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County's loan to Southland a no-go
(Paducah Sun, The (KY) (KRT) Via Acquire Media NewsEdge) Aug. 12--The McCracken Fiscal Court won't lend Southland Renewable Fuels $1 million for its proposed bio-diesel fuel plant but will consider giving the company a grant of up to $42,000 to help pay interest on a commercial loan.
The fiscal court also met in closed session on Monday to discuss hiring David Flowers as manager of the inspection department. No formal action was taken after the closed session, but Judge-Executive Van Newberry and Commissioners Ronnie Freeman and Jerry Beyer said a consensus was reached that is likely to be on the agenda for the next meeting.
They would not say if the consensus was to hire Flowers to replace long-time manager Randall Boggess. Flowers currently is an assistant building inspector for Paducah.
Southland incentive
The fiscal court first discussed a $1 million low-interest loan for Southland Renewable Fuels in March, but delayed action while it sought an attorney general's opinion on the legality of the loan.
The attorney general last month said the concept is legal. However, a vote was again delayed when it was discovered a loan is not part of the county's economic development incentive policy.
At Monday's meeting, Newberry asked the commissioners if they thought the policy should be changed to include loans. Commissioners Zana Renfro and Freeman said no, while Beyer joined Newberry in supporting the idea.
Renfro and Freeman said they felt it was bad policy and would set a bad precedent.
Southland needed the loan as seed money to obtain long-term financing for the $72 million project that would employ 65 people within three years, according to Tim Swinford, managing partner of a group of 11 investors.
The interest rate for the loan would have been 3.75 percent as opposed to loans from commercial banks that would range from 4.75 percent to 8 percent.
The fiscal court at its next meeting will considering giving the company a grant equal to the difference in its loan and a bank loan.
According to the figures provided to the fiscal court, interest on the county's loan would have been $28,125 while interest on the bank loan will range from $35,625 to $60,000, depending on Southland's credit rating. The fiscal court would provide a grant ranging from $7,500 to $41,875.
A vote on the grant is expected in two weeks.
Inspection department revision
Hiring a new manager was one of several recommendations made by a task force that studied the inspection department. It said that Boggess should be transferred to the position of tax compliance officer.
Freeman two weeks ago opposed replacing Boggess. On Monday, he said his opposition was to transferring Boggess out of the inspection department. "We've got a lot invested in him with his training and ability," Freeman said.
If a management change is made, Freeman said, it is likely that Boggess will remain a building inspector. He said it also is possible that tax compliance duties will be assigned to the inspection department.
Bill Bartleman can be contacted at 575-8651.
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