Successful IRP loan program needs an influx of money; borrowing $800K would require $150K from city
Before they felt comfortable making a decision on the matter, a couple weeks ago members of the Crookston City Council, at a Ways & Means Committee meeting, said they wanted the city Development Policy & Review Committee to sit down and discuss how much the city should borrow from the USDA in order to keep the city's Intermediary Relending Program (IRP) program going.
The committee met last week and recommended that the city seek $800,000 from the USDA. That's more than twice as much as City Administrator Shannon Stassen initially recommended the city ask the USDA for, but there are some on the council who feel the city needs to be more aggressive when it comes to spurring economic development in the community, even if it means upping the city's ante.
It's not just free money, however; the more the city borrows to keep cash available for loans in the IRP fund, the higher the required local match is. In order to ask the USDA for $800,000, city Finance Director Angel Hoeffner said the city will have to come up with $150,000.
Since its inception in 1982, more than 80 Crookston businesses have benefited from various levels of IRP financing. Currently, various businesses are making payments on 11 IRP loans, and all are in good standing.
Talk among council members earlier this month indicated that the local dollars would come from the "railroad fund," which dates back to Burlington Northern-Santa Fe Railroad's removal of the bridge on Eighth Street over the railroad tracks. The city initially wanted a new bridge put in but it was deemed to be too expensive so, instead, BNSF gave the city a chunk of money, and it has remained in the fund over the years, funding various local projects deemed to have a community-wide benefit.
In his memo to the council in advance of Monday night's Ways & Means Committee meeting, Stassen indicates that the goal would be to pay the $150,000 back to the railroad fund, beginning in around five years. The city council meets at 7 p.m. in the council chambers, and the committee will meet in the conference room immediately afterward. On their agenda is discussing how much to borrow from the USDA.