Ohio Admin. Code 3318:1-7-01 - Community schools classroom facilities loan guarantee program procedure for application and risk management
(A) To be considered for participation in the
community schools classroom facilities loan guarantee program (the program),
the governing authority of a "start-up community school" shall apply to the
commission and provide such additional requested data and documents as are
deemed necessary for evaluating the application. "Start-up start-up
community school" means a "new start-up school" as that term is defined in
division (A) of section
3314.02
of the Revised Code. Additional requested data and documents may include, but
are not limited to the following:
(1) School
information including name, sponsoring authority, contract information,
enrollment information, and contact information.
(2) Governing authority information,
identifying the president and treasurer of the governing authority.
(3) Classroom facilities project information
describing the project to be financed.
(4) Loan information identifying the loan
amount, term, number of payments, payment amount, interest rate, total
principal and interest, and amount of guarantee requested.
(5) Other relevant information including, but
not limited to, information on all existing direct and contingent loan and
lease obligations of or on behalf of the school, loan history, conflicts of
interest, and pending litigation that could have an adverse financial impact on
the applicant.
(B)
Applicants to the program must be deemed credit worthy by the commission and
are subject to credit review.
(C)
The executive director shall appoint a charter school facility loan guarantee
review committee ("review committee") to review applications and make recommendations
for approval by the commission. The "review
committee" shall include representatives
from the banking industry, community schools, and such other informed parties
as are as
deemed necessary in assisting the commission in assessing the risk of each
application for purposes of protecting the interest of the state.
(D) The "review committee" shall assess applications using the following
criteria:
(1) Minimize risk to the state.
(2) Maximize benefit per dollar
guaranteed.
(3) Maximize use of
other non-guaranteed funds.
(4)
Maximize the diversity of types of projects and loan arrangements.
(E) The review committee may
recommend one or more loans to the executive director after each round of
applications. The executive director may present some, all, or none of these
loans to the commission for conditional approval. Upon conditional approval of
the commission, the executive director shall work with each approved applicant
community school and its financial institution to agree upon a loan guarantee
agreement. Such agreement shall be presented to the commission for approval
before execution. The commission's approval shall direct the executive director
to sign the loan guarantee agreement and carry out its terms and conditions.
(F) If approved by the commission,
the maximum term of the guaranteed portion of any loan to purchase a facility
or for renovations to a facility owned by the governing board of the community
school shall be the lesser of fifteen years or the useful life of the asset,
with the total guarantee not to exceed one million dollars.
(G) If approved by the commission, the
maximum term of the guaranteed portion of any loan used for modular facilities,
buildings renovations to a leased facility, or other improvements to a leased
facility shall be the lesser of seven years or the useful life of the asset,
with the total guarantee not to exceed five hundred thousand dollars. Where
improvements or renovations are being financed for leased facilities, the lease
term with renewal options shall extend beyond the financing term or at least
for a sufficient term to insure that the community school is the primary
beneficiary of the improvements.
(H) If approved by the commission, the
maximum term of the guaranteed portion of any loan to purchase furnishings or
technology infrastructure shall be the lesser of five years or the useful life
of the asset.
(I) Under no
circumstances shall the guarantee amount exceed eighty-five percent of the
total principal and interest of the loan. In the event of default, the net loss
of the commission shall not exceed eighty-five percent of the outstanding and
unpaid principal balance of the loan, accrued interest of the loan and
reasonable costs of collection, excluding penalties and late fees incurred by
the borrower.
(J) The commission
shall monitor the financial status of the borrower and require the borrower to
submit a copy of the following documents to the commission:
(1) Annual report.
;
(2) Financial statements and budgets.
;
(3) Quarterly financial reports of the
governing board.
;
and
(4) Community school
payment report received from the Ohio department of education.
(K) The lender shall notify the
commission of any delinquent payment on any loan that is subject to an approved
guarantee by the commission. In the event that a default occurs, the lender
shall follow its normal collection and foreclosure procedures to minimize any
claims against the guarantee fund.
(L) Upon any default, where the lender
intends to take action to accelerate the loan, within thirty days of the lender
taking such action, the lender shall give notice to the commission, meet with
the borrower in order to make a determination as to the nature of and severity
of the problems causing such default, and promptly communicate this information
to the commission.
(M) When the
lender has determined to take action to accelerate the loan, the lender may
seek any method of remedy available under the laws of this state, with prior
notification to the commission of the remedy sought, and shall follow the
normal procedures for default for similar loans made by lender. The commission
may propose to the lender any alternative remedy, including remedies that may
deviate from lender's normal process. While the lender may consider the request
of the commission, the lender retains the right to determine when default has
occurred and to determine the appropriate remedies to be taken to collect the
loan.
(N) Upon payment in full of
the guarantee amount by the commission to the lender under an approved
guarantee, the commission shall have the right to enforce or participate in any
claim, right, or remedy that the lender then has or may thereafter acquire
against the borrower and the security interests under the loan documents and
shall be entitled to the benefit of and any right to participate in any
security interests and collections then or thereafter held or acquired by the
lender. No payment by the commission to the lender under an approved guarantee
shall reduce, discharge, satisfy or terminate any obligation of the borrower.
Notes
Promulgated Under: 111.15
Statutory Authority: 3318.50
Rule Amplifies: 3318.50
Prior Effective Dates: 06/26/2002 (Emer.), 09/19/2002, 08/10/2012
Promulgated Under: 111.15
Statutory Authority: 3318.50
Rule Amplifies: 3318.50
Prior Effective Dates: 6/26/02 (Emer.), 9/19/02
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.