By Jan White
CROCKETT – In their monthly meeting on September 13, the CEIDC voted to retire their debt of approximately $328k.
Board member Wade Thomas spoke to the group about his reasons for wanting to pay off the loan. “We have spent the last few weeks talking with financial advisors, bankers, and attorneys, both individually and as members of this Board. To my knowledge, we did not talk to anyone at any level that said we should not pay this off.” Thomas spoke to Brandon Bridges, who is not only the Economic Development’s banker but also involved in ED, who told Thomas that it was an old loan, and they were three owners past having anything to do with the loan.
Bridges had been involved with the initial loan and reminded Thomas of the state of the town when that loan was taken out. “The state school had closed, and we lost two-hundred jobs on that day. This city was in a panic. That was a huge hit for us.” In order to continue for the property to be used as a viable facility, repairs needed to be made. The CEIDC, with the support of the town and the city council, borrowed the money necessary to improve the facility.
Thomas said that members of the Board had spoken to the attorney for the City of Crockett and the CEIDC, Bill Pemberton, who told them they were at liberty to do what they wanted – either pay off the loan or keep paying on it.
“But we went beyond that,” Thomas stated. “We have talked to other legal council. We have talked to bond managers in Austin. We have talked to no one who has said there was anything wrong with the way the loan was done.”
Thomas went on to expound on the loan issue. “We were taken to school a little bit about the difference between a loan using sales tax and a loan using ad Valorem tax and bonds, which is what the city does. Those are handled through the attorney general’s office. This organization is different than that. We put up sales tax funds to secure our notes. So there is a difference. There seemed to be some confusion caused by people here in town that got us confused. But that’s okay. We went to school on it.”
Thomas said that the organization “has the funds, and I would like to save the interest we are paying over the next four years and get rid of this loan. This loan was taken out years ago by the good people who sat here. We weren’t there. But we’re still answering the questions about something that was done six years ago. We’re still getting the darts thrown at us. Let’s get rid of it.”
Questions were raised about the financial aspect of paying off the loan and what position it would put the CEIDC in. Said Thomas, “We will have an account with $200k in it. We are increasing that balance by around $20k a month, and it would also give us the $7,400 a month back into our account, which we are currently paying on that loan.”
Board members also brought up upcoming expenses that were not specified in the budget, such as the CEIDC’s share of the forensic audit, the cost of the new A/C unit they committed to purchasing for the Mary Allen Museum Heritage House, and a financial commitment to the “Early Morning” project, possible roofing repairs, and the four-inch gas line.
Thomas’ contention was, “If we need to borrow money, our banker has sat right here and said, ‘You people are good with us. Come in and talk to us any time you need money.’ I don’t want to wait to pay off this old loan thinking that maybe we’ll need some money that we can’t cover somewhere down the road.”
Each Board member was offered the chance to voice their opinion on paying off the loan, but in the end, the motion was made and passed that the loan obligation to Prosperity Bank be paid off and that the proposal to pay off the loan would be submitted to the city for their consideration as soon as possible.