Published 12:00 am Tuesday, October 16, 2007
Rolando should meet benchmarks to receive loan
By the time these words are printed, Crenshaw’s Board of Mayor and Aldermen may have already voted to loan the proceeds of a Rural Impact Grant to Rolando-Curtis Foods.
Aldermen voted at their October 2 meeting to apply for the $150,000 grant. They were to meet again Monday, October 15. The money would be given to the Town of Crenshaw to use as a loan to facilitate production at the new industry
That’s good. There’s no doubt that economic stimulation is no more sorely needed than in Crenshaw. If that grant could allow the small municipality in northwestern Panola County to pull itself up by its bootstraps, all of us would benefit.
But town officials should remember that money which comes to the town in grants belongs to all of its citizens. And if the money is then loaned to Rolando-Curtis Foods, or to anyone for that matter, town officials should handle it strictly as a business proposition.
Like any loan it should come with strings attached. The borrower should provide collateral. The borrower should provide a personal guaranty of real estate or other property of value that the town would receive in the event of default.
Further, receipt of the loan proceeds should be contingent on Rolando-Curtis Foods meeting realistic benchmarks set by the town’s elected officials. For example, when production has begun and a certain number of people have been put to work, then a predetermined percentage of the loan proceeds should be released to Rolando.
That’s just good business. Public entities like towns routinely channel public money for economic development into private hands, and always attached are good business conditions. For the Town of Crenshaw to settle for any less is to invite default. Remember: money granted to Crenshaw belongs to all of its citizens. The mayor and aldermen are the stewards whose job is to safeguard the grant funds on its citizens’ behalf.
And then, after Rolando-Curtis Foods gets into production and repays the money to the town, elected officials can use the money to again stimulate economic development with another loan.