This project will allow for up to 23 additional jobs in the Meridian area within the first year of operation. While these jobs are not ^ guaranteed, the current schedule of employee hiring includes 6-7 \ people within the first two months. Of those positions, 3-4 will be for people of low -to -moderate income. The balance of the jobs will be created as and if required over the remaining 10 months. Given projected growth, the company predicts job creation exceeding 300 positions by the tenth (10th) year of operations. Employment will be tracked according to low -to -moderate income and by minority. F. Article XII of contract between Idaho Department of Commerce and the City of Meridian will not be complied with as there is no outside visible construction that will take place on the above referenced project. G. The time phasing of the project will be as follows: May 2, 1985 - Grant award August 1, 1985 - State/City of Meridian contract signed Aug 1, 1985 - City of Meridian/Administrative Agency contract signed Aug 1, 1985 - Admin. Agency/Power Dynamics, Inc. loan agreement completed Jul 1, 1985 - Power Dynamics, Inc. project initiated Sep 30, 1986 - Power Dynamics, Inc. project completed Dec 30, 1986 - Audit complete/Grant closed H. Establish Environmental Review Record. I. Submit Needs Assessment/ Community Development Plan. MERIDIAN REVOLVING LOAN FUND PROGRAM BUDGET The program budget which was submitted with the 1985 ICDBG application is adequate for successful completion of the RLF project. Due to a change in grant administrators, there is a possibility that less funding will be required in the administrative expense category. Ida -Ore association indicated a need of $24,000 for project administration which was listed in the original budget form. The City of Meridian has term- inated its agreement with Ida -Ore and retained J -U -B ENGINEERS, Inc. for ICDBG administration. J -U -B ENGINEERS, Inc. anticipates their administrative expenses to be less than $15,000. The City will also incur legal fees but it is possible that administrative expenses will be less than the $24,000 which was budgeted by Ida -Ore. If fewer funds are used than budgeted in the Administrative Expense category, the City will return these funds to the Department of Commerce. Please see attached ICDBG Budget form. BUDGET COMMUNITY DEVELOPMENT PROJECT Applicant: City of Meridian Project: Meridian Co:mnmity Developr_mt Program *Year (I) X Year (2) TOTAL PROJECT COSTS BUDGET FOR YEAR ONE Line Items Administrative expense** Project planning 6 design*' Land,structures and rights- of-way Architectural/engine ring fees Projection inspection fees �� Relocation expenses Relocation payments o in- dividuals & businesses Demolition and Removal construction and project improvement Venture Capital Loan Contingencies Audit** AMOUNT Block Other Grant Fed State Local Tota_Tl I 24.000 ' - 0 0 - I ' I I -0- I -0- -0- ' ! -0- I- - 0 I I- i 0- 250 000 I 250 000 - 0 - ! - 0 - i 1,000 ( 1 i r i 1,000 Total estimated costs: S275,000 275.000 TOTAL S 275,000 Remarks: *Multi-year projects need a budget page for each year and for the total project. **ICDBG funds in these categories combined are limited to 10% of total ICDBG funds.. Private Investment is considered a benefit and should not be included in the project budget. /t C,.t �r / 44f� ill r - t-4-%-" MLACLA al( e -f /t C,.t �r / 44f� ill r - t-4-%-" MLACLA DEPARTMENT OF COMMERCE PROSPECT CONFERENCE REPORT -z- dote: 6 6 S bar agency rep(s) quick follow-up needed: Report 67 others present. 1-. `2yCL g? - A40v" If A..jrjW O�*�o �-Xw� P%441 --f - -9q � irk... i► -..+F =��.s,.-6, - t Ida -Ore Planning and - Development -Association - In the Business Resource Center July 5, 1985 Power Dynamics.Incorporated Attention Mr. Lowell Hodgkins P.D. -Box 4 San C142arlos,-�California 94070 Dear. . Mr.. Hodgkins:` As per:our phone conversation of this date, I have listed below the _documentation and -clarifications that -I currently require to continue racessin P g your loan -application. 1) Corporate tax returns for the last two, fiscal_ye rs; y µ =2) Iterimi nancal statement; both Ba ri"�d i lance 'Sheet �J a it` an Loss State=(less than 60 -`days old) 3) Names.,.a4dresses and,;phone mumber_s of Ahree;auppiiers; j _Y 4) You :aditsed-that,you -have:oo'tained,an. order from :Northrup:for _ approx4mately.S1,000,000,.00: Please provide a copy of ;that_ purchase=order; �. _ - 5 h : Corporatetructure - I understand -that a00� :of --the stock -is owned by�;both yourself.: and your -wife, but ; that the: structure _wi IV ch advise -__if -aqd _how, the .ownership wi1ct�ange:.`..- ... 6) Reference page 61� : of Business PI an: 1985; Power ,D tci s . nc,- yau� sUte;o that: =for the - secotjd phase of #uttdi ng you • wiil -requf re fundfing ,firrt the amount of.: $1;500,000- in`thearfora�-af' equity investment- and ,i n addi ti on that .i t: , i 1.1necessary ao_ receive_ a: _.. . 14ng-ter�g_�commitment through the D,ivislon7of-Economic and -�- Coianunity Affairs, State -of Idaho -for 90 financing of�scapital= 3, _ ,,-jgvis. nts�� .Please adviWas to: -the progress that you; have; made iii date to obtain -- such financing; - r 7) Have the -payroll taxes been paid tq the IRS .(as per,"our _phone -conversation, I understand that -this is paid), 8) You advised that you would-be selling your -firm imCalifornia. µ Has---4this:�sale transpired? :If so, are there any nonrcompete -:,Cl auses? = _ '911,.I.-During.your meeting in Meridian earlier thi s . mortth' you = advised ._ that: you,.tan-- be operational ;sand manufacturi ng. -(.for Northrup - contract)'_ wi thi n two weeks of arrival 'in Boi se:fdhd''that'you ' woul d =.have your -rep organization i.n place -in approximately -90 days. "1s ;this still feasible? Member Counties Ada, Adarw. Boise. Canyon, Elmore, Gem, Harney, Malheur, Owyhee, Payem. Valley. Washington Business Resource Center, 7270 Potomac Drive, Boise, Idaho 83704 (208) 322-7033 or P.O. Box 311, Weiser, Idaho 83672 (208) 349-2411 Power Dynamics Incorporated Page two July 3, 1985 10) You advised that Bill Erdman will head your R & D section, but will.not be moving .to -Idaho for several months. How will this impact your time schedule:`for development? 11) Do you feel that your projected Profit and Loss Statement and cash-flow analysis for the first year of operations (start-up phase) are still accurate or can you foresee any adjustments necessary at this time? ; 12) Your,—,sonal-financial:statement indicates a --note payable to Benkiser.Electric @ $20,000.00. Please advise the particulars of this loan, 13) Your..`projection indicates salary for the President at $52,000 while your write-up indicates $60,000. Please advise as to correct' figure. 14) To emplace`_our employment program we will require the following: a) Tentative schedule of hiring; b) ,Job descriptions.; Or, 6i Tptiow� traini ng program. An Employment -and Traininq�Specialist from IDA -ORE wilV-contact- you for:,. this information:_ While the -above information -isnot all inclusive, it should provide the bulk of the information required to process your loan application. Sincerely, Pau nei der Ec omi c Devel o .: pmeut_ .Sped al � s PJS t'1 b stb - WWJ_Affl-- OFFICIALS JACK NIEMANN, City Clark �1 KIESERT,Tressurer �E D. STUART, Water Works Supt. rNE G. CROOKSTON, JR., Attorney A WARD, Waste Water Supt. KENNY BOWERS, Fire Chief July 2, 1985 HUB OF TREASURE VALLEY A Good Place to Live CITY OF MERIDIAN C 728 Meridian Street MERIDIAN, IDAHO . a3642 Phone 888-4433 GRANT P. KINGSFORD Mayor Dr. David 0. Porter Administrator Attention Jan Blickenstaff Division of Economic and Community Affairs Statehouse Boise, Idaho 83720 Dear Dr. Porter: COUNCILMEN BILL BREWER RONALD R. TOLSMA J. E. BERT MYERS ROBERT GIESLER BOB SPENCER Chairman Zoning i Planning Enclosed find the following documentation for the ICDBG Grant to the City of Meridian: _14 Environmental Review - Finding of Exemption; -2) Request for Release of Funds and Certification; ,-3f- Contract between City of Meridian and IDA -ORE Planning and Development Association (Administrative Agency) - unexecuted; ..- Y Attachment A - Agreement; zT Attachment B - Administrative Management Plan - unexecuted; 6) Attachment C - RLF Program Guidelines; �-7'r Attachment D - Scope of Work; 8) Attachment E - Re -Use (Payback) Plan; -.Q+ Budget - City of Meridian; Budget - IDA -ORE Planning and Development Association; and 1,Y) Loan Application Summary - Power Dynamics, Inc. I request that you begin processing our contract request immediately with an effective date of May 3, 1985. Please note that the executed Contract and Agreement will be forwarded within the next few days. Thank you. Sincerely, 7fo- Grant Kingsford Mayor, City of Meridian GK: Ib OFFICIALS ACK N1EMANN,City Clark A. KIESERT, Treasurer NCE D. STUART, Water WorM Supt. NAYNE G. CROOKSTON, JR., Attorney EARL WARD, Wute Water Supt. KENNY BOWERS. Fire CAIet HUB OF TREASURE VALLEY A Good Place to Live CITY OF MERIDIAN 728 Meridian Street MERIDIAN, IDAHO Ism Picone 8884433 GRANT P. KINGSFORD Mayor FINDING OF EXEMPTION COUNCILMEN BILL BREWER RONALD R. TOLSMA J. E. BERT MYERS ROSERT GIESLER BOB SPENCER Chairman Zoning i Planning It is the finding of the City of Meridian, Idaho that the Power Dynamics, Inc. project included in its 1985 Idaho Community Development Block Grant is exempt from the Environmental requirements of 24 CFR 58 because all activities funded by the grant meet the definitions of Section 58.34 Exempt Activities. The project consists solely of the following: a. An economic development loan being used for inventory and/or operating funds; and b. Purchase of equipment. The project will not impact any of the Federal Authorities as listed in 24 CFR 58.5 (a)(h). Environmental Review Officer 'j(jgi J -U -B ENGINEERS, INC. AGREEMENT BETWEEN CLIENT AND ENGINEERS FOR PROFESSIONAL SERVICES J -U -B Project No. 14622 THIS AGREEMENT entered into this _30 day of u 1 -IL 19_ 8r. — between (the CLIENT) and J -U -B ENGINEERS, Inc., an Idaho corporation of Rni Qp Idaho (the ENGINEERS), WITNESSETH: WHEREAS, the CLIENT intends to Administer. art Idaho Coiiiimini ty na..eoPmotrt $].csk a�QF;t hereinafter referred to as the PROJECT; NOW, THEREFORE, the CLIENT and the ENGINEERS in consideration of their mutual covenants herein agree in respect to the performance of professional engineering services by the ENGINEERS and the payment for those services by the CLIENT, as set forth below. CLIENT INFORMATION The CLIENT will furnish to the ENGINEERS All previous ICDBG files and data from the Ida—Ore organization. SERVICES TO BE PERFORMED BY THE ENGINEERS TheENGINEERSwill pprformall requirp• is ' -- • RT.V Admini-Irration plan -for- -- -- - SCHEDULE OF SERVICES TO BE PERFORMED The ENGINEERS will perform said services as follows: to begin work Rrior to ar-tual contra^t, ate to sensitive nature of vroiect BASIS OF FEE AND BILLING SCHEDULE The CLIENT will pay the ENGINEERS for their services and expenses as follows: Time and materials basis. Administration fee estimated at $13,730 File Folder Titeridian RLF — ICDBG 1485 Remarks THE TERMS AND CONDITIONS ON THE REVERSE SIDE ARE PART OF THIS AGREEMENT IN WITNESS WHEREOF, the parties hersto have executed this Agreement as of the day and year first above written. CLIENT:. ENGINEERS: Gr^nt Kin„gafnrA,_Maynr rites of Meridian J -U -B ENGINEERS, Inc. Meridian St. 250 So Beechwood, Suite 1 STREET sridian ID 83642 'tl R 3 709;31— r STATE ZI► CI I� By SIGNATURE Grant L. Kingsford, Mayor TITLE TI f Distrlbufion: White - ENGINEERS SIGNATURE Yellow - CLIENT Pink - PROJECT FILE I Is.l TITLE Golden Rod - OFFICE FILE REV. 7 91 ld HUB OF TREASURE VALLE)' A Good Place to Live OFFICIALS COUNCILMEN \ k BILL BREWER N, KIEBERT, Treasurer CITY OF MERIDIAN RONALD R. TOLSMA 1UCE D. STUART, water works Supt. 728 Meridian Street J. E. BERT MYERS >~IAYNE G. CROOKSTON, JR., Attorney ROBERT GIESLER EARL WARD, waste Water Supt. MERIDIAN, IDAHO KENNY BOWERS, Fire Chef 83642 BOB SPENCER Phone 888-4433 Chairman Zoning 8 Planning GRANT P. KINGSFORD Mayor IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM DIVISION OF ECONOMIC AND COMMUNITY AFFAIRS REQUEST FOR RELEASE OF FUNDS AND CERTIFTATION (Pursuant to Section 104 (h) o; Title I of the Housing and Community Development Act of 1974 and 24 CFR58) 1. Name 2. Address (include street, city, state and zip code) 3. Grant Number: 4. Date of Request/ Certification ENVIRONMENTAL City of Meridian 728 Meridian Street Meridian, Idaho 83642 5. REQUEST FOR RELEASE OF FUNDS. Release of approved grant funds for the following project is requested: PROJECT Establish a Revolving Loan Fund GRANTEE (If other than applicant) 6. CERTIFICATION. With reference to said project it is hereby certified: That the level of environmental clearance carried out by the City of Meridian in connection with said project did not require the preparation and dissemination of an environmental impact statement; That the dates upon which all statutory and regulatory periods for review, r-� comment, or other response or action in regard to the aforesaid clearance commenced and expired as indicated below; that all such dates which are applicable to the aforesaid clearance are indicated below, and that with the expiration of each of the time periods indicated below, the City of Meridian is in compliance with the requirements of 24 CFR Part 58: Commence Expire ITEM MO/DAY/YR MO/DAY/YR Notice of Finding of No Significant Environmental Impact Publication N/A Same: Comment Period N/A 7 day Notice to Public: Publication N/A Notice of Intent to File EIS: Publication N/A Draft ES: Comment Period N/A Same: 90 day period (CEQ) N/A Final EIS: 30 day period (CEQ) N/A That the undersigned officer of the City of Meridian is authorized to, and does, consent to assume the status of responsible federal official, under the National Environmental Policy Act of 1969, insofar as the provisions of said Act apply to the Division responsibilities for environmental review, decision making and action assume and carried out by the City of Meridian that by so consenting, the undersigned officer of the City of Meridian assumes the responsibilities where applicable, for the conduct of environmental review, decision-making, and action as to environmental issues, preparation and circulation of draft and final environmental impact statements, and assumptions of lead agency responsibilities for preparation of such statements on behalf of Federal agencies other than the Division when such agencies consent to such assumption; That the undersigned officer of the City of Meridian is authorized to consent, personally, and on behalf of the City of Meridian to accept the jurisdiction of the Federal courts, for the enforcement of all the aforesaid responsibilities; and that the undersigned does so consent, on behalf of the City of Meridian and of the undersigned, in the official capacity of the undersigned. Grant Kingsford, Mayor gnature Name, Title 728 Meridian Street Meridian, Idaho 83642 Cit of Meridian ress Ufficer of City/County IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM TITLE: CONTRACT .: This contact is made and entered into between the City of Meridian, Idaho hereinafter called the GRANTOR, and IDA -ORE Planning and Development Association, hereinafter called the GRANTEE. This contract shall be subject to all the terms and conditions as herein set forth as well as those terms and conditions as set forth in those annexes attached hereto -as noted below: Attachment A Agreement by and between the City of Meridian and IDA -ORE Planning and Development Association, Inc. dated March 29, 1985 Attachment B Administrative Management Plan Attachment C Revolving Loan Fund Program Guidelines for IDA -ORE Reinvestment Fund Attachment D Scope of Work Attachment E Payback Plan TERMS AND CONDITIONS Article I - Period of Performance The scope of work required to be completed hereunder shall be accomplished from the effective date of May 6, 1985 and shall continue up to and including December 30, 1986, unless otherwise amended. Article II - Grant Amount and Payments The maximum amount of Idaho Community Development Block Grant (ICDBG) assistance hereby awarded is $275,000.00. The GRANTEE hereby agrees to provide up to $ —p— in the form of job training funds (i.e., local, state, or other federal contributions) for the purposes of completing this project. The GRANTEE shall adhere to the budget as outlined in the attached budget. The GRANTEE shall deposit all ICDBG funds for financing the project in a non-interest bearing account. The GRANTEE shall periodically request payment up to 100% of the value of work performed up to the total sum of the ICDBG grant assistance minus the budgeted audit line item. If the GRANTOR is satisfied with the request, the GRANTOR will pay the amount requested within 30 days of the receipt of the request. The GRANTEE shall certify that all work is complete as billed and shall be liable for any discrepancy in documentation. Requisition of the budgeted audit line item shall be submitted in conjunction with the audit report and shall be paid upon acceptance of the audit by the GRANTOR. The use of ICDBG grant funds for administrative costs is limited to a maximum of 10% of the total ICDBG funds awarded by this contract. Article III - Work Performance The project activities to be accomplished under the conditions of this contract are outlined in the Scope of Work, as described in Attachment B. Article IV - Financial and Progress Reports - In the performance of this contract the GRANTEE shall keep books, records and accounts of all activities related to the provisions of this contract. The GRANTEE will certify each interim reauest for funds (financial report) that is submitted to the GRANTOR. The GRANTEE shall also submit a final financial report which details costs incurred by line item as described in the project budget. This report shall be submitted upon completion of the project funded under this contract. The GRANTEE shall submit interim progress reports as specified in the Reporting Schedule, Attachment C. A detailed written final report with documentation of the activities carried out shall be submitted to the GRANTOR, as stated in Attachment C, at the conclusicn of the project. Article V - amendments The GRANTOR may amend this contract on its own initiative or at the request of the GRANTEE to reflect changes in the scope of work or design of the project; however, such changes shall be mutually agreed upon. In no case shall the nature or purpose of the project be amended from what is generally described in the application and was the basis for selection of the project. And further, in no case shall the budget be amended to exceed the ICDBG dollar amount originally granted in the contract.' The GRANTEE shall be responsible to pay out of its own funds for any costs above the original ICDBG sum granted by this contract. No scope of work costs or services shall be changed unless approved in a written contract amendment signed by both parties. Article VI - Subcontracts The GRANTEE shall notify the GRANTOR and forward for its approval any subcontracts under this contract. Upon a showing that the contract has complied with the prerequisites and requirements, the GRANTOR shall issue its approval to proceed with the subcontract. All contracts and subcontracts must comply with all applicable state and federal laws and regulations. Article VII - Audit and Monitoring The GRANTEE shall provide the GRANTOR with an annual financial audit in accordance with Attachment P of OMB Circular A-102 and the new circular that will supersede it. The audit shall be completed by a certified public accountant during the regular annual audit cycle. Audits shall be provided annually until the completion of the project. The GRANTOR may monitor and make periodic inspections and evaluations of the project, its books, records and amounts of the project. The GRANTEE shall make available the books and records to the GRANTOR during regular working hours. These books and records shall be maintained for at least three years following the audit of the project. Each GRANTEE that provides a portion of their Idaho Community Development Block Grant in any fiscal year to a subrecipient such as a nonprofit organization, shall require the subrecipient to meet the audit and monitoring requirements of Attachment P of OMB Circular A-102 and the new circular that will supersede it, or Circular A-110. The GRANTEE shall be responsible for monitoring any subrecipient for compliance with all federal and state laws and regulations including the audit requirements. Article VIII - Termination The GRANTOR shall have the right to terminate this contract in whole or in part, at any time before the date of completion, whenever it is determined that the GRANTEE has failed to comply with the conditions -of the contract. The GRANTOR shall promptly notify the GRANTEE in writing of the determination and the reasons for the termination, together with the effective date. The GRANTOR may terminate this contract in whole or in part for the convenience of the GRANTOR when both parties agree that the continuation of the project would not produce results in commensurate with further expenditure of funds. the two parties shall agree in writing upon termination conditions, an effective date and a fair and reasonable payment, as determined by the GRANTOR for all work completed. Article IX - Special Warranty The GRANTEE warrants that nothing of monetary value has been given, promised or implied as remuneration for entering into this contract. The GRANTEE further declares no improper personal, political or social activities have been used or attempted in an effort to influence the outcome of the competition, discussion or negotiation leading to the award of this contract. Article X - Relationship of Contracting Parties Contracting parties warrant by signature that no employer-employee relationship is established between the GRANTOR and the GRANTEE by the terms of this contract, and further indemnifies the County and holds it harmless against any and all suits, actions, claims or losses of every kind, nature and description, including costs, expenses, and attorney fees, that may be incurred by reason of any act or omission, neglect or misconduct of the GRANTEE which may arise out of this agreement. Article XI - Conflict of Interest No official, employee of the GRANTEE or GRANTOR shall have any direct or indirect financial interest in the project. Article XII All grant recipients will erect a sign for all construction projects identifying the project's funding source after notice to proceed is issued; location as directed. Maintain in good condition; remove when directed. Note: Except for the project sign, there shall be no signs or advertisements of any kind erected on the site. Project sign shall comply with the following requirements: 4'x8' of 3/4" exterior grade MOO plastic sealed plywood, framed with suitable metal edge moldings for prevention of delamination. Paint with three (3) coats of exterior trim or sign enamel; colors as selected. Also, employ sign painter approved by architect, to apply additional graphics and lettering, as directed, over the three coat finish. At least two (2) additional coats are required for the graphic and lettering work. Employ sign painter approved by architect to letter names of the project, architect or consulting engineers, contractor, and principal subcontractors. Secure sign to nominal 4"x411x12" pressure treated wood posts set 4' 0" into ground with concrete surrounding each post. In addition, the sign will give credit to the GRANTOR of Commerce and to the Governor for the funding. Article XIII - Federal Regulations and Assurances All conditions and assurances required of the GRANTOR by Title I of the Housing and Community Development Act of 1974, P.L. 93-383 as amended, are binding on the GRANTEE as outlined in Attachment D, Assurances. GRANTEE shall comply with all. terms and conditions of Federal Grant Number B -85 -DC -1-0001 and all applicable federal laws and regulations as stated in the Idaho Community Development Block Grant Handbook. Additionally, both parties shall adhere to statutes and regulations of the State of Idaho. APPROVED: FOR THE CITY OF MERIDIAN: Signature Grant Kingsford Typed Name Mayor, City of Meridian Title Date FOR IDA -ORE PLANNING & DEVEL. ASSN.: Signature Typed Name (authorized official or GRANTEE) Title Date s ATTACHMENT A Agreement by and between The City of Meridian and IDA -ORE Planning and Development Association. Inc. WHEREAS The City of Meridian has applied for grant financing from the Idaho Community Development Block Grant (ICDBG) funding to provide debt financing to firms locating in or currently located within the jurisdiction of The City of Meridian; and WHEREAS The City of Meridian must, under the Idaho Constitution, operate such economic development financing programs under agreement with a local development corporation; and WHEREAS IDA -ORE has the technical capacity to evaluate the credit worthiness of loan applicants and the capacity to service and administer said loans on behalf of The City of Meridian; and WHEREAS IDA -ORE also has responsibility for marketing and management of other public financing programs such as the SBA 503 Loan program for the The City of Meridian; NOW THEREFORE, in consideration the above premises the parties defined above agree as follows: 1) That the IDA -ORE Reinvestment Loan Fund Guidelines shall govern the management of the The City of Meridian Revolving Loan Fund account. 2) That IDA -ORE Planning and Development Association (I/0 PDA) may charge the initial ICOBG grant necessary, proper and legal expenses for establishing initial loans, carrying out loan fund management, marketing, accounting and reporting, and such legal expenses as may be required. 3 ) That 1/0 PDA shall establish a budget . for expenses identified in 2), above, at such time as there is a contract in place for program administration. 4) That this agreement may be terminated for convenience or cause by either party by providing 30 days written notice. 5) That this agreement may be modified at any time in writing for any expedient or legal purpose. Page 2 of 2 IN WITNESS WHEREOF, the parties haw _. -"theA; hands. By. / .�,��.i L:.r..Ri (• ,rte --� rant Ings or (B � ayor Dick�"$utcher ice } The City of Meridian IDA .0; Planning andres ent Development Association BY: hi hoate, xecutTv- e erector IDA -ORE Planning and Development Association Executed this "day of 19as � T G`. e a ishop Notary 85-1 Attachment B ADMINISTRATIVE MANAGEMENT PLAN This Agreement is made this day of , 1985 between the City of Meridian hereinafter r—e erred to as City anIda-Ore Planning and Development Association, P.O. Box 311, Weiser, Idaho 83672, Phone Number (208) 549-2411 (Weiser)/(208) 322-7033 (Boise), hereinafter referred to as Agency. Whereas City has received an Idaho Community Development Block Grant (ICDBG) for $275,000.00 (Two Hundred Seventy -Five Thousand Dollars) to _establish a Revolving Loan Fund for assistance to businesses located in the City of Meridian it desires to provide for administrative services to administer said Grant. This Agreement will establish the terms and conditions, along with the duties and responsibilities of the parties entering into this Agreement. 1. Agency agrees to assume responsibility for City's compliance with Federal Regulations and processes except as noted below. 2. Agency agrees that it will ensure compliance by all borrowers, their contractors and subcontractors with all applicable Federal Regulations and processes.. 3. Agency agrees that it will ensure compliance by all contractors and subcontractors with the following.Acts:' a) Davis -Bacon Act; b) Copeland "Anti -Kickback" Act; /'\ c) Contract Work Hours and Safety Standards Act. 4. Agency agrees that it will provide data to City and/or complete all paperwork required by City for conformance to conditions number 1, 2 and 3 above. 5. Agency agrees that it will conduct an Environmental Review for each project undertaken during the Grant period. This Review will include all research and preparation of all paperwork required by State, Federal or Local agencies. In addition, Agency agrees to ensure that all requirements for such Environmental Reviews will be completed in accordance to any State, Federal or Local laws and regulations. 6. Agency agrees that it will follow the financial management guidelines as set forth in the Revolving Loan Fund Program Guidelines during the Grant administration period. 7. Agency agrees that it will adhere to the terms, conditions and time phasing of the project as set forth in the Scope of work. Furthermore, that it will monitor the Revolving Fund Projects as set forth in said Scope of Work so as to demonstrate projected performance of the so noted benefits. 8. Agency agrees that it will assume fiscal responsibility for administra- tion of the Revolving Loan Fund and that it will track all funds and prepare and provide all required bookkeeping information for City records. Agency also agrees to provide City with a complete duplicate set of all bookkeeping records. 9. Agency recognizes that while Agency is responsible for preparation of all the above noted items, that City is primarily responsible for preparation and maintenance of same. Therefore, Agency agrees to provide City with a complete duplicate set of forms, paperwork, reviews, studies, and bookkeeping records, along with any other documents prepared by Agency. 10. Agency agrees to establish a filing system for records as noted in Program Overview and'Administration, Volume I, FY '84, pages 7, 8 and 9. 11. Agency agrees that it will contract with an independent Certified Public Accountant for an audit(s) of the Grant according to federal and state program audit requirements, and that said contract and firm must meet with the approval of both City and Division of Economic and Community Affairs/Idaho Department of Commerce. 12. The City agrees that it will contract with an independent Certified Public Accountant for an audit(s) of the Grant according to federal and state audit requirements and that said contract and firm must meet with the approval of the Division of Economic and Community Affairs/Idaho Department of Commerce. -13. City agrees that it will implement the attached Grantee Section 3 Affirmative Action Plan. This is Attachment B of the Contract between City and the Agency dated Grant Kingsford Mayor, the City of Meridian Date Date GRANTEE SECTION 3 AFFIRMATIVE ACTION PLAN The City or County agrees to implement the following specific affirmative action steps directed at increasing the utilization of business concerns located within the Section 3 covered area or owned by Section 3 area residents. A. To ascertain from the local HUD program official the exact bo-:ndaries of the Section 3 covered pro- ject area and where advantageous, to seek the assistance of the state in preparing and implementing the affirmative action plan. B. To identify eligible business concerns for ICDBG- assisted contracts through: the Chamber of Commerce; local advertising media including public signage; Project area committees; citizen advisory boards; lists available through the state Community Develop- ment Representative; regional planning agencies; and all other appropriate referral sources. C. To maintain a list of eligible business concerns for utilization in CDBG-funded procurements, to insure that all appropriate project area business concerns are notified of pending contractual opportunities, and to make available this list for general city pro- curement needs. *D. To insert this Section 3 Plan in all bid documents, and to require all bidders on contracts to submit a Section 3 affirmative action plan including utilization goals and the specific steps planned to accomplish these goals. *E. To insure that contracts which are typically let on a negotiated rather than a bid basis in areas other than Section 3 covered project areas, are also let on a negotiated basis, whenever feasible, when let in a Section 3 covered project area. *Loans, grants, contracts and subsidies for less than $10,000 will be exempt. !. To maintain records, including copies of correspondence namoranda, etc,, which document that all of the above , affirmative action steps have been taken. G. To appoint or recruit an executive official of as Equal Opportunity Officer to coordinate the imme city mentation of this Section 3 plan. Ple- As officers and representatives of (Name of City 0_ F County) We the undersigned have read and fully agree to this Affirma- tive Action Plan, and become a party to the full implementation of this program. Signature Title Date Attachment D Scope of Work The City of Meridian will contract with IDA -ORE Planning and Development Association as their Revolving Loan Fund Agency with the basic terms and scope of work as follows: A. The project will be to establish a Revolving Loan Fund to assist businesses in' the City of Meridian. The first project to be funded will be as follows: Power Dynamics, Inc., Meridian Idaho 83642 - this project will be to provide $379,000.00 for start-up expenses and first year operating capital for the business at the Meridian site as follows: Use Source ICDBG _ EQUITY Working Capital $235,000 $ $129,000* Equipment 15,000 TOTAL $250,000 $ -0- $129,000 *Equity injection to be provided from profits of first year operations. B. Grant administration will be provided according to the administration plan outlined in Attachment B. C. The Revolving Loan Fund Management Plan that will be Utilized to administer this Grant will be the Revolving Loan Fund Program Guidelines for IDA -ORE Reinvestment Fund as originally submitted with the Grant application and attached hereto as Attachment C. D. The Payback Plan that will be utilized for re -use of program income will be that submitted with the Grant application and attached as Attachment E, the City of Meridian Local Re -Use Plan for Program Income. E. The benefits of this project will be as follows: 1) This project will allow for up to 23 additional jobs in the Meridian area within the first year of operations. While these jobs are not guaranteed, the current schedule of employee hiring includes 6-7 people within the first two months. Of those positions, 3-4 will be for people of low -to -moderate income. The balance of the jobs will be created as and if required over the remaining 10 months. Given projected growth, the company predicts job cration exceeding 300 positions by the tenth (10th) year of operations. Employment will be tracked according to low -to -moderate income and by minority. Scope of Work Page 2 F. Article XII of contract between Idaho Department of Commerce and the City of Meridian will not be complied with as there is no outside visible construction that will take place on the above referenced project. - G.. The time phasing of the project will be as follows: May 2, 1985 - Grant award Jul !o, 1985 - State/City of Meridian contract signed Jul o, �, 1985 - City of Meridian/Administrative Agency contract signed Jul 1985 - Admin Agency/Power Dynamics, Inc. loan agreement completed Jul 20, 1985 - Power Dynamics, Inc. project initiated Sep 30, 1986 - Power Dynamics, Inc. project completed Dec 30, 1986 - Audit.complete/Grant closed H. Establish Environmental Review Record. I. Submit Needs Assessment/Community Development Plan. ATTACHMENT E 5.0 City of Meridian Local Re -Use Plan for Program Income March, 1985 The City of Meridian Revolving Loan Fund account will yield a program income which can provide for small reinvestment opportunities annually and will be added to and cooriiinated-with other public and private financing as funds become available. 