County seeks RLF program setup change

DAVE MOSIER/independent editor

The Revolving Loan/Microenterprise Loan program has provided loans for start-up and existing businesses for more than two decades. However, with the separation of the city and county economic development programs, ownership of the program is now in dispute.

A committee that includes county and the city representatives, as well as local lenders, an accountant and representatives of the county’s low- to moderate-income population, currently operates the program, which is administered by Darlene Myers, economic development coordinator with the Ohio State University Extension, through a contract with the city and county.

The Van Wert County Board of Commissioners, though, say the program should be administered by the county, since the program was begun with funding from a Community Development Block Grant obtained through county sources.

Both sides met this past week to discuss the situation, with Commissioners Todd Wolfrum and Thad Lichtensteiger and County Economic Development Director Sarah Smith representing the county and Stuart Wyatt, Gary Corcoran and Myers representing the Revolving Loan Committee.

“According to our research, the original loans for that loan were county loans, and the people at the (state) revolving loan fund in charge of it say it should be run by the county then,” Wolfrum noted. “We’re not trying to disrupt things any more than we need to, but we think that needs to come under our management, the entire revolving loan fund.”

Smith, who called the revolving loan program a “huge economic development tool”, said talks she had with Mercer County and state economic development officials indicated that revolving loan funds are typically county funds.

Myers agreed that the microenterprise loan fund was created using county money, but said she would have to do more research to see where the original funding came from for the macro-enterprise fund, often called the city Revolving Loan Fund.

According to Corcoran, then-Van Wert mayor Gene Bagley was the person who went to the state in the early 1990s to obtain initial revolving loan grant money from the state for Tendasoft Inc., a local company located in Vision Industrial Park that later went bankrupt. Other early loans were awarded to Wild Willy’s Pizza and El Jalapeno restaurants.

The catalyst for last week’s discussion is the county’s wishes to use the revolving loan fund as matching money for a number of community projects, including downtown revitalization in Van Wert, an infrastructure capital project in Ohio City, and other grant projects. Currently, most of the loans made by the Revolving Loan Committee are provided to small businesses.

“We want to do some things in the pretty immediate future,” Wolfrum said, noting that some of the projects have deadlines that are coming up fairly soon.

Smith said she has had discussions with Mercer County development officials about ways to use a revolving loan fund – something that county does very well, since it currently has the largest revolving loan fund in Ohio. During those discussions, Smith said Mercer County officials indicated that Van Wert County’s revolving loan fund should also be a county fund similar to the one in that county.

She also added that she felt that, since both funds are open to all county residents, having one designated as a “city” fund leads to possible confusion for those wanting to apply for loans – especially with the macro-enterprise loan program.

Myers, who has administered the loan program since being hired by OSU Extension in 2001, said she feels the program has been successful as it is currently and would hate to see changes made in how it is administered. She noted that the microenterprise loan fund currently has a balance of approximately $78,000, while the macro-enterprise fund balance is approximately $190,000.

Corcoran said that, while transferring administration of the loan program to the county, is a relatively easy thing to do, transferring existing loans could be a much more complex process.

“As far as transferring existing clients, that’s a whole different story,” Corcoran said, noting that there are a large number of loans currently on the books.

Wyatt wondered aloud whether Van Wert City Council would also have to approve a transition to county administration of the program, but Wolfrum said there should be a termination clause that allows the county to opt out of the current administration contract with OSU Extension.

Corcoran noted that the first step in moving administration of the program to the county would be to change the administration agreement from administration by OSU Extension to the county. Cost of administering the funds can be taken directly from fund balances, with up to 20 percent of loan money earmarked for admin costs.

Myers said, for her part, she hoped that the current committee structure would be continued if the county takes over the program.

“I would strongly advise that you keep the committee in place as long as they are willing to serve,” Myers said, noting that several members have served for years.

“We’re not trying to reinvent the wheel here,” Wolfrum said, indicating the county’s willingness to discuss that issue.

More talks are planned to work out details of a new agreement.