Micro-loan program wins OK

With little debate Wednesday night, the La Grande City Council gave approval to a proposed micro-loan program for local businesses and a transient room tax grant program for tourist-related activities.

The council had met to discuss the programs in a work session Monday, so details were worked out before a resolution approving the programs was put to a vote. The vote passed unanimously.

The micro-loans will be in amounts up to $5,000 and may be used for a variety of purposes including working capital, equipment or inventory purchase, marketing and advertising, and more.

A list of ineligible activities includes refinancing of debt, investment purposes not related to the business, non-profit or non-taxing enterprises, base payroll and payment of taxes.

A next step is for the council to appoint a committee to oversee the program and review applications.

The committee will be comprised of volunteer professionals appointed by the city council. At least two members will represent the local commercial lending community.

According to staff reports, the loans are for small-scale, short-term gap financing. The city created the program to increase employment or help retain jobs and improve the business environment.

The micro-loan program was made possible because of the receipt of $40,000 in unanticipated revenues. The city does not plan to add to that fund.

Survival of the program depends on borrowers paying the loans back. The majority of the loans will be for 36 months. Interest rates are negotiable, but will be set above the prevailing commercial lending rate and will not be less than 5 percent per year.

Applications for loans must be made on forms provided by the city. Anyone needing more information on the program should contact Community and Economic Development Director Charlie Mitchell, 962-1307.

The council also signed off Wednesday on the proposed transient room tax grant program, designed to support tourism in La Grande.

The city has $25,000 in unallocated funds in the current budget for the program. Some $2,500 will be placed in a mini-grant program, with the remainder set aside for larger events and programs.
Union County Tourism will administer mini-grants, with final approval of applications resting with the city manager. Mini-grant awards will not exceed $500.
Larger requests will be reviewed and approved by the city council. Union County Tourism will be given the opportunity to review and comment on the requests.
In other business Wednesday, the council passed a resolution giving City Manager Robert Strope authority to sign off on routine administrative matters.
Also, the council ratified Strope’s recent administrative action regarding a Department of Environmental Quality mutual agreement and  order.
The order was connected to a $3,600 fine the DEQ levied against the city this summer for a minor discharge of untreated sewage into Taylor Creek.
Strope and City Attorney Jonel Ricker appealed the fine, and the DEQ agreed to reduce it to $1,800.
Strope executed the agreement in order to comply with a DEQ deadline. He then asked that execution of the agreement be ratified by the council.