State-Journal.com - Development official details financial woes

A local industrial development official has again received assurance that Franklin County Fiscal Court will contribute half of a $103,000 loan payment that the industrial board can’t make.

Libby Marshall, chairwoman of the Capital Community Economic/Industrial Development Authority, met with Fiscal Court in Thursday’s work session to explain CCEIDA’s financial problems and to seek the county’s assistance.

She met with the City Commission earlier this month to make the same request.

CCEIDA needs the city and county to pay $51,500 each to cover CCEIDA’s 2010 loan installment to the Kentucky Association of Counties.

“We’ve got money in the budget to pay our $51,500,” said Judge-Executive Ted Collins. “We understand it’s our obligation and I don’t see a problem with us making a payment when it’s due (May 20).”

Marshall thanked Collins, saying, “You’ve been most generous and gracious in your support for our work and we greatly appreciate it.”

Collins said, “We know what you all are doing is going to come out good for the whole community in the long run. We’re in unusual economic times and we’re going to work with you to get through that.”

Marshall wrote recently to Collins and Fiscal Court that the loan was acquired to develop the business park’s infrastructure.

“Due to the economic downturn, there have been no sales of property that would have enabled CCEIDA to maintain its obligations on this loan…

“While the board will pursue every potential revenue source that could be applied to the installment of this loan, our prospects are not promising.

“We appreciate that this request comes when the economic downturn has imposed substantial pressure on your budget and we regret that we must call on Franklin County Fiscal Court for this obligation.”

CCEIDA received $86,000 each from Fiscal Court and the City Commission last year. Of that, $36,000 went to pay off a 1999 $900,000 loan used to buy an office park site from John and Pat Hanly.

To help pay it, CCEIDA got a community development block grant and bought equipment, which it leased to automotive parts manufacturer Certified Tool to pay for all but $73,000 of the loan.

Certified Tool closed its Frankfort branch in 2008 and CCEIDA auctioned the equipment for $195,000.

But Delphi – a former customer of the auto parts manufacturer – claimed the $195,000 and the funds have been in legal limbo since.

The court battle is “probably six months minimum away from any resolution,” Marshall said Thursday.

Phil Kerrick, CCEIDA’s former executive director, told the City Commission last August that any money recovered in court would be used to repay the city and county.

Thursday, Marshall also said CCEIDA “could meet all of the obligations with the sale of our land, at least at what we think is the fair market value.

“We’re not interested in a fire sale in poor economic times just to turn the land over when perhaps it has greater value if we have the ability to wait until the market rebounds and business rebounds.

“Our calculation is that at the reasonable market value of that land we’re secured for our obligations.”

If the city doesn’t help pay the loan, Fiscal Court will be on the hook for $103,000 since it obtained the loan for CCEIDA from KACo.

Along with the $103,000 due this year, CCEIDA owes KACo loan payments of $107,000 in 2011, $111,000 in 2012 and $113,000 in 2013.

In other business Thursday, Fiscal Court:

>Received a $450,000 check from County Clerk Guy Zeigler for partial payment of 2009 excess fees from his office. The remainder will be paid at the completion of an audit.

>Approved a county road aid program contract with the state Transportation Cabinet. Franklin County will receive $411,282 in the next fiscal year for maintenance, reconstruction or construction of county roads.

>Voted to reject the bids as too high for a hot water system at the Franklin County Regional Jail and to re-advertise for bids.