5.1 Estimates of Program Income Program income from the Power Dynamics Corporation loan yield estimates of program income as follows: 5.11 Years 1 - 5: $215,090 5.12 Years 6 - 10: $239,186 5.13 Total repayment (this financing): $454,276 These estimates include balloon payments scheduled in accordance with the terms and conditions of proposed loan agreements, and assumes the fund will be invested in a money market checking account yielding at least 8.0A per annum. f5.2 Proposed Uses of PrograTI Income Program income based upon current priorities will be used to provide new financings in tandem with other public and private financings - essentially a revolving loan fund program for City of Meridian. The priorities for financing will be: 5.21 To stabilize existing local firms to position them for 5.22 5.23 growth; To assist healthy growing new employment; and firms to expand and create To use as financial incentives to attract new industrial locations. A well managed Meridian revolving loan fund should result in two to three times the initial investment over the first five years and four times the original investment in 10 years. 5.3 Management Mechanisms The City of Meridian proposes to provide public financing services to the City of Meridian through the IDA -ORE Reinvestment Loan Fund. 5.31 The IDA -ORE Reinvestment Loan Fund (I/0 RLF) is managed by the development finance professionals at IDA -ORE Planning and Development Association (I/0 PDA - see resumes in Appendix D). Funds provided by the City of Meridian will be marketed and managed in accordance with the I/O RLF Management Plan (Appendix D). 09 5.32 The City of Meridian will provide for participation in the proposed credits through the IDA -ORE Development Finance Committee and Board of Directors, of which the City of Meridian is a participating member. The delegation of authority for the Meridian Revolving Loan Fund account is graphically displayed in Figure 1.0. Figure 1.0 Meridian Revolving Loan fund Account Organizational Chart Idaho Department of Commerce The City of Meridian __;�Treasure Valley -- IDA -ORE PDA ---- Farticipating CDC Lenders Staff Loan Review IDA -ORE Committee Development Finance Committee 5.33 Administrative expenses will be distributed between the ICDBG program and the borrowers in the first round of financing. Administrative expenses can be charged to borrowers and the interest earnings of the Meridian Revolving Loan Fund account. I/O PDA has a fully automated bookkeeping system, supported by a multi-user Alpha -Micro 10 megabyte computer, the accounting firm of �^ Bledsoe b Bledsoe (Payette) and plans to add a professional accountant to its staff this year. The I/O PDA currently manages an SBA 503 Loan portfolio of $2,246,000 (and growing). 10 5.34 The City of Meridian Revolving Loan Fund account may be reinvested in new debt financing in accordance with the priorities established in 2.0, above, and managed under the guidance of the IDA -ORE Reinvestment Fund Guidelines (Appendix D). 5.35 Unobligated funds will be accumulated in accounts established at the borrowers bank of record and at least quarterly transferred to an account to be established for deposit, accounting and management by the I/O RLF Meridian account in a Meridian full service bank. I/O PDA will be accountable under an agreement with the City of Meridian to account for and prepare progress reports on the Meridian account and loan activity on a quarterly basis. Such accounts shall be minimally "money market" style interest bearing accounts with interest accruing at an 8% per annum basis (minimum interest goal). 5.36 Changes in this Re -Use Plan can be made at the discre-ion of the City of Meridian in consultation with the State of Idaho Department of Commerce and in accordance with applicable federal regulations governing eligible Community Development Block Grant Programs. Such plan changes will be the subject of at least one public hea-ing for which the public has been properly notified accord,.ng to Idaho law. Changes in the I/O RLF Management Plan can be affected by Meridian's participation on the Board of Directors of I/O PDA, the custodian and operator of the I/O RLF. The agreement between the City of Meridian and the I/O PDA for management of the Meridian account may be terminated at any time in accordance with the terms and conditions of the agreement. 5.37 Meridian Revolving Loan Funds (in the rollover phase) will be available for business development anywhere within the confines of the City of Meridian. Projects funded in adjacent areas must benefit at minimum 51 low -to -moderate income residents of the City of Meridian by providing employment and other benefits hief 11Zcted-Official ate Local Development Corporation ate Officer/Ti tle 11 BUDGET COMMUNITT �EVLLOPMLNT lR 3eCT Applicants _The City of Meridian Project: Establish an economic Revolving Loan Fund for the City of Meridian *Year (l)_ X Year (2) BUDGET FOR TOTAL PROJECT COSTS YEAR ONE AMOUNT Block Other Line Items Grant !'ed State Local IN%6..,1 Administrative expense" Project plannino & desk,)" Land,structures and rights of—way Architectural/engine ring fees Projection inspection fees Re-'ocaticn expenses Reloca-:cn payments o in- dividuals & businesses Demolition and Removal construction and project improvement Ventre Capital Loan (R L F ) Contingencies Audit"* 24,000 24,000 " - 0 I 0 ' - 0 - - 0 - I - 0 - - 0 - - 0 J - 0 - _ 0 _ ► - 0 - I - 0 -0- + -0- 250.000 I 250 0001 - 0 - 1 1,000 I � j ; 1,00-01 Total estimated costs: 5275.000 275.000 Remarks: TOTAL S 275.000 *Multi-year projects need a budget page for each year and for the total project. •'ICDBG funds in these categories combined are linited to 101 of total ICDBG funds. Private Investment is considered a benefit and should not be included in the project budget. I r% .. BUDGET COMMUNITY DEVLLOPNLNT PROJCCT Applicants IDA -ORE Planning & Development Association Projtctt Establish an economic Revolving Loan Fund for the City of Meridian *Year M X BUDGET POR YEAR ONE Line Ttems Administrative expense" Project planr.inQ 6 design* Land,structures and rights of—way A -ch i tectural/engine . i ng fees Projection inspection, fees Revocation expenses Re:oca t :on payments o i n- dividuals a businesses Demolition and Removal construction and project improvement Venue Capital Loan (RLF) Contingencies Audit' • Y*ar (2) TOTAL PROJECT COSTS AMOUNT Block Other— Grant Ped Stag r,,,.,, r 123,000 ----- avb01 23 000 r - 0 - - 0 - i -O- j ► i - 0 - I - 0 - i r , - 0 - - 0 - - 0 - r - 0 - i - 0 - ' - 0 _ -0- ) I -0- I 250.000 i ! 250 0001 - 0 - -.0 - 171,000 l I 1.000 Total estimated costs: 5274,_000 274 ,nnn Remarks: TOTAL S . 274 - nnn `Multi-year projects need a budget page for each year and for the total project. •'ICDBG funds in these categories combined are limited to 10t of total ICDBG funds. Private Investment is considered a benefit and should not be included in the project budget. 1^ GRANTEE city of Meridian GRANT # PRO IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT REVOLVING LOAN FUND LOAN APPLICATION SUMMARY LOAN APPLICANT Name POW n DY .*'ICS, INC. Address P. 1L:249 S -n CQrl,)r, CA qL^?n lelephone N Type (Proprietorship, Partnership, Corporation) Chief Executive Officer PROJECT Location "Pric4lAn, lr?pyo. ::.Ypct Prir'ress unler cons'.aeratior.. Applicant's Current Employment Ales, n,::nPPrir.�-, A� :PTrb y of motion ccntrol syst.e":F. Employment Effect of this Project Fro- 2-, within ...) (2) yeQrs to over 30r. e . e en year. BENEFIT (JPP AttAcred s&pluie) Permanent Jobs Created for Low and Moderate Income (LMI) Citizens rr^- :: vitrin t,._:) Schedule (i) •:PPrs t0 i,:ell over 1..1• tie tPr•-- W1^ Y�) YePr. 7PP At.`.Acre" sc� P^ule Jobs Retained for LMI Citizens Training Program(s) Job trAinlnr nrosrrpms offerinr on-t]e-job trnininv n us foryrql erlucptlon Asp s Pnce will be Schedule offered to crePte snecifie job skills As well Ps uro-lotion oDnortunitles. Actions to be taken to provide benefit$ to minorities and women An Pffirmative Actinn Drorrarr will be in effect. It Is estimFtted t),Ptwomen , T norities co::ld Schedule rAke uD 40 or more of tYe local work force. PROJECT COST Land General 6 Administrative Expenses M180 000 Buildings i Modifications Machinery i Equipment Working Capital k 63 000 Other (specify) Product Development ;121+000 TOTAL 4379,000 JUSTIFICATION FOR USE OF PICDBG FUNDS FOR PROJECT USES CrP=`i^^ �r •�PZ• lob 07-,,)-tun.itie=• InC`'Pp�P. of P.?rr.inr CsaDn},ilitlP� trr�urr �!�� tri'"`_`" cro: r�r+c'. influx ')* ir.-^ tl-e loc=i IncrPP!-P,? local ��x b�sP. SOURCES OF FUNDS (must equal project cost) Equity Injection S Loans from Officers Commercial Loans Federal Participation IOther (specify) Gross Profit, On-Goinc Business:1?9,r)0n Amount sought from PICDBG Revolving Loan Fund- 25-,000 TOTAL -4 - , r) COLLATERAL (By source of funds and position) Perrorgl ruArpntees by stncK)-o'_�Prs to be suonle7ente� by a Deed of Trust on real property ss soon As possible. PROPOSED CONSTRUCTION/REPAYMENT SCHEDULE 12535.67 until the end of the sixth (6th) yeRr, fit which time the principal balance will be due and payable in full. LOANS T- 15 yesrs Interest Rate 9" Signature of Person Applying for Loan Signature of LDC Officer Signature of Chief Elected Official Conditions bs.11oon Payment of bslance in six (F.) errs. rresie^* Title Date Executive Director Title Date *larch 29, 1985 Title Da t e K r �� G N✓t 1�NA'1d�•ITA-�- HCl//6ss/ -- ----a_.-- A'.UC/� .__0_ 74 -es, 12-7- 10 2-7_ sy_ zi7�._5_-_llcss�,C� 3. I r i i I r i Completion of Other Environmental Program Requirements 1. Floodplain and Wetlands. No project proposed falls within a designated floodplain or wetland. 2. Historic Preservation S-3 No activity proposed involves or will affect any structure listed in the National Register of Historic Properties, any structure eligible for such registration, or any structure listed in or eligible for listing in any state or local registry of historic places. 3. Coastal Zone No activity falls within a coastal zone. 4. The Safe Drinking Water Act of 1974 (Sole Source Aquifer) The project is not located within the impact area of a sole source aquifer. 5. Endangered Species Act of 1973 No activity proposal will impact a listed species or critical habitat. 6. Wild and Scenic River Act of 1968 This project does not impact any rivers covered by the Wild and Scenic River Act. 7. Clean Air Act 8. Other HUD Regulations Noise Standards 24 CFR 51 B Siting Near Hazards 24 CFR 51 C �J"f �-;-�' 3u3 -23G — /Soo —41 rs Airways Clear Zone Standards 24 CFR 51 D��- /sn� 6-15) Environmental Review Officer Signature Date E-1 ENVIRONMENTAL PROCEDURES CHECKLIST 1. If project was environmentally conditioned in the grant contract, is the Notice of Removal of Grant Conditions (i.e., release of funds)ate prior to commitment or obligation of funds for the project? Yes No 2. Did the grantee expend local or any other funds prior to release of funds for the project and then use ICDBG funds to reimburse such local expenditure? (1) Yes No 3. Has the grantee prepared, maintained and made avail- able for public inspection an Environmental Review Record (ERR) for the project? Yes No 4. Does the ERR include: a. a description of the project adequate to locate it easily? Yes No b. a level of clearance finding indicating either: (1) that the project is not an action which may significantly affect the environment? Yes No (2) that it is an action which may significantly affect the environment? Yes No c. a copy of a published Notice of Intent to File a Request for Release of Funds which uses the standard format and wording? Yes No d. the date of such publication? (1) Tb obtain this information the CPD Representative or Environmental Officer should examine grantee fund commitment dates as represented by such documents as local contract dates, dates for draw -down of funds, etc. E-4 FLOODPLAINS AND WETLANDS 1. Is the proposed action located in a wetland and/or the 100 year floodplain•or whether it has the potential to be measurably affected by a floodplain or wetland? List flood plain map number and date 1.8 S✓.v B.i - G'ry 5....._�. � �t•1tr.et.�,.. C.,� �_ •�w.u.� 6188 - �/'133� Yes No PC 2. If yes, then continue: Does the ERR indicate the following required alternatives have been evaluated: a. alternative sites outside the floodplain or wetland? Yes No b. alternative actions which serve the same purpose, but which have less adverse impact? c. alternative of no action? Yes No Ye s No Does the analysis demonstrate that the location of the project on the floodplain or wetland site is the only ' practicable alternative? Yes No 4. Has the grantee designed or modified its project action so as to: a. minimize harm to or within the floodplain; Yes No b. minimize the destruction, loss or degradation of wetlands; Yes No c. restore and preserve natural and beneficial floodplain values; Yes No d. preserve and enhance natural and beneficial wetland values; Ye s No e. comply with the standards of the National Flood Insurance Program? Yes No E -S /01_�N HISTORIC PRESERVATION AND ARCHEOLOGY CHECKLIST 1. Does each Environmental Review Record include a letter from the State Historic Preservation Officer (SHPO)? Date State Historical Preservation Office (SHPO) was notified Yes No 2. Have all projects or activities declared categorically exempt from NEPA reviews been the subject of historic preservation assessments and information check when required? Yes No X 3. For projects where historic properties were found to be present, does the ERR include: a. Documentation of consultation with the SHPO concerning the applicability of Criteria of Eligibility for the National Register of Historic Places? Yes No b. If the grantee and SHPO agreed on a finding of eligibility, documentation of consultation about the Criteria of Effect? Yes No c. If answer to "b" above is yes and there is an effect on a Register eligible property, a copy of the community request for a determination from the Department of the Interior (DOI)? Yes No d. If the applicant an SHPO disagreed on eligibility, a copy of the request made to the Department of Interior for a Determination of Eligibility? Ye s No e. If the applicant and SHPO agreed on a finding of eligibility and agreed on either a finding of effect or no adverse effect on Register eligible proper- ties, documentation that the findings were forwarded to the Advisory Council on Historic. Preservation �-� (ACHP) for review and comment? It%— Ye s No 4. If there is a finding of adverse effect on Register eligible properties, does the ERR contain an executed Memorandum of Agreement? I City of Meridian (� Community Development Program March, 1985 The City of Meridian's Comprehensive Plan, adopted in 1978, supports the proposed economic development project and the establishment of the proposed venture capital program under Goal 3, Policy 2 (Appendix 1.0 Meridian Area Description The City of Meridian, Idaho was incorporated during the early 1900's and quickly established itself as an important trading center for agricultural products and services. In 1918, the Meridian Creamery facility was constructed and for nearly 60 years provided stable employment for Meridian residents. Meridian's reputation as a "nice place to live" is due in part to its numerous older residents and pride they place in their homes and properties. Meridian streets are clean, safe and attractive, as well as the residential subdivisions throughout the community. The City of Meridian is located between I-80 and Fairview West of Boise in the middle of what is, and was, predominantly an agricultural area. The city now lies in the path of development from the nearby Boise Metropolitan area. The economy is based on a mixture of retail service and manufacturing - principally prefabricated homes and mobile homes. 2.0 Community Development Needs The City of Meridian is essentially a bedroom community to Boise and needs to broaden its tax base and increase the number of better paying jobs for the predominantly low and moderate income population. 3.0 The 1985 Meridian Community Development Block Grant.Program The objective of the 1985 Meridian Community Development Block Grant program is to broaden its tax base by attracting new "sunrise" industry with growth potential and also the promise of substantial employment and wage growth potential for Meridian's low and moderate income residents. 4.0 Program Design The city's 1985 program proposes to establish a Venture Capital Loan Fund to support the location of a corporation new to Idaho, i Power Dynamics Corporation of California. 05 Power Dynamics is a new corporation which sells, services and assembles motion control devices (energy conservation equipment) installed on variable speed electric drives. Their project described in more detail in Appendix F proposes to use the requested $250,000 Venture Capital Loan to complete the development of their production prototype; packaging the power stage for their new product line; ready design for production and market their new line of electronic motion control devices. Appendix D displays the twelve month start-up projections and month-to-month cash flow requirements, partially funded with the venture capital loan. Also identified are the benchmarks or measures of progress for product and market development. 5.0 Rating and Ranking Criteria: Economic Development 5.1 Previous Actions The City of Meridian has successfully carried out other community development program elements such as major water and sewer development to prepare the community's infrastructure to support new industry. II 5.2 Additional Actions The city is now prepared to support new industry, needs to provide financial and other incentives to secure new industrial development. A venture capital loan fund will support this objective. 5.3 The Relationship of Results to Funds Requested-- The equested= The Meridian Venture Capital Loan Fund will not create large numbers of jobs in partnership with Power Dynamics, Inc. in the first year. The second year 23 new jobs will be created at a cost per job of $10,870. The number of jobs forecasted during the first production year targeted for low and moderate income people is 13. The employment forecast through year 5 is 133 and by year 10, 300. 5.3 Identification of Need and Impact I 5.31 Ada County's average unemployment rate for 1984 was 4.8. The growth rate for Meridian City has been approximately 2.3% per year. 5.32 Although the Ada county area rates as the least distressed in the region, there are substantial numbers of low and moderate income population in the Meridian area. 0E; J 5.33 The total minorities in Meridian are approximately k---, 219. 5.34 The number of handicapped are approximately 405. 5.35 The Citizen Involvement Process is described in Appendix H. 5.36 The Power Dynamics Corporation over the next 5 to 10 years will provide a steadily growing sources of employment in a "sunrise" industry. This will add to the tax base and supply badly needed low and moderate income jobs which by the tenth year could number 170. 5.37 The loan will be managed under an agreement with the IDA -ORE Planning and Development Association who will monitor progress and craws through the 12 month start up phase and progress on low -to -moderate income employment through year six of the loan. 5.4 Environmental Impact The proposed venture capital loan is not anticipated to result in an adverse impact on the environment 5.5 Displacement The venture capital loan will not result in business or residential displacement. 0 7 Am lv MERIDIAN CITY COUNCIL JULY 1, 1985 PAGE # 2: Mayor Kingsford, is the the claim of the City? There was no response. B41 r a Ine' int e audience who w' es to defend Mayor Kingsford, Due to their failure to pay their water bill or to present any valid reason why the bill has not been paid, their water shall be turned off on July 9, 1985. In order to have their water turned back on, there will be an additional fee of $10.00. They are hereby informed that they may appeal or have the decision of the City reviewed by the Fourth Judical District Court, pursuant to Idaho Code. Even though they appeal, the water will be shut off. The Motion was made by Myers and seconded by Tolsma to approve the turn-off list of delinquent accounts. Motion Carried: All Yea: Mayor Kingsford announced the delinquent accounts amounted to $4,504.65: Item #4: Amendments to the Zoning & Development Ordinance: Mayor Kingsford advised the Council that there was some problems with these amendments in regards to the Zone classification for a Regional Shopping Center and with the subdivision process and that the City Attorney needed to research these items and suggested this be tabled until the next meeting. The Motion was made by Giesler and seconded by Tolsma that the Amend- ments to the Zoning & Development Ordinance be tabled until the July 15, 1985 Meeting. Motion Carried: All Yea: Item #5: Approve Audit Engagement: Mayor Kingsford advised the Council that the City had received a engagement request for the City Audit from Alexander Grant & Company formerly Fox & Company who has preformed the Audit for the past two years for the same cost as last year and recommended the Council approve the engagement of Alexander Grant & Company: The Motion was made by Myers and seconded by Tolsma to engage Alexander Grant & Company to preform the City Audit for the fiscal 1984/85 year. Motion Carried: All Yea: Other Items: Mayor Kingsford advised the Council that in reference to the Revolving Loan Fund Grant, he needed two items approved by the Council, one, he needed to be appointed the Enviromental Review Officer and two, he needed approval for him and the City Clerk to 'sign the necessary papers to proceed with the Grant. Mayor Kingsford advised the Grant was proceeding and there could be dispersement of funds by July 20,1985. MERIDIAN CITY COUNCIL JULY 1, 1985 PAGE # 3 j� The Motion was made by Myers and seconded by Tolsma to appoint Mayor Kingsford as the Enviromental Review Officer for the Revolving Loan Fund Grant. Motion Carried: All Yea: The Motion was made by Brewer and seconded by Myers to authorize the Mayor and City Clerk to execute any of the paperwork necessary to complete the Revolving Loan Fund Grant. Motion Carried: All Yea: Department Reports: Gary Smith, City Engineer, the Park at NW 8th is coming along good, the fill dirt has been hauled in and weeds cleaned up and fairly well leveled, could need a couple more loads of dirt. Moe has agreed to put a dumpster down behind the racetrack and Mr. Nelson is going to load the large items in the dumpster. We started our flushing program last night. I wish to thank Gary Schaffer of the Valley News for the article he wrote for the paper, it was really appreciated. Councilman Brewer, I don't feel threatened by the West Park Site and I hope Dr. Slaughter can get the study completed. n Councilman Giesler, the Committee is meeting with Dr. Slaughter on Wednesday and Dr. Slaughter has advised the final report would be completed by July 15, 1985. He is lacking some information from the Price people. Rick Orton, we have been in contact with them on this and we should have the information for Dr. Slaughter in the next day or two. Mayor Kingsford advised the Council the City was now the owner of the property next to the City Hall which they had approved negotiating and purchase at a prior date. Being no further business to come before the Council the Motion was made by Myers and seconded by Tolsma to adjourn at 7:42 p.m.: Motion Carried: All Yea: APPROVED: GRANT KINGSFORD, MAYOR ATTEST: Ja k Niem City Clerk : Mayor & Council Mitich, Keibert, P & Z Commission Valley News, Statesman Ward, Stuart, Eng. ACHD,ACZ,ACC,APA,CDH, Fire, Police, Atty. NIMD,BRA, Hein File (3) Mail (2) OFFICIALS JACK NIEMANN, City Clerk CdA KIEBERT, Treasurer P,eJCE D. STUART, Water Works Supt. �AYNE G. CROOKSTON, JR., Attorney EARL WARD, Waste Water Supt. KENNY BOWERS, Fire Chief '00�, May 31, 1985 HUB OF TREASURE VALLA Y A Good Place to Live CITY OF MERIDIAN Mr. Mike Johnson 650 Main Street Boise, Idaho 83702 Dear Mike, 728 Meridian Street MERIDIAN, IDAHO 83642 Phone 8884433 GRANT P. KINGSFORD Mayor A COUNCILMEN BILL BREWER RONALD R TOLSMA J. E BERT MYERS ROBERT GIESLER BOBSPENCER Chairman Zoning & Planning The City of Meridian was recently the recipient of a RLF Grant from the State of Idaho. Ida -Ore Planning and Devel- opment Association handled the submission of this Grant for the City of Meridian. We have been advised that the Board of Ida -Ore is not interested in the administration of this Grant. The City of Meridian would appreciate your support in hav- ing the Board reconsider their decision as we are of the opinion that Ida -Ore Planning and Development Association is more qualified to handle the administration of this _ Grant than anyone else in the area. Sincerely, Grant Kingsford Mayor City of Meridian, ID. pc: File ss John V. Evans, Governor y o David O. Porter, Administrator q State Capitol Building /001-1 ��rE o� Boise, Idaho 83720 DIVISION OF ECONOMIC AND COMMUNITY AFFAIRS_ May 10, 1985 J /, G f Mayor Grant Kingsford 728 Meridian St. Meridian, ID 83642 Dear Mayor Kingsford: Congratulations on being selected to receive an Idaho Community Development Block Grant. It is evident in the application the great amount of effort and solid preparation that went into making the project competitive. It is these local efforts which succeed in improving communities and therefore the State of Idaho as a whole. In viewing your application, the Advisory Council questioned the reasonableness of the proposed administrative costs as outlined in the project budget. The only costs allowed under the grant are those costs directly related to the administration of the grant and closing of the RLF loan. Application preparation costs are not allowable costs. Upon your providing acceptable justification of the administration costs or revised costs, a detailed scope of work, time schedule, and budget, a contract will be prepared for your signature. Grant Management Workshops will be conducted during May and early June. The workshops cover the local government's responsibili- ties and liabilities of managing an Idaho Community Development Block Grant. The major federal regulations and laws will be covered including the procedures and paperwork involved. It will be very beneficial if you, your financial staff, any administra- tive staff, and consultants attend these workshops. This will give my staff an opportunity to discuss the contract provisions with you. The workshop schedule will be mailed as soon as final arrangements are made. If you have any questions please contact Loren Nelson at 334-4717, who is the staff person assigned directly to your project. Si cerely, 71 Dr. David O.' Porter �% 1�'� 7c) Administrator IDAHO,V.v DOP : j bg A Land For All Seasons 4 AI •-,S John V. Evans, Governor ,� o David O. Porter, Administrator 4r State Capitol Buildthg r�rF� 04` Boise, -Idaho 83320 DIVISION OF ECONOMIC AND COMMUNITY AFFAIRS May 10, 1985 Mayor Grant Kingsford 728 Meridian St. Meridian, ID 83642 Dear Mayor Kingsford: Congratulations on being selected to receive an Idaho Community Development Block Grant. It is evident in the application the great amount of effort and solid preparation that went into making the project competitive. It is these local efforts which succeed in improving communities and therefore the State.of Idaho as a whole. In viewing your application, the Advisory Council questioned the reasonableness of the proposed administrative costs as outlined in the project budget. The only costs allowed under the grant are those costs directly related to the administration of the grant and closing of the RLF loan. Application preparation costs are not allowable costs. Upon your providing acceptable justification of the administration costs or renis-edlcosts, a detailed scope of work, time schedule, and budget, a contract will be prepared for your signature. Grant Management Workshops will be conducted during May and early June. The workshops cover the local government's -responsibili- ties and liabilities of managing an Idaho Community Development Block Grant. The major federal regulations and laws will be covered including the procedures and paperwork involved. It will be very beneficial if you, your financial staff, any administra- tive staff, and consultants attend these workshops. This will give my staff an opportunity to discuss the contract provisions with you. The workshop schedule will be mailed as soon as final arrangements are made. If you have any questions please contact Loren Nelson at- . 334-4717, who is the staff person assigned directly to your project. SPerely, ��'�I ' , 40!! Dr. David O. Porter Administrator IDAHO DOP : j bg A Lend For AN Seasons 4tiA� E� � John V. Evans, Governor m David O. Porter, Administrator q� State Capitol Build1bg Boise. -Idaho 83320 DIVISION OF ECONOMIC AND COMMUNITY AFFAIRS_ May 10, 1985 l� Mayor Grant Kingsford 728 Meridian St. Meridian, ID 83642 Dear Mayor Kingsford: Congratulations on being selected to receive an Idaho Community Development Block Grant. It is evident in the application the great amount of effort and solid preparation that went into making the project competitive. It is these local efforts which succeed in improving communities and therefore the State. of Idaho as a whole. In viewing your application, the Advisory Council questioned the reasonableness of the proposed administrative costs as outlined in the project budget. The only costs allowed under the grant are those costs directly related to the administration of the grant and closing of the RLF loan. Application preparation costs are not allowable costs. Upon your providing acceptable justification of the administration costs or renis-edecosts, a detailed scope of work, time schedule, and budget, a contract will be prepared for your signature. Grant Management Workshops will be conducted during May and early June. The workshops cover the local government's •responsibili- ties and liabilities of managing an Idaho Community Development Block Grant. The major federal regulations and laws will be - covered including the procedures and paperwork involved. It will be very beneficial if you, your financial staff, any administra- tive staff, and consultants attend these workshops. This will give my staff an opportunity to discuss the contract provisions with you. The workshop schedule will be mailed as soon as final arrangements are made. If you have any questions please contact Loren Nelson at _. 334-4717, who is the staff person assigned directly to your project. Si cerely, n Dr. David O. Administrator DOP:jbg 9! Porter IDAHO A Land For AM Seasons Mayor Grant Kingsford 728 Meridian St. Meridian, ID 83642 Dear Mayor Kingsford: - Congratulations on being selected to receive an Idaho Community Development Block Grant. It is evident in the application the great amount of effort and solid preparation that went into making the project competitive. It is these local efforts which succeed in improving communities and therefore 1 -he State.of Idaho as a whole. In viewing your application, the Advisory Council questioned the reasonableness of the proposed administrative costs as outlined in the project budget. The only costs allowed under the grant are those costs directly related to the administration of the grant and closing of the RLF loan. Application preparation costs are not allowable costs. Upon your providing acceptable justification of the administration costs or renis-ed,costs, a detailed scope of work, time schedule, and budget, a contract will be prepared for your signature. Grant Management Workshops will be conducted during May and early June. The workshops cover the local government's responsibili- ties and liabilities of managing an Idaho Community Development Block Grant. The major federal regulations and laws will be covered including the procedures and paperwork involved. It will be very beneficial if you, your financial staff, any administra- tive staff, and consultants attend these workshops. This will give my staff an opportunity to discuss the contract provisions with you. The workshop schedule will be mailed as soon as final arrangements are made. If you have any questions please contact Loren Nelson at 334-4717, who is the staff person assigned directly to your project. Si cerely, Dr. David O. Porter Administrator IDAHO DAHO DOP : j bg A Land For AH Seasons e�`'t 7033 4tiA,s.w—�l O John V. Evans. Governor o David O. Porter, Administrator q4 State Capitol Building r�rEo4� Boise,-Idaho 83320 DIVISION OF ECONOMIC AND COMMUNITY AFFAIRS May 10, 1985 l� Mayor Grant Kingsford 728 Meridian St. Meridian, ID 83642 Dear Mayor Kingsford: - Congratulations on being selected to receive an Idaho Community Development Block Grant. It is evident in the application the great amount of effort and solid preparation that went into making the project competitive. It is these local efforts which succeed in improving communities and therefore 1 -he State.of Idaho as a whole. In viewing your application, the Advisory Council questioned the reasonableness of the proposed administrative costs as outlined in the project budget. The only costs allowed under the grant are those costs directly related to the administration of the grant and closing of the RLF loan. Application preparation costs are not allowable costs. Upon your providing acceptable justification of the administration costs or renis-ed,costs, a detailed scope of work, time schedule, and budget, a contract will be prepared for your signature. Grant Management Workshops will be conducted during May and early June. The workshops cover the local government's responsibili- ties and liabilities of managing an Idaho Community Development Block Grant. The major federal regulations and laws will be covered including the procedures and paperwork involved. It will be very beneficial if you, your financial staff, any administra- tive staff, and consultants attend these workshops. This will give my staff an opportunity to discuss the contract provisions with you. The workshop schedule will be mailed as soon as final arrangements are made. If you have any questions please contact Loren Nelson at 334-4717, who is the staff person assigned directly to your project. Si cerely, Dr. David O. Porter Administrator IDAHO DAHO DOP : j bg A Land For AH Seasons e�`'t 7033 IV) 0 tkcc o� Before: MERIDIAN CITY COUNCIL KM=KaXX0N=XKKxM Location: 728 Meridian Street Meridian, Idaho Time: 7:30 P.M. UUMN. Other Date: APRIL 22, 1985 Items to be discussed are as follows: REVOLVING LOAN FUND GRANT FOR POWER DYNAMICSINC. Dated this 20th day of April ,1985 �p�T SES John V. Evans, Governor o David O. Porter, Administrator q� DIVISION OF ECONOMIC AND COMMUNITY April 3, 1985 Mayor Grant Kingsford 728 Meridian St. Meridian, ID 83642 Dear Mayor Kingsford: We have received your reviewing it. State Capitol Building Boise, Idaho 83720 AFFAIRS application and are in the process of The Division's Advisory Council will have all of the applications reviewed and ranked by May 2, 1985, at which time the Governor will make the final selection. All applicants will receive notification as to whether they did or did not receive a grant at that time. Please do not hesitate to call if you have any questions or concerns regarding the Idaho Community Development Block Grant Program. Sincerely, Jan P. Blickenstaf Program Manager Idaho Community Development Block Grant Program JPB:ga IDAHO A Land For A// Seasons L/ IL MARCH 18, 1985 TY COUN CIC or MERIDIAN � of the Meridian City Council called to order by May Regular Meeting 30 P•n'- Bob Giesler: Kingsford at 7: M ers, Grant Ron Tolsma► Bert Y Bill Brewer, Smith, Kenny Bowers, Members Present: Gary Earl Ward, Smith, Bob Bruce Stuart? Schaffer, Terry Martha Others Present: Gary Dale Bates, Wayne Crookston. Elouise Ryan, Murphy, Dennis Kevin Robertson, Dale Ryan, Tom Cole, Sandra Spencer, Phil Choates► Lloyd Howe' Berry, Elizabeth RYaBob Mitich as written: Murphy, Ronda Lowe, 1985 approved minutes of previous Meeting held March 4► M Block Grant for Senior Citizens: Public Hearing: Community to rep - Item 41: Citizens was present President of the Senior 0 Mr. Dale Ryan. request: the Agenda resent this req s scheduled on or King the rules and provisions of Ordinance #446 Ma Kingsford announced these Public Hearing y would be conducted under in of the speakers. but would waive the swearing Y Cit of Meridian apply I am here tonite to request that the ian Senior Citizens in the for a Community Ryan, B 00. lock Grant for the MeridThese funds will be used for air conditioning, fo amount of $4+50.the ramp. insulation and covering closed. There were no other comments, Public Hearing urPwer that the City QO NU7'ICE OF PUBLIC HFIRBVG Pursuant -b 11he Housing dad Community Development Act, the City of Meriian is hereby providing notice of Public Hearing before the City Council on March 18. 