Options reviewed for use of option tax revenues
by Jack Deming
Feb 21, 2013 | 1799 views | 2 2 comments | 5 5 recommendations | email to a friend | print
WILMINGTON-The selectboard set out at Wednesday night’s meeting to formulate a plan to present to voters on Town Meeting day that maps out a clear path for usage of the immediate funds available from the 1% option tax, as well as future income.

The board discussed usage of the projected $100,000 that the 1% option tax fund will have at its disposal for the current fiscal year. Selectboard chair Tom Consolino believes that it is only fair that the board present to voters a plan to use these immediate funds. Using suggestions from town manager Scott Murphy, the board decided it would be in the town’s best interest to set up a $75,000 revolving loan fund, which Murphy says will help new businesses start and help current businesses expand, which in turn will encourage job growth for the town.

The loan fund would act as a secondary loan source for business owners that would, in Murphy’s words, “piggyback” bank financing. Murphy said the board should not close the door on the possibility of being a primary lender, but should require loan applicants to show they approached a bank first. “These loans, even though they are supposed to be repaid over five to seven years, are generally repaid quicker,” said Murphy. “Usually if a business is successful it keeps growing, and pays off within two and a half years.”

Murphy admits that $75,000 can only go so far, but the fund would be self-sustaining within two years, granted the 1% option tax doubles the funds for fiscal year 2014.

Lisa Sullivan, owner of Bartleby’s Books, voiced concern about whether all $75,000 was guaranteed to be applied for and used. “If in the first year you’re not seeing usage of the $75,000 and you’re not seeing applications there should be a promise to look at that,” said Sullivan. “ I think we need investment in economic development now, and it would be a shame to have that (money) sitting there and have nobody going for it.”

Mount Snow Valley Chamber of Commerce director Adam Grinold told the board he believed it is wiser to use the money now instead of dedicating such a massive portion to a fund that may take two years to meet its potential. “I think the loan idea is great but I think we need victories now,” said Grinold. “I think the town is in a position to encourage its expanding business in other ways. We have extraordinarily high sewer rates compared to other towns. Our water rates are astronomical. There’s tax abatements also, and many other tools this town can use for development.”

“I don’t think we’re going to answer everyone’s needs with the first two quarters of payment” said Consolino. “That is why we’re making suggestions now and when we see 12 months’ results in September, we can review, refigure, and refocus our expenditures at that point. We’re just trying to get off the ground.”

Consolino listed the other three apportionments of the grant money the board decided on as immediate visual results. These included an allotment of $5,000 for creating a well-funded recreation trail through Wilmington and Dover. Murphy says that Dover is prepared to work with the town financially, and the current trails are underfunded, and shabby. The board is also setting aside $10,000 to match grant money for installation of lights in the West Main Street parking lot, and $10,000 for a summer and fall event fund, to make monies available to event organizers with the goal again being that the fund is not the organizers primary fund.

The selectboard will hold a meeting in September when the first 12 months’ income will come full circle and give the board a solid number to plan with in the future. Murphy also suggested a process be in place by which voters are notified about and allowed to vote on loans that are above a specific financial cap to be set by the selectboard. Consolino agreed that voters must have a clear view of the board’s use of the money. “It is important to have transparency.”

“It’s incumbent on the board to come up now with tentative suggestions to have in mind for a September meeting when we will have a 12-month history of what kind of income is coming in. The idea tonight is to have a plan to present to Town Meeting.”

The board also took up discussion about reaffirming incumbents whose terms are expiring to boards, commissions, and committees. According to the board, the town’s policy is to ask incumbents if they wish to be re-appointed and the selectboard will reaffirm (or not) their appointments by the end of February. The board chose not to reaffirm appointments just yet. Selectboard member Meg Streeter asked the board to consider reviewing the attendance of all incumbents before taking action. Streeter also would like to see the chairs of each board to come up with attendance formalities. Consolino moved that the board extend all appointments until April 3, which was so voted. Streeter says the board should encourage other boards to meet outside of business hours on weekdays to encourage participation, and selectboard member James Burke explained the board just needs time to review the policy before reaffirming.
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chap914
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February 21, 2013
I'm concerned with the dedication of $75,000 of Town funds to a so called "Revolving Loan Fund" to new businesses start and help current businesses expand, the Fund to act as a secondary financing source to bank funding, or in those instances where a lender has turned down a prospective borrower, the Fund might act as a primary lender.

I question whether this is an area which Town funds ought to be utilized and put at risk; whether making secondary loans or, in those cases where an applicant has been turned down by a lender, the Town might act as the primary lender, is a reasonable and proper use of public funds, especially where there are public agencys, who are better qualified to judge the financial potential of a borrower and his or her business plan such as, for example, the SBA; and whether we are inviting our our version of Solyndra.

chap914
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February 21, 2013
I'm troubled by the suggestion that the Town take $75,000.00 of the proceeds of the local options tax to set up a revolving loan fund to provide secondary financing of businesses or in the case where the prospective borrower doesn't qualify for a loan from a lender, that the fund (the Town) act as a primary lender of last resort.

My concerns are (1) how far will $75,000.00 with a maximum loan amount of $10,000 with a repayment term of five (5) years; (2) the fact that the Town will be in a secondary position to a primary lender (smacks of the Clinton-Bush 110% mortgage loans now in foreclosure); (3) that in addition to conventional lenders, government agencys are available to lend funds for business endeavours, to vet the business risks and make the loans, noteably the SBA; and (4) the probability that notwithstanding good intentions Wilmington will experience its own version of Solyndra.