Funds are available to help your community create jobs and housing, recover from economic and natural disasters and increase commercial and agricultural production. The Illinois State Treasurer's Linked Deposit Program helps communities like yours help themselves. Special deposits are made in Illinois banks for specific loans promoting worthy local projects, keeping Illinois dollars invested in Illinois future.

Economic and Community Development Linked Deposits may be used for short-term working capital, plant and equipment improvements, construction or expansion of manufacturing facilities, construction or rehabilitation of low- or moderate-income housing, and a variety of other projects. Deposits range from $100,000 to $2,500,000 and carry a term of one to three years at or near market rates for one-year certificates of deposit. Banks may charge up to 2.5 percent above the deposit rate and annual rate renegotiation is possible. Emphasis is placed on the "jobs ratio" (deposit amount/jobs created or retained) when awarding Economic Development Linked Deposits. The guideline for this ratio is $15,000 - $25,000 in deposits for every job created.

Agricultural Linked Deposits may provide for the purchase of seed, fertilizer, chemicals, crop insurance, livestock, energy, labor, veterinary services, debt refinancing and used equipment. Deposits range from one month to one year in length, average about $30,000, and are made in Illinois agricultural banks which agree to reduce their rates on agricultural loans. Deposits are discounted approximately 1/8 to1/4 percent and banks are required to charge farmers no more than 3.0 percent above the deposit rate, thus creating a below-market loan.

Small Illinois banks often don't have the resources in their portfolios for community investment. Local banks participating in the Linked Deposit Program promote good will and provide much-needed funds to revitalize their communities. Other advantages include a guaranteed fixed spread between deposit and lending rates for the term of the Linked Deposit, amortized loans funded with level term deposits, and negotiated principal, rate and term, allowing banks to customize a financing package for each loan. Illinois state funds are protected by the Federal Deposit Insurance Corporation and the full collateralization of all deposits.

The Illinois State Treasurer's Linked Deposit Program is a "win-win" situation for Illinois taxpayers. Helping communities improve their standard of living benefits all of us who make our homes and earn our wages in Illinois. I urge you to be in touch with David Cleverdon in my Chicago office (312/917-3571) to learn more about how the Linked Deposit Program can work in your community.

October 1989 / Illinois Municipal Review / Page 5