McCOOK, Nebraska -- Red Willow County has the opportunity to get out of the banking business.
Starting in the mid-1990s when two dairies were built north of McCook using money borrowed through the federal government's Community Development Block Grant Program and repaid to Red Willow County, the county created a "revolving loan fund" that loans money to new businesses and to existing business that want to expand. While many of the loans and business ventures have been and continue to be successful, several have not -- including a $300,000 loan that went "pear-shaped" -- and the headaches associated with those loans have prompted county commissioners to wonder why the county is in the banking and loan business anyway.
Now, commissioners have a chance to get the county out of that business.
Karl Elmshaeuser of Ogallala, director of the 18-county West Central Nebraska Development District, told commissioners Monday morning that its new "Nonprofit Development Organization" can assume administration and monitoring of Red Willow County's CDBG funds and its revolving loan program.
At its last accounting, Red Willow County has $214,000 in its revolving loan fund, a lump sum of money that the federal government likely will ask to be returned because the county's loan program hasn't made any loans in the last two years.
If Red Willow County commissioners give the county's $214,000 to the WCNDD's NDO, the money would be added to the NDO's loan program which will offer loans to businesses within the WCNDD 18-county region. Loan requests would be researched by the NDO loan committee, and loan payments made to the NDO, Elmshaeuser said.
Red Willow County would not lose all local control, Elmshaeuser said, as it is a member of the WCNDD, and Red Willow County commission chairman Earl McNutt of McCook is a WCNDD board member.
A larger pool of money may benefit businesses seeking and eligible for loans larger than what Red Willow County can make, Elmshaeuser said. Another advantage, he said, would be that loan requests, financial information and payment history would be handled by the NDO loan committee and not by individual county commissioner boards, providing borrowers a level of confidentiality not available when they are agenda items for discussion during commissioners' open meetings.
That lack of confidentiality can be seen as a deterrent to applying for a Red Willow County loan, said commissioner Steve Downer, when applicants know some financial information is discussed during commissioners' meeting and their payment history is printed in the Gazette.
Payments and/or program income from Red Willow County's existing loans would be assigned to the WCNDD NDO.
McNutt told Elmshaeuser Monday morning that while he's not speaking for Downer or Vesta Dack, he feels the county board is ready to get out of the loan business. Dack said if that's the business she wanted to be in, she'd work for a bank.
Commissioners took no action on the item, tabling it until the Oct. 17 meeting. They also want to talk to county attorney Paul Wood and to Rex Nelson of McCook, administrator of the county's revolving loan fund program.