1985, at Me hour of 7:30 o'clock p.m., at the Meridian Qty }fall, 73E Meridian Street, Meridian, Idaho. To bear public comment on the needs or the low to moderate income population of the City. Cou neent will also be received regarding a eommenity develop ment program to be presented at the Hearing which will address, ESTABLISHKENT (W REVOLVING WAN FUND. The public may learn more ab nd the Com- munily Development Program at The Meridian 1 City Hall by contactigg Jack Xwnwr, My i Clerk. DATED this 1st day of March,INL JACK NIEMANN,City tierk :Marchi,lg,1t115. PROOF OF PUBLICATION State of Idaho, County of Ada ss. JeaIlille Hi3Wk-------, being first duly sworn, depose and say, that I am over twenty-one years of age, and chief clerk of VALLEY NEWS, a weekly newspaper of general circulation, published at Meridian, County of Ada, State of Idaho, and that the annexed notice was published in said paper once each week for ---2 - ----- consecutive weeks, the first publ* tion being on the --k ----- day of ------.. M3YCl1 _______ 19 .... ------ , and the last publication being on the .}3_ _ day of _ Mardi --_ ------- That said notice was published in the newspaper proper and not in a supplement. That said newspaper had been continuously and uninterruptedly published in said county for a period of 78 consecutive weeks prior to the first publication of this notice, and is a newspaper within the meaning of the Idaho statutes. Chief Clerk Subscribed and sworn to before me this ----- 14___ day of ------ March ---------------------------- --- -- 198-__—. ----�---------------- Notary Public in and for_idaho Residence or Postoffice Address-_A+iel_1C%13I'1 Idaho. woo NOTICE OF PUBLIC HEARING Pursuant to the Housing and Community Development Act, the City of Meridian is hereby providing notice of Public Hearing before the City Council on March 18, 19035, at the hour of 7:39 o'clock p.m. at the Meridian City Hall, 728 Meridian Street, Meridian, Idaho, to hear public comment on the needs of the lova to moderate income population of the City. Comment will al§.o be received regarding a community development program to be presented at the Hearing which will address, ESTABLISIVENT OF A REVOLVING LOAN FUND. The public may learn more about the Community Development Program at the Yeridian City Hall by contacting Tack Niemann, City Clerk. AMBROSE, FITZGERALD BCROOKSTON /'1►. nays and Counselors P.O. Box 427 Meridien, Idaho 83842 Telephone 888.4481 DATED this lst day of March, 1985. NOTICE OF PUBLIC HEARING Pursuant to the Housing and Community Development Act, the City of Meridian is hereby providing notice of Public Hearing befox the City Council on March 18, 1995, at the hour of 7:39 o'clock p.n at the Meridian City Hall, 728 *Meridian Street, *Meridian, Idaho, to hear public comment on the needs of the low to moderate income population of the City. Comment will al§o be received regarding a community development program to be presented at the Hearing which will address, ESTABLIS114ENT OF A REVOLVING LOAN FUND. The public may learn more about the Community Development Program at the Meridian City Hall by contacting Jack Niemann, City Clerk. %MBROBE, TZOERALD :ROOKBTON I*--, nNy1 end :ounMla� O. ear 127 *11w Idyl - 87M2 na-eN441 DATED this 1st day of ;March, 1985. nn/ City C 1 01 NOTICE OF INTENT TO APPLY FOR IDAHO COMMUNITY DEVELOPMENT BLOCK GRANT The county of Meridian intends to apply for an Idaho Community Development Block Grant for the purposes of: Economic Development_Public Facility. Housing Rehabilitation Project Description:uNt1 2t- I f` F' 5 Type of Action: S rKl c'�; s N A h�L F��i�ay2�t�v Single Purpose Single YearP� Multi Purpose Multi Year. In the amount of: $ , and will be matched by: $ in other federal, state, local or other funds. (Indicate which ones). gn�db Chi f E e ed Official Phone Number 1/y 3 3 Date _ 01C;2 ? /� igne rs xr ing Application Phil Choate Representing Phone Number 3 2 2 7C'33 Date n �__k-_b 2t- I f` F' 5 DEFINITION OF VENTURE CAPITAL • CREATE NEW BUSINESSES OR EXPAND/REVITALIZE EXISTING ONES • MAKE HIGH RISK/HIGH REWARD INVESTMENTS IN ENTREPRENEURS • PERFORM INTENSIVE ANALYSIS/INVESTIGATION BEFORE INVESTING • INDIVIDUALLY STRUCTURE USING APPROPRIATE INSTRUMENT • MAINTAIN LONG-TERM, CAPITAL GAINS ORIENTATION • PROVIDE INVESTEES WITH DIRECT VALUE-ADDED • RECEIVE PORTION OF GAINS AS INCENTIVE n A*—", /N, H Z W E CL O J W H W Y m � N Q N O Z d v z U Z Q Z ►r c r LL - c t c 4./ to T Z • N N V mui 'p L 4J ... a QJ h y L %A QE N r T r N • N � C A 01� O K C O T Q1 L C .->1 E A L CM 4-3 O C� C C C O Cl L- 4-1 v O 4-j O >- N d Q in 4J L. r 4J 4-) dD O t ua �n v �c CL M c a i O E C E 1 L T c Q r n - T L a r O >1 T 4•) C 16 10 A N d r• 41 7 E C A O C! 41 A L 4J 4-) 90r r O 4J 4J H N � 4J � r Q r L LL. 4- 91 V V A n n V > 4-)C C C N O m V r C C T so r C 01 c LL - E L A O C T O 41 i 4> > Im V C C O 4J r 4-/ 0.— Cc •r A N A E E r 4-- C Y L C D d O cu .ic 4- •r A N O C O L L L A ta. 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Arrives Assessment 50/month Quick Deterni" Brief Checks Priority Meeting t 20/month $/month n Counterproposal Collect Visit on price Information 4/month 2/month Determine Issues Coordinate CW.Plete Begin Drafting Investigation Neqotiations 1/month k/month Process takes 1-6 months SELECTION CRITERIA FOR MAKING INVESTIGATIOnS • COMPATIBILITY OF GOALS • SIZE OF FINANCING • PRICING (RISK/REWARD) • COMMITTED STRONG LEAD • COMPLETE MIWGEMEMT TEAM • PREVIOUS STRONG INVESTORS • REASONABLE LONGER-TERM CAPITAL NEEDS • BOARD POSITION AVAILABILITY • FAMILIARITY WITH INDLISTRY • EFFORT REOU I RED • ACCESSIBILITY VENTURE CAPITAL PROCESS "DEAL STREAM" FINDING/ANALYZING PROPOSALS "MONITORING/CONTROL" ASSISTING INVESTEES "EXITING" PROVIDING LIQUIDITY TIME 0-3 YEARS 4-8 YEARS DEAL FLOW FOR TYPICAL VENTURE FIRM . AVERAGE 50 BUSINESS PLANS/MONTH • GENERALLY MAKE QUICK CHECKS ON 40',vF .. MEET WITH 20% FOR MORE THAN 1 HOUR • MAKE COUNTER PROPOSALS TO 4% INVEST IN 1-2% n TYPICAL INVESTIGATION • TWO INITIAL MEETINGS (MONTH ONE) • SPOKE TO: - THREE COMPETITORS - FIVE CUSTOMERS - TWO SUPPLIERS - REFERENCE CHECKS WITH : SUPERIORS : SUBORDINATES : PEERS - PAST OFFICERS - BANKERS - ACCOUNTANT - LAWYER - EXPERTS/CONSULTANTS • ARRANGED MEETING WITH TWO POTENTIAL CUSTOMERS • VISITED MAJOR CUSTOMERS • NEGOTIATED TIGHT AGREEMENT (MONTH FIVE) - BOARD CONTROL PROVISIONS - PRICE ADJUSTMENT IF FORECASTS NOT MET - ANTIDILUTION (RACHET ON PRICE) r Investigation Process Examine Business Fu Is R01 K TMENT DECISION n PRIMARY INVESTMENT CRITERIA • INNOVATIVE, SUPERIOR PRODUCT/SERVICE BASED ON PROPRIETARY CAPABILITY/BROAD TECHNOLOGY - LEAD TIME/BETTER MARGINS - VALUABLE ACAUISITION/HIGHER f/E • LARGE, RAPID GROWTH MARKET - EASIER COMPETITION - NICHES AVAILABLE SUPER'OR MANAGEMENT - INTEGRITY, INITIATIVE, CONFIDENCE, COMMITMENT - COMPREHENSIVE BUSINESS SKILLS - PRIOR P/L RESPONSIBILITY/DIRECT EXPERIENCE PERFECT DEAL GUIDELINES • COMPATIBILITY OF GOALS - DESIRE TO BUILD A PROFITABLE AND PRE-EMINENT COMPANY - WILLING TO GO PUBLIC/MERGE WHENEVER IS BEST FOR STOCKHOLDERS • FAIR PRICING - 1OX VALUE IN FIVE YEARS (AT.10X P/E) - REASONABLE MARK-UP FROM LAST ROUND • INNOVATIVE OR PROTECTED PWWCT/SERVICE PERMITTING 10% NPAT • MARKET WILL PERMIT GROWTH TO $50M WITHIN 5 YEARS - CURRENTLY AT LEAST $10OM; GROWTH RATE OF OVER 25%/YR - NO DOMINANT FACTOR NOW - IDENTIFIED CUSTOMERS (CLEAR BENEFITS) • COMPLETE MANAGEMENT TEAM LID BY ENTREPRENEUR WITH PRIOR EXPERIENCE I -N THE BUSINESS - ALSO LEADING TECHNOLOGIST _ KNOWLEDGEABLE MARKETING MAN n PERFECT DEAL GUIDELINES • COMPATIBILITY OF GOALS - DESIRE TO BUILD A PROFITABLE AND PRE-EMINENT COMPANY - WILLING TO GO PUBLIC/MERGE WHENEVER IS BEST FOR STOCKHOLDERS • FAIR PRICING - 1OX VALUE IN FIVE YEARS (AT.10X P/E) - REASONABLE MARK-UP FROM LAST ROUND • INNOVATIVE OR PROTECTED PWWCT/SERVICE PERMITTING 10% NPAT • MARKET WILL PERMIT GROWTH TO $50M WITHIN 5 YEARS - CURRENTLY AT LEAST $10OM; GROWTH RATE OF OVER 25%/YR - NO DOMINANT FACTOR NOW - IDENTIFIED CUSTOMERS (CLEAR BENEFITS) • COMPLETE MANAGEMENT TEAM LID BY ENTREPRENEUR WITH PRIOR EXPERIENCE I -N THE BUSINESS - ALSO LEADING TECHNOLOGIST _ KNOWLEDGEABLE MARKETING MAN O , V x V W to Or c CL c ECL = O C a! y s EE REo� ~ o -a c* E o > Q `�ainP a CHECKS • PERSONAL - SUPERIORS - PEERS - SUBORDINATES • COMPETITORS • CUSTOMERS (CURRENT, POTENTIAL) • SUPPLIERS • BANKER/CPA/LAWYER • CONSULTANTS/EXPERTS/TRADE ASSOCIATIONS • PRIOR INVESTORS/INVESTMENT BANKERS 0 CHART OF SELECTED STATE NVESTNENT ACTIVITIES StateDebtSmall °ty Secondary Business Market Proorem ALASKA X X CALIFORNIA X COLORADO X CONNECTICUT X X P ILLINOIS x X x INDIANA X X IOWA X X LOUISIANA X X MAINE X X MARYLAND x MASSACHUSETTS X X MICHIGAN X X p MINNESOTA ' X M3SSISSIPPI X MONTANA x X X NEW JERSEY x P NEW MEXICO x x x NEW YORK X X OHIO X X OREGON X X PENNSYLVANIA X X P RHODE ISLAND P UTAH X X WASHINGTON x WISCONSIN x X x W YOt4NG x X x P - Under Consideration X - Program Implemented LIST OF SEED FUNDS WEST COAST ALPHA PARTNERS BAY VENTURES CROSS POINT MOHR VENTURES EAST COAST AEGIS VENTURES ZERO STAGE CAPITAL CO., INC. Al-. ATDC (ATLANTA TECHNICAL DEVELOPMENT CORPORATION) ELSEWHERE SEED FUND - MINNESOTA BERRY CASH SOUTHWEST PARTNERSHIP (TEXAS) THE MASTERS FUND (COLORADO) "SEED" FUNDS • A GROWING PHENOMENON - 26 FUNDS NOW EXIST - 10 ON THE WEST COAST - 10 ON THE EAST COAST - 6 ELSEWHERE • DEFINITION - INTERESTED ONLY IN START-UPS, USUALLY STAFFED WITH "OPERATING" PARTNERS AS WELL AS FINANCIAL • WILL HELP & FINANCE BUSINESS PLAN DEVELOPMENT • WILL HELP STAFF MANAGEMENT TEAM • WILL PROVIDE EARLIEST ROUND(S) OF FINANCING • 'MILL NOT PROVIDE LATER (LARGER) ROUNDS - BUT WILL ASSIST IN ^ OBTAINING SAME • GENERALLY SMALL FUNDS, HIGH RISK/REWARD PROFILE • HIGHER FEE STRUCTURE - MORE HAND -HOLDING, ETC. • MORE ESTABLISHED LARGER FUNDS ARE STARTING SPECIALIZED FUNDS OR INVESTING IN SEVERAL TO AID DEAL FLOW BOARD OF DIRECTORS • TYPICALLY VENTURE CAPITAL INVESTORS NEGOTIATE NUMBER OF BOARD SEATS AT THE OUTSET • IF COMPANY DOES POORLY - NUMBER OF SEATS REPRESENTED BY VENTURE CAPITALISTS EXPAND AS NEW INVESTORS COME IN • AUTHORITY OF BOARD - (SEE DETAILED LIST) • FREQUENCY OF MEETINGS - GENERALLY MORE FREQUENT (10-12 TIMES PER YEAR) AT OUTSET - MAY DECREASE IF COMPANY IS ON PLAN AND CONVERSELY WILL INCREASE IF SERIOUSLY OFF PLAN • LARGE AMOUNT OF TIME SPENT WITH CEO OF FIRM - MUCH OF IT OFF LINE - EACH CASE DIFFERENT n >> 3"0 L. 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V � A • 4 u a En be v O O t0+ C 7 am 41 .� C .� c w > c •.� .-4 O .� 3 > v -4 4j 4 'v 3 ro u go = a o N c 0 c ,Y 4 N E ai •> 014 V 41C 41 C a > W 14 m a� E a 7 V., > y 1 V C .^. 4) c .1 F > to 0 ft U) a� • c u •v O c 1&4 E o O rl N > O 4' w RJ ►r � u 0 C O E ry c ii ti c U o o a E a� 'oO l.r E U -- O �n 1 V KJ C' 1+-'t Q C :3 -n ►fl QI co > Q V, -••� U I.a s-) o c c 3 o aft a, •.� w p O+ o to.� F•v O .0 C 3.4 yr .-1 -p C •C7 -C N C C rU 4.) aJ C a --f 0.4 fin u do C C y R1 4.) > > y IA a 3 C u u Ic .� u c4., A 41 ep a1 rQ O� U) u .c �' •4 w NU w o > s c .p U) � a J c c o0 O 4 o E w 41 o 41 Cl • A r-1 7 C .,� p �-, u° .c �. -04 •° u y c Z O v C w H V) 0 W O HOW VENTURE CAPITALISTS HELP • BUDGETING AND CONTROL TECHNIQUES • POLICY MATTERS/STRATEGIC AND TACTICAL PLANNING • PERSONNEL RECRUITING • TECHNOLOGY INTERCHANGE/LEGAL ASSISTANCE • CREDIBILITY WITH SUPPLIERS/CUSTOMER INTRODUCTIONS • RECOMMEND SUPPORTING PROFESSIONAL SERVICES • FURTHER FINANCING NEEDS • BUSINESS NEGOTIATIONS • SOUNDING BOARD ALL LEADING TO A HIGHER VALUATION r r;. HOW VENTURE CAPITALISTS HELP • BUDGETING AND CONTROL TECHNIQUES • POLICY MATTERS/STRATEGIC AND TACTICAL PLANNING • PERSONNEL RECRUITING • TECHNOLOGY INTERCHANGE/LEGAL ASSISTANCE • CREDIBILITY WITH SUPPLIERS/CUSTOMER INTRODUCTIONS • RECOMMEND SUPPORTING PROFESSIONAL SERVICES • FURTHER FINANCING NEEDS • BUSINESS NEGOTIATIONS • SOUNDING BOARD ALL LEADING TO A HIGHER VALUATION A MANAGEMENT CONSULTING F] FINANCIAL ASSISTANCE EM SEED FUND INVESTMENT 0 START-UP 58 management Consulting 6 Financial Assistance 4 Seed Fund Investment RESEARCH AND DEVELOPMENT 37 management Consulting 5 Financial Assistance 5 Seed Fund Investment 1ST STAGE FINANCING 21 management Consulting 4 Financial Assistance 1 Seed Fund Investment 2ND STAGE FINANCING 12 management Consulting 3 Financial Assistance 0 Seed Fund Investment 3RD STAGE (NEW PRODUCT DEVELOP.) 10 management Consulting 5 Financial Assistance 1 Seed Fund Investment U: 4TH STAGE (INITIAL UBLI 1 management Consulting 0 Financial Assistance 0 Seed Fund Investment MANAGEMENT CONSULTING 139 FINANCIAL ASSISTANCE 23 SEED FU"D INVESTMENT 11 0-11", FINANCIAL PARTICIPANTS IN SEED FUND INVESTMENTS 0 8 CD 0 CoMputer Software $15,000 Seed Fund $15.000 Owner Equity Seed Fund Transducer Sensor fffl $35,000 Seed Fund :103.000 Owner Equity Owner Equity 0 Confectionary Machine :35,000 Seed Fund $87.000 Owner Equity Tolerance Testing Device $35,000 Seed Fund =35,000 Owner Equity Flotation Device $35.000 Seed Fund :35.000 Owner Equity Hydraulic Tool $10,000 Seed Fund $10,000 Owner Equity. Dredging System $7,5D0 Seed Fund $15.000 Owner Equity Computer Software $20.000 Seed Fund S20.0D0 Amer Equity Metal Sensor Device $25.000 Seed Fund SSO.DDO Owner Equity Industrial Solvent $5.000 Seed Fund $10.000 Owner Equity Ethanol and CO $50.000 Seed Fand 5100.000 Owner Equity TOTAL OWNER EQUITY - $480,000 TOTAL SEED FUND - $272.500 n .M.. p N O W O A O 8 o 0 � TIC_IPATED SEED FUND RETURNS C mputer Software Payback 5:1 Seed Tine Period - 3 Yrs. Fund Im Transducer Sensor Anticipated Payback 4:1 Returns Tine Period - 3 Yrs. Confectionary Machine Payback 3:1 . Time Period - 3 Yrs. Tolerance Testing Device Payback 5:1 Time Period - 4 Yrs. Flotation Device Payback 10:1 Time Period - 6 Yrs. Hydraulic Tool Payback 4:1 Time Period - 4 Yrs. Dredging System Payback 5:1 Time Period - 2 Yrs. Computer Software Payback 2:1 Time Period - 1 Yr. Metal Sensor Device Payback 5:1 . Time Period - a Yrs. Industrial Solvent Payback 5:1 Time Period - 2 Yrs. ■ �IIII I 1 Ethanol and CO2 Payback 3:1 Time Period - 2 Yrs. TOTAL INVESTMENTS - $ 272.500 Y U Q L'a Q a. Z 2 Q LL W W W N � . N W Z w O %1 LY Y L1 U Q tl Y Q 4..► a. I c O W 1•- U W 7 O cc a. C _O O F- W tL U- C) LY M ^ LZ N J W O Q Z O U 3 O Z O� C^ N W _ W O O O W W N e4 of r•• N N N fn cn Ion OO N � � K O C LD K N co co Cc ^ p O p -W M O M O eLn M OA ^ cn M Cl N M O L� M O N M O �O M O %n M .r. A L C •-- N N C%J en O rC LL C V ^ r r O M O O W O M Oen en M O M O p O C ^ M O M O �' M eJ7 M Cl L� M O en 1A O Z; O O N M O LIf 'n 1/► tL9 ^ N CD LA M C O p C t� r4 en M O Ln M O O �1 i A L C O rC LL C V ^ N L w O LT .- •� C L a w O Ln V L y Lv ••- i •� A � E ..+ c y d � L 01 L v �• J. LZ 41 v T LU N Z A q y C LL � V E i0- 1.O- Z h0- O L. Ln W G L� DLA C O N a+ > A C �a� s , un LL G I� N yo O ham• L.p.%TCD PARTIIEAS 00 00 09 00 00 -Ad%fIS4W,y'IIj Good..... Ni11 I. 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O w C +- J ,•- W O C3 r- •r 4- U> � N O •r N •-- O O T3 4 ' L V 4J > w V 4j r- .� 4J Q •�-- '�C ' 41 O b •r >r' do .0 E L� oo E L E L o. A O N 4) N p 0 > aJ v0A +1 +" � E 'r- a 01 C d tFA- N 'o E a s es a c O c •r C ''- -.- E 41 cn s_ O *r - w Uw Ts ♦, C �� E G� 41 E +J 93 .0 C 'N 4- O O N .= L r L d .0 O; O cu N o ao 3:m L i •}' ftj N a 4Li'� d 4- E� =3 o • E +.,f = 0 V1 N w N - O di C CL 4J cn u V O 0 ,o t~ E n L VA-- d k- •r 4JZ W R3 4J 4-j +-, +, 4- OA ro E aJ 3 > r- >, C L E'U r N O W L G:3 O LO 0+�V LO >+J b •r 4--)o •rr- )( .. C (o QJ • Q- w Q- d L •r +J Q1 •r •r C N O m N r- = X71 r 0� N +..1 '0 c 41 41 +j +J C L O C C 4JW L. to N r d CL mm 4J•C r 4! z L Qf4J r W ,m = V �p O dO QJ V Q CL O L A 4JYW+� U O N ^ .r L _ •r Ch 3 L f� r - E CL C 4J �-.� t • • • C 4! 4J L to A 4J O • • 41� O O r- 41 c V V � 01 m N A V h •r '� N C N o go +•j O ro L E 'r' .0 CL n 4 _0 GENERAL PARTNERS' ACTIVITIES PERCENTAGE OF TIME • SOLICITING PROPOSALS = 5% • SELECTING OPPORTUNITIES = 10% • ANALYZING BUSINESS PLANS = 10% • NEGOTIAT:ING INVESTMENTS. 5% • SERVING -AS DIRECTORS/MONITORS/ADVISORS = 40% • ACTING -AS CONSULTANTS/ST.RATEGIC PLANNERS 15% • RECRUITING MANAGEMENT _ 51 • ASSISTING IN.OUTSIDE RELATIONSHIPS _ -5x • EXITING 5% �z S� Cecil D. Andrus ., o Governor James V. Hawkins Director DEPARTMENT OF COMMERCE July 19, 1991 The Honorable Grant P. Kingsford Mayor, r`iqr of Meridian: 33 E. Idaho Meridian, ID 83642 Dear Mayor Kingsford: 700 west State Street Statehouse Mail Boise, ID 83720-2700 Phone (208) 334-2470 FAX (208) 334-2631 We have been notified that the FY87 audit for your Idaho Community Development Block Grant project(s) listed below has been approved by the Legislative Auditor's Office. ICDBG-85-III-26 $ 50.00 ICDBG-85-III-13 6,517.42 With this approval, you are in compliance with fiscal regulations of the block grant program. Please retain this letter in your project files. Since eiy, Ka ces, Administrator Div>tsion of Community Development KF:dca aw-M/AuditsFolder/87AuditaAp l&.7/19/91 -P S . .Zt * _fV44, per, 6 a. 0'& "'� I IDAHO Cecil D. Andrus ° 700 West State Street Governor y p Boise, Idaho 83720 James V. Hawkins Phone (208) 334-2470 Director 14� Telex 5106003708 IDCOMRCE Fax (208) 334-2631 DEPARTMENT OF COMMERCE September 26, 1990 The Honorable Grant P. Kingsford Mayor, City of Meridian 33 E. Idaho Meridian, ID 83642 RE: ICDBG-85-III-13 RLF Congratulations on the completion of the Idaho Community Development Block Grant Project referred to above. The only grant stipulation remaining is that all records pertaining to the grant must be retained for three (3) years from project closeout. Enclosed is a Certificate of Completion and a Closeout Agreement for this Idaho Community Development Block Grant. With this Agreement, the grant is officially closed. Sincerely, James V. Hawkins Director JVH:JB/aw Enclosures cc: Wayne S. Forrey aw-17/JBMeridRLF8511113.0/0Ltr OFFICIALS JACK NIEMANN, City Clerk JANICE GASS, Treasurer BRUCE D. STUART, Water Works Supt. WAYNE G. CROOKSTON, JR., Attorney EARL WARD, Waste Water Supt. KENNY BOWERS, Fire Chief BILL GORDON, Police Chief GARY SMITH, City Engineer August 24, 1990 HUB OF TREASURE VALLEY A Good Place to Live CITY OF MERIDIAN 33 EAST IDAHO MERIDIAN, IDAHO 83642 Phone 888-4433 GRANT P. KINGSFORD Mayor Mr. Jan Blickenstaff Idaho Department of Commerce 700 West State Street Boise, Idaho 83720 Dear Mr. Blickenstaff, COUNCILMEN RONALD R. TOLSMA J. E. BERT MYERS ROBERT GIESLER MAX YERRINGTON Chairman Zoning d Planning JIM JOHNSON Enclosed are two copies of the grant close out report on ICDBG-85- III-13 signed by Mayor Kingsford. Also enclosed is a cashiers check #392177669 in the amount of $18,149.52 that represents the balance of the program income after payment of expense. Sincerely, trk m n ty Cler ty of M ridian, ID. AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915-1968) JOHN O. FITZGERALD, P.A. THIS FIRM INCLUDES WAYNE G. CROOKSTON, JR., P.A. PROFESSIONAL CORPORATIONS WILLIAM J. SCHWARTZ January 2, 1990 Meridian Economic Development Corp. 33 East Idaho Street Meridian, Idaho 83642 LEGAL SERVICES FROM JUNE 6, 1989 -- DECEMBER 31, 1989: MATTERS RELATING TO: TELEPHONE 888-4461 AREA CODE 208 REVOLVING LOAN FUND/POWER DYNAMICS: PROOF OF CLAIM MATTERS; LETTERS AND DISCUSSIONS WITH DEPARTMENT OF COMMERCE; STATUS LETTERS; FINAL CLOSING STATUS LETTER 4.50 COMPUTROL BLOCK GRANT ADMINISTRATION: DISCUSSIONS WITH PROJECT ADMINISTRATOR; CORRESPONDENCE 1.00 GENERAL ADMINISTRATIVE WORK: DISCUSSIONS WITH PROSPECTIVE IRB APPLICANT .50 6.00 ATTORNEYS FEE: 6.00 HOURS X $80.00/HR.= $480.00 COSTS: -0-- TOTAL 0 - TOTAL AMOUNT DUE $480.00 HUB OF TREASURE VALLEY A Good Place to Live OFFICIALS COUNCILMEN JACK NIEA NN, City S,TreasurerClark CITY Q MERIDIAN RONALD OE BEfTMYERSA dANK:E BASS, Treasurer BRUCE D. STUART, Water Works Supt. ROBERT T MYERS WAYNE G. CROOKSTON, JR., Attorney 33. EAST IDAHO MAX YERRINSLER EARL WARD, Waste Water Supt. GTON KENNY BOWERS, Fire Chief MERIDIAN, IDAHO 83642 Chairman zoning a Planning BILL GORDON, Police Chief Phone US -4433 'g JIM JOHNSON GARY SMITH, City Engineer GRANT P. KINGSFORD - Mayor January 1, 1990 Mr. Jan Blickenstaff, Program Manager-'` Idaho Department of-.Commer'ce' 700 West S.tate`:Street Boise, Idaho 83720 Dear Mr. Blickenstaff: The City ofMeridian is in the process of completing the Final Report and Closeout Documentation for ICDBG - 85 - III - 13. The city is also in the middle of organizing a Local Improvement District (LID) and a final application for our proposed ICDBH East First Street Improvement Project. As soon as we can complete the full application and LID work, we will finish the; closeout reports for the 1985 Revolving Loan Fund (RLF) grant. Our City attorney has prepared a brief progress report regarding the legal status of the loan collection efforts. A copy; of this report is enclosed. It is our desire that program.income from the RLF be obligated to the proposed East First Street Improvement project. If the city does not receive this proposed grant, the city understands that the program income will have to be returned to your office. We certainly appreciate your understanding and assistance throughout the 1985 RLF project. Thank you for helping 'the City of Mer0fant:'. Sincerely, Grant P. Kingsford Mayor City of Meridian, ID. AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915-1968) TELEPHONE 8884461 JOHN O. FITZGERALD, P.A. THIS FIRM INCLUDES AREA CODE 208 WAYNE G. CROOKSTON, JR., P. A. PROFESSIONAL CORPORATIONS WILLIAM J. SCHWARTZ December 28, 1989 Jack Niemann Acting Clerk, Economic Development Corporation of the City of Meridian 33 East Idaho Street Meridian, Idaho 83642 Re: Power Dynamics/ Lowell Hodgkins lawsuit and Bankruptcy Dear Jack, I am writing to you in my capacity as the attorney for the Economic Development Corporation of the City of Meridian and pursuant to your request regarding the above referenced matter and its status. As you know, there were many attempts to collect the loan that Power Dynamics, Inc. owed to the Economic Development Corporation of the City of Meridian (EDC). Funds were collected from Power Dynamics on several occasions and funds were collected from Anvic International pursuant to an assignment of rights by Power Dynamics. The funds ultimately were not collectable other than by means of a lawsuit. Also, at this time Mr. Hodgkins' residence had become unknown as he was no longer residing in San Carlos, California. It was the decision of the Board of Directors of the Economic Development Corporation to go ahead and pursue legal action in the hopes of locating the Hodgkins. I therefore instituted suit against Power Dynamics Inc. and Mr. & Mrs Lowell Hodgkins. This law suit was filed in United States District Court for the District of Idaho. The Complaint was filed November 23, 1988. The complaint requested a judgment in the amount of $306,390.33, which was the amount due and owing at the time of filing the complaint, including interest. I did succeed in determining that the Hodgkins had moved from San Carlos, California, and had relocated in Redwood City, California. Service of the Complaint and Summons was, thus, obtained upon Lowell and Nola Hodgkins and upon Power Dynamics Inc. at the residence of the Hodgkins' at 581 Marlin Court, Redwood City, California on December 27, 1988. After receipt of the Summons and Complaint the Hodgkins contacted an attorney, Gary R. Brenner, in San Mateo, California, and he contacted me. On behalf of the Hodgkins, he ultimately offered to settle the law suit by paying to the EDC the sum of $5,000.00, and he indicated that if that sum was not accepted the Hodgkins would file a Chapter 7 bankruptcy. This offer was forwarded to both the Board of the EDC and to the State of Idaho Department of Commerce. Both entities determined that to compromise a claim of well over $300,000.00 for $5,000.00 was not a wise decision and that it would be best to force the Hodgkins into bankruptcy on the chance that some funds could obtained through the bankruptcy. If, however, no funds were obtained it was better to force the bankruptcy rather than settle for such a ridiculously low amount. I therefore informed Mr. Brenner that the offer was not acceptable and that if was going to contest the lawsuit file an answer to the Complaint or if he was going to file a bankruptcy for the Hodgkins he might as well move ahead on that as the EDC was going to pursue the suit. Shortly thereafter in the end of May, 1989, I did receive a Notice that Mr. and Mrs Hodgkins had filed a Chapter 7 bankruptcy on May 8, 1989, in the United States Bankruptcy Court, Northern District of California. This is a straight liquidation bankruptcy which requests that the debtor be discharged from his debts and the debtor submit his assets, subject to certain exemptions, to the Court to pay what debts can be paid from the assets. Upon the filing of a bankruptcy all legal action is held in abeyance and cannot be proceeded upon. I therefore did not continue with the lawsuit. The Notice was dated May 24, 1989, and informed creditors that they had 90 days after June 21, 1989, to file proofs of claims for the amounts that the Hodgkins owed them. I filed a Proof of Claim with the Bankruptcy Court on June 26, 1989. The amount of the claim was $346,802.53. I did receive an Order from the Bankruptcy Court, dated September 22, 1989, stating that the Hodgkins had been discharged from all dischargeable debts, which includes the debt owed to the EDC. This Order of Discharge does not necessarily mean that there will be no funds forthcoming from the Bankruptcy Court but in all likelihood that will be the case. Based upon the financial information of the Hodgkins that was received as part of the offer of $5,000.00, it appeared that the Hodgkins has no assets that were not exempt property that could be liquidated and the proceeds used to pay unsecured creditors, which is the classification of the debt owed to the EDC. It would appear, therefore, that no further funds will be received from the Bankruptcy Court and that this matter is closed. Certainly no further action can be taken against the Hodgkins, their debt to the EDC having been discharged. The EDC could pursue Power Dynamics, Inc., but that would appear to be fruitless as I am quite sure that it never did have substantial assets. If you or any Board Member of the EDC has any further questions, I would be pleased to respond if possible. Very truly yours, i�W?. WAYN G. CROOKSTON, JR. Cecil D. Andrus Governor James V. Hawkins Director November 17, 1989 DEPARTMENT OF COMMERCE The Honorable Grant Kingsford Mayor, City of Meridian 33 E. Idaho Meridian, Idaho 83642 - Dear Mayor Kingsford: 700 West State Street Boise, Idaho 83720 Phone (208) 334-2470 Telex 5106003708 IDCOMRCE Fax (208) 334-2631 The information submitted to date concerning the loan to Power Dynamics is sufficient to clear the HUD sanction on this project. The next step in the closeout process is to complete the Final Report and closeout papers. The Final Report should address the status of the law suit. The Closeout forms are enclosed. If you have any questions, please call me at 334-2470. Sincerely, Jan Peter Blickenstaff Program Manager Division of Community Development JPB: aw aw-12/JB-Meridian sanct clyd eKIH2o 1890• ENTENNIAL•1990" INFORMATION REGARDING CLOSEOUT DOCUMENTS Send to the Department the following: One signed' original of the Final Performance Report. You should have one signed original for your records. 2. One signed" original of the Final Financial Report. You should have one signed original for your records. 3. Two signed' originals of page C-4: Computation of Grant Balance, Certification of Recipient and Idaho Department of Commerce Approval. We will sign both orginals and return one to you. 4. Two signed' originals of the Closeout Agreement. We will sign both originals and return one to you. If you complete a Closeout Agreement pending receipt of the final audit, call your project manager for instructions as to what audits will be required. 'NOTE: ALL DOCUMENTS MUST BE SIGNED BY THE CHIEF ELECTED OFFICIAL. Grantee: Project Type: ED National Objective: LMI Date of Report: PERFORMANCE REPORT Contract No.: PF Housing Slum/Blight Imminent Tht. Prepared by: Phone Number: I. Provide a detailed narrative of completed activities (by budget line items). The discussion should include specific activities accomplished, how they were accomplished, who was involved and how the activity relates to the overall project. For example, the narrative of administration activities should include a description of the procurement process, the environmental review process, steps taken for review of subrecipients, etc. II. Project Schedule Projected Schedule Actual Schedule (from contract or application) Indicate reasons for any variations. III. Project Benefits A. Projected Benefits (taken from application). B. Actual Benefits l.a) Provide a detailed narrative of activities completed for prevention or elimination of slum and blight (if applicable). b) If actual benefits vary from projected, indicate reasons. 2.a) Provide a detailed narrative of activities completed for benefit to LMI persons (if applicable). b) If actual benefits vary from projected, indicate reasons. 3.a) Total Population Total Population Projected to Actually Benefited Ben e f i t Number V. of Total b) LMI ProjectedPopulation LMI Actually to Benefit __N Benefited Number X of Total C) Minorities Pro- Minorities Population jected to Bene- Actually fit Benefited d) Projected Actual Direct Jobs Direct Jobs Number % of Total Jobs e) Actual LMI Jobs f) Actual Minority Jobs Projected Actual to Date g) Private Investment Provide documentation of the jobs listed above including: type of position, salary, sex and minority status of the employee filling the position and whether the employee was unemployed at the time of hire. The Final Performance Report will not be approved without this information. The data in this report is true and correct as of this date. Signature of chief elected official Date DEPARTMENT OF COMMERCE Room 108, Capitol Building Boise, Idaho 83720 FINANCIAL REPORT — REQUEST FOR FUNDS IMPORTANT — Instructions on reverse side should be read before completing this report. Use for contracts and / or grants Name Address Report Period - Month of I Date of Report (Detailed breakdown of expenditures per budget category must STATUS OF ICDBG FUNDS Person Phone No. ❑ INTERIM REPORT ❑ FINAL REPORT ed with each reooriI BUDGET EXPENDITURES (Report all expenditures and obligations made from beginning of grant to end of reporting period.) *Only 10% of tnta/ cmiarAi /rnar../.,Unn... .. we J.;X—d A._...___ ,:_- - BUDGET 11. Budget 12. Program 13. Project Totals Income (ICDBG, State Earned & Local) ICDBG ..carnccrl FUND 15. ICDBG Funds Obligated ICDBG 1. Amount of Contract $ 6. Total expended to date $ 2. Less payments to date $ ICDBG Cash Balance 7. (Item 2 minus Item 6) $ 3. Balance of contract $ 8. Program Income- Balance on Hand $ Amount expended — To Beginning 4' of report period $ 9. Unexpended Cash Balance $ at report end (Item 7 plus Item 8) 5. Amount expended during report period $ 10Funds Requested 15 $ (Line plus or minus Line 9) BUDGET EXPENDITURES (Report all expenditures and obligations made from beginning of grant to end of reporting period.) *Only 10% of tnta/ cmiarAi /rnar../.,Unn... .. we J.;X—d A._...___ ,:_- - BUDGET 11. Budget 12. Program 13. Project Totals Income (ICDBG, State Earned & Local) ICDBG 14. ICDBG Funds Expended ..carnccrl FUND 15. ICDBG Funds Obligated nrrc ncnrs wirrrour uTv✓sion approval. OTHER PROJECT FUNDS 16. Other 17. Other Project Funds Project Funds Expended Obligated PROJECT TO DATE 18. TOTAL EXPENDITURES 19. TOTALS Nuir Furnishing Taise information may constitute a violation of applicable State and Federal Law. CERTIFICATION OF FINANCIAL OFFICER: I certify that the above data is correct, based on the contractee's official accounting system and records, consistently applied and maintained, and that expenditures shown have been made for the purposes of, and in accordance with applicable contract terms and conditions. The funds requested are for reimbursement of actual expenditures during the report period. Tyoed Name Signature DOCFY86 Title IL Computation of Grant Balance A. Amount of contract (section I, line 1) B. Total ICDBG funds expended and obligated (section I, line 19, columns 14 © 15) C. Unutilized grant to be cancelled (line A minus line B, above) D. Grant Funds Received (section I, line 2) E. Balance of Grant Payable (line B minus line D, above)" *If line D exceeds line B, enter the amount of the excess on line E as a negative number. This amount must be repaid to the Department of Commerce. III. Certification of Recipient: It is hereby certified that all activities undertaken by the Recipient with funds provided under the contract agreement number , have, to the best of my knowledge, been carried out in accordance with the contract; that proper provision has been made by the Recipient for the payment of all unpaid costs and any unsettled third -party claims; that the Idaho Department of Commerce is under no obligation to make any further payment to the Recipient under the contract in excess of the amount identified in Section II, line E, hereof; and that every statement and amount set forth in this document is true and correct as of this date. Special Conditions: Signature of Chief Elected Official Typed Name and Title of Chief Elected Official IV. Idaho Department of Commerce Date This Certificate of Completion is hereby approved. Therefore, I authorize cancellation of the unutilized contract commitment and related funds reservation and obligation of (from line C) Signature of IDC Authorized Official Typed Name and Title of IDC Authorized Official C-4 Date Contract Number: Attachment B Closeout Agreement This Agreement made by and between the Idaho Department of Commerce (IDC) and the (the Grantee). In reliance upon and in consideration of mutual representations, IDC and the Grantee agree to close Project No. All required audits have been received and approved. Additionally, the Grantee hereby agrees to: 1. Obtain advance written approval from the Idaho Department of Commerce authorizing expenditure of program income received prior to the date of this Closeout Agreement. The amount is 2. Expend this program income received up to the date of the Closeout Agreement pertaining to this project, in accordance with Title I of the Housing and Community Development Act of 1974, as amended. 3. Submit status of program income and compliance with Title I requirements annually starting with and until the $ is expended. Idaho Department of Commerce By: Title: Date: GM:aw Ann -1 The Grantee: in Title: Date: Attachment B Closeout Agreement This Agreement made by and between the Idaho Department of Commerce (IDC) and the (the Grantee). In reliance upon and in consideration of mutual representations, IDC and the Grantee agree to close Project No. All required audits have been received and approved. Additionally, the Grantee hereby agrees to: 1. Obtain advance written approval from the Idaho Department of Commerce authorizing expenditure of program income received prior to the date of this Closeout Agreement. The amount is 2. Expend this program income received up to the date of the Closeout Agreement pertaining to this project, in accordance with Title I of the Housing and Community Development Act of 1974, as amended. 