Port authority past due on county loan

The Lincoln County Port Authority borrowed $152,633 from Lincoln County in 2013, an interest-free loan which was supposed to be paid in full by Oct. 30, 2015. As of Jan. 14, 2015, not a single dollar has been repaid to the county on the loan.

The money, said port authority board member Kevin Peck, was used to retrofit the building now occupied by LiV Golf Cars to make it suitable for them as a manufacturing facility. Even though the funds were used to assist the start-up manufacturing company, he said the port borrowed the money and the port’s facilities have been improved by the money so the port should repay the money. He intends to present his position at the port authority’s next board meeting, in February. 

“The money helped make what is really an improvement to the port,” he said. “The bottom line is that we owe it back to the county.”

The agreement, made Sept. 6, 2013, was signed by commissioners Tony Berget, Mike Cole and Ron Downey on behalf of the county and by Paul Rumelhart on behalf of the port authority. It requires the port to make annual irregular payments, with the amounts of those payments to be determined by the number of employees by LiV Golf Cars. Full repayment was to be made no later than Oct. 30, 2015.

“The Lincoln County Port Authority does agree to repay in annual irregular payments of amounts determined by the number of people employed by LiV Golf Cars and paid by the Big Sky Trust Fund Grant,” the note reads. “The amount in full will be paid by Oct. 30, 2015.”

Under the terms of the community development block grant program, which helped finance the start-up, LiV was to have 22 employees on the payroll by September 2015. That goal has not been met, as LiV struggled with design and technical difficulties early, including problems with turning radius, set design and the foot pedal design. While these issues were relatively minor and did not adversely impact performance, the company decided to take the time necessary to perfect the issues prior to product launch. At the same time, a software issue in the battery management system required 12 months to resolve. The delays caused significant pressures for the company’s capital reserves while delaying the launch of their product.

Peck said he has hopes that the company, which he characterized as “undercapitalized,” can turn the corner and become a success. But even it it doesn’t, he said, the county should be repaid for the amount borrowed by the port authority.

“Regardless of whether LiV rises out of the ashes and becomes a success or ends up failing, I feel that we need to pay this off,” he said. “The board hasn’t met on this yet, but we will talk about it at our February meeting.”

The county commissioners earlier this year asked the Montana Department of Commerce for a one-year extension for LiV to reach their employment targets, but the company has continued to struggle in their attempts to market their product in the competitive golf cart market. 

The February meeting of the Lincoln County Port Authority board is set for Feb. 23.