Loan program looks to aid local municipalities
MORRIS – Local municipalities struggling to find federal loan money may have another option, if a loan program currently being considered by the Grundy County Finance Committee is adopted.
Through the program, the county would invest a portion of its cash reserves in providing low-interest loans to local communities. The loans could be used for capital improvement projects.
The program is the brainchild of Minooka Village Administrator Dan Duffy, who modeled it after the state’s Community Development Assistance Program and the principles of micro financing.
“This idea came out of the micro financing world,” Duffy said. “That is, investing back into the community with assets you have on hand and getting a return.”
Duffy said the program was designed with three primary goals in mind: providing municipalities with the opportunity to fix infrastructure, stimulating the economy by reinvesting locally and fostering further economic development.
Grundy County currently has a little more than $8 million in cash reserves, according to the most recent budget and already invests a portion of that money in interest-bearing securities.
Duffy said, by offering the loans at a 2 to 3 percent interest rate, the county would still make money while greatly helping local communities in need.
“This opens up an opportunity for the county to think outside the box,” Duffy said. “Any interest the county would get back would be in the same ballpark, or maybe more, than they would get in other securities.”
Termed at five to 10 years, the loans would give municipalities time to adjust their budgets for the repayments and would return the county’s investment in a reasonable amount of time.
The intergovernmental loans would also eliminate the barriers and qualifications that often keep communities from receiving federal and state aid, Duffy said.
“A lot of the government programs out there do offer low interest loans, but they have strings attached to them,” Duffy said.
With the program, the county would be free to grant loans based on need or greatest potential investment.
The finance committee discussed the loan program at the most recent meeting.
“There are couple programs like this already in place,” board member Dick Joyce said during the meeting, referring to programs in other counties.
During the meeting, board member John Almer mentioned using the program to help fund the sewer replacement project in the Prairie Oaks Subdivision outside of Coal City.
The homeowners have come to the last two finance meetings to ask the county to fund the remaining $105,000 needed to finish the $1 million project.
Duffy said he had Prairie Oaks, and similar projects, in mind when he drafted the loan program.
“Here’s a group of people who have their own private septic system that’s not working, and they need help,” he said. “You could do a low-interest loan to help those in that community.”