3. Submit status of program income and compliance with Title I requirements annually starting with and until the $ is expended. Idaho Department of Commerce By: Title: Date: GM:aw Ann -1 The Grantee: By: Title: Date: Closeout Agreement This Agreement made by Commerce (IDC) and the Attachment B and between the Idaho Department of (the Grantee). In reliance upon and in consideration of mutual representations, IDC and the Grantee agree to close Project No. All required audits have been received and approved. Idaho Department of Commerce Bys Title: Date: The Grantee: By: Title: Date: Attachment H Closeout Agreement This Agreement made by and between the Idaho Department of Commerce (IDC) and the (the Grantee). In reliance upon and in consideration of mutual representations, IDC and the Grantee agree to close Project No. All required audits have been received and approved. Idaho Department of Commerce The Grantee: By: Title: Date: By: Title: Date: GRANT L. AMBROSE (1915.1968) JOHN O. FITZOERALD. P.A. WAYNE O. CROOKSTON. JR.. P.A. WILLIAM J. SCHWARTZ AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 THIS FIRM 114CLUDES PROFESSIONAL CORPORATIONS JUNE 6, 1990 Meridian Economic Development Corp. 33 East Idaho Street Meridian, Idaho 83642 LEGAL SERVICES FROM JUNE 6, 1989 -- DECEMBER 31, 1989: PREVIOUSLY BILLED JANUARY 2, 1990 MATTERS RELATING TO: TELEPHONE 888-4461 AREA CODE 208 REVOLVING LOAN FUND/POWER DYNAMICS: PROOF OF CLAIM MATTERS; LETTERS AND DISCUSSIONS WITH DEPARTMENT OF COMMERCE; STATUS LETTERS; FINAL CLOSING STATUS LETTER 4.50 COMPUTROL BLOCK GRANT ADMINISTRATION: DISCUSSIONS WITH PROJECT ADMINISTRATOR; CORRESPONDENCE 1.00 GENERAL ADMINISTRATIVE WORK: DISCUSSIONS WITH PROSPECTIVE IRB APPLICANT .50 6.00 ATTORNEYS FEE: 6.00 HOURS X $80.00/HR.= COSTS: $480.00 in TOTAL AMOUNT DUE $480.00 Cecil D. Andrus Governor James V. Hawkins Director June 3, 1990 DEPARTMENT OF COMMERCE The Honorable Grant R. Kingsford, Mayor City of Meridian 33 E. Idaho Meridian, Idaho 83642 Dear Mayor Kingsford: 700 west State Street Boise, Idaho 83720 Phone (208) 334-2470 Telex 5106003708 IDCOMRCE Fax (208) 334-2631 This letter relates to your Idaho Community Development Block Grant. We are currently in the process of analyzing all the grants with program income. We ask that you verify this information for corrrectness and help update our records. Listed below are your grants which have program income and the amounts. Please complete and return the enclosed form by June 18. 1990. If you have any questions, please contact me at 334-2470. Thank you for your assistance. Meridian Sincerely, i - 85 -III -13 $11.236.74 Ann Marie Funke, Intern Community Development Division Enclosure r- • DEPARTMENT OF COMMERCE, COMMUNITY DEVELOPMENT Please respond to the following questions regarding your grant with program income: o� Meridian - 85-111-13 $11.236.74 1. Are the amounts we have recorded for the grant the same as your amounts for that grant? yes no 2. Do you have other block grants with program income that we do not have listed? yes X—no 3. If yes, please list the grants and the amount of program income. 4. If some of the Program Income was spent, list what was purchased. (add additional sheets if necessary) Please sign and send in the completed form by dune 18. 1990. CHIEF EXECUTIVE OFFICIAL'S SIGNATURE: CL I MAIL TO: Department of Commerce Community Development ATTN: Ann Marie Funke 700 West State Street Boise, Idaho 83720 Fax (208) 334-2631 Y. AMBROSE, FITZGERALD & CROOKSTON ATTORNEYS AND COUNSELORS 1530 WEST STATE _ p, O. BOX 427 BRANT L. AMBROSE (1915-1%8) MERIDIAN, IDAHO 83642 TELEPHONE 1 JOHN O. PITZOBRALD, P.A. THIS FIRM INCLUDES AREA CODEE 20S ZOS WAYNE O. CROOKSTON, )R_, P.A. PROFESSIONAL CORPORATIONS WILLIAM J. SCHWARTZ January 2, 1990 Meridian Economic Development Corp. 33 East Idaho Street Meridian, Idaho 83642 LEGAL SERVICES FROM JUNE 6, 1989 -- DECEMBER 31, 1989: MATTERS RELATING TO: REVOLVING LOAN FUND/POWER DYNAMICS: PROOF OF CLAIM MATTERS; LETTERS AND DISCUSSIONS WITH DEPARTMENT OF COMMERCE; STATUS LETTERS; FINAL CLOSING STATUS LETTER 4.50 COMPUTROL BLOCK GRANT ADMINISTRATION: DISCUSSIONS WITH PROJECT ADMINISTRATOR; CORRESPONDENCE 1.00 GENERAL ADMINISTRATIVE WORK: DISCUSSIONS WITH PROSPECTIVE IRB APPLICANT .50 T.—O-0 ATTORNEYS FEE: 6.00 HOURS X $80.00/HR.= $480.00 COSTS: TOTAL AMOUNT DUE $480.00 I'All THE CITY LEADERS INSTITUTE 3045 THAYEN PLACE, BOISE, IDAHO 83709 Telephone - (206) 362-6332 rax - (209) 322-3057 STATEMENT Account of: City of Meridian 33 East Idaho Meridian, ID 83642 For Professional Services DATE: August 23, 1990 RE: Closeout for CDBG Block Grant # ICDBG-85-111713 TERMS: Net 10 days unless modified by Agreement. Interest charged on unpaid amount at the maximum applicable rate allowed by law. DATE CLi DESCRIPTION OF SERVICES, EXPENSES, ETC. SUBTOTAL PROJECT NO. Aug 16, 1990 #1950 Prepare closeout report for City of to Meridian Block Grant No. ICDBG-857111-13. Aug 23, 1990 Attend closeout coordination meetings at Idaho Dept. of Commerce. Review all financial drawdowns and reconcile with State Fiscal Officer records. Prepare Final Performance Report, Final Financial Report, Computation of Grant Balance, and Closeout Agreement. Professional Time = 12.0 hrs. @ $70.00/hr $ 840.00 Expenses = 37 miles @ .26/mi 9.62 TOTAL AMOUNT PAYABLE $ 849.62 I AMBROSE, FITZGERALD & CROOKSTON Grant P. Kingsford President Economic Development Corporation 33 East Idaho Street Meridian, Idaho 83642 Dear Grant: TELEPHONE 8884461 AREA CODE. 208 Please find enclosed a copy of a letter that II have received from Lowell Hodgkin's attorney, and a copy of the btor Questionnaire that Mr. Hodgkins has filled out. If at all possible I think that we should probably discuss this a little bit at the meeting scheduled for February 7, 1989. WGC/mks enc. n Very trulyyours, WAVN G. CROOKSTON, JR. ATTORNEYS AND COUNSELORS 1� 1530 WEST STATE - P. O. BOX 427 MERIDIAN, IDAHO 83642 GRANT L. AMBROSE (1915-1968) JOHN O. FITZGERALD, P.A. THIS FIRM INCLUDES PROFESSIONAL CORPORATIONS WAYNE G. CROOKSTON, JR., P.A. WILLIAM L. M. NARY February 6, 1989 Grant P. Kingsford President Economic Development Corporation 33 East Idaho Street Meridian, Idaho 83642 Dear Grant: TELEPHONE 8884461 AREA CODE. 208 Please find enclosed a copy of a letter that II have received from Lowell Hodgkin's attorney, and a copy of the btor Questionnaire that Mr. Hodgkins has filled out. If at all possible I think that we should probably discuss this a little bit at the meeting scheduled for February 7, 1989. WGC/mks enc. n Very trulyyours, WAVN G. CROOKSTON, JR. 40rfo/a & Irenner ATTORNEYS A////T LAW77�� 16 J1or/li Van All" Or. Van /�aleo, alilornia 94401 Van J71antlee0 Ol/ICe: y%ry X ,,Drenner 10 &;/"%✓Talion: —A (41 5) 348 0625// Visile 660 %Aard 0. Arlola January 31, 1989 r nnneieco. C194102C1941024102 Von Jra (41 5) 348-2044 (41 5) 621-1290 Wayne G. Crookston, Jr. Ambrose, Fitzgerald & Crookston 1530 W. State Street, Ste. C P.U. Box 427 Meridian, ID 83642 meridian v Hodgkins Case No. CW881388 Dear Mr. Crookston: h In my telephone con s proposed a $5,000.00 cashsettlementon behalf of weeks ago Id Mrs. ou sed me Hodgkins in the above srthatewould have toymake al dec sion that onthere such were several agencies an offer and that current financial information would be require in order to evaluate the settlement. I am intending to file a Chapter 7 bankruptcy on behalf of Mr. _ and Mrs. Hodgkins if this matter cannot be o worked to me out d I o ld therefore share with you the information P o Chapter 7. I se encl Mrs. Hodgkins for the purpose of filing Cha p encl se herewith a copy of the worksheets which were recently prepared by Mr. and Mrs. Hodgkins. Please advise me if these will be sufficient for your purposes. It is my understanding that I will have an extension ectf to me to file an answer in the above referenced case, J written demand from your office. Thank you for your courtesy in this matter. Very ly yours, z � iG2Lz- GARy R. BRENNER GRB/wef Enclosure cc: Mr. & Mrs. Hodgkins Power Dynamics Incorporated BUSINESS PLAN: 1985 POWER DYNAMICS, INC. P.O. Box 1424, San Carlos, California 94070 (415) 591-4390 i ,-, Power Dynamics Incorporated BUSINESS PLAN: 1985 OUTLINE A. EXECUTIVE SUMMARY B. COMPANY & INDUSTRY 1. COMPANY 2. INDUSTRY C. PRODUCT LINE D. MARKET PLACE 1. MARKET DESCRIPTION 2. MARKET SIZE & TRENDS 3. COMPETITION E. MARKETING 1. MARKETING STRATEGY 2. SALES & DISTRIBUTION 3. PROJECTED SALES & MARKET SHARE 4. PRICING 5. ADVERTISING, PUBLIC RELATIONS, & PROMOTION 6. SERVICE & WARRANTY POLICIES F. OPERATIONS 1. LOCATION 2. PLANT & EQUIPMENT 3. MANUFACTURING PROCESS 4. LABOR 1 P.O. Box 1424, San Carlos, California 94070 (415) 591-4390 OUTLINE - CONTINUED G. MANAGEMENT 1. ORGANIZATION 2. KEY MANAGEMENT 3. BOARD OF DIRECTORS H. GROWTH & DEVELOPMENT SCHEDULE I. CRITICAL RISKS & PROBLEMS J. FINANCIAL REQUIREMENTS 1. CURRENT FINANCIAL CONDITION 2. FINANCIAL PROJECTIONS 3. FUNDING REQUEST K. CONCLUSION L. APPENDICES 1. MOTION CONTROL SPECIALISTS 2. SATISFIED CUSTOMERS 3. APPLICATIONS 4. RESUME - LOWELL R. HODGKINS 5. RESUME - WILLIAM L. ERDMAN 6. RESUME - RICHARD DEEP 7. RESUME - JAMES L. TOLOSANO 8. RESUME - BRIAN SHAW 9. STANDARD TERMS & CONDITIONS 10. FINANCIAL STATEMENT DATED OCTOBER 31, 1984 YEAR END 2 6. The total industry as projected by Frost & Sullivan, the leading independent marketing research firm for the industry, is a multi- billion dollar industry. It requires only a very small percentage (less than 17) of this potential in order to meet our business plan. For example, Frost & Sullivan projects the market in which we will be directly involved to be $1.6 billion by 1990. We project $14.4 million for the same year. This amounts to less than 17 (0.97) of the marketplace. 7. A very realistic projection indicates gross sales of $50.3 million by the tenth year of production. Gross profits are projected to increase from over 329 during the first year to 397 in the tenth year. Net profits will grow steadily from -5.357 in the first year to over 217 in the tenth year. 8. We have researched and found several geographical areas which offer an economic climate extremely favorable to such an endeavor while at the same time providing a high quality of life potential to attract talented key personnel. In addition, the areas offer a favorable labor market with a high work ethic and economic development agencies with both the willingness and where -with -all to provide economic and numerous other forms of assistance and expertise absolutely essential to the success of such an endeavor. 9. We have been told by numerous experts in the field that we have a fundable project with a high potential for success. With these essential points in mind, we sincerely urge you to examine our complete business plan in detail and we stand ready to answer any questions that may arise as the result of such an examination. Sinc rel Lowell R. Hodgkins President Power Dynamics, Inc. 4 Power Dynamics Incorporated EXECUTIVE SUMMARY This is a business plan which proposes to extend Power Dynamics from its present position, that of a marketing and engineering organization with limited manufacturing capabilities, to a full blown manufacturer with national marketing capabilities. For the following reasons, we believe that the timing is now right to embark upon such an endeavor: 1. We have assembled a highly competent and compl-�Dnentary five man management team and support staff to successfully accomplish the goals laid out in this business plan. 2. The basic electronic design is now complete.and in the early stages of prototyping. This design is on the leading edge of technology and promises a product line that can be produced for less costs while offering a level of quality, reliability, and features superior to anything presently available on the market place. 3. Forecasts of the national economic climate well through the 1980's and beyond indicate an opportune time for full entry into a very large and diverse industrial market place. 4. One of our proposed product lines is a key ingredient in energy saving projects for which complete paybacks in reduced energy costs are being documented at well less than two years on average. Literally hundreds of millions of dollars will be spent in this area over the next five years. We presently have in hand an order for $220,000 and the promise of two more with a combined value of approximately $1,000,000. 5. Our other product line represents the very pulse beat of manufacturing machinery destined to be refurbished or replaced as plants modernize and expand in a broad spectrum of industries and applications. 3 P.O. Box 1424, San Carlos, California 94070 (415) 591-4390 B. COMPANY & INDUSTRY I. COMPANY At the present time, Power Dynamics, Inc is a marketing and engineering organization providing products and services to industry in the field of motion control, with the added capabili- ties of building complex engineered drive and motion control systems. However, up to this point in time, we do not have a product line of our own. The engineered systems have been engineered and constructed utilizing products of other manufacturers. Appendix 1 - Motion Control Specialists, provides a concise description of our current capabilities. Appendix 2 - Satisfied Customers, and Appendix 3 - Applications, pro- vides an indication of the nature and extent of our busi- ness at the present time. This business plan proposes that the timing is now right to extend our capabilities to include the full blown manu- facture and national marketing of a full line of digital AC and DC variable speed drives. Considering the experience and capabilities of the key personnel available for this endeavor, this is a natural, however extremely ambitious extension of our present operation. As a matter of fact, we have experienced a natural evolution leading us directly and unmistakably in this very direction. To explain this, a short historical synopsis is necessary. Power Dynamics began conceptually October 1, 1981 when Lowell Hodgkins became Vice -President - Marketing for Benkiser Electric, San Leandro, CA. At the time, Benkiser was a large appartatus repair and distribution center for power transmission equipment such as motors, reducers, variable speed drives,, and other related equipment. Our largest supplier was General Electric. 61 r r-� In addition to managing the marketing end of this existing business, it was Hodgkins' further responsibility to create a new high tech division that would represent various compatible manufacturers of motion control related products. These products would be essentially electronic in nature. In addition, we would develop in-house engineering and production capabilities to allow us to provide com- pletely integrated drive and control systems. All of this was accomplished and during its first full year. (April 1, 1982 - March 31, 1983) in business, Power Dynamics booked very nearly $400,000. Unfortunately, just as it appeared that Power Dynamics was off and running, the owner of Benkiser Electric invested substantial company assets into an outside endeavor that put an immediate financial choke on the entire operation and ultimately proved to be a total financial disaster. Faced with the alternative of having to abandon Power Dynamics, Hodgkins offered to purchase the division pro- vided terms could be arranged that would allow him to carry on the business and maintain a cash flow considering his own financial resources. An agreement was finally struck and on July 27, 1983, Lowell and Maria Hodgkins assumed 100% ownership of Power Dynamics, Inc. Shortly thereafter, we were joined by Bill Erdman, a design engineer with a masters degree in electronics and signifi- cant industrial DC drives experience. At approximately the same time, we hired Jim Hewlett, an electronics technician with indepth field service, -applications engineering, and software development capabilities. Approximately six months ago, Erdman announced that he had been working for some considerable time on numerous innova- tive concepts for the design and manufacturing of a com- plete family of AC and DC variable speed drives. 9 Quite frankly, the idea of giving birth to yet another drives manufacturer was not met with immediate and over- whelming enthusiasm. However, thanks to Bill's persis- tance, the concept did not die before it was evaluated and nurtured. Once brought into the proper perspective, and even further en- hanced with additional innovative ideas, it became more and more apparent that we had at our fingertips a number of technological advances that when added together would result in the ability to produce a highly superior drive at a significantly reduced cost. Of considerable importance is a revolutionary concept for han- dling field drive failures by remote computer interface, result- ing in tremendously reduced downtime ($$$) for the end user of our equipment. The product and its benefits will be more fully described in Section C - Product Line. Armed with the knowledge that we could build a superior drive at reduced costs, and reinforced by a study of Frost & Sullivan's "Integral -Horsepower Variable -Speed Drives Market" published October, 1980, it became apparent that the whole idea was worth considerable additional investi- gation. With such a concept in mind we began to assemble the various ingredients that would be required to make such an endeavor successful. The first task was to be sure that we really had a sound product design that meets all the required criteria. The DC drive design is nearing completion and the product is ready for prototype development. See Section C - Product Line. The next ingredient to assemble was a competent and compatible management team. We now have a committed five man management team in place. See Section G - Management. Next under consideration was an indepth analysis of the market place. This is described in Section D - Market Place. 7 ,r -N With these ingredients in mind, we began consideration of a geographical location that would provide relatively inexpensive production facilities, a non-union oriented work force with a high work ethic, a quality of life that would allow us to attract talented individuals from various sections of the country and still remain competitive in our industry, and a community atmo- sphere anxious to have our business and willing to help us in whatever ways are necessary to attract our business. We belive we have found such a location in the Boise, Idaho area. A full discussion of this subject will be provided in Section F-1 - Location. The final and most vital ingredient was adequate funding. These requirements are covered in detail in Section J - Financial Requirements. This brings us back to the present. We have built a solid busi- ness base providing repeat business and excellent references. There was absolutely none when we started. We have successfully completed a number of fairly complex engineered drive systems under our own name which established credibility. During the last fifteen months we have invested in office and shop equip- ment, an IBM personal computer and printer, engineering and business software, and a significant amount of engineering time to reach our present position. We have reached this position with extremely limited resources and without any outside funding. Phase I of our funding will provide the necessary funds to allow us to continue our present operation while completing product prototyping, final packaging, and refinements; producing product literature, specifications, and pricing; working on press releases and establishing the mechanisms for handling and qualifying leads generated, and cementing relations with several key accounts prior to Phase II, the actual manufacturing phase. 8 n 2. INDUSTRY In 1980, Frost & Sullivan published a very comprehensive market- ing survey entitled "Integral -Horsepower Variable -Speed Drives Market". The following five (5) pages are copies of the Industry Overview from that report. It is important to note that variable speed can be achieved in a variety of ways and is required for a wide range of industrial applications, not all of which are obvious to someone not thoroughly experienced in this field. It is of further importance to note that Power Dynamics intends to build only the electronic (referred to in the Frost & Sullivan report as electric) types of variable speed drives, both AC and DC. Finally, it should be noted that a new field, that of motion control has emerged since the publication of this report. The term power transmission includes motors, reducers, belts, gull- ies, chain, sprockets, and variable speed drives. The term motion control includes the variable speed drive but does not include the power train between the motor and the machine or device that is being driven. With the advent of highly sophisticated micro -processor based controllers for precise positioning and coordinated motion appli- cations such as robotics, CNC controlled machine tools, laser positioning, and satellite tracking antennas, just to mention a few, the field of motion control encompasses a much -greater market potential than has been addressed in the Frost & Sullivan report. This broader motion control concept of an industry is where Power Dynamics see ourselves as residing. As a matter of fact, we are presently adapting digital technology previously reserved for applications requiring extremely high precision to a broad spec- trum of industrial applications previously satisfied by less sophisticated analog drives. 0 FROST & SULLIVAN 5. INDUSTRY OVERVIEW The variable -speed -drive industry is made up of a diversity of enterprises. These range from large units of major multibillion - dollar conglomerates to tiny specialist firms with annual sales of less than $5 million. Frost & Sullivan has identified 55 operating units of 41 companies which have significant market shares in one or more variable -speed -drive product categories. These businesses are described in Section 6 of this report. There are three major types of variable -speed drives: mechan- ical, hydraulic, and electrical. Manufacturers do not generally think of themselves as members of a unified, variable -speed -drive industry. They tend to identify themselves as part of the mechani- cal power -transmission -component industry, the fluid -power industry, or the electrical/electronics industry. For all but a handful of small, privately held, specialty firms, variable -speed drives ac- count for a minor portion of the total sales of the companies pro- ducing variable -speed drives. Typically, the variable -speed -drive product line is part of a broad offering of mechanical power -trans- mission, fluid -power, or electrical components. There is no published financial data available which is speci- fic to the variable -speed -drive operations of an individual company or operating unit. Over half of the 55 enterprises described in this report are operated by 15 large, billion -dollar corporations which do not provide separate reporting for their variable -speed - drive businesses. The rest of the units are either privately held Peorooucuon witnout written oermtsston of the cooyrngnt owner is striCny orontbited 6 5 V 1 i FROST S SULLIVAN companies that do not publish Financial reports, or small units of sizeable diversified companies. Although quantitative financial - performance data is unavailable, Frost & Sullivan believes that com- fortable profit levels can be achieved in many, if not all, of the variable -speed -drive product areas. Comments by executives of firms which manufacture both variable -speed drives and related components suggest that the drives are often the most profitable products in the line. Among the smaller firms are a number who have gained sig- nificant market positions, and have apparently prospered by being innovative in their product design or marketing approach. Some (for example, Wood's, Graham, and Lovejoy) entered the variable -speed - drive business decades ago with mechanical devices, and have since diversified into electrical drives. 10, Only about one-third of the companies described in this report produce more than one type of variable -speed drive of the dozen types reviewed. About one-fourth of the companies offer both AC and DC drives. Almost the same number offer both mechanical and elec- trical drives. Only Dana and Emerson produce all three major types of drives (mechanical, hydraulic, and electric). With the exception of these two firms, all of the suppliers of hydraulic drives spe- cialize in only one specific hydraulic product type, and offer no mechanical or electrical drives. Emerson, with eight product types, and Reliance, with seven product types, have the broadest coverage. For each of the dozen product types, Frost & Sullivan has es- timated the dollar volumes and market shares of the principal compe- titors. (See Section 4 of this report.) These estimates indicate Feoroduction without written oermtssion of 66 V 2 the cocyrignt Owner is strictly Prohibited. FROST & SULLIVAN that Reliance Electric Company is the leading supplier of variable - speed drives to the U.S. market, accounting for approximately 20712 of the total with an overall volume in excess of $120 million. Just six firms account for approximately two-thirds of the industry total, as shown in Figure 5-1. Most of the larger firms in the variable -speed -drive industry sell a substantial portion of their output directly to OEMs and users through their own sales offices. These offices, which are lo- cated in major cities thro-ughout the country, provide considerable application -engineering and system -design support to customers. Similar services are provided by manufacturers representatives on behalf of many of the smaller firms. In the popular, fractional - through -125 -hp capacity range, distributors play an important role. Particularly in the case bf AC and DC electric drives, manufacturers have developed preengineered standard -drive packages and accessories which can be easily stocked and merchandised by distributors. Bos- ton Gear claims to have been the first to put DC variable -voltage controls on the shelf for distributors to sell. Since pioneering this approach in 1961, Boston has become one of two major suppliers of single - phase DC drives. Today, more than 95112 of their variable - speed -drive sales reach customers -through distributor channels. Noting Boston's success, many of their competitors have emulated them. Within the variable -speed -drive industry, the AC variable -fre- quency -drive segment is presently the most volatile. Droduct inno- vation is progressing at a rapid pace. Existing manufacturers are Rooroouchon without written OermISSiOn Ot the Cooyn9ht Owner is strictly orohiorteo I 67 V FRW i SULLIVAN LEADING MANUFACTURERS OF VARIABLE -SPEED DRIVES n (Minimum -Estimated u.S. Sales in millions of dollars) Source: Frost & Sullivan Estimates Figure 5-1 Reproduction without written pereMssion of F-68 I V the copyright owner is strictly prohibited. Louis Drive Type Reliance G.E. Emerson Eaton Allis Incom Open Pulley 4.5 - 1.0 - - - Belt/Motor 17.5 2.5 15.0 - 2.0 - Chain Transmission 0.8 - - - - - Traction - - - 4.0 - - Hydroviscous - - 3.0 - - - Single -Phase -Input DC 15.0 3.0 6.0 - 1.0 19.0 Three -Phase -Input DC 80.0 75.0 20.0 7.0 11.0 10.0 Single -Phase -Input AC 0.1 0.2 0.2 - - 0.1 Three -Phase -Input AC 3.0 10.0 15.0 3.0 8.0 0.1 Eddy Current - - 5.0 50.0 10.0 - TOTAL 120.9 90.7 65.2 64.0 32.0 29.2 Source: Frost & Sullivan Estimates Figure 5-1 Reproduction without written pereMssion of F-68 I V the copyright owner is strictly prohibited. n FROST & SULLIVAN revolutionizing their product lines, and new suppliers are entering the field hoping to participate in the rapid growth of this seament. Expanding demand provides an opportunity for substantial rewards, but the rapidly escalating competitive pressure and fast -changing technology are making this a high-risk field. AsoroOuction without written permission of 6 g V 5 the copyright Owner is strictly prohibited. FROST & SULLIVAN 6. COMPANY PROFILES 6.1 Allen-Bradley Company, Milwaukee, Wisconsin Allen-Bradley is one of the largest, privately held companies in the United States. It was founded in 1909. Among its first pro- ducts were speed controllers for electric motors, and resistors for the fledgling electronic market. Allen-Bradley has since grown into a multinational corporation with over 14,000 employees and sales of several hundred million dollars annually. The company manufactures hundreds of products in three product groups: industrial controls, electronic components, and magnetic materials. The company is the leading U.S, manufacturer of motor starters and related automation controls. In recent years, Allen-Bradley has moved aggressively in- to solid-state technology and has become a leader in the fast-grow- ing, programmable -controller industry. They participate in the ad- justable -speed drive market with a line of DC variable -voltage speed controllers. The DC drive line spans the h to 1,500 hp capacity range and includes regenerative and nonregenerative models of both single- phase -input and three -phase -input types. Single -phase -input models cover the , to 5 hp range and are preengineered standard packages. These were the only off-the-shelf products in the line prior to late 1979 when a new series of packaged three -phase -input drives covering the 7.5 to 200 hp capacity range were introduced. Custom -engineered 11011.1 drives are still available throughout the entire - to 1,500 hp capa- city range. Aeoroduction wanout written oermission of O V I 1 the cooyngnt owner is strictly oroniorte0. J FROST & SULLIVAN ,,„IN 1. EXECUTIVE SUMMARY Frost & Sullivan estimates that United States consumption of the principal types of variable -speed drives will total just over $600 million in 1980 and will grow to over $2.5 billion by 1990. Growth in demand has paralleled capital -expenditure trends in manu- facturing industries. This pattern is expected to continue. Sales of variable -speed drives are expected to grow at a somewhat faster rate than capital expenditures. The higher growth rate will result from the conversion of fixed -speed equipment to variable -speed oper- ation, upgrading to more -sophisticated variable -speed drives, and increased application of variable speed to effect energy savings. Variable -speed drives are used in a myriad of manufacturing, extractive -industry, utility -power -plant, and HVAC (Heating, Venti- lating and Air -Conditioning) applications. A diversity of general- purpose and special-purpose drive types are available, and many of these types compete for use in particular applications., In the popular, general-purpose portion of the market encompassing the fractional through 125 hp capacity range, distributors play an im- portant role, serving smaller OEM and user customers. The variable -speed drive industry's broad market base and di- versity of products provides considerable stability. Most purchases of drives fall into the capital -expenditure category. Users not only purchase machinery with drives preincorporated, they also buy substantial quantities of drives for use in modernization projects. Reoroauctlon without written permission of lite copyrngnt owner is strictly proniottea FROST & SULLIVAN In aggregate, capital -expenditure levels have held up relatively better than other sectors of the economy in recent recessions, per- haps because they are planned well in advance. While variable -speed drive sales are somewhat more volatile, they are sustained, never- theless, by the pattern of capital -expenditure trends. Over the next decade, energy conservation is expected to stimu- late demand for adjustable -speed drives. If the flow rate from pumps is adjusted by varying the speed of the pumps rather than by the operation of a valve, considerable energy savings can be real- ized. Similarly, controlling the speed of fans is more energy effi- cient than the operation of dampers in heating, ventilating, and air conditioning equipment. As energy costs continue to rise, more and more conversions to adjustable -speed drives can be justified. / Over the next decade, AC variable -frequency drives are expected to enjoy the most rapid growth rate of any drive type. These drives will benefit from rapid advances in semiconductor technology appli- cable to both control logic and power switching. As technology ad- vances, prices will be reduced. Already, some manufacturers have introduced new generations of drives which cost only about one-third as much as their own prior models. Furthermore, capacity ranges are being extended upward. Unlike DC variable -voltage drives which re- quire the use of expensive DC motors, AC variable -frequency drives can be used with standard AC squirrel -cage induction motors. Al- though AC variable -frequency drive electronics are more complex than DC variable -voltage drive electronics, AC motors are simplier than DC motors and cost less. Motor technology has matured, so motor Reorotluction wanout written Permission of I the cooyngnt Owner ,s strictly prohibited FROST 3 SULLIVAN n prices are not likely to decline; but, as electronic prices fall, the overall. economics of AC drive and motor systems will improve relative to DC drive and motor systems. Frost & Sullivan estimates that AC variable -frequency drives will increase their share of the U.S. variable --speed drive market from 13% in 1980 to 27% in 1990. In the U.S., more than forty companies are significant sup- pliers of variable -speed drives. The largest market share is held by Reliance Electric Company. Reliance produces several types of variable -speed drives, and enjoys about a 20% share of the total market. Just six firms, Reliance, General Electric, Emerson, Eaton, Litton, and Incom, acco�:nt for about two-thirds of the total. Des- pite this apparent indust -y concentration, a number of small spe- cialist firms participate. More than half of the individual com- panies and autonomous divisions of large corporations which make up the industry offer only one product type. In addition to the pri- mary manufacturers who market their products nationally, there are a number of small, local and regional suppliers, many of whom are dis- tributors who assemble custom -drive systems using components sup- plied by several manufacturers. There do not appear to be signifi- cant technical barriers preventing entry into the fast-growing AC variable -frequency segment of the market. This report is based on a research study which focused on gath- ering market -size -and -trend information cirectly from equipment man- ufacturers and from users. As a result, Frost & Sullivan has de- veloped individual forecasts of the U.S. market for twelve specific types of variable -speed drives. Forecasts are presented in both Reoroduchon without written oermiaaion of--, the ccoYngnt owner is,trictly oroNoited 3 I 3 FROST 3 SULLIVAN current -dollar and constant-,-:c;";ar fcrm. For each form, there is a near-term and a long-range forecast. Frost & Sullivan has included current -dollar forecasts in this report (see Figures 1-1 and 1-2) because many people find current - dollar figures easier to understand. Such forecasts anticipate the numbers which are expected to appear in future reports of actual oc- currences, and can be related to actual dollar figures reported in the past. Frost & Sullivan believes that the constant -dollar forecasts presented in Figures 1-3 and 1-4 provide a more accurate picture of the real situation. The current -dollar forecasts were derived from the constant -dollar forecasts. All forecasts were developed from or 1980 -base -year estimates of the size of the market for each product type. To generate the constant -dollar forecast, a growth factor was developed for each product; these factors reflected the interplay of various influences on the outlook for each specific product. The growth factors shown in Figures 1-1 through 1-4 indicate the growth rate to be expected in constant dollars, assuming the same capital -expenditure level throughout the decade. The constant - dollar forecasts presented in Figures 1-1 and 1-2 were developed by modifying the product -growth factors to reflect future growth in capital expenditures. The forecast assumes that constant -dollar in- creases in capital expenditures will be as shown by the following 10,11.1 table: Reoroouctlon without Written dismission of I A I T 4 j the C00yright owner is strictly prohibited_ I��i IL 1 j FROST & SULLIVAN ADJUSTABLE -SPEED -DRIVE NEAR-TERM CURRENT -DOLLAR FORECAST r� (U.S. Domestic Shipments in millions of dollars) Source: Frost & Sullivan Estimates Figure 1-1 Reoroauction without written oermossion of 5 I 5 the coavrignt owner ri stnctiv orohiodtec. Growth Product Factor 1980 1981 '982 1983 10.: MECHANICAL DRIVES: Open Pulley 4% 30.0 35.1 41.1 47.6 51.? Belt/Motor Ob 50.0 56.5 63.8 71.5 73.4 Chain Transmission 0% 7.0 7.9 3.9 10.0 11.: Traction 5. 