SLINGER — Village officials have notified the U.S. Department of Agriculture that about $125,000 left over from a 2010 Rural Development Grant will be returned to the department.
The money was to be used to establish a revolving loan fund to help promote small business development and expansion.
Village Administrator Margaret Wilber said the first loan issued under this program was to Slinger Elderly, LLC, which used it as a bridge loan during the construction of their second Serenity Villa facility. The village issued a second loan in 2012 to the Schmitz brothers, which was used to finance a portion of the reopening of Little Switzerland. That loan was paid off in May.
“Unfortunately the program has a lot of very stringent requirements that made it difficult for small companies to qualify for funding,” Wilber said. “As I explained at the (Village Board) meeting, instead
of just letting the money sit there collecting interest, we’d rather try to set up a local program that could be used more actively. This means we’ll be starting out with less money, but it could be more productive in the long run.”
Wilber said one example of the USDA’s stringent requirements is the program calls for first mortgages, even though the maximum amount available is $10,000 per job created with a total cap of $100,000.
“Even the successful loan issued to the Schmitz brothers required several personal guarantees and collateral pledges that many new or or smaller companies are unable to provide,” Wilber said. “We didn’t need a motion (Monday) on the revolving loan fund because we were just looking for the board’s concurrence on moving forward with dissolving the fund.
“We’ve notified USDA that we’d like to dissolve it, so they’re talking to the utility that may want to have the money transferred over so they can start a program.”
Wilber said once the village hears back from the USDA, there will be a resolution to officially
return the funds, either back to USDA or transferring them to another utility.
“There is little likelihood of finding productive uses for the funds that would comply with the programs’s restrictions,” Wilber said.
Wilber said the $300,000 originally received from the USDA is drawing just under $2,000 in interest each year and there is about $125,000 in the fund that would be returned to the USDA account.
“This could possibly be combined with the current RDA funds (about $150,000) to establish some type of village program such as encouraging facade improvement or other development activity,” Wilber said. “We believe it would be worthwhile to explore creation of a local program that could be used more actively to promote local development.”
The Village Board will hold more discussion on the issue at a future meeting.