County keeping closer tabs on revolving loan funds

Wednesday, July 15, 2009

After commissioners' actions Monday morning, Red Willow County's attorney and treasurer will see all documents regarding loans from the county's revolving loan fund before they're brought to commissioners for approval.

Commission chairman Earl McNutt said, during a commissioners' meeting Monday morning, that recent confusion regarding amendments to the repayment schedule of a county loan makes it necessary that commissioners review and revise, if necessary, procedures regarding loans from the Red Willow County Regional Economic Development Fund.

County attorney Paul Wood told commissioners that the U.S. Department of Economic Development and banks generated, and he "tweaked" the documents involved with the very first loans -- to two dairies built northeast of McCook in the mid-1990s. From that point on, Rex Nelson, administrator of the county's loan program, said, he has used "boilerplate" texts to generate documents for subsequent loans. Most are simple and straight-forward, but it's work-out situations that get very complicated, he said. This is, he said, when he needs someone to cross-check all documents.

Wood said he has never been called upon to write a whole loan document, but that he has assumed the county wants him to review them. Nelson agreed, "This winds up being a county document. The county attorney needs to review them."

Nelson said that he feels that commissioners may be trying to handle too much at their meetings, and that this "ultimately winds up being destructive to the people we're trying to help." He suggested that monthly reports to commissioners about whether loan recipients are current or behind in their payments may be inappropriate.

Nelson recommended that, for the sake of the client, reports be made to the loan program administrator and delinquencies handled on an escalating scale:

* Thirty days delinquent, administrator meets with client.

* Sixty days delinquent, loan program board determines action.

* Ninety days delinquent, administrator presents plan to the county attorney.

Wood disagreed. "I don't think you want (a loan) 30, 60 and 90 days in default before the (county) board knows."

He continued, "This is a loan of public money. It's got to be open. We can't hide it. It is public money -- we're not a private lending institution. The public has a right to know."

McNutt told Nelson, "As a county body handling money, the people have a right to know."

Commissioner Leigh Hoyt, who, with business partners borrowed money from the county loan program to develop "Willow Creek Meats," said the monthly report should remain public information, that it acts as additional motivation to make sure that all loan payments are made in a timely manner.

"My name's on there with everyone else," Hoyt said. "If Willow Creek Meats doesn't make a payment, my name's mud like everyone else."

Hoyt strongly recommended that Wood and "a figures-person" review all documents. County treasurer Marleen Garcia has caught errors and voiced concerns about documentation before and again in a recent amended amortization schedule, he said. "She has a knack for it," Hoyt said. McNutt agreed that, before commissioners sign anything, Garcia needs to see it. McNutt said he wants "more people working hand-in-hand, double-checking" loan program documents.

McNutt said that, in the future, all documents will go to Wood and Garcia before they come to commissioners for a decision and signatures. Nelson said the review process needs to be timely.

McNutt said the latest controversy served to open up lines of communication, and Wood said this discussion gives him more direction regarding his responsibility in the review of loan documents. "The constructive thing out of this is that information will go to Marleen before anything's signed," Wood said. "The loans will not be on the (commissioners') agenda until they're ready to be acted upon."

Wood and Nelson will review the program's rules and regulations, and Wood will revise them, if necessary, to define the new process.


In other action:

* Deb Lafferty, secretary to the county's fair board, presented very preliminary figures for the fair's and the Kiplinger Arena's 2009-2010 budget.

Lafferty said that the arena is "making more money than ever and is supporting itself now. The schedule is filled every weekend, she told commissioners.

Lafferty said they plan to add sidewalks out of the new showers, and to buy an arena rake. They also need to make repairs to or replace the sound system affected by the arena's humidity. Budget lines for lights, water and heating fuels have been increased. A "wish list" of building repairs/improvements includes awnings over the new showers and an open-sided "carport" roof over calf pens, and could increase that line item from $10,500 budgeted in 2008-2009 to $42,657 budgeted in 2009-2010.

Lafferty said that because the Kiplinger is generating more revenue than in the past, one fairground employee's salary will be taken from the Kiplinger budget. Lafferty said she greatly appreciates work performed on the fairgrounds by offenders, inmates and trustees from the Nebraska Department of Corrections' Work Ethic Camp in McCook. "They perform a lot of work that would otherwise be paid for by county tax payers," Lafferty said.

Lafferty said that the fair's operating budget includes some new windows and possibly a new foam roof on the Ag Complex. She estimated that 98 percent of the line items in the fair operating budget remain the same as a year ago, indicating a $15,000 increase overall.

The fair sinking fund, used to build the new restrooms and showers at the Kiplinger, will now collect funds designated for new restrooms under the grandstand, Lafferty said.

McNutt said commissioners have not yet determined salaries/raises for 2009-2010, nor has Assessor Sandra Kotschwar determined the county's valuation for next year. "At this point, we have no idea how tight money's going to be," McNutt said.

* The board approved an indemnification agreement with the City of McCook for the use of the city's bleachers, picnic tables and water truck during the 2009 county fair.

* A six-month program income report on the county's revolving loan fund program indicates that all loans are current except Pawnee Aviation, which has defaulted on two loans of $200,000 and $100,000. On June 30, 2009, Pawnee Aviation owed the county $366,595.41.

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  • You suppose that perhaps closer tabs should have been in place before the 300,000 gift to the chopper man? Bernie Madoff would be proud of our chopper man. A suggestion, get all your facts and ducks in a row, before you give out facts.....such as Accents Etc. reported by the county to be 3 payments behind, but was really only one and was working on that. I'm sure Accents Etc. really appreciated that press release!

    Mrs. Garcia is not happy that her office has to now do titles, I'm sure she will be overjoyed to add this non compensated job to her all ready overly busy office........but I guess the role of government is no longer to serve the people/taxpayer???? Of course we found that out years ago, when our dear commisioners okayed the hours of the courthouse and allowed it to be closed at 4pm. Screw that poor guy/gal that has a job that works until 5pm with no lunch hour etc.

    Let them eat cake, they say.

    -- Posted by goarmy67 on Wed, Jul 15, 2009, at 7:17 PM
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