By Per Peterson
What happened to the EDA’s revolving loan fund?
That was the big question at last Wednesday’s EDA meeting after the board tossed around figures for a future loan to a potential new business in Tracy’s downtown.
As of now, the EDA’s account is not separated into revolving loan and reserves.
But, as EDA member Tony Peterson stated, there always had been before now — one has always been established every budget year.
“We always set aside — every year and every budget — money for a revolving loan fund, and we’ve been going through money willy-nilly,” Peterson said. “That was the purpose of the city administrator being at these meetings, to keep everybody in tune of the financials, not just saying, ‘You have this big pot and you can spend from it.’”
Peterson said the revolving loan fund should be a line item in the EDA’s account. That would set limits by the EDA’s by-laws as to how much of a percentage of that fund can be doled out to any one project.
“Historically, the revolving loan fund has never been more than about 60 grand,” Peterson said.
Peterson added that it wasn’t until recently that the EDA tapped into the reserve account, and said that’s not a good thing to get involved in. He said the board needs more checks and balances and shouldn’t make a habit of just throwing money every time it’s requested.
The EDA is funded through the cash reserves created by rental properties and Peterson said that revenue is down because there are fewer rental properties.
“O’Brien Court is a break-even deal,” he said. “Orchard Lane is cash-flowing right now, but barely. So if we start giving all this (money) away, we’re going to start having to levy for wages and other loans. We need to have a little fiscal responsibility here. I have to raise taxes for sewer and water — I don’t like it but I have to — I don’t have to raise taxes for EDA (expenditures).”
Peterson added that he’s not opposed to any particular loans, but the board must be careful about how much money it’s loaning out.
See this week’s Headlight Herald for more on this article.