Draft Financial Capacity Guidelines

1
Draft Financial Capacity Guidelines

• Presentation to the Commission
• Rockland, ME
• September 7, 2005

2
Basis in rule for demonstration of financial
capacity

• Statute and Section 10.24
• Adequate financial provision has been made..
• Section 10.25,C
• For all subdivisions and commercial, industrial,
  and other non-residential development.
• Adequate financial resources to construct..
• Commission shall consider the cost of the
  development, amount and strength of the
  commitment by the financing entity, and evidence
  of sufficient resources available directly from
  the applicant..

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Why are guidelines needed?

• Financial capacity must be established, but the
  rules dont say what is sufficient.
• What materials will provide adequate evidence?
• What amount of documentation is required for a
  small project vs. a large project?
• When is additional information needed for
  financing mitigation or restoration?

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Summary Table
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Draft Guidelines

• Category 1
• Private, residential, less than 100,000
• Category 2
• Private, residential, more than 100,000
• Commercial, industrial, subdivisions, other
  non-residential
• Disturbing less than 1 acre of land, less than
  2500 sq. ft. of floor area, development cost less
  than 100,000, OR
• In Protection Subdistrict, not likely to
  adversely affect resource

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Draft Guidelines

• Category 3
• Commercial, industrial, subdivisions, other
  non-residential
• Disturbing more than 1 acre of land, more than
  2500 sq ft of floor area, more than 100,000 in
  any subdistrict, OR
• Disturbing less than 1 acre of land, less than
  2500 sq ft of floor area, less than 100,000, in
  Protection Subdistrict and likely to adversely
  affect the resource

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Submittals

• Category 1
• Estimated development costs
• Category 2
• Estimated development costs
• How will project be financed?
• If financing is involved, letter from the
  financing institution that funds available or
  financing has been secured

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Submittals

• Category 3
• Detailed development cost estimate
• Construction schedule
• Funding statement
• Documentation of financial capacity
• Letter from financing institution, government
  agency, etc.
• Letter of intent to fund
• Corporate annual financial report
• If self-financed, financial statement or other
  evidence

9
Submittals

• Category 3 projects requiring mitigation or
  restoration where future funding is required
• Escrow account
• Letter of credit
• Surety bond
• Liability or other insurance

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Summary Table
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Questions

• Does the category approach work?
• Do the thresholds work?
• 100,000
• 1 acre of land disturbance
• 2,500 sq ft floor area
• Residential vs. all others
• Protection Subdistricts vs Development/Management
• Does LURC want to enter into long-term agreements
  for escrow accounts, surety bonds, letters of
  credit, or liability insurance?