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County setting up revolving loan fund

| August 25, 2004 12:00 AM

By Brent Shrum, Western News Reporter

A $200,000 federal grant obtained by Lincoln County in 2000 and loaned out to help a Libby businessman establish a paving business is serving as the basis for a revolving loan fund for economic development.

The Community Development Block Grant funds made it possible for Don Brown to buy the equipment needed to start up Kootenai Paving four years ago. With the sale of the business earlier this year, the loan has been paid back in full with interest, resulting in a $251,000 fund that can be used for additional economic development projects, said Lincoln County Commissioner Rita Windom.

The county commissioners met last week to discuss the fund with Kootenai River Development Council director Paul Rumelhart and economic development specialists Eric Hanson of the state Department of Commerce and Gary Winship of the Northwest Business Center.

Hanson advised the commissioners on three options for managing the fund — administering it on its own, sharing administration with an outside agency like the KRDC or Northwest Business Center, and having an outside agency handle all the administration.

The commissioners are moving toward establishing a board to oversee the fund, retaining full authority for the county, Windom said. The board will include the three commissioners and two members from the private sector, one from a financial background and the other from banking, she said.

In managing the fund itself, the county will have to comply with CDBG requirements including environmental reviews, public hearings, benefits for low-to-moderate income residents and Davis-Bacon wages, and others. The county will also be responsible for loan guidelines and applications, taking loan payments and contracting for audits.

If the county arranged with an outside agency for partial or full administration of the fund, the fund would no longer be restricted by federal guidelines, but Windom stressed that by retaining control over the fund the commissioners will be able to ensure the fund is used to benefit the entire county. In addition, Windom said the county will be able to borrow from the fund for infrastructure projects, possibly including the renovation of and addition to the county jail.

Rumelhart said the KRDC is looking at the fund as another source of financing for business proposals when traditional lending opportunities are not available.

³If it¹s available on a local basis, I think that¹s super,² he said.