By Dave Fidlin
Correspondent
Whitewater’s in-house finance director recently weighed in on the quasi-independent Community Development Authority’s 2018 financials, which included several business loans that likely will not be paid back.
Steve Hatton, who heads up the city’s finance department, reported on his findings when the CDA’s board of directors held its most recent meeting Feb. 28.
During the discussion, Hatton pinpointed an area of the CDA’s budget known as the program fund.
Within it, Hatton said, are “several loan accounts that are less than likely to be fully recovered.”
According to a memo from Hatton, two business startups — or borrowers — are included in a $189,816 write-off for loans issued through the federal Community Development Block Grant development loan program.
Solomo Technology has an unpaid balance of $102,510, according to Hatton’s memo, while JCIB Inc. has an unpaid CDBG loan balance of $87,306.
Additionally, Hatton noted Solomo Technology has an unpaid $102,000 balance through a capital catalyst loan program.
“We established reserves in 2017 to mark the loan carrying the value to market,” Hatton wrote in the memo. “Recovery options were explored and deemed non-recoverable by the CDA.”
Also in the mix, according to Hatton’s memo, are two other loans issued to startups that are not being outright written off at this point, but face risk of occurring.
One startup borrower, EdviewRate, has an outstanding $102,510 balance from the CDBG program, while Bomboard has a $105,300 through the capital catalyst program.
In the case of the three proposed write-offs, Hatton described them as “reserve to asset” and would not have an impact at this time on the CDA’s fund balance or operating statement.
The two loans at risk of not being paid are being placed in a reserve account. Hatton said the unpaid balances “will appear as loan loss expenditures in 2018” and “will not deplete fund balance.”
The CDA is set to take formal action on Hatton’s recommendations at a forthcoming meeting, possibly as soon as late this month.