12.5 14.8 17.4 20.4 23.6 TOTAL MECHANICAL 99.5 114.3 131.2 149.5 168.9 HYDRAULIC DRIVES: Hydrostatic 0% 15.0 17.0 19.2 21.5 23.3 Hydrokinetic 0% 11.0 12.4 14.0 15.7 17.5 Hydroviscous 10% 13.0 16.0 19.7 24.0 29.:. TOTAL HYDRAULIC 39.0 45.4 52.9 61.2 70.3 ELECTRICAL DRIVES:. OC Single -Phase Input 0: 75.0 84.8 95.8 107.3 119.1 DC Three -Phase Input 5: 250.0 Z95.0 348.1 407.3 172.; TOTAL DC 325.0 379.8 443.9 514.6 591.: AC Single -Phase Input 15% 7.0 9.0 11.5 14.6 18.4 AC Three -Phase Input 15% 70.0 89.6 114.7 145.7 183.: TOTAL AC 77.0 98.6 126.2 160.3 201." Eddy Current 3% 70.0 81.2 94.2 103.3 123.5 TOTAL ELECTRICAL 472.0 559.6 664.3 783.2 916.9 GRAND TOTAL 610.5 719.3 848.4 993.9 1156.? Source: Frost & Sullivan Estimates Figure 1-1 Reoroauction without written oermossion of 5 I 5 the coavrignt owner ri stnctiv orohiodtec. FROST i SULLIVAN ADJUSTABLE -SPEED -DRIVE LONG-RANGE CURRENT -DOLLAR FORECAST (U.S. Domestic Shipments in millions of dollars) HYDRAULIC DRIVES: Hydrostatic Growth 25.7 37.8 Hydrokinetic Product Factor 1980 1985 1990 MECHANICAL DRIVES: 78.4 '-� TOTAL HYDRAULIC 39.0 78.9 Open Pulley 4% 30.0 61.4 108.1 Belt/Motor 0% 50.0 85.7 126.0 Chain Transmission 0% 7.0 12.0 17.6 Traction 5% 12.5 26.7 49.2 TOTAL MECHANICAL TOTAL AC 99.5 185.8 300.9 HYDRAULIC DRIVES: Hydrostatic 0% 15.0 25.7 37.8 Hydrokinetic 0% 11.0 18.9 27.7 Hydroviscous 10% 13.0 34.3 78.4 '-� TOTAL HYDRAULIC 39.0 78.9 143.9 ",IN ELECTRICAL DRIVES: DC Single -Phase Input 0% 75.0 128.6 188.9 DC Three -Phase Input 5% 250.0 533.9 983.6 TOTAL DC 325.0 662.5 1172.5 AC Single -Phase Input 15% 7.0 22.6 63.6 AC Three -Phase Input 15% 70.0 225.7 635.5 TOTAL AC 77.0 248.3 699.1 Eddy Current 3% 70.0 137.1 231.0 TOTAL ELECTRICAL 472.0 1047.9 2102.6 GRAND TOTAL 610.5 1312.6 2547.4 Source: Frost & Sullivan Estimates Figure 1-2 Reprotluchon witnout written p.rmi.eitln of 6 I 6 the copyright owner is strictly prohibited. AV n /-IN FROST A SULLIVAN ADJUSTABLE -SPEED -DRIVE NEAR-TERM CONSTANT -DOLLAR FORECAST (U.S. Domestic Shipments in millions of 1980 dollars) TOTAL HYDRAULIC ELECTRICAL DRIVES: 1980 Growth Product' Factor MECHANICAL DRIVES: 30.0 Open Pulley 4% Belt/Motor 0% Chain Transmission 0% Traction 50. TOTAL MECHANICAL 7.0 HYDRAULIC DRIVES: 7.7 Hydrostatic 014, Hydrokinetic 0% Hydroviscous 10% TOTAL HYDRAULIC ELECTRICAL DRIVES: 1980 1981 1982 1983 19A1 30.0 32.7 35.6 38.9 42.) 50.0 52.5 55.1 57.9 60.2 7.0 7.4 7.7 8.1 8.4 12.5 13.8 15.1 16.6 18.1 99.5 106.4 113.5 121.5 128.7 15.0 15.8 16.5 17.4 18.1 11.0 11.6 12.1 12.7 13.2 13.0 15.0 17.2 19.8 22.5 39.0 42.4 45.8 49.9 53.3 OC Single -Phase Input 0% 75.0 OC Three -Phase Input 5% 250.0 353.8 TOTAL OC 119.6 325.0 AC Single -Phase Input 15% 7.0 AC Three -Phase Input 15: 70.0 92.4 TOTAL AC 133.1 77.0 Eddy Current 3% 70.0 521.8 TOTAL ELECTRICAL 640.9 472.0 670.6 GRANO TOTAL 012.3 610.5 78.8 82.7 86.8 90.3 275.0 302.5 332.8 362.7 353.8 385.2 119.6 453.0 8.4 10.1 12.1 14. 84.0 100.8 121.1 143.9 92.4 110.9 133.1 158.3 75.6 81.6 88.2 94.1 521.8 577.7 640.9 705.7 670.6 737.0 012.3 388.2 Source: Frost & Sullivan Estimates Figure 1-3 g4torotluction without written oermuaon of 7 I 7 the cooynpnt owner 9 etnctty Prontbitetl n FROST i SULLIVAN ADJUSTABLE -SPEED -DRIVE LONG-RANGE CONSTANT -DOLLAR FORECAST (U.S. Domestic Shipments in millions of 1980 dollars) Growth Product Factor 1980 1985 1990 MECHANICAL DRIVES: 13.5 15.7 Hydroviscous 10% 13.0 Open Pulley 4% 30.0 44.5 62.4 Belt/Motor 0% 50.0 61.4 71.2 Chain Transmission 0% 7.0 8.6 10.0 Traction 5% 12.5 19.4 28.5 TOTAL MECHANICAL 99.5 133.9 172.1 HYDRAULIC DRIVES: Hydrostatic 0% 15.0 18.4 21.4 Hydrokinetic 0% 11.0 13.5 15.7 Hydroviscous 10% 13.0 25.2 46.5 TOTAL HYDRAULIC 39.0 57.1 83.6 ELECTRICAL DRIVES: DC Single -Phase Input 0% 75.0 92.1 DC Three -Phase Input 5% 250.0 388.1 TOTAL DC 325.0 480.2 AC Single -Phase Input 15% 7.0 16.8 AC Three -Phase Input 15% 70.0 168.4 TOTAL AC 77.0 185.2 Eddy Current 3% 70.0 99.1 TOTAL ELECTRICAL 472.0 764.5 GRAND TOTAL 610.5 955.5 Source: Frost & Sullivan Estimates Figure 1-4 Recroaucuon without wntteh permission of 8 I 8 the copyn"m owner is strictly prohtbrtetl. 106.8 570.2 677.0 38.5 385.3 423.8 132.6 1233.4 1489.1 r 1981 +5% 1986 +3°0 1982 +5% 1987 +3% 1983 +5% 1988 +30 1984 +4% 1989 +3% 1985 +2% 1990 +3% n FROST & SULLIVAN Frost & Sullivan expects capital -expenditure levels to be some- what higher than normal for the next several years as a result of favorable changes already underway in the political climate. Toward the latter part of the decade, the rate of increase will taper off and will gradually drop back to parallel a GNP growth of 3% per year. The 2% increase shown in 1985 reflects the next dip in the business cycle. The current -dollar forecasts were derived from the constant - dollar forecasts by adjusting for inflation. Although the current inflation rate is alarming, Frost & Sullivan is optimistic about the future and expects that inflation will be gradually brought under some semblance of control during the next decade. Inflation is fi- nally receiving wide recognition as a major threat to the economy. Public policy seems to be moving in a direction which will control inflation by encouraging capital investment to increase productiv- ity, by discouraging consumption, and by reducing government spend- ing. Although there is a possibility that the policy shift now underway will be abandoned, leading to an acceleration of inflation and a rapid erosion of the economy, it seems more probable that sound policies will prevail. The specific inflation rates used to develop the forecast were as follows: Reoroducnon without written pertetssion of 9 I I 9 j the COOynynt Owner �s stn Ctty prohibited FROST 6 SULLIVAN 1981 +8% 1986 +5% 1982 +8% 1987 +5% 1983 +7% 1988 +5% 1984 +7% 1989 +5% 1985 +6% 1990 +5% Readers who have different assumptions about product -growth outlooks, capital -expenditure trends, and inflation rates can gener- ate their own current -dollar forecasts and constant -dollar forecasts from the 1980 -base -year data presented in this report. J Reoroauction without written oeroesuon of 1 Q 1 the cocyright owner is Sir, city Prohibited Finally, it should be pointed out that a variable speed drive is defined as including not only the electronics but also the motor (AC or DC) whose speed is being controlled. Several of the major competitors, primarily General Electric, Westinghouse, Reliance, Louis Allis and Emerson manufacture the motors as well as the electronics. This does give these companies a potential economic advantage. Power Dynamics, like dozens of other independent drive manufacturers has no intention of manufacturing motors. However, historically the independent drive manufacturers have been able to buy motors at a distinct price advantage, particu- larly from General Electric, Powertron, and Baldor, so as to sell a complete drive package at a competitive price with an accept- able gross profit. The buy-outs and their correspondingly lower gross profit potential have been taken into account in our ten- year financial projection. r"N' C. PRODUCT LINE For a wide variety of applications, it is desirable if not absolutely necessary to be able to vary the speed of the drive system. Over the years, this has been accomplished in a wide variety of ways. There are various products on the market that accomplish this purpose via mechanical means. There are eddy current clutches and viscous type couplings that work toward this end. However, the major market has been and will increasingly be for AC and DC electronic variable speed drives. These are precisely the products that we intend to manufacture. DC Variable Speed Drives: There are a wide -range of types of DC variable speed drives. Of the SCR variety, there are regenerative and non -regenerative, half -wave and full -wave, single phase and three phase, modifiable and non -modifiable. Power Dynamics will start out on the high end, building an integral horsepower (1 HP and larger), fully regenerative, three phase, modi- fiable drive. This product line will cover from 5 HP through 1000 HP. There will be a number of unique state-of-the-art features that will set this product far ahead of competitive drives presently available to the market place. Because the drive is digital, it will be cap- able of receiving control commands from an external digital source, an analog source which will be converted through an on board D/A converter, or run as a stand alone unit. Precise position, speed, or torque control will be possible through these digital means. On board diagnostics will be available for status reporting of the drive state, leading to minimum down-time. The use of semi -custom compo- nents and hybrid power semiconductor circuits will lead to small and efficient packaging. The drive can be broken down into five (5) functions which are discussed in more detail below. 11 r 1.POWER BRIDGE The power bridge will provide full 4 -quadrant six -pulse rectifica- tion. This will be accomplished using modern power hybrid techno- logies to minimize parts count, reduce costs, and increase reliability. The power bridge has been uniquely designed to dissipate heat directly into the atmosphere without violating the integrity of the Nema rated dust or watertight enclosures. The advantages include the ability to withstand harsher environmental conditions such as heat, moisture, dust, etc. while offering a more compact packaging which costs less to manufacture. The solid state devices in the power bridge will have dv/dt and di/dt ratings to minimize failure due to noise and transients. '_%� 2. FIRING CIRCUIT The heart of the drive will be a new state-of-the-art digital firing circuit that has been under development for several years. Traditionally, the firing circuit has been implemented using analog signal processing techniques. This has required large amounts of board space and parts count, with high assumable costs. The firing circuit to be implemented on our digital drive will be made of semi - custom digital logic arrays. The major advantages of this design are high response, reliability, less susceptability to adverse external conditions, and reduced manu- facturing costs. Since most of the circuitry will reside in semi - custom chips, the design cannot be readily copied by our competitors. 3. 'REGULATOR The regulator section of the drive will be 16 bit microprocessor driven with eprom based data storage. The micro is responsible for control loop regulation (proportional, integral, derivative), diag- nostics, and communication interfaces. Because the speed feedback is in discrete form, zero percent speed regulation is obtainable. High repeatability of control set point parameters is now possible due to the discrete nature of the input. As the loop parameters can be IOIN modified in real time, demanding applications can be met. WA FG -M-1111 4. DIAGNOSTICS In analog drives, limited diagnostics are handled with a circuit checker or via LED displays. Our digital analyzer will greatly increase the number of points to be monitored. Vital functions of the drive will be updated on a continual basis, providing first fault indication which allows for rapid determination of the problem in case of a drive failure. In most cases, when a drive fault occurs, the circuit breaker trips and power to the drive is lost, removing all indication of what caused the failure. Our digital analyzer will store fault information in battery -backed ram so that error information will not be lost when the power source is interrupted. This history of the drive states at the precise moment of failure will allow for immediate analysis of the problem. This information will be available either on line or off lire through a modem for computer analysis and corrective recommendations. Power Dynamics will maintain a central diagnostics computer on line 24 - hours per day, seven days a week for this very purpose. 5. COMMUNCATION The on -board communication function of the drive will allow remote access by a host machine. Parameter settings, fault information and loop parameters can all be monitored through the serial port. In this manner the host machine is capable of coordinating a number of drives for precise process control. Standard modifications will be capable through the main micro. Addi- tional less used and/or more intricate modifications will be provided on several universal printed circuit cards involving a combination of digital hardware, firmware, and- software. The advantages are great flexibility in handling a wide variety of application modifications, tremendous cost savings, especially as software is utilized over and over again, and the continued difficulty for competitors to copy the design scheme. This product line will be capable of handling the vast majority of the applications for DC variable speed drives in our targeted market place. However, for very simple or very low horsepower requirements, the product very well may be an overkill and not cost effective. 13 With this in mind, it is anticipated that a stripped down version of this product will have to be offered for less demanding applications. Also, in order to round out the product line, it is anticipated that a line of single phase drives (1/2 HP - 5 HP) will have to be developed. AC Variable Frequency Drives: These drives are presently available in a wide range of horsepowers, from fractional to over 1000 HP. Since the thrust of our marketing will be toward markets involving centrifugal pumps and fans, we will concentrate our initial efforts in the 7-1/2 HP thru 250 HP range. This range covers the vast majority of centrifugal pump and fan applications around the country. There are several approaches to building AC variable frequency drives. First, they are divided into two broad categories: voltage source and current source. Each has its own particular advantages and disadvantages. The voltage source drives are further categorized by the type of solid state power devices utilized. Because of rapid development of power transistor technology, we favor the scheme that utilizes a diode -bridge in the converter stage and power transistor in the inverter stage. Since our present in-house technical expertise is not as high in this area, we will approach the design of this product line as follows: Since we have an interim relationship with Yaskawa via Saftronics, we have an excellent AC variable frequency drive to sell; however, at an extremely reduced profit margin. Once established in the business of manufacturing DC drives, we have three (3) candidates out of which we hope to hire one as product manager for our AC variable frequency development. We will utilize the technology developed for the DC drive in combina- tion with the technology brought forward by the Japanese in PWM AC - variable frequency drives. This may be a one or two step development program. Our ultimate goal is to build a totally digital AC variable frequency drive, but an intermediate step involving some analog circuitry may be necessary in order to come to market with product in a timely manner. 14 Arm -0. D. MARKET PLACE 1. MARKET DESCRIPTION The product line has wide spread application in a broad market place. The combined management team has an indepth background in a wide range of industries utilizing AC and DC drives and drive systems. The following is a brief description of the various industries in which we will target our effort. Cranes & Hoists: DC variable speed drives are being utilized more and more on large crane and hoist applications. These applications require high response, fully regenerative drives with special features that only a very few drive manufacturers can supply. Power Dynamics has absolute state-of-the-art capabilities in this area and has a long term contractual agree- ment to supply drives and drive components to one of the leading crane and hoist manufacturers in north America. Plastics: The principals of Power Dynamics havebroad application n experience in applying sophisticated DC drive systems to a broad array of applications in the plastics industry.. These begin with relatively simple extruders and blown film lines and extend to full two dimensional plastic orientation Hines utilizing thirty (30) or more drives all running in synchronous coordinated motion. Among others, the applications include center and sur- face winding, register controlled multi -color printing, slitting., sheeting, and other converting of plastics and related packaging materials. Power Dynamics' largest orders shipped in 1984 was specified by Crown Zellerbach for winding and printing applica- tions. Major opportunities will exist for retrofits, as plants modernize over the next several years. This business will be taken by those companies who have the best applications oriented field sales force and the best field service and trouble -shooting solutions, not necessarily the lowest price. OEM's will be more difficult to crack, but will be attracted by the numerous sales features our product will incorporate into their product. 15 FMO Paper: The paper industry is undoubtedly the largest dollar volume user of electronic variable speed drives. There is a broad range of applications for both AC and DC variable speed drives, although DC is predominant at this point in time. Our past experience has been with Weyerhauser, Scott, and Georgia- Pacific. We have retrofitted and sectionalized complete paper machines and provided drives for a wide variety of paper convert- ing applications. Membership in TAPPI, the industry's major trade organization, is a must. Since Power Dynamics is operating on a regional basis, we are not actively involved in this industry at present; however, we still have sufficient old friends in the industry to help us regain a foot hold once we broaden our horizons. Again, retrofits involving equipment up- grading and plant modernization will be dominant for the balance of the eighties, and the firms that can provide solid field application engineering assistance and trouble -shooting solutions will prevail over the ones that are selling on price alone. As with the plastics machinery OEM's (many of whom are the same), the paper machinery OEM's will find it hard to resist the selling features the product line will provide. Textiles: Our experience in the textile industry is somewhat more limited. However, the applications are similar to the plastics and paper industries, and in the southeast, textiles represent a significant opportunity in the application of vari- able speed drives. Wire & Cable: This is another industry with significant useage of DC variable speed drives. Power Dynamics has supplied all of the variable speed drive requirements for Raychem Wire & Cable in Redwood City over the last two years and is now making signifi- cant inroads with General Cable, which has eleven (11) wire and cable plants around the country. Drive applications include rod breakdown, wire drawing, ipsulating and coating lines, stranders, pairing machines, sheathing, and cabling. Again, we sing the same song. The plants are in dire need of renovation and are extremely limited in terms of technical expertise. am n n Lumber & Wood Products: Although this industry has been in the doldrums for several years, there are many applications for both AC and DC variable speed drives. It has become obvious that the most automated mills in the industry have the best opportunity of survival. As such, our digital drives, with their easy adapt- ability to plant computers, should be welcome as mills modernize. Due to the remote locations of so many mills, our remote computerized diagnostics will be of extreme interest to this industry. Price will be important, but reliability, remote trouble -shooting capabilities, and application engineering assis- tance by field sales engineers will be most important. Heating, Ventilating, Air -Conditioning: This is the fas- test growing industry for variable speed drives today, primarily because of significant energy savings that can be realized through the utilization of such devices. These are typically one-shot name bid type jobs, so reliability is important in order to be invited to bid and price is important in order to secure the business. The principals of Power Dynamics have been successfully involved in literally millions of dollars worth of such business in the past. Power Dynamics has supplied over thirty (30) such systems to date and currently has an open order for $220,000 for twenty-nine (29) more systems. We will be bidding an additional forty-five (45) systems to go to the same customer. Municipal & Industrial Waste Treatment: Similar to the HVAC market, this represents a very large potential market for AC variable frequency drives with great energy savings implications. In addition, Power Dynamics'new products capabilities will in- clude a slip energy recovery system for wound rotor motors for which there are many hundreds of retrofit potentials around the country. There are only a•few manufacturers of this product in the United States. These jobs are usually awarded on a sealed bid basis; therefore, a reputation of reliability is important to get on the bid list and a competitive price is important to get the order. 17 n 2. MARKET SIZE & TRENDS The following ten (10) pages are a copy of the Executive Summary from Frost & Sullivan's report on the Integral -Horsepower Vari- able -Speed Drives Market published October, 1980. Of the $2.547 billion market estimated for 1990, Power Dynamics will participate with products (AC & DC Three -Phase Input) that represent $1.619 billion of this total. Based upon Power Dynamics ten (10) year projection, 1990 will represent the fifth year of that projection. Fifth year gross sales projections of $14,400,000 represent less than 1% (0.889') of the $1.619 billion in which we will participate. There are three major trends that will provide a major impact on the market place. An awareness of and responsiveness to these trends will have a major influence on the success of drive manu- facturers for the balance of the 80's and well into the 90's. The first trend involves AC vs DC drives. For years the great promoters of AC variable frequency drives have been predicting the doom of the DC drives industry. The result of the AC manu- facturers indiscriminate attempts to replace DC on a wide variety of applications have probably done more to retard the growth of the AC industry than help it. Failure to seriously consider the application by most of the large AC manufacturers has caused some major setbacks. The sophisticated and truly experienced individuals in this industry (of which there seems to be less and less each year) realize that the AC variable frequency drive is not the do -all panacea that it has often been promoted to be. However, there is an outstanding market for which AC variable frequency is perfectly suited. This market involves centrifugal pumps and fans, and because of the unique speed vs. horse- power/torque relationship of these devices, there are great energy saving potentials in the utilization of variable speed drives. AC variable frequency, without doubt, is the best choice W n n for this application. As the cost of energy increases and the price of these drives continue to decline, the payback period continues to be reduced, resulting in a tremendous growth poten- tial for years to come. As industries all across the country begin modernization and expansion projects, a second major trend is beginning to emerge. In order for these plants to compete, they must be capable of producing a superior product at less cost. This means machinery that will produce it better, faster. Since the drive is the heart-beat of any machine, it becomes the most critical of the limiting factors. The high response, high accuracy digital drives to be supplied by Power Dynamics will have a strong impact on this trend. The unique, state-of-the-art remote diagnostics capabilities of our product line will provide a major means of drastically limiting downtime, a major element in the productivity of any manufac- turing facility. The third major trend is the continuing emergence of high pre- cision applications such as robotics, lasers, fibre optics, sate- llite and missile tracking, and precise machining, cutting, and positioning requirements. The drives of the future must be able to respond to these demanding specifications. Power.Dynamics is on the threshhold of producing this drive of the future today. Ke FROST 3 SULLIVAN BRANDS OF VARIABLE -SPEED DRIVES - SELECTED PRODUCT TYPES 1AS NAMED BY OEMS AND USERS) Sample Percent of Product Type Size Index Brand Mentions Eddy -Current Clutch 290 EATON DYNAMATIC 66% LOUIS ALLIS 210 Other 13% Multispeed Motor 216 RELIANCE 340 G. E. 26`, WESTINGHOUSE 110 Other 29% DC Variable Voltage 1000 RELIANCE 35Y, G.E. 140" BOSTON GEAR 10 WESTINGHOUSE 6 LOUIS ALLIS 50/ SABINA 4% SECO 4°; WER 4% CLEVELAND MACHINE CONTROLS 3` ALLEN -BRADLEY 2% MINARIK 2011, MORSE 2a POLYSPEDE 2010 WOODS 2° Other 5% AC Variable Frequency 481 PARAMETRICS 35" RELIANCE 17=' G.E. 15=� LOVEJOY 6% RAMS EY 6'0 U.S. ELECTRICAL MOTORS 41; EATON 4" LOUIS ALLIS 4",, EMERSON 3°=. PTI 3" Other 3'S Variable -Ratio Belt 623 REEVES (RELIANCE) 38' U.S. ELECTRICAL MOTORS 32" LOVEJOY 8' GERBING 6-: WOODS 41 SPEED SELECTOR BROWNING Other 6% (Continued) • aaprooUction --out written permission of the copyngrtt owner is strictly prohtbtted 2 1 1 V I I I] 14 3. COMPETITION The following page is another excerpt from Frost & Sullivan's report which indicate the brand names most often mentioned by OEM's and User's (primary source of business for Power Dynamics) in response to questionaires sent out to provide one basis of information for this report. Since Power Dynamics is concerned with only two (2) categories - DC Variable Voltage and AC Variable Frequency - we will analyze the competition in these categories. DC Variable Voltage Reliance: By far, the most outstanding manufacturer of DC drives over the 'Last twenty-five years or more. As a result, Reliance has been the leader for many years. Although still dominant, n Reliance has developed weaknesses. Through acquisitions, Reliance has grown to the point where DC drives are not a domi- nant part of their product mix. Where as ten to fifteen years ago their sales engineers were true professionals with incredible drive applications knowledge, their present day sales engineers on average display a surprisingly limited knowledge of DC drives and their applications. Exxon's purchase of Reliance for $700,000,000 several years ago has done nothing to enhance their position. Americans do not have a love affair with major oil companies these days and the great fiasco about an inexpensive and revolutionary AC inverter that would save billions in energy that Exxon used to overcome anti-trust objections to the acquisi- tion but was never able to produce left a sour taste all across the industrial spectrum. Rumors continue to persist that Reliance is on the block for less than half of Exxon's purchase price with no takers. Still, Reliance is the competition to beat in the engineered DC drives market. General Electric: There are areas, such as very large horsepower drives for the primary steel industry where G.E.'s only competi- tion is Westinghouse. G.E. has the technology to produce a sophisticated digital DC drive, and has to some extent. They are vulnerable because their price is high, their ability to respond is slow, and they have a habit of taking advantage of customers that feel dependent upon them. In the area of crane and hoist n drives, we have secured a major customer who was desperately looking for a viable alternative to G.E. 20 Boston Gear: Boston has done a tremendous job in selling the smaller off the shelf standard drive through their extensive distributor network. They do not represent much competition to Power Dynamics since they have extremely limited capabilities in horsepower range and drive systems. Westinghouse: Like G.E., Westinghouse has certain niches in which Power Dynamics or any other independent drive manufacturer cannot compete. These typically are horsepowers much larger than Power Dynamics intends to build, at least in the early stages of our development. Aside from that, Westinghouse simply does not provide the level of competition that G.E. does. They seem to be constantly jumping in and out of markets. At times, however, they can be disruptive. In the past, when they decided that they wanted to make an impact on a given market, they would generally come in with an extremely low price. There would be a short flurry of activity and then all of a sudden they would disappear. We suspect that when the profit margins resulting from the low - ball pricing would filter back to the bean counters, the boom would be.lowtred and pretty soon, that was the end of it. Louis Allis: At one time, this was one of the fine old companies in the power transmission business. As so often happens, their acquisition by Litton Industries some fifteen or more years ago has retarded their progress. They still manufacture a good pro- duct and they are bringing out a digital drive and they do have systems capabilities. They are high priced, slow to respond, and have a field sales organization with limited engineered systems knowledge. They will, however, provide real competition from time to time. Sabina: A Los Angeles based company, Sabina can be tough compe- tition on the West Coast. They sell on price and have some systems capabilities. For whatever reasons, customers either love them or hate them. They have done an excellent job of taking over the variable speed drives business for ski -lifts, especially in the west. However, considering the limited size of this market and the potential third party liability problems asso- ciated with it, they are welcome to it. None the less, in numerous other areas, they are worthy competition. 21 n Seco: Seco moved their operation to the southeast (I believe Greenville, SC) a number of years ago and it is my understanding that they enjoy a reasonably significant market share in that area. They are rarely heard from elsewhere. They sell on price and the last I heard, they had limited systems capabilities. I suspect that they will have to be reckoned with when we enter the southeastern market. Wer: A division of Emerson, Wer provides formidable competition. They tend to sell on price; however, Emerson has exerted heavy pressure to keep the profits up, forcing them to be less competi- tive than in the past. They can build systems and they have a reasonably good product line. They sell partially through reps and partially direct. This leaves them somewhat vulnerable, especially in the areas covered by reps, although this is not to say that their reps do not do a good job for them. They have tended in the past to be heavily OEM oriented, often ignoring the large potential in retrofits -that can be sold directly to the industrial end user. Cleveland Machine Controls: This is an excellent example of a small independent drives manufacturer that has grown, not spec- tacularly, but steadily over the years. Acquisitions have pro- vided a significant portion of that growth. This is the beauty of having a strong capital base behind any company. Their most recent acquisition of Randtronics, Menlo Park, CA gave them a West Coast base and a superior drive design. However, they really bought a shell, since the major talent at Randtronics had already departed. CMC will provide tough competition in certain areas with good reps, but both their engineering and marketing personnel are mediocre at best. Allen Bradley: Allen Bradley entered the DC drives market ten to fifteen years ago by purchasing Thermal Products, Inc, Cedarburg, WI. Since that time, the design has been fancied up a bit, but not really changed significantly. However, Allen-Bradley builds quality, has a fine reputation, and effective marketing. They are not the competitive force in DC drives as they are in other areas. As they continue to come on strong with motion control capabilities in their programmable controllers, they will provide significant competition for high response, high resolution servo type applications. 22 n Minarik: Strictly fractional and sub -fractional drives. They do an excellent job in their field, which is not our field at this particular time. Morse: Similar to Boston, they sell a DC drive as a part of their complete power transmission line of products through an excellent distributor organization. Not really competition in the systems business. Polyspede: A Texas company that deals strictly through reps. About seven years ago they developed a reputation of not paying commissions when due. Needless to say, they were dropped by several good rep organizations. They do not seem to be a factor in the market place today. Woods: Similar to Boston, they sell a DC drive as a part of their complete power transmission line of products through an excellent distributor organization. Not really competition in n the systems business. The following are companies not mentioned in the Frost & Sullivan report: Sweo Engineering: Ed Sweo left Randtronics several years ago and is building an excellent regenerative DC drive in Bellevue, WA. He is not interested in building systems, but rather in selling his drives to be incorporated into systems by others. Power Dynamics has done just that successfully on several occasions. Sweo has extremely limited means of marketing on a national basis. Burton Industries: A New England firm in Pawtucket, RI, Burton has real strength in wire and cable. A major portion of their business comes from the New England, New York, and New Jersey areas. They have systems capabilities and build a reasonable complete product line. Their design is adequate but not state- of-the-art. Good competition in their areas of strength. 