City leaders consider loan rules

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By Kevin Koelling, Managing Editor

Councilman wants tighter controls

CANNELTON - Cannelton needs to implement rules for people borrowing city money to start or boost their businesses, Councilman Adam Goffinet suggested at a March 10 meeting of the city council. The issue arose again at an April 14 meeting.

"Adam presented this some time ago," city attorney Chris Goffinet said. "We don't have guidelines (specifying) under what rules do we loan money, when do we expect it to be repaid and so on."

The city's economic-development loans "are supposed to be supplemental funding for a project," Adam Goffinet said. "If someone can only get $90,000 from the banks for a $100,000 project, they can come to us for the rest. It's not our job to fund people's businesses, but to help people out."

Then Clerk-Treasurer Mary Snyder reported at an August 2004 meeting some borrowers had filed bankruptcies or had court judgments issued against them. As The News reported then, one resident who had taken over a business when her mother died agreed to repay most of the $8,000 that remained unpaid, but noted the city failed to provide documentation of payments already made.

Two borrowers had declared bankruptcy, court judgments had been issued against two more and another two were delinquent but making payments, reported Snyder, who'd labored to reconcile incomplete city records left by her predecessor.

Under the process used previously, would-be borrowers made their requests to the city and were required to list their businesses as collateral.

Chris Goffinet said he would draft an ordinance outlining an application process.

In related business, the council tabled EDC loan requests from Lisa Moscola and Jeff Dixon so they can be reviewed.

Moscola wants to borrow $5,000 to purchase equipment for her pet-grooming business, Clerk-Treasurer Arvina Bozarth said Friday, and Dixon is seeking $11,000 to open a "Chicago-hot-dog" franchise in the Covered Wagon.

Moscola said she'd already obtained 80 percent of the financing she needed.

"That's the kind of information we need," Adam Goffinet said.

In other business, Bozarth sought council members' signatures on an ordinance establishing a "rainy-day fund," which they approved previously. State official are encouraging local governments to establish such funds, she said, into which excess property- and income-tax revenues, and those derived from timber sales, may be transferred and used for any city needs.

The council also discussed vacating Richardson Street, which Councilman John Young III said runs adjacent to his house. Councilwoman Lynn Fulkerson said the previous city administration had discussed but never completed the vacation.

Young said he has seen cars start up the road, but their drivers realize "it's extremely dangerous, and they'll start backing down." That action is dangerous, too, and "I don't want the city to be liable if something happens," he said.

Chris Goffinet said people with property along the road will have to be notified and a public hearing will have to be conducted before the road can be vacated. The city's utilities department would retain an easement for a sewer line in the area, he added.

Young said another road, platted along one side of the city's ball field but never improved, also needed to be vacated. A surveyor was scheduled to visit the field, and a legal description and deed had been obtained toward transferring part of the field to Cannelton City Schools, Young and the attorney reported.

"The school should file a petition to vacate (the road)," Chris Goffinet advised.

Mayor Smokey Graves said the impact of House Bill 1001, which cut property-tax revenues for local-government units, was to be discussed at an annual mayors'-association meeting today through Wednesday.