Commissioners won't act as debt collectors for state

McCOOK, Neb. -- Red Willow County got out of the banking and loan business in 2012. Four and a half years later, on Monday morning, county commissioners made it clear they don't want to be in the debt collection business either.

During their weekly meeting Monday, commissioners revealed that two of the businesses that borrowed money from the county's former revolving loan program are now behind on their payments. All three commissioners agreed, it's no longer the county's concern. Commissioner Steve Downer said, "By the stroke of a pen, we signed the state's papers. We're done. We're out of it."

The county started its revolving loan program in 1998, funding it with the payments made by two McCook-area dairies built with $540,000 in loans from the federal government's Housing and Urban Development (HUD) Community Development Block Grant (CDBG) Program and administered by the Nebraska Department of Economic Development (DED). As the dairies made payments to Red Willow County, the county made low-interest loans to existing local businesses and to new small businesses promising to create jobs.

There were successful loans and there were failures, and a lot of headaches for commissioners who, with the McCook Economic Development Corp., approved loan applications, loaned money, collected monthly loan payments and wrote off bad loans. At many times throughout the years, different combinations of commissioners said that the county should not be in the banking business ...

In 2012, the DED decided that the state would be better at running every county's revolving loan program and requested that balances in program coffers be returned to the state. "They were coming for that money anyway," Downer said Monday because Red Willow County hadn't made any loans for, at that time, about two years.

Downer said at the commissioners' meeting Monday morning, "We signed their papers. We followed their policy. We're done. By the stroke of a pen, we're out of it."

Red Willow County sent $263,065.06 ($267,500 with some interest added in) back to the state in June 2012, and in August 2012 commissioners officially signed out of the state's DED CDBG loan program. "What we did in 2012 -- we turned the money back. We turned everything back," Downer said.

Fellow commissioner Vesta Dack said Monday morning, "We are no longer the debt collector. We are done. And I am not ready to get involved again."

Kirk Dixon, executive director of the MEDC, which is still the state's liaison for CDBG loans made in Red Willow County, asked commissioners Monday morning what involvement the county wants in addressing business owners whose payments are late.

"We thought we were done with this," said commission chairman Earl McNutt. "We honestly thought we were clear of it."

McNutt pointed out, as he did repeatedly during the time the county ran its CDBG loan program, it wasn't a tax levy in Red Willow County that funded the loan program, that it wasn't specifically Red Willow County taxpayers' money that funded the program. He said Monday, "It is ultimately state taxpayers' money" and still needs to be paid back by those taking out loans.

Dack said she sees no more county responsibility for collecting loan payments, Red Willow County in origin, late or not.

Speaking of one of the two businesses in default, Dixon said he's not ready to give up. "What marketing and promotional support can we (the MEDC) provide him?" he asked. "The question is, do we kill a business that isn't producing, but could? We need to roll up our sleeves and get involved."

Dixon said he feels a responsibility to the one loan recipient he spoke of to "coach, nudge and press," urging him to make necessary decisions, rather than having someone else make them for him.

Dixon emphasized, "We are earnestly looking for positive solutions."