23 n n Saftronics: Originated in South Africa, they expanded to Canada, and finally the United States. They have a very complete product line, extremely competitive pricing, and systems capabilities. They are presently represented by Power Dynamics in northern California. Their major problem at this time is that they are spread extremely thin personnel wise and have a very difficult time responding in a timely fashion, leaving them very vulnerable to the competition. Powertron/CSR: Shortly after Walter Rudich sold Wer, he started Powertron, building direct copies of G.E. DC motors. The motors were sold competitively, but quality was a problem. Later, he developed his own DC control. Over the years, Powertron has experienced a lot of personnel turnover and have only been a factor where cheap and dirty has been the criteria to sell. How- ever, Controves-Gurtz purchased Powertron about two years ago and merged then with Controlled Systems Research, another subsidiary with reasonably good servo capabilities. This combination could be a significant market factor if they ever get their act together. Seimens-Allis: For years, Seimens has been the Reliance of Europe. Several years ago they entered into a form of joint venture with Allis Chalmers to build drives in the United States. They are operating out of Texas. The Seimens technical capabili- ties are impressive. If they are successful in putting a market- ing organization together in this country, they will present tough competition. Asea: Asea of Sweden has bought the crane controls division from P&H and have built a large new facility in Milwaukee to support this operation. They represent another foreign entry that could represent stiff competition in the future. " 24 AC Variable Frequency Parametrics: In shear numbers, they have sold more V/F drives than any other manufacturer. They have also had more failures than any other. They are reasonable competition at the lower end of the horsepower range but have continued to attack markets that have gotten them into serious problems at times. Reliance: A fairly late entry into the V/F market, Reliance has a fairly good product and has made a significant impact mainly because of their size and reputation with products (such as DC drives) which they have been successfully supplying to industry for many years. Reliance will be one of three or four signifi- cant competitors for years to come. They typically sell on quality, know-how, and reputation rather than price. General Electric: Also a relative late entry into the V/F market, G.E. builds a high quality but high priced drive. They are continuing to invest in this product and will definitely be one of the major factors in the industry. Lovejoy: An old line manufacturer of mechanical variable speed drives, Lovejoy entered the V/F market about eight years ago with a product that simply did not work. They have since corrected their problems and have a reasonably good product, but the stigma remains. They will be a factor, but not to the extent that it appears they were going to be before all the problems began cropping up. Ramsey: Ramsey is one of the older members of this industry. They build a very rugged drive that works well but costs a lot. They will remain a factor if they keep up with rapidly changing technology. They sell through reps and have not always demon- strated an aware and agressive sales force. U.S. Electrical Motors: A subsidiary of Emerson, U.S. markets the Emerson (formerly Borg Warner) drive. This has not been a major part of their rather extensive product line. 25 Eaton: Eaton Dynamatic division has experienced many of the problems and frustrations of being acquired by a company that knows little about their business. However, the most recent version of their V/F drive is a good one and they will be a significant competitive factor in the market place. Louis Allis: Louis Allis builds a good solid current source V/F drive that is generally not competitive. They do a fair job of getting specs written that allows them to get a reasonable number of jobs. Will continue to be a factor. Emerson: Their Borg Warner division of Emerson is one of the oldest manufacturers of V/F drives. Like all the others, they have had problems in the past through misapplication. However, they have a good voltage source inverter and will definitely be a competitor of significance. PTI: PTI is now a division of Allen Bradley. This acquisition ^ has not worked out well and PTI sales suffered when they cancel- led the reps in favor of selling through Allen Bradley's direct sales force. The future of PTI, once considered the real comer in the industry, is questionable. The following are companies not mentioned in the Frost & Sullivan report: Toshiba: Toshiba is the most formidable recent entry to the U.S. V/F drives industry. They have invested in a very large facility in Houston, TX. Because of the Japanese's superiority in power transistors, Toshiba is able to offer relatively high horsepower (up to 250 HP for variable torque applications) in a PWM design that is less costly than other approaches. They also build a current source inverter that is capable of very high horsepower. Their success will be inversely proportional to any resistance to buy Japanese, which appears to be dissipating rapidly. 26 n Yaskawa: Yaskawa has virtually the same capabilities as Toshiba. As a result of a name brand arrangement that Saftronics has with Yaskawa, Power Dynamics has been successful in selling one large job ($220,000) utilizing these drives, one smaller job, and is presently working on several additional large jobs. This is fine for the moment, but Yaskawa is also marketing their product under their own name, and chances are that this relationship may not be something to depend upon for very long. Robicon: It is surprising that Robicon was not mentioned in the Frost & Sullivan report. They build a current source inverter and do win a reasonable number of good size jobs each year. They were purchased a number of years ago by Barber -Coleman and it is our understanding that they have recently been sold. It is unknown what effect this might have upon their future. Graham: Like Lovejoy, Graham is an old line manufacturer of mechanical variable speed drives that entered the V/F drive market some years ago. They build a current source inverter and definitely represent competition in the markets of interest to Power Dynamics. Seimens Allis: Have started to show up on bids for V/F drives. They presented stiff and agressive price competition on the job recently awarded to Power Dynamics. We expect to hear a great deal more from Seimens Allis in the future. 27 n 111 E. MARKETING 1. MARKETING STRATEGY: Power Dynamics' new logo will include the slogan, "Innovation In Motion." We will enter the market with a product of superior design and we have budgeted for R&D in order to maintain that position. We will approach selected industries for which our unique capabilities will have particular appeal. We have selected tar- geted accounts within these industries where we perceive a real need for the product. While other companies are moving toward a mass distribution marketing approach, we plan to fill a void that they are leaving behind. Our emphasis will be on engineered drive systems rather than on mass produced distributor items, with one major consi- deration kept in mind at all times. That consideration involves our definition of an engineered drive system. Very stringently, we will adhere to the following: An engineered drive system is an unique combination of perfectly standard components. Our perfectly standard components will be hardware components and software subroutines created by R&D or purchased from outside vendors. Our sales department can sell and our applications engineering department can engineer these standard components into any workable combination that can be sold and manufactured for a profit. Continuing product innovation will be market driven. As a market need is perceived with sufficient potential for development, this will be carefully considered as an R&D project. Once accepted, completed, and released from R&D, this new product or modifica- tion will then become a "perfectly standard component." 28 /� Field sales personnel will be selected and trained to provide a high degree of application engineering assistance to the customer. As a result, we will create numerous situations where the customer simply cannot afford to do business elsewhere. We will maintain that situation in an honorable fashion, but we do expect to be compensated for providing superior products and services. We will stress and teach the art of top-down selling; which when utilized properly, brings us quickly into direct personal contact with the engineering and management personnel that are the decision makers. This unique technique totally circumvents the costly and time consuming conventional method of selling through the purchasing departments. The product line is far too complex to have the typical purchasing department involved until it is time for a purchase order to be cut. Market feedback will be essential to establishing pricing policies; however, established minimum gross profit margins will not be violated without strong indications that to do so will result in major future benefits. Advertising and promotion will be industry oriented and will feature benefits rather than features, again pointing toward the rifle rather than the shotgun approach. Reference to J-3, Financial Projections, will provide insight as to the funding of the various marketing related expenses. 29 r� 2. SALES & DISTRIBUTION The natural tendency for a start-up company is to sign up an organization of manufacturer's representatives in lieu of its own direct sales force. On the surface, this appears to be the least expensive way to start, since the rep does not typically get paid until he sells something and the manufacturer gets paid. The problem is one of control and support. First, the rep is an independent businessman over whom the manufacturer has very little control. Furthermore, in addition to the normal competi- tion, the manufacturer competes with all the other rep's princi- pals for a reasonable share of his time. Next, most good reps try to handle lines that are compatible; however, there is very often an overlap between lines.that results in a very real con- flict of interest. Finally, because of the highly technical nature of the drives business, it takes a lot of expensive tech- nical support in order to turn rep inquiries into orders, and then manage the project throughout the engineering and production phases after the product is finally tested, shipped, and started up. If resources are extremely limited, then this is the only route a manufacturer may have to travel. If so, it can be guaranteed that the growth process will be slow and arduous. With a great deal of experience to support these contentions, Power Dynamics has opted to project our future sales without the utilization of manufacturer's representatives. Instead, all sales will be handled direct. During the one year start-up period projected prior to actual full blown manufactur- ing, this chore will be handled solely by the President. As a result of over twenty-five years in this and related businesses, Lowell Hodgkins has established customer contacts all over the United States. Twenty-five (25) initial target accounts will be selected from the archives of this experience and a concentrated effort will be made to secure prototype orders of significant dollar value prior to the commencement of the actual manufacturing phase. This, of course, is necessary if we are to hit the ground running when the actual manufacturing phase begins. 30 n n As a result of the state-of-the-art technology being utilized in our design, we are assured of a considerable amount of free P.R. in the major trade journals. The proper screening and follow-up of the tremendous number of inquiries that always result from such publicity should result in additional early business. By the time the manufacturing phase begins, the V.P. - Marketing and V.P. - Application Engineering will be on board and available to assist in the customer contact. The country will be divided into five (5) regions, and by the beginning of the second year of Phase II, we project to have three (3) direct sales engineers on board. The number of sales engineers will increase in an orderly and projected fashion until we reach our full projection of twenty-seven (27) in the ninth year. (See Projected Sales & Market Share). The following "Sales Engineer's Projection, Quota, and Compensa- tion Plan" is the model that has been developed against which progress will be measured and compensation will be awarded. Certain explanations are in order to make this projection clear and understandable. First, in order for a sales engineer to properly budget his time, he must attach projected sales dollars to each customer or pros- pect with whom he expects to do business. He then allocates his time accordingly. We have arbitrarily set up A Accounts = $100,000 per year, B Accounts = $50,000 per year, and C Accounts = $25,000 per year. Anyone with a potential of less than $25,000 is not worth calling upon. It should be understood that no territory will follow this projection in its exact form. It is intended as an attainable yardstick. For instance, if you have one account doing $150,000 per year, that is equal to one (1) A Account and one (1) B Account. If you are short one (1) A Account to meet budget, you will need to make up for it with either two (2) B Accounts or four (4) C Accounts or some combination thereof. The idea is to produce the bottom line and maintain the proper ratio of time allocation to gross sales. 31 The compensation works as follows: All new sales engineers start at a base salary of $35,000. They are given an expense account budget which if exceeded, will raise some large red flags. Quotas are set to be exceeded. The model calls for the quota to be exceeded each year, although in reality some may exceed them by wider margins while others may fail to meet them. Continued failure to meet quota will be reason for dismissal. A bonus of 0.5% of the quota will be paid for meeting quota. An additional commission of 2.0% of all sales exceeding quota will be paid. Bonuses and commissions will be calculated and paid quarterly. The following year base salary will be the sum of the previous year salary and bonus. Obviously, if there is no bonus, then the base salary would remain the same. ,.� As can be seen, a sales engineer that stays on track will start out costing about 9.0% in the first year and work that percentage down to about 5.0% in the fourth year, where it will hover for the remainder of the projection. Obviously, the greater one is able to exceed his quota, the lower his total cost will be as a percentage of sales. 32 A � 8�85888cn� 4-k 44 f9 1 , Ln a cn a8"8aC4a80 g4 ' O O �.(,8 0Q i 'ria-} .y % 4+ �O H "r } 0000$0000In NLn 6NN C4OuO1S�N111 �. 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PROJECTED SALES & MARKET SHARE Following is the "Projected Income & Marketing Expenses By Region" portion of our financial projection. This projection is based upon the "Sales Engineer's Projection, Quota, & Compensation Plan" from the previous section and the judicious addition of sales engineers over a period of time that will allow for the proper training and support of these people while at the same time providing a rate of growth that can econo- mically be supported. As stated earlier under Market Size & Trends, of the $2.547 billion market estimated for 1990 by Frost & Sullivan, Power Dynamics will participate with products (AC & DC Three -Phase Input) that represent $1.619 billion of this total. Based upon Power Dynamics' "Projected Income & Marketing Expenses By Region", 1990 will represent the fifth year of this projec- tion. Fifth year gross sales projections of $14,000,000 repre- sent less than 1.0% (0.889%) of the $1.619 billion in which we will participate. 33 4. PRICING: Price levels will be established based upon a combination of two factors: 1. Minimum acceptable gross profit levels 2. Competitive price levels With the aid of computers, it is possible to monitor both on a timely and ongoing basis. The goal is to maximize gross profit. If competitive price levels or product preference allows us to exceed minimum acceptable gross profit levels then we obviously have no problem. If, on the other hand, competitive price levels become so depressed that we cannot compete in certain areas at minimum acceptable gross profit levels, then we do have a problem. We must either find ways to reduce costs so that the acceptable n gross profit level can be obtained, or pass up the business. n There may, of course, be occasions when it would be justifiable to violate the minimum gross profit levels. This generally falls into the category of buying oneself in a situation that could prove profitable down the road. This very definitely involves betting on the come, and should be considered very carefully. Very often, instead of buying a so-called future bonanza, you simply establish a low -ball pricing reputation or, even worse, start a price war. It has been an industry practice for many years to establish different pricing levels for different classifications of customers, such as OEM, User, or Distributor. It has also been the practice to completely violate these price schedules in competitive situations. It seems more appropriate to establish discounts based upon quantity, which also provides some real opportunities for cost savings. These discounts will be based upon either single order 34 volume discounts or written annual purchase agreements. The idea is to offer discounts in direct proportion to cost savings; however, the OEM usually still ends up with the preferred price since he usually buys in much larger quantities over a given year than does the user. On occasion, some large industrial users buy as much or more than many OEM's and well deserve the preferred price. This pricing policy must be flexible enough to take into con- sideration the engineering assistance that is going to be re- quired weighed against the volume of business. It is not diffi- cult to factor this into the cost before discounts are applied. Terms of 2%, ten (10) days, net thirty (30) days will be standard n with the 2% built into the cost. Interest of 1-1/2% per month will be assessed on invoices outstanding beyond thirty (30) days. Progress -payments can and will be required on larger jobs, typically $50,000 or greater. Cash in advance or COD will be required for anyone without established credit. The goal is to keep average aging of accounts receiveables in the neighborhood of forty-five (45) days, but in no event to exceed sixty (60) days. (See Appendix 9 - Standard Terms & Conditions). n Our financial projection has taken into consideration that it is not reasonable to expect the same profit margin on buy-out items such as motors and transformers for which we provide no value added as on product produced. Total gross sales has been broken down into manufactured product sales and buy-out product sales. We have estimated the cost of buy-out products to be 65% of their portion of gross sales. This has a significant effect upon overall gross sales but is•the only realistic way to approach such a projection. Therefore, we have projected a considerably smaller profit margin in buy-out product sales than we have in manufactured product sales. We have developed over a considerable period of time, based upon years of experience, a very comprehensive quotation format. We have incorporated this format into our Wordstar word process- ing system which allows us to produce an impressive and compre- hensive quotation with minimal effort. 35 n 5. ADVERTISING, PUBLIC RELATIONS, & PROMOTION Although we have budgeted for significant advertising and pro- motional expenditures, we feel that the state-of-the-art nature of our product line will warrant initial and ongoing press re- leases in the various trade journals as well as such business media as Forbes, Wall Street Journal, and California Business. Our early advertising budget will be spent primarily on price books, brochures, and technical manuals. We will publish a sales and specification brochure for each product in the line. Later, when the product line has become sufficiently broad, we will produce a multi -page product line brochure. In addition, we feel that it is extremely important to produce industry related bro- chures stressing benefits rather than features. Pricing informa- tion for customer consumption is generally not nearly as impor- tant as technical data. Our emphasis will be to produce good quality technical manuals and to avoid for as long as possible publishing pricing information except for internal consumption, which will be part of a computer program. Trade journal advertising will be a part of the advertising budget and will grow as the budget grows. These advertisements will promote high tech accomplishments and customer benefits. These ads will be concentrated in Design News, and publications related to our target industries. Participation in selected trade shows are also a part of our long range advertising and promotion budget. However, the high cost of such endeavors will preclude participating in such events during the early stages of development. We anticipate some selective participation by the third year of the manufacturing phase. Individual participation and management staff in important in developing organizations as well as the various industries. 36 by members of our sales, engineering, trade associations will be extremely rapport with other members of these keeping us abreast of the goings on in n Probably the most unique and ambitious promotional tool we plan to develop is a customized vehicle such as a Winnebago equipped with working demonstrators of our product capabilities. The idea would be to rotate the vehicle from region to region, putting on demonstrations at the prospective customer's facilities. It is also possible that this vehicle could be used in certain trade show situations. If the first demo vehicle proves to be success- ful, we have budgeted to ultimately provide one demo vehicle for each of the five (5) sales regions. 37 n 6. SERVICE & WARRANTY POLICIES Standard Terms & Conditions (See Appendix 9) warrants our products against defects in workmanship and materials for a period of one (1) year from date of shipment. Under certain circumstances, this can be extended to eighteen (18) months from shipment or twelve (12) months from startup, whichever occurs first. It is an industry standard to provide warranty repairs F.O.B. supplying drive manufacturer's factory. This is totally impractical in most cases, but since a large percentage of so— called warranty service requests turn out to be externally caused failures, the policy seems to be necessary in order to avoid constantly giving away field service. Where a service technician is actually required to travel to the job site, Power Dynamics requests a purchase order in advance. If the problem turns out to be covered by warranty, then the customer will be charged only for travel and subsistance expenses as incurred. Otherwise, the customer will be billed for the full service call. We feel, however, that we have developed a far superior solution to service problems. Our digital analyzer fully monitors every critical point in the drive, including all inputs and outputs. Furthermore, the analyzer retains this information in battery backed ram so that in case power is lost either due to a fault trip on the drive or for any other reason, a status history is maintained by the analyzer. The analyzer is connected via an RS232 port to a modem. When the customer buys the digital analyzer (an option), he is given an access code which is good for the term of the warranty. Whenever he has a drive failure or for any other reason, he can access our diagnostics computer, connect directly to the digital analyzer via the modem for an indepth diagnostics report on the drive and instructions for performing corrective measures. In at least 90% of the cases, this should completely eliminate the necessity of having to send a field service technician. However, to be truly effective, it will be necessary for the customer to stock certain spare parts, which is normal. After the warranty period if over, the customer may renew this service for an annual fee. 38 c >4MLn9MoOQuo) 0O6o46o46o4 uo16o4pO00oC4 609V0}604 M Ln0m0 o604604 V0iLn44)- po6O4 409- Mulvo1 OulMOOQUol OoVo9-41*000cWinON0NvC4 V) 110%0000NL1O 11 Nut �n0�000Nv1 .rQ.-�. 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C.� UNNNNN JC.p MMMMMM�U U�7 .1 �7 �7 �7� w� Z W Z r£ H � Z z = V1 V1 V1 Vl W W z v >.Wc�c�UUUU > wc�c�c�c�c�c� >.Wc�c�c UU4c �a.zic�c�c�c�c�a¢cnm mw Z Z Z Z z 2 Z a Z Z Z Z Z Z a Z Z Z Z Z Z Z a Z Z Z Z Z Z a Z Z Z Z Z w rn W o[[¢rrNw w w w w w N O FCtz££o7w w w w w M o H w w w w W w p w w w w w M o cnw w w w W Q Q Q Z hcn-r G: W WWWWWZfN-r a E•WWWWWZHaFW co W W W W=" &HwW W W WZr�-ia WWWWWF&`� : >. L) a¢¢a¢��-,wa��.w>>N.a¢a¢¢a��iuoo j>..¢¢¢¢¢"HCW>..¢c -C¢c °" conn; wwr�rncncncncncncncnwacncncncocncncn�acncncncncncncncnWcav�cncncnrncnm ocncncncncncnM0400 QO F. OPERATIONS I. LOCATION Although the entire management team presently resides in the San Francisco Bay Area, we have unanimously concluded that it would be difficult if not impossible to implement and conduct a manu- facturing operation in this area at this time. The reasons for this decision are numerous, but they all have to do with the extremely high cost of living. We have researched and found several geographical areas which offer an economic climate extremely favorable to such an endeavor while at the same time providing a high quality of life potential to attract talented key personnel. In addition, the areas offer a favorable labor market with a high work ethic and economic development agencies with both the willingness and where -with -all to provide economic and various other forms of assistance and expertise absolutely essential to the success of such an endeavor. Specifically, the two areas that have been thoroughly investi- gated are Boise, Idaho and Redding, California. Both areas will fill all of the criteria mentioned above. For several reasons, our current preference is Meridian, a suburb of Boise. The advantages as we see them are as follows: First, as a matter of economic necessity, the availability of a working capital loan at reasonable terms through the City of Meridian is of paramount importance. We are told that the city fathers are genuinely enthusiastic about bringing our operation to their community. We feel that a friendly and cooperative community attitude is extremely important to our potential for success. Second, there is a large potential labor pool that is known to have a high work ethic. Competitive hourly rates are consistant or possibly slightly below national averages. 39 Third, land and improvements are reasonably priced, and fixed assets financing is available under favorable terms. There are also several disadvantages. By moving out of northern California, we would not be able to fulfill our commitment of representation specifically in northern California. This will reduce somewhat the amount of income available to us during the startup phase. We hope to compensate for this in large part by being able to solicit systems work over a broader geographical area. The two other disadvantages involve somewhat less convenient air travel connections to various parts of the country and less availability of neighboring electronic suppliers. We do not feel that either of these are maior inhibiting factors. ^ Finally, adding it all together, we believe that the advantages far outweigh the disadvantages, and we believe that the Boise area may just turn out to be a very nice place to work and live. 40 n 2. PLANT & EQUIPMENT The following preliminary drawings indicate the size and layout of a manufacturing facility that will allow us to meet our pro- jected goals. Please note that this plant is designed to be built in three phases. Phase I (blue) consists of 3200 sq. ft. and will serve very adequately during the start-up phase of our business and for a time into the manufacturing phase. Only the offices colored blue will be completed during Phase I, and an overhead door will be in place at the location that will later provide access to Phase II and III. This building will serve very nicely to con- duct sales, R&D, engineering, and limited manufacturing. Phase II will be constructed in concert with growth. According to projections this phase should be constructed during the first year of our manufacturing phase. Phase II (yellow) will cover 30,000 sq. ft.; however, the office portion of this phase, which is 30' x 150', is two levels, resulting in a total utilization of 34,500 sq. ft. At the same time, the offices indicated by yellow will be added to the Phase I section. With the addition of Phase II, we should be able to produce $259000,000 in gross sales before additional space is required. By the time we reach Phase III, a certain level of success will have been accomplished. As can be seen by the area shaded in pink, Phase III will be added to both ends of Phase II. In keeping with practices being adopted by many successful companies around the country, Phase III will include a health club for employees and their families. This consists of a pool, two (2) racquetball courts, an exercise balcony, and a cafeteria area. This area can be served by the same women's and men's restroom facilities (which contain showers) that serve the main plant area. The balance of the portion of Phase III which houses the health club will also provide expanded facilities: the Printed Circuit & Sub -Assembly department and Research & Development. This portion of Phase III, covering an area 42'x 150', is also two (2) levels, thereby utilizing 12,600' sq. ft. 41 QO The main portion of Phase III, covering 22,500 sq. ft. will be utilized for receiving, all inventory, a machine shop, and mechanical assembly and modifications of enclosures and motors. This will free up a great deal of space in Phase II, which becomes the main assembly and test area. Referring to the Cash Flow Analysis portion of our Financial Projection, it can be seen that we have adequately budgeted for the above facilities. We have also budgeted for manufacturing equipment, office equipment, computers, demonstration vehicles, automobiles, and an airplane. It should be noted that Power Dynamics presently owns at least the bare essentials. We have office furniture, shop and test equipment, an IBM personal computer, and a fair amount of busi- ness and engineering software. However, as we begin to grow, more and better equipment will be required. From the manufacturing end, this is not a business requiring a high capital investment in equipment. Specifically, the big items down the road will be a wave solder machine, a burn -in chamber, and semi -automated parts distribution for the various P.C. stations. A lathe, several drill presses, a laser cutting de- vice, and a large paint spray booth will be required by mechanical. Quality pneumatic, electric, and mechanical hand tools, fixtures, and templates will be utilized in main assembly. The test department will require test motors (various horse- powers, both AC and DC), dynamometers (two sizes), scopes, meters, and a computer. The normal requirements for office equipment will exist. Good reproduction equipment will be vital. Computers will play a major role from the outset. Marketing, engineering, accounting, production control, and material control will be computerized from day one. The plan is to start with personal computers and later link them up to a main frame. Even the CAD (computer aided design) system can be performed very powerfully on an IBM personal computer and plotter at a fraction of the price of a main frame system. Demonstration vehicles, company automobiles, and a company air- plane will be made available as the budget allows. 42 lu I ell 7 1 71 t I � � i I lY K 3. MANUFACTURING PROCESS It is easiest to understand the flow by referring to page 2 - All Phases - Preliminary Floor Plan of the plant drawing under 2. Plant & Equipment. It all starts with an order. When an order is received it is reviewed by the VP - Marketing and entered into the computer where profit potential is calculated. If acceptable, it goes to application engineering for review and any engineering that is required. Design is completed with the aid of the CAD system. Preliminary drawings and a bill of materials is generated. This package goes to Production & Material Control for ordering or requisition from stock of materials. It may be necessary to requisition directly from the Printed Circuit & Sub -Assemblies department_ if the items are not in stock. Ideally, for most efficient operation, this department should operate autonomous from the main assembly floor, building its products for stock later to be used in specific jobs. This department will have its own test and quality assurance personnel. All printed circuit cards will be "burned -in" in a chamber capable of cycling temperatures to insure against infant mortality failures in the field. Getting back to the main flow, once adequate parts have been accumulated, they are kitted in the stock area and assigned for layout and assembly. Actually, at this point, two different operations begin to take place at the same time. The back panels or sub -panels and the parts to be assembled thereon, go to the Panel Layout & Mechanical Assembly area for layout and assembly. At the same time, the enclosure is cut and punched and heatsinks and operator devices are assembled into it in the Enclosure Assembly area. In this same area, any required motor modifica- tions, such as assembling encoders or tachometers, coupling to gear reducers, etc. is accomplished. 43 n The enclosures and sub -panels meet up in final assembly, where the sub -panels are mounted into the enclosures and interwiring is completed. From final assembly, the completed job goes to quality assurance for a thorough inspection of the work accomplished and to make sure that the full intent of the order has been satisfied. The quality assurance personnel will visit the other departments so that numerous inspections are made throughout the process, with the thought in mind of catching any errors early on. From quality assurance, the job goes to final test, where the equipment is fired up for the first time and put through a com- puterized test sequence, insuring its readiness for shipment. Finally, the job is painted, crated, and prepared for shipment. Quality Assurance will inspect one 'Last time, this time making sure that complete documentation is included and in order. 44 ,^ 4. LABOR Good quality employees with a strong work ethic are the key to success. Moving to an area with a reasonable abundance of such people is a start. Maintaining the high work ethic and avoiding union organization is the goal and responsibility of management. This responsi- bility cannot be taken lightly, since it's successful accomplish- ment could well mean the difference between the success or failure of the business. With this in mind, we have developed an employee relation phil- osophy which we believe will serve to everyone's best interest. First, we believe in promotion from within wherever possible. With this in mind, we willwork out a joint program with Boise State University which would allow employees to start out on the production floor in one of a variety of positions while also taking courses in electronics and computer sciences at the col- lege. This would allow these ambitious young employees to work their way up through test and field service into engineering, R&D, sales, or even management. As the company grows, there is really very few limitations as to where a bright and resourceful person can go. Next, there will be an incentive program for every employee. By establishing standards throughout the plant, employees that im- prove upon these standards will be awarded bonuses. An overall profit sharing plan will be included in this incentive plan. Third, a generous package of fringe benefits, which will grow as the company prospers, will be provided. Hospitalization, dental insurance, and life insurance will be included in the basic package. Vacation and sick leave will be scaled based upon length of employment. As the business grows, other benefits will be added. As can be seen in the plant drawings, Phase III includes an employee health club. A recreational facility at Sun Valley might also be con- sidered. Family picnics and Christmas parties will be sponsored by the company. 45 Finally, a strong effort to maintain open communication between management and employees will be put forth at all times. Such a rapport should prove extremely valuable in healing wounds, either real or imagined, before they begin to fester. As to the skill levels required, there are no mass assembly positions requiring totally unskilled labor. Even the entry level assembly positions will require a certain amount of train- ing and experience. There is the necessity to be able to read schematics, learn color -coding, and be able to effectively handle a wide variety of hand tools. A fairly high proportion of our employees will require consider- able technical capabilities. These will include electronics engineers and technicians, software designers, and experienced applications engineers. As a result, not all of these positions can be filled through home grown efforts. For the same reasons that we believe that our employee relations policies will be effective in keeping employees productive and satisfied, we also feel that these policies will be influential in attracting key individuals from other areas. In addition to the five (S) man management team, we have earmark- ed approximately ten (10) additional employees that we would like to move into the area. These include an AC variable frequency designer, a design draftsman, two (2) electronics technicians, a software designer, an experienced printed circuit assembler, an experienced all around shop employee, secretary, and sales en- gineer trainee. The following is an estimate of our local labor requirements throughout the ten year projection. 