By CARL E. FEATHER - email@example.com
The Ashtabula County Port Authority is weighing a $175,000 loan request from Growth Partnership for Ashtabula County.
The authority took up the question during its meeting Friday. Growth Partnership, a county economic development organization, has requested the loan to pay off its line of credit issued through a bank and secured by an individual.
“The entity that secured the line of credit before this has done a great job,” Strayer said. Nevertheless, that entity has requested the authority find another backer for the outstanding balance on the line of credit, which was used to help keep the partnership struggle through a time of high expenses several years ago. Strayer said the partnership is keeping up with payments on operational expenses and its first mortgage, which is about $350,000.
Strayer said the partnership also is talking to a bank about the financing. The Port Authority was pegged as a source of funding because it has the money and there is a movement for the private partnership and public port authority to work together on economic development, “and we reached out to them,” Strayer said.
Executive Director Brian Anderson said there’s nothing written in stone, but confirmed the authority and partnership have held discussions on the loan. Authority members said the loan would be secured with a second mortgage on the property that houses the partnership’s office.
Growth Partnership receives the majority of its funding from private donors, or trustees, who pay $5,000 each annually. This allows the organization to operate under the radar screen of public meeting requirements and therefore keep sensitive economic development discussions out of the public eye. But the group does accept membership by public entities. For example, Ashtabula County commissioners have three memberships and a position on the executive committee.
As a condition of the loan agreement, the port authority is requesting a seat on the executive committee of Growth Partnership. Authority member Richard Selip said the partnership is willing to do that, but the bylaws require the port authority to become a member first. Anderson said the partnership is in the process of revising its bylaws and will probably expand the term from the current one year.
On the Port Authority’s side, the Ohio Revised Code requires a special loan fund be created, said Executive Director Sean Ratican. Once bylaws are adopted for the fund, it would be stocked with cash from the authority’s general fund.
Conneaut attorney Nicholas Iarocci, who is an authority member, said he reviewed the request and “has some real questions about it.”
“I support Growth Partnership and I support what they do, but I’m not quite sure the port authority should be the one to loan them these funds. I’m not sure it is appropriate,” he said.
Selip and member George Csepegi supported the authority becoming a member.
“We need to do economic development; we should have done it before,” Selip said.
“I think we really should belong to it, do anything we can to keep the organization healthy,” Csepegi said. “We need it in the county.”
However, authority President Rob Schimmelpfennig questioned whether the Port authority should join since the county already purchases three memberships.
Strayer said the partnership has about 50 trustees.
Specific terms of the loan agreement have not been worked out, but the discussion suggests there would be an annual principal plus interest payment. At the onset of the loan, the interest would be slightly more than the membership fee. Schimmelpfennig said the cash held by the authority is not making much in way of interest from the bank; a proposed budget for 2013 plans on the board receiving only $330 in interest on its deposits.
The authority requested that Schimmelpfennig obtain financial projections and other data from the partnership before the December meeting.