Program expanded to include 'Gap Loan' option

SIDNEY -- LB840 was designed to help communities draw businesses. It is a program designed by the state, and approved by each community's voters.

LB840, Legislative Bill 840, was approved by the State in the 1990s. Sidney City Manager David Scott said the State decided municipalities had no way of incentivizing business and new businesses, and offered a way for communities to keep a portion of their tax dollars for business incentives.  The program is approved by voters, as well as how much will be set aside and how it would be disbursed. 

"Before they came up with this plan, there really wasn't much ways for local municipalities and cities to incentivize business, so what the State did is create LB840, which allows cities to set aside a portion of their sales tax and dedicate that directly towards incentivizing business, business growth in their respective communities," City Manager David Scott said recently.

Voters decide if the community will participate in the LB840 program, and how much.

"The voters decide whether they're going to do an LB840 plan or not. Sidney was one of the first people to vote to enact the plan. Our amount is $300,000 a year. Different cities have different amounts. Some cities are very small and don't have near the sales tax base that we have," Scott said.

Sidney's plan stayed consistent until private interest developed in supporting business.

"Ours has never changed. It's always been $300,000. The council passed an ordinance and put before the voters in the '90s and that's what they voted for. We did redo ours in 2018. That was the last time it was voted on, by the general public. What we changed at that point was not, we were not at the end of our 10 years and needed to take it back to the voters at that point. But what we were wanting to add at that point ... what we were wanting to do is we had people wanting to donate to our LB840 fund. Our plan was not written where we could take any money, other than just sales taxes; that's it," Scott said.

Scott said the last change to the LB840 by the State is in 2019 when they allowed for early childhood development and housing. He said since the State allowed early childhood and housing projects it didn't have to go before voters. It did, however, have to go before the LB840 advisory committee and then the city council. If both agreed, the two new subjects could be added to a city's LB840.

"We honestly did not do that right away in 2019. We did it in 2021; two years later we had taken it to the advisory committee. We knew that was going to be something that we would need to start," Scott said.

He said regardless the community, LB840 is not governed by the city manager or by the economic development director. An LB840 program requires independent advisory committees, he said. Sidney's two oversight committees are the Economic Development Citizens Advisory Committee and the Historic Preservation Board. Scott said the City started designing its LB840 program as performance-based in 2018.

A gap loan program was recently added to the LB840. Economic Development Director Brandy Stone said a business owner works with a bank, and if the business needs further assistance to reach the amount needed, the business owner can talk to the city about the gap loan program. Scott said the City has been working on the gap loan program for more than a year. He said the gap loan is an option if a bank cannot meet the funding needs of a business; it does not compete with a bank.

Applications are scrutinized by the Economic Development Committee, or the Historic Preservation Board.

Applications are available online at https://www.cityofsidney.org/86/Economic-Development