46 # # # t-+z� Ln, Ln, O�-T0p YdOTCN k#C * #k Ln # # # # # # # # r,MM MCl) cn IT � •-iM # # -IT V1 Q`# # # ag }i�OONN000 nN # nO00 # ^~�# -r 0000 7.r 1000 # 10O�o# # F > 409- d}409. 64 69 N ~ # M 00 # Ln V}V} * u'1M(ON �* 69 V)(A ## # # # # OCO^:MM V1 VnO0NLn %0 # # # >+ZN 00- # O �D# k # MSO �O � M �p t0 # r` C9 k # �Z00 MM d00 �7M # V1-+Ic `O# k # ul 69 V} 69 403,61). 59 Vi 6O9 cn x ¢CN M 613. 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O al # # 64 al # �O N N%000 O O V) >4 # C4 V) 0100%0 OO 00 — 0,* l it E � ao CO Cl) ao 4 aP1 O # q # # 4 # N00MN CN —000 # 00M104 # NOONN 000 # 00 M' - +ah # Ya Z all .r .1 .r .Y 01 .7 % # a- 4 C; C; r d O7 O # cl .C; NNNMN NN # �o - r, ap # ^ > 64 64 64 40. 64 60-419. N Zt 10 # MN C14 ON 00 MI7 all # alp # OCO0 0000�00��-+ >-a z10 10 00 N .1 00 #k Hcn ~# # # 0 w # # # # # MI7 I710M 001* # 00—O+# # nI1.YMl- r, It # 00000# F # S.4 NC7 a7 N 0001 # 00 r+# # 1010 N# O # 10 > 644s. V! 64 64 64 10 00 all v¢ 69-49, 6`O4 # # # o* a# z z 0 aAC) a# Prw > z .aw # # # cxUr-r�-rO:c C7 # n:O�# U3 # H¢v[K.Hc7 Fc�-C # zwcz F¢ # a¢a# ¢# ¢wxaoz zv # a # a•r a a== ac v a o � o #a w# �X:cnwEcnx¢UH# .a�H# n u * W H u # I x# m w u ro # # # # # ## cc # z # 000 # # (xo w m H # # vcn# ca CL) 4W' cn# H FC # #a# # F w # x O # W # L1 9z 0 # # W A # #04 = # U # F # N Cl. W# I # # 3 # # HF# # 6 # a m� t# # z# E m a # # x 04 m C # # I W Q # # x E # # # # cn # # # # # z -4 # Oa# co z N # w a # w c # W H # z °c° # # m # # # # H o m z•. xx i w cz # * od u cu 04 w # I U # # 3 a� r # N # # # # °a w a � x � 14 2. KEY MANAGEMENT Power Dynamics has assembled a management team of the highest caliber, compatible and complimentary, and well experienced in the field. The following is a brief description of each indivi- dual, the position and responsibilities that he will assume, and talents and experience he brings into the business. Resumes may be found in the appendix. Lowell R. Hodgkins: President. At 54 years of age, Hodgkins brings over twenty-five (25) years of experience in the power transmission field. During the last fifteen (15) years, Lowell has been directly involved with engineered drive systems involv- ing both AC and DC drives as a sales engineer and in various management positions. He holds a B.A. in psychology (North- western University) and an M.B.A. in marketing (University of Chicago). He has lived and worked out of Atlanta, Chicago, Brookfield, CT, n and San Carlos, CA and has travelled the entire country exten- sively. Hodgkins brings to the business an indepth knowledge of potential customers and applications. n. As president, he will have the ultimate responsibility for all phases of the operation. His style is to surround himself with competent managers and delegate authority commensurate with re- sponsibility. His major tasks will be to set goals and guide- lines and then monitor progress. He will also be available to lend assistance to his various managers where his experience and expertise will be beneficial. He will eagerly encourage group discussions, but reserves the right to make the final decision, and assumes full responsibility for such decisions. Richard J. Deep: Vice President - Marketing. Rich is 31 years old and has a solid background, having graduated from the Univer- sity of Maryland with a B.S.E.E. and having completed General Electric's Technical Marketing training program in 1978. He is currently working on his M.B.A. at the University of San Francisco. 47 Rich gained his major experience as it will relate to this posi- tion while employed by General Electric from 1977 until 1983. He gained substantial experience in the application of motors and drives and worked his way up from field sales engineer to Western Regional manager for motors and drives, at which time he was responsible for eleven (11) sales engineers with an annual sales quota of $40,000,000. In his present position with Hewlett Packard (employment since March 1983) as Product Marketing Manager for Bar Code Products, Rich is responsible for total marketing of bar code products worldwide. This includes production forecasts, strategic pric- ing, new product introduction, and competitive analysis. He has been responsible for the introduction of seven new products, three major advertising campaigns, and the development of several major specials on an exclusive basis. Volume has doubled during the first year and is expected to double again this next year. These are the types of tasks that Rich will be performing for Power Dynamics, hopefully with similar results. Rich plans to join Power Dynamics on a full-time basis at the beginning of the Production Phase of our business plan. He will continue to be available for consultation as required during the interim Startup Phase. William L. Erdman: Bill is 32 years old and holds a B.S. degree in engineering science from the University of Wisconsin, a core electrical engineering course, also from Wisconsin, and a M.S.E.E. degree from the University of Santa Clara. His special- ization was in the area of automatic control theory. Bill has extensive application and design engineering experience involving DC variable speed drives, having been with Wer from 1975 to 1980, Marathon Electronics from 1980 - 1983, and consult- ing for Marathon Electric and Power Dynamics during the past year. He is presently working as a systems engineer for N.A.S.A. Ames Research Center. 48 As director of Research & Development, Bill will be responsible for the development of our product line. In this capacity, he has brought to the company a completed digital design that has well over 600 hours of design time already invested in it. He will continue to be responsible for the development of all future products, such as the AC variable frequency drive, and all of the various modifications and improvements that will be forthcoming as time goes by. Brian Shaw: Vice President - Engineering. At age 41, Brian also brings a tremendous background of experience to the company. After ten (10) years in the Air Force (active and Reserve) during which time he completed a forty (40) week electronics course, Briangraduated from the Milwaukee School of Engineering with a B.S.E.E. Prior to his last six years with Crown Zellerbach as Chief Appli- cations Engineer for drives and controls in the packaging divis- e—ON ion, Brian spent approximately ten (10) years with various com- panies in sales and engineering positions involving a wide variety of drives and controls applications. As V.P. - Engineering, Brian will be responsible for all applica- tion engineering prior to construction. In addition to managing his department, Brian will periodically provide field engineering assistance to our field sales and applications engineers. A job for which he is particularly well qualified. We plan to have Brian join our staff full-time at the beginning of the Production Phase of our business plan. James Tolosano: Vice President - Manufacturing. At age 37, Jim brings nearly thirteen years of experience in the manufacturing end of the engineered drive systems business. Virtually all of this experience was gained at Marathon Electronics, previously known as Avtek Systems. During the period from 1972 - 1984, Jim worked his way up from test technician to Manager of Operations. Jim holds an A.A. in Liberal Arts from College of the Siskiyous, Weed, CA and a B.S. in Engineering Sciences from CA State University at San Francisco. As V.P. - Manufacturing, Jim will be responsible for the entire manufacturing aspects of the business, for which he is extremely well qualified. 4q no OPEN POSITION: Vice President - Finance. This is a key manage- ment as yet to be fulfilled, but one we feel to be crucial to the long term success of the business. The successful applicant for this position will have responsibility for the accounting depart- ment and the overall financial well being of the company. We feel that this position should be filled by the beginning of the Production Phase of the business plan. 3. BOARD OF DIRECTORS: The Board of Directors will consist of seven (7) members. Lowell R. Hodgkins will be a permanent member and the initial chairman. Two (2) members from the management will be selected annually by vote of that group. Three (3) members will be selected by the venture capital investors. One of these could be the Vice Presi- dent - Finance, especially if this individual is selected by the investors. The seventh member will be selected by the first six (6) members. 51 n H. GROWTH & DEVELOPMENT SCHEDULE We have previously examined a ten (10) year projection sales fore- cast. This is an ambitious, however not unreasonable schedule to meet. We have also seen plans for adding to our physical plant in several stages. Our funding request (Section J) provides adequate capital to grow as per the projections. As will be seen in the following section, a significant amount of the funding will be utilized in building inven- tory and maintaining a cash reserve to support the projected growth. The following are projected gross sales and calculated cash balances for each of the ten (10) years projected: /0-01 Year Gross Sales % Increase Cash Balance 1 $ 1,500,000 $ 734,453 2 $ 3,200,000 113% $ 275,258 3 4 $ 6,600,000 106% $ 316,552 $ 9,000,000 136% $ 14,814 5 $14,400,000 60% $ 277,874 6 $19,800,000 38% $ 847,131 7 $27,600.000 39% $ 2,419,005 8 $35,500,000 29% $ 5,178,912 9 $43,300,000 22% $ 9,313,567 10 $50,300,000 16% $20,963,920 As can be seen, the company could not adequately fund growth at a more rapid rate through the fourth year. However, if the rate of growth was somewhat slower than projected, then we would cut back on inventory and invest the excess funds until they were needed further down the road. A slower growth rate, obviously, would stretch out the timetable for return on investment. From the fifth year on, funds being accumulated, and either a faster growth rate or outside investments could begin to be considered. 52 We feel the key to success is flexibility. This business plan is exactly that, a business plan against which we will continually monitor and compare actual performance. However, if circumstances dictate that the plan be modified, then modified it will be and then performance will be compared to the modified plan. The key is to have standards to work toward; however, experience tells us that from time to time those standards will have to be changed. Our ability to implement the production phase of our business plan will be extremely dependent upon achieving certain goals during our startup phase. These goals are as follows: 1. Product Development: We expect to have a running prototype within three (3) months after the startup phase commences of our DC drive. On going at the same time will be the final packaging design of the power stage, which could be only minimally effected by any changes deemed necessary as a result of prototype testing. This design should be complete within five (5) months. Finished design of the entire drive is expected within seven (7) months. We will allow two (2) months for art work and prototype production of printed circuit cards. During this same period, documentation should be completed. This completes this design ready for production in nine (9) months. This gives us a three (3) month cushion which can be put to excellent use on complex modifications design, consideration of a non -regenerative version of the drive, and conceptual engineering in preparation for our AC variable frequency design project, earmarked for our first year in the production phase. 2. Marketing Development: In addition to maintaining and increasing income from Power Dynamics on going activities, which has a budgeted gross income of $520,000, there are many marketing related chores to be accomplished during this one year startup phase. The most important of these is •to secure a purchase commitment from several major accounts. One of these has already been informally consummated and several others are in the works. In addition, we expect to receive a number of prototype orders before the startup year is over. Our goal in this respect is to begin the production phase with a minimum of a $500,000 backlog. 53 The next most important chore is to produce some quality sales lit- erature. At least one product spec sheet needs to be available by the end of the sixth month. Pricing should be defined by the ninth month, and at least two (2) industry oriented brochures should be available by the end of the startup phase. Once literature is available and a follow-up system has been imple- mented, we will begin soliciting for press releases in selected industry trade journals. Once these hit the street, a large number of inquiries can be expected. Qualifying and following these leads can be extremely time consuming, so the timing of letting these releases is critical. If we release before we have the man power to handle the response, then we will simply be overwhelmed and not do the job, hence the effort will be wasted. Therefore, we expect that these should be released near the end of the startup period, so that intensive follow-up will not be required until we are in the produc- tion phase, at which time the VP - Marketing and the VP - Engineering will be on board along with several others, and the chore will then n be manageable. Once into the production phase of this business plan, we could prob- ably squeeze up to $2,500,000 out of the 3200 sq. ft. of Phase I of our building plan. The jump into Phase II will be a big one and we will be over capacity (buiding wise) for several years. However, it probably would not be economical to break up the building into more stages. A more reasonable solution might be to rent out a portion of the space for warehousing during those early years. As stated earlier, we feel that we could produce up to $25,000,000 in the combination of Phase I and II. Based upon our projection, we would need Phase III available near the end of the sixth year. 54 n I. CRITICAL RISKS & PROBLEMS The most critical risk is one over which we have absolutely no con- trol: a sharp down -turn in the national economy. Although all the economic forecasters have indicated that we should enjoy possibly the longest period of stable economy in the last quarter century, it is possible that this might not be true. A major recession during the early years of development could be disasterous; however, we feel that we have planned in enough flexibility to handle minor economic swings without real serious problems resulting. Another risk involves designing around micro -chips that might not be readily available at some future time. We have seen in the recent past a case where Intel's 8031 became so popular that they could not keep up with the demand. As a result, they made a decision to satisfy their top nine (9) accounts, which represented 80/ of their business, leaving hundreds of small users with no acceptable source of supply. Many of these small companies were literally forced out of business. The other side of the coin is in choosing a brand new chip that does not catch on and is ultimately discontinued. The safe choice is a well established chip with multiple sources of supplies. In going for this safer haven; however, we may have to pass up on some state-of-the-art features found only on very new unproven chips. A problem for any emerging product line is to get the first units sold, up and running so that you have something to point to. It seems everyone is reticent to be the guinea pig. Fortunately, we have several key accounts who will help us overcome this problem, but there is no doubt that the early orders are going to be the hardest to come by. The loss of any one of our management team would be a serious set- back. In the early stages, our director of R&D is particularly crucial to the product development and our president is essential to holding things together and bringing the product to market. However, we are fortunate that the team members not only compliment one another, but have overlapping backgrounds that would allow us to take up the slack if one member was lost either temporarily or perma- nently. This then means that any such loss would be painful but not terminal. 55 n Finally, as mentioned earlier, along with the advantages of locating in Boise, Idaho, there are also several disadvantages. These are mainly associated with air transportation and convenient sources of supply. Operating out of the Bay Area tends to spoil one in both of these areas. Commercial air travel will be somewhat less convenient because of the necessity to make connections, typically Denver or Salt Lake City. The lack of extremely convenient suppliers can be overcome by careful planning. 56 J. FINANCIAL REQUIREMENTS 1. CURRENT FINANCIAL CONDITION As stated in the beginning, Power Dynamics was started on a shoestring and cash flow has been extremely tight during the 1- 1/2 years since it was purchased from Benkiser Electric. Up until this point, we have managed without the aid of any additional working capital to the modest amount invested by the Hodgkins'. At the present time, although we have a number of attractive orders on the books along with several proposals about to become orders, cash flow is extremely tight and could be inhibiting to being able to fulfill these orders. Our Startup Phase funding request will not only provide the necessary capital to complete product development, but also the cash flow to continue Power Dynamics' present business activities on a current basis, which in turn will help support this startup phase. (See Appendix 10 - Year End Financial Statement - Dated October 31, 1984). 2. FINANCIAL PROJECTIONS On the following pages is our complete Production Phase 10 -year projection. "Projected Income & Marketing Expenses By Region" was included earlier under Projected Sales & Market Share, but is included again here so as to provide continuity in the analysis of this projection. The following comments should aid in analyzing this projection: 1. The breakdown of gross sales has been explained earlier. Our early emphasis will be in Regions 1, 3, & S, where we know specific customers with specific requirements which we feel _ our product and technical experience will be beneficial in fulfilling. As we develop, gross sales will be directly proportional to the size and success of our sales force. 2. The breakdown of the marketing expenses has also been explained earlier. The totals of the "Marketing Expenses By Region reappear as the first item under General & Administrative Expenses. AIM 3. Under "Cost Of Goods Sold", it should be noted that these costs have been calculated as a percentage of either manufac- tured product sales or buy-out product sales, whichever is appropriate; however, the percentages shown in the projection are percentages of total gross sales. For instance buy-out materials are calculated at 65% of buy-out product sales, which shows up on the projection as 22.75% of total gross sales. Similarly, manufacturing materials are calculated at 25% of manufactured product sales, but shows up as 16.25% of total gross sales. This is also true of the manufacturing labor and engineering and drafting labor. 4. Material Control department overhead is figured at 5% of the sum of the purchased items: Freight is figured at 7-1/2% of the sum of the purchased items. 5. Rent is estimated for the Startup Phase and the first year of the Production Phase. Depreciation is based upon capital expenditures shown under "Cash Flow Analysis" and is projected on a straight line basis over the following periods: Item Life Buildings 30 years Mfg - Equipment 15 years Office Equipment 10 years Computers 10 years Demo Vans 5 years Automobiles 3 years Airplane 7 years 6. There are no marketing wages, etc shown during the first year since these chores will be handled by management personnel. 7. Under "General & Administrative Expenses", senior management - expenses are calculated as follows: President - $60,000 + 0.05 (Excess over 30% G.P.) Vice President - $40,000 + 0.035 (Excess over 30% G.P.) Director - R&D - $40,000 + 0.035 (Excess over 30% G.P.) 58 n 8. All other salaries are based upon the high end of a competitive range for starting with an annual 10% increase. 9. All other G & A expenses are based upon a percentage of gross sales as shown. 10. Interest expenses are based upon 12% of capital expenditures balance outstanding. 11. Employee benefits are based upon 17.5% of all salaries. 12. Under "Cash Flow Analysis", capital expenditures are based upon 10% of the estimated cost of the expenditures. Under "Yr Total" is shown the total purchases for that year. After the first year, only the grand total of yearly purchases is shown; however, the cash expenditure is always based upon 10% of the total expenditure. Under "Basis" is showy, the amount. against which depreciation is calculated with the annual depreciation being subtracted from the next year's basis and new purchases being added to the previous year's basis. 13 Investment Tax Credit is based upon 10% of the year's capital expenditures. State & Federal Taxes are calculated at 50% (Net Profit - ITC). Accumulated Taxes carries forward tax credits. 14. Profit after taxes is based upon a compulation which first looks at whether net profit is positive or negative and then at the effect of accumulated tax credits on the effect of cash flow, so that this number can be an actual element in the cash flow calculations. 15. Inventory level is based upon 25% of the estimated total material control expenses for the following year. Constant monitoring of current sales and sales trends will be vital to making reasonably accurate estimates. Inventory build up is the difference between last year's inventory level and this; year's calculated required level. 59 16. Growth reserve is based upon 25% of the estimated total G & A expenses for the following year. Growth reserve buildup is the difference between last year's growth reserve and this year's calculated required level. 17. Interest on excess cash is calculated at 10% of last year's cash balance. 18. Stock market value of Power Dynamics stock is calculated at fifteen (15) times profit after taxes. Return on investment is calculated at ten (10) times capital investment, in this case ten (10) times $1,500,000. Return/Value ratio is simply the expected return divided by the stock market value. 60 3. FUNDING REQUEST After a great deal of consideration, it finally has been decided that this should be a two phase business plan with each phase funded separately. The Startup Phase funding request is for $250,000. This is formally being requested through the Division of Economic & Community Affairs, State of Idaho, who in turn is arranging a grant request through the City of Meridian, Idaho in the form of a loan with reasonable interest and a repayment schedule tailored to our capabilities to repay. These funds will provide the needed capital to complete the development of our DC drive as well as improve cash flow so that we can carry on with our present business activities in a current -manner. A cash flow projection for this phase follows. n The Production Phase, estimated to begin one (1) year after the Startup Phase commences, will require funding in the amount of $1,500,000. We are requesting these funds in the form of an equity investment in return for a portion of stock in the company. The terms are negotiable. In addition to the equity investment of $1,500,000, it will also be necessary to receive a long term commitment through the Divi- sion of Economic & Community Affairs, State of Idaho for 90% financing of capital investments as required in accordance with the business plan. It has recently been brought to light that the developer is willing to provide land and buildings on a lease option basis which would substantially reduce the size of the commitment required, at least during the early stages of the business plan. Although the Production Phase funding is not required immediat.ly, a commitment based upon certain agreed upon criteria being met would be valuable as early as possible. 61 I Power Dynamics Incorporated MOTION CONTROL SPECIALISTS POWER DYNAMICS proudly represents the following quality manufacturers of motion control related products: SAFTRONICS - DC variable speed drives, fractional thru 800 HP. AC solid state starters thru 500 HP. AC variable frequency drives thru 200 HP. GIDDINGS & LEWIS ELECTRONICS - Micro -computer based programmable controllers providing state-of-the-art control for a wide variety of motion control applications from precise position- ing to digital control of up to eight separate motions simul- taneously. WESTAMP - High response DC servo amplifiers for positioning and other precision motion control applications. ANVIC INTERNATIONAL - Solid state regenerative secondary recovery systems for highly energy efficient speed control of wound rotor motors. USE CORPORATION - Radio remote control systems for cranes; con- struction, mining, and firefighting equipment; material handling. In addition, POWER DYNAMICS has the in-house capability to assume full system responsibility for a broad spectrum of motion control appli- cations. As such, we can provide: SYSTEM DESIGN - Electronic and electro -mechanical design and layout, fully documented and ready for construction. SOFTWARE DEVELOPMENT - Complete software programs, utilizing the G&L PC409, for a wide range of motion control appli- cations. HARDWARE DEVELOPMENT - Electronic printed circuit designs where such is not readily available from an established source. ELECTRO -MECHANICAL ASSEMBLY - Layout, assembly, and packaging of components required to provide a complete motion control system. SYSTEM RESPONSIBILITY - Includes all of the above plus the assumption of and warranty. responsibility for system operation, start-up, P.O. Box 1424, San Carlos, California 94070 (415) 591-4390 <�1 SATISFIED CUSTOMERS - RAYCHEM CORPORATION, CENTRAL ENGINEERING - Menlo Park, CA - RAYCHEM CORPORATION, WIRE & CABLE - Redwood City, CA - CROWN ZELLERBACH - San Francisco, CA - EDERER, INC. - Seattle, WA - METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA - Los Angeles, CA - CURRIE MACHINERY - Santa Clara, CA - DAVIS WALKER - San Leandro, CA - U.S. STEEL CORPORATION - Pittsburg, CA - SQUAW VALLEY - Olympic Village, CA - KAISER HASKON - San Leandro, CA - HUNTER ENGINEERING - Riverside, CA - RETECH, INC. - Ukiah, CA - LOCKHEED MISSILES & SPACE COMMUNICATIONS - Sunnyvale, CA - LAWRENCE LIVERMORE LABORATORIES - Livermore, CA - EARLE M. JORGENSEN - Oakland, CA - GEORGE M. MARTIN COMPANY - Emeryville, CA - INTERFAB/BSI - Oakland, CA - WASHINGTON HOSPITAL - Fremont, CA - CARCO ELECTRONICS - Menlo Park, CA - SILTEC CORPORATION - Menlo Park, CA - SHUGART ASSOCIATES - Sunnyvale, CA .400 HITTER - PINOLE, CA APPLICATIONS - AC, DC, & Wound Rotor secondary recovery variable speed drive systems for centrifugal pumps and fans. - Hardware and software development for four -axis robotic palletizer. - Digital phase lock loop drive system for cable braided sheathing line. - Computerized tracking system for weld dressing on rotating pipeline pipe. - DC drive system (bridge, trolley, hoist, auxiliary hoist) for bridge crane handling fuel cells in nuclear power plant. - Retrofit of DC drive system of extruded wire insulating line. - High response DC regenerative drive for payoff on insulated wire inspection line. - Retrofit of DC ski lift drive. - Retrofit of DC drive for wire draw machine. - Application of radio remote control to cranes, locomotives, mining, and construction equipment. - Application of micro -computer based programmable controllers to high-speed multi -section printing presses and winders. - Lubricant spray control system for aluminum foil rolling mill. - Electronic controlled systems for franchise baseball and softball batting cages. - Micro -computer controlled teststand for full range testing of stepper motors. - Micro -computer based systems for material handling and automatic printed circuit board stuffing for the semiconductor industry. RESUME LOWELL R. HODGKINS PERSONAL I am fifty-four (54) years old, in excellent health, and happily married. We have four (4) grown boys who are self-sufficient. EDUCATION After one (1) year of engineering at Drexel Institute of Technology in Philadelphia, my education was interrupted by two (2) years of service in the U.S. Air Force. Ten years and two children later, I picked up my education at nights. I completed my undergraduate work at Northwestern University, majoring in psychology and graduate work in business at the University of Chicago. FXPF.RTry F I entered the power transmission field when I went to work for U.S Electrical Motors in 1957. After completing an indepth six month train- ing program, I spent two (2) years as a Sales Engineer working out of Atlanta, GA. My accomplishments included tripling sales in the terri- tory and selling the first U.S. Varidyne system to the automotive industry. A significantly higher income and a growth opportunity enticed me to join Electra Motors, Inc in 1960. I worked as Southeastern Regional Sales Manager out of Atlanta for 5-1/2 years, and then moved to Chicago to build up an ailing territory and run their sub -assembly facility for an additional two (2) years. The purchase of Electra Motors by Litton Industries provided the major reason for joining The Schrade-Batterson Co., a power transmission manufacturer's representation organization, in 1968. I spent 4-1/2 years building up to a volume of well in excess of $1,000,000 per year and gaining a tremendous education; however, there was absolutely no opportunity for advancement. Among the lines handled were: Reuland Electric (motors, gearmotors) Sterling Electric (motors, mechanical variable speed, gear reducers) Horsburgh & Scott (gear reducers) Allen Bradley (motor controls) Ohio Gear (gear reducers) Cleveland Machine Controls (DC drives) Helland (torque limiting devices) Dings (disc brakes) In 1973, I left the power transmission field briefly to work with my uncle in a real estate development project. My uncle died about six months into the project, and I struggled through, seriously undercapitalized, until the project was complete. Total time involved: 2-1/2 years. I made very little money but gained a tremendous education. In May, 1975, I joined Avtek Systems as Eastern Regional Sales Manager. By the end of 1977 I found myself representing over 75% of the company's business and in deep disagreement with its management philosophies. On January 1, 1977, I became Representative Sales Manager for Burton Industries, Inc. During my 2-1/2 years association, I built up a significant group of agents and personally sold a number of large systems. Unfortunately, we grew at a rate faster than we could produce. After several months of negotiations, I was enticed to return to Avtek Systems in June, 1979, this time as Manager of Marketing. The first year required a major overhauling, which included the development of a completely new rep organization, creating a pricebook and litera- ture, and instilling a marketing oriented philosophy throughout the company. Unfortunately, a new President was installed in April, 1980 whose efforts became totally counter-productive. In spite of this, we experienced a 40% sales increase for 1981. In addition to all my other activities, I personally sold $1,400,000 in drive systems that year. On October 1, 1981, I joined Benkiser Electric as V.P. - Marketing. In addition to managing their sales and marketing efforts, I had the further responsibility to create a new high tech division that would represent various compatible manufacturers of motion control related products. These products would be essentially electronic in nature. In addition, we would develop in-house engineering and production capabili- ties to allow us to provide completely integrated drive and control systems. This was the beginning of Power Dynamic, Inc. In 1983, the course of Benkiser's business changed dramatically and in July, my wife and I purchased 100% of the stock of Power Dynamics. I have added new lines, increased our engineering capabilities, and we are now in the process of developing our own state-of-the-art digital DC drive product line. Hobbies & Interests My personal interests include skiing, sailing, racquetball, hiking with my wife and dog, and creative writing. I am a private pilot with an instrument rating. William L. Erdman 128 Dartmouth #3 San Mateo, CA 94402 Telephone: 415/342-5297 Employment History 11/84 to present: N.A.S.A. Ames Research Center, Mountain View, CA. Systems Engineer in the Systems Branch of the center. Responsibilities include the design of servo systems for simulators and wind tunnel applications. 9/83 to 10/84: Consulting Engineer drive systems. Customers included Electric Corp., and Power Dynamics. in the field of static AC and DC Marathon Electronics Group, Marathon 4/80 to 9/83: Marathon Electronics Group. Held positions including Senior Application Engineer, Manager of Research and Development and as a Test Engineer. Responsibilities included design of power converters for static AC and DC motor applications in paper, steel, plastics, and wastewater treatment industries. 1/75 to 4/80: WER Industrial Div. of Emerson Electric Corp. Field Service and Field Sales Engineer in the Chicago area. Responsibilities included specifying and startup of multi -motor drive systems in the steel, paper, plastics, metal converting and machine tool industries. Education 1/81 to 7/84: University of Santa Clara. M.S.E.E. Degree. Specialization in the area of automatic control theory. 9/78 to 9/79: University of Wisconsin - Madison. Complete core electrical engineering course while on leave from Emerson Electric. 9/70 to 12/74: University of Wisconsin - Parkside. B.S. Degree in engineering science. Publications "Dynamic Braking of DC Machines: A Mathematical Approach", IEEE Transactions on Industrial Applications, May/June 1983. "Quadrature Detection Transforms F -V Converter To Bipolar Device", Electronic Design, February 4, 1982. Personal Born: 9/25/52 Married since 8/74 RESUME OF: Richard J. Deep 1993 Farndon Ave Los Altos, CA. 94022 EDUCATION: Graduated in 1976 from the University of Maryland, College Park, MD with a BS degree in Electrical Engineering. Completed General Electric training program in Technical Marketing in 1978. Currently working on an MBA from the University of San Francisco. EXPERIENCE• Worked as a design engineer for Value Engineering Co., Alexandria, June, 1976- VA. Responsible for the design and testing of various electronic Jan., 1977 circuit designs. Projects included devices for the United States Army, the U.S. Navy and the Central Intelligence Agency. Employeed by the General Electric Co. Worked in a variety of sales and marketing jobs, each with progressively more respon- sibility. Graduated from the Technical Marketing Program in June of 1978. Worked as a Field Sales Engineer in Los Angeles, respon- sible for the a one million dollar sales quota in industrial Jan., 1977- motors and drives. In 1978, I was transferred to Schenectady, NY Mar., 1983 where I was a marketing engineer in the Large Motor and Generator plant. There I was responsible for the marketing of five million dollars worth of equipment throughout the United States. In 1979, I returned to the West Coast as a Sales Engineer in San Francisco. My sales quota at that time was $1.5 million in industrial drives, motors, and controls. In 1981, I was promoted to Motor and Drives manager for the Western Region. I was responsible for $40 million in quota from eleven sales engineers throughout the Western U.S. Emp loyeed by Hewlett-Packard Co., Palo Alto, CA as a Regional Sales Engineer for the Optoelectronics Division. Responsible for the sales and support of optoelectronic equipment to world- wide salesforce. In November of 1983, I joined a newly formed Mar. 1983- Bar Code Products Program as a Product Marketing Manager. In Present this new role, I an. responsible for the total marketing of bar code products worldwide. This includes production forecasts, strategic pricing, new product introduction and competitive analysis. Current line volume is greater than $12 million. In the past year, i have been responsible for the introduction of seven new products, three major advertising campaigns, and the development of several major customer specials on an exclusive basis. The volume on the product line has doubled during the first year, and is projected to double again this year. HOBBIES: I enjoy tennis, bicycling and skiing. I am active and in excellent health. n POSITION PLAN Objective: The objective of the product marketing position is to provide overall guideance for positioning products in the worldwide marketplace and to generate profitable orders for the division. Major Areas of Responsibility: - To generate profitable orders which are consistent with the order and ASP targets. - To position existing products in the worldwide market- place so as to make them desirable and saleable. - To determine a pricing strategy which is consistent with point 1 and 2 above. To define new products needs in the marketplace and to work with R&D and Manufacturing to develop these products. Manage all aspects of new product introductions in- cluding market strategy, product strategy, pricing strategy, technical literature, demo plan, promotion plan, distributor stocking, field training, and distributor training, and specials policy. - To track accurately and completely the products of our competitors. - To provide accurate and timely shipment demand fore- casts to Marketing and Manufacturing. - Provide forecasts required for intermediate range planning, targeting, reforecasting, and 6 month shipment demand in a timely fashion. - Publish frequent CML articles to inform and motivate the sales force. Develop the HP Internal market for bar code products. Performance Measures: 1. ASP and volume performance by quarter and fiscal year. 7. Insure all scanner (of a type we make) used by HP divisions are BCPs. 8.. 'Visit major accounts at least twice a year. n Quarter K$ Product ASP 1 1473 Wand - Open Tip $ 44.02 2 1829 Wand - Sld Tip 74.50 3 1847 Wand - Metal 101.07 4 1878 Chip 155.49 FY184 7027 Sensor 15.76 2. Introduction of new products in accordance with agreed upon schedules and in a quality manner. 3. Market investigations for new products in accordance with agreed upon schedules and including YHP and CMO involvement. 4. Provide required forecasts by the PME deadline. 5. Complete SDF by the 13th of each month. 6. Publish at least one CML article per month. 7. Insure all scanner (of a type we make) used by HP divisions are BCPs. 8.. 'Visit major accounts at least twice a year. n JAMES L. TOLOSANO 603 Vanessa Drive San Mateo, CA 94402 (415) 574-3532 EMPLOYMENT 1984 - Present: Artwel Electronics, Inc. Position: Sales Manager 1972 - 1984: Marathon Electronics/Avtek Systems Position: Increasingly responsible positions including Manager of Operations, Manager of Manufacturing Engineering, Manager of Manufacturing, Production Superintendent, Quality Assurance Manager, Test Supervisor, Field Service Engineer and Test Technician. 1971 - 1972: Russell Enterprises Position: Operations Manager EDUCATION 1967-1970 California State University at San Francisco B.S. Engineering Sciences 1965-1967 College of the Siskiyous - Weed, CA A.A. Liberal Arts Other: College of San Mateo - Courses in Horticulture and Business. Professional Seminars in manufacturing productivity, customer contact skills, product liability, safety and maintaining non-union status. PERSONAL Born: August 26, 1947 - Weed, CA Height: 516" Weight: 135 lbs. Married: Wife, Executive Secretary Health: Excellent, no physical limitations Hobbies: Horticulture, photography, carpentry, reading, weight training. EMPLOYMENT 2/84 - Present: Artwel Electronics, Inc. Burlingame, CA Position: Sales Manager Perform sales and engineering duties in a manufacturer's representative organization. Principals include McGraw -Edison Power Systems Division, Mitsubishi Electric (programmable controllers and inverters), Pepperl & Fuchs (proximity switches and intrinsically safe systems), Phasetronics (SCR power controllers), Thermal Associates (power electronics heat transfer products), Noratronics (syrvo and stepper motors), Tech Tran (special transformers) and Power Semiconductor Inc. (SCR's, diodes, D.C. drives and A.C. motor starters). 1972 - 1984: Marathon Electronics/Avtek Systems Burlingame, CA Marathon Electronics is a manufacturer of solid state industrial control systems. Their primary products are custom engineered and manufactured A.C. and D.C. variable speed motor drive systems from 1 to 2000 horsepower. The company's annual sales volume was three to five million dollars. The applications of these systems were in diverse areas including large municipal pumping, process controls for plastics, paper and wood, people moving, material handling, mining, ship propulsion, and fans. 9/81 - 1/84: MANAGER OF OPERATIONS Successfully managed the areas of Material Control, Purchasing, Quality Assurance, Manufacturing, Manufacturing Engineering, Facilities, and Safety. Prepared and controlled budgets for all the above areas. Formu- lated and implemented the master schedule. Handled all steps of union grievances and contract negotiations. Survived a work stoppage and conduct- ed a successful decertification campaign. Shipped the largest volume in the company's history at the highest G.P. level. Successfully reduced material costs through good vendor relations, vendor contract negotiations and researching new sources. Reduced the inventory by 35% and increased its accuracy. 2/80 - 9/81: MANAGER OF MANUFACTURING ENGINEERING Initiated the implementation of a new series of motor drives with a strong emphasis on working with the Research and Development Group to ensure manufacturability and cost improvements. Designed new work stations, plant layout and documentation for the new products. Directed the cost reduction committee and the implementation of cost reduction projects which reduced annualized costs by 6.5% of the gross sales volume in one year. Performed all the functions in industrial engineering. n 9/76 - 2/80: MANAGER OF MANUFACTURING Managed all of the manufacturing areas which included printed circuit board, sub-ssembly and wire harness assembly, painting, epoxy heatsink construction, welding and sheet metal fabrication, wiring and final assembly. Administered union matters. Assisted in the installation of a computerized inventory and accounting system. 8/75 - 9/76: PRODUCTION SUPERINTENDENT Supervised the union foremen in the wiring and main assembly area, paint shop and sheet metal shop. Controlled delivery performance, productivity, safety, quality, and scheduling including manpower and machine loading. Participated in union negotiations and answered first step grievances. 8/74 - 8/75: QUALITY ASSURANCE MANAGER Managed the Quality Assurance, Test and Service Departments. Wrote a Quality Control Manual and Workmanship Standards. Very successful in motivating the workers to think quality. Set up systems to monitor reli- ability and provide feedback on customer field problems. Set up the first authorized service shops which eventually were to lead to great reductions in service and warranty costs while supplying a greater degree of service to our customers. 3/73 - 8/74: TEST SUPERVISOR First line supervisor of ten test technicians. Assisted with troubleshoot- ing. Designed and set up new test stations, power distribution, large test stands and motor/generator sets to 1000 horsepower. Carried out recruiting and hiring duties. 10/72 - 3/73: FIELD ENGINEER Performed start-up and service work on electrical drive systems including ski lifts, saw mill equipment, missile handling cranes and pump controls. Performed engineering modifications and troubleshooting on the systems as well as to the component level. 7/72 - 10/72: TEST TECHNICIAN Performed production testing of printed circuit boards to the component level, sub -assemblies, SCRs and to a variety of custom engineered systems. 6/71 - 7/72: Russell Enterprises San Francisco, CA Managed a retail outlet and the manufacturing aspects of a tailor-made clothing operation. Supervised six employees. DELIVERY The shipping dates given by the Company are approximate and are based on prompt receipt of all necessary information regarding the order. The Company uses its best efforts to meet all shipping schedules but cannot be held responsible for its failure to do so for causes beyond reasonable control. The Canpany shall not be liable for any lass or damage resulting fran delay in delivery. Shipments which are deferred by the Buyer are stored at the Buyer's risk and expense and the Canpany will invoice the Buyer on standard terns for full purchase price of the equipment on the date on which the items are ready for normal shipment. CANCEUATICN Suspension or cancellation of any order may be mane by the Buyer only upon written approval of an authorized officer Of the Canpary. If the order is cancelled by the Buyer, the Buyer shall pay to the Canpany the reasonable casts and expenses including engineering and all commitments to suppliers and subcontractors, incurred by the Company prior to receipt of notice of such cancellation. Cancellation of the order for the convenience of the Canny does not result in a charge to the Buyer, but cancella- tion by the Canpany caused by deleterious action or lack of required action by the Buyer is considered and handled as a cancellation by the Buyer and subject to the sane charges. PACKAGM AND PACKING Standard commercial packing as utilized by the Company for domestic shipments is provided at no charge to the Buyer. ANY charges or deviation from standard packing and handling is subject to extra charge which is added to the customer invoice. Extra chars for special packing are based on the extra casts to the Company. MRIENIS AND TRANSPORTATION All equipment is shipped F.O.B. Shipping Point. Shiprnsnts of equipment purchased by the Company for resale to the Buyer when shipped direct frcrn factories are shipped in accordance with that manufacturer's standard terms of shipment. All Sales are made F.O.B. Shipping Point. Title to equipment passes at place and time of shipment. Me Customer makes all clauns against Line carrier for shortages or damages in transit. All published weights are approximate. UIDErTJTTTTY AGA= E7RUMM AND CrdER SUITS Orders for equipment, whole or part, to the Buyer's specifications and/or designs are manufactured with the express understanding that the Buyer warrants and fees: That the equipment as required does not infringe upon any United States patent, design, copyright, trade secret, or trademark of any third party. To defend, indemnify, and hold harmless, the Company, its successors and assigns, against any loss, liability cost or expanse resulting frau the action of any third party relations to infru*pment of any of the previously mentioned alleged rights or privileges of that third party, resulting fran the manufacture and shipment of the equipment. RETURNED OOCDS Goods sold hereunder may not be returned unless accompanied by an executed "Material Return Authorization" issued only by the Canpany, at its option. LU= WARRANTY AND LIMITATICN OF FEE DY All new equipment is warranted free of defects in material or woriananship and to conform to applicable dra4irW and specifications approved by the Canpany for a period of twelve months from the date of shipment. Within the warranty period, the Company will repair or replace, F.O.B. Shipping Point, the components or the complete equipment. -All claims must be in writing to the Canpany. The Company shall in no way, be liable for (a) damages in shipment (b) failures or damages due to misuse, abuse, improper installation or abnormal conditions of temperature, dirt or corrosives (c) failures due to operation, intentional or otherwise, above rated capacities (d) non -authorized expenses for removal, inspection, transportation, repair or rework and (e) consequential damages. There is no further warranty, either express or implied and the Company's liability shall in no event exceed the cast of correcting defects in the equipment. The forgP'nng replacement or repair is the exclusive remedy available fran the Company should any of the Campany's Products prove defective, the Canpany is not liable for damage of any type whatsoever, including incidental and consequential dames. No warranty of merchantability or fitness of purpose shall apply. '• 1.91' I � 1N 1 r --MAT. TEIM quotations, orders, order ackrmledganents, and prYsnises are subject to the Canpany's Standard Terms and Con- diticns of Sale and can be changed only by a written authorization frau the President of the Canpany or his authorized delegate at the Car)any's principal office in Belmont, California. Failure of the Company to object to provisions in conflict with standard terms and conditions whether or not con- tained in the Buyer's Purchase Order, shall not be constnied as a waiver of standard terms or as an acceptance thereof. NO STATd1M, REPRESENTATION OR WARRANTY NOT CONTAINED IN THE STANDARD TERMS, CONDITIONS, CURRENT PRICE LMS AND ALTTHO = WRITTEN QUCITATIONS SHALL BE BINDING UPON THE COMPANY UNLESS MADE IN WRMM BY AN OFFICER OF THE COMPANY. While the Canpany strives for accuracy in catalogs and data sheets for construction purposes, only certified draengs of the Company as accepted in writing by the Buyerwill be considered as guarnntee of dimensions, layouts, and configuration. All published specifications are subject to change without notice. Performance expectations and guarantees will be made by the Canpany only upon specific written request accompanied by complete requirements and operating data of the proposed installation. Typographical and clerical errors in quotations and orders are subject to correction. PURL LIMM PRICES AND QUCJTATIQSS Prices shown on published price lists are not offers to sell a specific product and are subject to confirmation with a specific quotation and acceptance of subsequent Buyer order. All published prices and discounts are subject to change without notice. All orders are subject to the price in effect at the time of shipment. Specifically: a) Orders placed by the Buyer for irmiediate shipment at the convenience of the CaWany are not subject to price increase. A Iters included in order placed but scheduled for future shipment by the Customer will be subject to an escalation of 1% per month until the release date. c) Items included in orders placed but not scheduled for release by the Buyer are subject to an increase not to exceed 6% each time the Company raises published prices. Unless otherwise specified, all written quotations are subject to change upon written notice to the Buyer and are void after thirty (30) days. A verbal quotation unless confirmed in writing within twenty-four hours is valid only for forty-eight hours after it is made. ORDERS All orders are accepted by the company only at its principal office in Belmont, California, and only by an authorized delegate of the President. No other persons or representatives are authorized to accept orders. TAXES The Canpany's prices do not include applicable sales, use, excise or similar taxes, and the ama nt of any such tax will be added to each invoice unless the Buyer has furnished the Company with an exemption certificate acceptable to the Company's taxing authorities. PAYMM TERMS Where credit has been approved, terms on all shipments are 2°A ten (10) days, net cash thirty (30) days fran date of shipments as indicated on the Company's invoice. Under conditions wherein the Company determines that financial prudence indicates such action, the Company may requim full or partial payment in advance before manufacture and/or shipment. Interest will be charged at the rate of 11% per month on invoices outstanding over thirty (30) days. For partial shipments, pro rata payments are due as shipments are made. n+ *he Company's discretion and where specified as a part of a written quotation, progress payments may be required. terms and conditions of such progress payments may vary fran project to project as specified in the written quotat M NIPM BIULW C[WM Buyer orders in any category for materials whose net price is less than $25.00 are entered for the minimum billing charge of $25.00 in each case. The Buyer is notified of the minimm billing charge prior to shipment. HUB OF TREASURE VALLEY A Good Place to Live °RM"ALSCITY OF MERIDIAN COUNCILMEN LL BREWER JACK NIEMANN. CK1r Pt+ Mt ALD A.TOLSMA RON A. M. KIEBERT, Trnwreir RICHARD O.NWMOL&CNWotPella 728 Meridian Street J. E. BERT MYERS ROBERTGIESLER BRUCE D. STUART, Welt W0lh9. 311101. MERID N. IDAHO WAYNE G. CROOKSTON, JR--AttaTM AB 808 SPENCER EARL WARD. WOW WSW IIIUK Chairman Zoning 6 Planning KENNY BOWER&PWOCMet Phone 8844433 GRANT P. KINGSFORD Mara October 2, 1986 Mr. Jan P. Blickenstaff Idaho Department of Commerce Statehouse, Room 108 Boise, ID 83720 Dear Mr. Blickenstaff: The City of Meridian hereby requests that closeout procedures be initiated on our Community Development Block Grant, No. ICDBG-85--III-l3. Please advise us of any steps which must be undertaken to facilitate the closeout. Sincerely, CITY OF MERIDIAN Grant P. Kingsford Mayor GPK:ss HUB OF TREASURE VALLEY A Good Place to Live OFFICIALS CITY OF MERIDIAN BILL RCOUNCIEWER City RONALD R. TOLSMA A. M. KIEBERT, Treasurer rte. RICHARD D. NICHOL& Chief Of POIIOe 7M Meridian Street J. E. BERT MYERS BRUCE D. STUART, Wath Walls. Su01. ROBERT GIESLER WAYNE G. CROOKSTON, JR., Attorney MERIDIAN. IDAHO EARL WARD. Waste Water Suot. 83842 908 SPENCER KENNY BOWERS, Fire Chief Phone 8884433 Chairman Zoning 6 Planning GRANT P. KINGSFORD Mayor October 2, 1986 Mr. Jan P. Blickenstaff Idaho Department of Commerce Statehouse, Room 108 Boise, ID 83720 Dear Mr. Blickenstaff: The City of Meridian hereby requests that closeout procedures be initiated on our Community Development Block Grant, No. ICDBG-85-III-13. Please advise us of any steps which must be undertaken to facilitate the closeout. Sincerely, CITY OF MERIDIAN Grant P. Kingsford Mayor GPK:ss J -U -B ENGINEERS. INC. 250 South Beechwood Avenue, Suite I Boise, Idaho 83709 Phone (208) 376-7330 TO LETTER OF TRANSMITTAL DATE GAG v� �'�" PROJECT NO. PROJECT NAME -`%(j ., .•Fi ! ��-r, i ��;�j-J7 ��Ly-� �f ATTENTION: �j.�.C. •r•• /i`/./.;:J�x-7,�� .n GENTLEMEN: f71 / /V WE ARE SENDING YOUI ATTACHED ❑ UNDER SEPARATE COVER VIA ( ��} r/7�a THE FOLLOWING ITEMS: ❑ SHOP DRAWINGS ❑ PRINTS ❑ PLANS ❑ SAMPLES ❑ SPECIFICATIONS --- -- -----71- - -- - ---- n _.. -- ----- rn -- - - -- ---- —--------- - -- - — - — COPIES DATE OR NO. DESCRIPTION ❑ AS REOUESTED ❑ RETURNED FOR CORRECTIONS 2L ❑ FOR REVIEW AND COMMENT - __..-.... ❑ FORBIDS DUE .19- 19 ❑ PRINTS RETURNED AFTER LOAN TO US \ REMARKS: i' THESE THESE ARE TRANSMITTED AS CHECKED BELOW: FOR APPROVAL ❑ AS REOUESTED ❑ RETURNED FOR CORRECTIONS '`❑q FOR YOUR USE ❑ FOR REVIEW AND COMMENT - __..-.... ❑ FORBIDS DUE .19- 19 ❑ PRINTS RETURNED AFTER LOAN TO US \ REMARKS: i' S 7Z J r- '�� IF ENCLOSURES ARE NOT AS NOTED. KINDLY NOTIFY US AT ONCE. COPY FOR SIGNED:�- RECEIVED BY: DATE PLEASE SIGN. DATE AND RETURN WHITE COPY NUB OF TREASURE VAUD.' A Good Place t0 Live OFFICIALS LMEN JACK NIEMANN.City ClNk C� �� MERIDIAN BIL BREWER A M KIESERT, Ttea"rer RONALD R TOLSMA '.HARD D. NICHOLS. Chief of Pollee 728 Meridian Street J E BERT MYEPS JCE D. STUART, Witter Worn$. SUPt. ROBERT GiESLER ,YNE G. CROOKSTON, JR.. Attorney MERIDIAN. IDAHO RL WARD. Waste Water Supt. 83642 908 SPENCER KENNY BOWERS, Fire Chief Phone 888.4433 Cnavman Zoning a Planm^g GRANT P. KINGSFORD Mayor October 2, 1986 Mr. Jan P_ Blickenstaff Idaho Department of Commerce Statehouse, Room 108 Boise, ID 83720 Dear Mr. Blickenstaff: The City of Meridian hereby requests that closeout procedures be initiated on our Community Development Block Grant, No_ ICDBv-SS-III-i3. Please advise us of any steps which must be undertaken to facilitate the closeout. Sincerely, CITY OF MERIDIAN Grant P. Kingsford Mayor GPK:ss HUB OF TREASURE VALLEY A Good Place to Ldve °'PICI"' CITY OF MERIDIAN COUNCILMENIR JACK NIEMANN. CMTCIaRI e�\ A. M. KIESINT. TFSMW W RONALD R. TOLSMA FIC14ANO0.NICNOL,ChiIWOf b00A an 7= Meridian Street J.E BEAT MYERS BRUCE 0. STUART, WOWWales. Swc ROBERT GIESLER WAYNE O. CROOKSMK JR.. AhOW4V MERMIAN. IDAHO EARL WARD. Wra WOW SUM 8:36d BOB SPENCER KENNY SOWERS, AMChW Phont EEE•r4i3 Cnavman 2omnq a Plannmq GRANT P. KINGSFORD mom July 31, 1985 Mrs. Gloria Mabbutt Community Development Specialist Idaho Department of Commerce Room 108, STATEHOUSE Boise, ID 83720 Dear Mrs. Mabbutt: The City of Meridian sincerely appreciates all of the hard work you have done in behalf of our Revolving Loan Fund project in Meridian. As you know, we have had to restructure our grant administration due to the exit of the Ida -Ore organization from this project. After the July 30th coordination meeting in your office, the Economic Development Corporation of the City of Meridian met and agreed to function as the Local Development Corporation in r-� place of the Ida -Ore organization in our project. The City•now has in place all of the necessary parties to successfully administer and complete the revolving loan fund project. Enclosed for your review and use in .preparing the State/City contract, are three copies of the Project Scope of Work, Project Schedule, Project Budget, .and Request for Release of Funds and Environmental Certification. Please consider July 1, 1985, as the effective date of the Meridian Community Development Block Grant project. J -U -B ENGINEERS, Inc. and the City attorney are currently reviewing the Administrative Management Plan, Revolving Loan Fund Management Plan, and Pay- back Plan, and these documents will be submitted later this week. Thank you for your deep concern and willingness to process the request for funds so promptly. If you need any additional material, please do not hesitate to contact my office, or J -U -B ENGINEERS, Inc. Once again, thank you for your assistance. Respectfully, Grant P. Kingsford, Mayor City of Meridian GPK:cm Enclosures SCHEDULE FOR AUDIT ICDBG GRANT NO.: ICDBG-85-III-13 NAME OF CONTRACT: City of Meridian Revolving Loan Fund ADDRESS: 728 Meridian Street CITY/COUNTY: Meridian, Idaho 83642 CONTACT PERSON: Mayor: Grant Kingsford Administrator: Wayne S Forrey TELEPHONE: Mayor: 888-4433 Administrator: 376-7330 CERTIFIED PUBLIC ACCOUNTANT RESPONSIBLE FOR THIS AUDIT: (Optional, if not available at this time.) Alexander Grant & Company, Auditors TELEPHONE: 344-2527 CONTACT PERSON: Mr. Jerry Bartell, CPA Inclusive dates of your audit cycle: October 1, 1986 to December 1, 1986 n SCHEDULE FOR AUDIT ICDBG GRANT NO.: NAME OF CONTRACT: ADDRESS: CITY/COUNTY: CONTACT PERSON: TELEPHONE: CERTIFIED PUBLIC ACCOUNTANT RESPONSIBLE FOR THIS AUDIT: (Optional, if not available at this time.) TELEPHONE: ^ CONTACT PERSON: Inclusive dates of your audit cycle: n ✓.Q y�►�Kg Co J t o1.i�wpwClt. L, � N �-►tv►'p1 r9va�lf> S�-e � �aa�o �+Jf' -- --- .L The Economic Development Corporation of the City of Meridian December 31, 1985 FINANCIAL STATEMENTS AND AUDITORS' REPORT THE ECONOMIC DEVELOPMENT CORPORATION OF THE CITY OF MERIDIAN December 31, 1985 CONTENTS Page AUDITORS' REPORT g GENERAL PURPOSE FINANCIAL STATEMENTS BALANCE SHEET 2 STATEMENT OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE 3 STATEMENT OF CHANGES IN FINANCIAL POSITION 4 NOTES TO FINANCIAL STATEMENTS 5 SUPPLEMENTAL INFORMATION REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 7 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE g REPORT ON COMPLIANCE WITH FEDERAL GRANT REQUIREMENTS 9 REPORT ON STUDY AND EVALUATION OF INTERNAL ACCOUNTING CONTROL 10 First Interstate Bank Building 702 West Idaho Suite 707 Boise. iD 83702 208 344-2527 Grmfffiornton IS Accountants and Management Consultants Member Firm Grant Thornton International Board of Directors The Economic Development Corporation of the City of Meridian We have examined the general purpose financial statements of The Economic Development Corporation of the City of Meridian as of and for the year then ended December 31, 1985 listed in the preceding table of contents. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the general purpose financial statements referred to above present fairly the financial position of The Economic Development Corporation of the City of Meridian at December 31, 1985, and the results of its operations, and changes in its financial position for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with the preceeding year. r Boise, Idaho March 4, 1986 (except for Note B, as to which the date is April 15, 1986) The Economic Development Corporation of the City of Meridian BALANCE SHEET December 31, 1985 ASSETS Cash Note receivable (note B) Less allowance for doubtful receivable FUND BALANCE Unreserved fund balance Reserved fund balance (note C) $ 7,228 $248,502 246,326 2,176 $ 9.404 $ 7,228 2,176 9,404 The accompanying notes are an integral part of these financial statements. 2 The Economic Development Corporation n of the City of Meridian STATEMENT OF REVENUES AND EXPENDITURES AND CHANGES IN FUND BALANCE Year ended December 31, 1985 Revenues Budget Actual Grant revenues $275,000 $258,238 Interest revenue - 4,523 Other income _ 2,582 Total revenues 275,000 265,343 Expenses Administrative costs 25,000 8,239 Other expenses - 1,953 Bad debt expense (note B) - 246,326 Total expenses 25,000 256,518 Excess of revenues over expenses $250.000 8,825 Fund balance, beginning of year 579 Fund balance, end of year 9,404 Variance favorable (unfavorable) $ (16,762) 4,523 2,582 (9,657) 16,761 (1,953) (246,326) (231,518) $t241.i15) The accompanying notes are an integral part of these financial statements. 3 The Economic Development Corporation of the City of Meridian STATEMENT OF CHANGES IN FINANCIAL POSITION Year ended December 31, 1985 Sources of working capital from operations Excess of revenue over expenses $ 8,825 Working capital provided from operations 8,825 Application of working capital Increase in notes receivable 2,176 INCREASE IN WORKING CAPITAL 6,649 Working capital at beginning of year 579 Working capital at end of year 7,228 Changes in components of working capital Increase in working assets Cash $ 6,649 INCREASE IN WORKING CAPITAL 6,649 The accompanying notes are an integral part of these financial statements. 4 The Economic Development Corporation of the City of Meridian NOTES TO FINANCIAL STATEMENT December 31, 1985 NOTE A - SUMMARY OF ACCOUNTING POLICIES A summary of significant accounting policies consistently applied in the preparation of the accompanying financial statement follows. 1. Business activity The municipal corporation, organized March 1983, is primarily involved in the furtherance of economic development in the City of Meridian. This is accomplished by authorizing bond issues and making loans at favorable rates to encourage business development. 2. Financial reporting entity The reporting entity for these financial statements include all agencies for which the Corporation has significant oversight responsibilities in accordance with the criteria established by NCGA statement #3. 3. Fund accounting The accounts of the Corporation are organized on the'basis of funds and an account group, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. As of this date The Economic Development Corporation of the City of Meridian has only one fund. 4. Governmental fund General Fund - The General Fund is the general operating fund of. the Corporation. It is used to account for all financial resources. Measurement focus The accounting and reporting treatment applied to the fixed assets and long-term liabilities associated with the fund are determined by its measurement focus. The governmental fund is accounted for on a spending or "financial flow" measurement focus, which means that only current assets and current liabilities are included on the balance sheet. The reported fund balance (net current assets) is considered a measure of "available spendable resources." The gcvernmental fund operating statements present increases (revenues and other financing n uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. 5 The Economic Development Corporation of the City of Meridian NOTES TO FINANCIAL STATEMENT (CONTINUED) December 31, 1985 NOTE A - SUMMARY OF ACCOUNTING POLICIES - Continued 5. Basis of accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The modified accrual basis of accounting is utilized for governmental fund types and expendable trust funds. The modified accrual basis of accounting, as used by The Economic Development Corporation of the City of Meridian, is that method of accounting in which expenditures are recorded at the time liabilities are incurred and revenues are recorded when received in cash, except for material and available revenues which are accrued to properly reflect taxes levied and revenues earned. All material revenue sources, including property taxes, intergovernmental revenues and fines and forfeitures have been accrued. NOTE B - NOTE RECEIVABLE AND SUBSEQUENT EVENTS n Note receivable consists of the following: Note receivable from Power Dynamics, due in monthly installments of $2,535 in- cluding interest at 9%, with entire balance due July, 1991, unsecured, personally guaranteed by Lowell Hodgkins, President of Power Dynamics $248,502 During April 1986, Power Dynamics closed their operations in Meridian. An allowance for doubtful account was established for the principal balance due. NOTE C - RESERVED FUND BALANCE Reserved fund balance represents repayments on the note receivable that are to be used for eligible program expenditures for Community Development Block Grant activities. 6 S U P P L E M E N T A L I N F O R M A T I O N First Interstate Bank Building 702 West Idaho Suite 707 Boise, ID 83702 208 344-2527 Gmffhornton 18 Accountants and Management Consultants Fir REPORT ON SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE G anther Thornton International We have examined the general purpose financial statements of The Economic Development Corportion of the City of Meridian, for the year ended December 31, 1985, and have issued our report thereon dated March 4, 1986 (except for Note B, as to which the date is April 15, 1986) . Our examination of such general purpose financial statements was made in accordance with generally accepted auditing standards and the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office, and accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. Our examination was made for the purpose of forming an opinon on the general purpose financial statements taken as a whole. The accompanying n Schedule of Federal Financial Assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The information in that schedule has been subjected to the auditing procedures applied in the examination of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. Boise, Idaho March 4, 1986 7 n The Economic Development Corporation of the City of Meridian SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE Year ended December 31, 1985 Federal Grantor/Pass Through Grantor/ Identification number Department of Housing and Urban Development Passed through from the State of Idaho Passed through from the City of Meridian ICDBG-85-III-13 0 Program or award amount $275,000 Total expenditures $258,238 First Interstate Bank Building 702 West Idaho Suite 707 Boise, ID 83702 208 344-2527 REPORT ON COMPLIANCE WITH FEDERAL GRANT REQUIRE14ENTS Gmntlbornton IS Board of Directors The Economic Development Corporation of the City of Meridian Meridian, Idaho Accountants and Management Consultants Member Firm Grant Thornton International We have examined the general purpose financial statements of The Economic Development Corporation of the City of Meridian as of December 31, 1985 and for the year then ended, and have issued our report thereon dated March 4, 1986 (except for Note B as to which the date is April 15, 1986). Our examination was made in accordance with generally accepted auditing standards; the provisions of Standards for Audit of Governmental Organizations, Programs, Activities and Functions, promulgated by the U.S. Comptroller General, as they pertain to financial and compliance audits; the provisions of the Office of Management and Budget's (OMB) Compliance Supplement -Uniform Requirements for Grants to State and Local Governments (the compliance supplement); the provisions of OMB's Circular A-102, Uniform Administrative Requirements for Grants -in -Aid to State and Local Governments, Attachment P, Audit Requirements, and accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. Based on our examination, we found that, for the items tested, The Economic Development Corporation of the City of Meridian complied with the material terms and conditions of the federal award agreements. Further, based on our examination and the procedures referred to above, nothing came to our attention to indicate that The Economic Development Corporation of the City of Meridian had not complied with the significant compliance terms and conditions of the awards referred to above. This report is intended soley for the use of The Economic Development Corporation of the City of Meridian, the cognizant audit agency, and other federal audit agencies, and should not be used for any other purpose. Boise, Idaho March 4, 1986 First Interstate Bank Building 702 West Idaho Suite 707 Boise. ID 83702 208 344-2527 REPORT ON STUDY AND EVALUATION OF INTERNAL ACCOUNTING CONTROL Board of Directors GrantRornton X The Economic Development Corporation Management Consultants of the City of Meridian Meridian, Idaho Member Firm Grant Thornton International We have examined the general purpose financial statements of The Economic Development Corporation of the City of Meridian as of December 31, 1985 and for the year then ended, and have issued our report thereon dated March 4, 1986. As part of our examination, we made a study and evaluation of the system of internal accounting control of The Economic Development Corporation of the City of Meridian to the extent we considered necessary to evaluate the system as required by generally accepted auditing standards and the standards for financial and compliance audits contained in the U.S. General Accounting Office's Standards for Audits of Governmental Organizations, Programs, Activities and Functions. For the purpose of this report, we have classified the significant internal accounting controls in the following categories: Cash receipts and cash disbursements. Our study included the control categories listed above. The purpose of our study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessary for expressing an opinion of the Corpo- ration's financial statements. Our study and evaluation was more limited than would be necessary to express an opinion on the system of internal accounting control taken as a whole or on any of the categories of controls identified above. Our study and evaluation made for the limited purpose described in the second paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, we do not express an opinion on the system of internal accounting control of the The Economic Development Corporation of the City of Meridian taken as a whole. However, our study and evaluation disclosed no condition that we believed to be a material weakness. This report is intended solely for the use of the The Economic Development Corporation of the City of Meridian, the Federal audit cognizant agency, and other federal audit agencies, and should not be used for any other purpose. Boise, Idaho March 4, 1986 10