The Kendall County Board voted 5-4 Tuesday morning to allow the county to loan local governments - including the county - money through its economic development revolving loan funds.
Board Chairman Scott Gryder, Economic Development Chairman Audra Hendrix, and board members Matt Kellogg, Matt Prochaska and Elizabeth Flowers voted in favor of the measure, while board members Judy Gilmour, Robert Davidson, Lynn Cullick and John Purcell voted against it. Board member Tony Giles was not present at Tuesday's meeting.
Those voting against the measure said they didn't know the parameters of the loans to governments before voting on the measure.
However, Hendrix, who brought the measure to the board, argued that the measure only opened up the county to lending money to those government entities. She said rules are already in place for businesses wishing to get a loan from the county, and that any loan would have to be approved by the County Board.
Hendrix said when the county received its first money from the state for economic development loans in the 1980s, the money came with restrictions, one of which was that it could not be lent to local governments. The state has since rescinded those restrictions, she said.
"This is basically reverting back to the way we were doing it before" 1988, when the state gave the county the funds, Hendrix said.
Hendrix said that the county had recently been approached by a local government - the Village of Oswego - whose revolving loan fund was depleted because of successful economic development projects.
Oswego Village Administrator Daniel Di Santo, who attended Tuesday's meeting, confirmed later that the village had been approached by businesses asking for an economic development loan from the village.
"We're thrilled with the decision that the county is willing to lend to municipalities," Di Santo said. "Oswego has had great success with the revolving loan program. Every one we've had has been successful, we have many in play now. That's also the reason we're here, because we've lent out all the money; there's not much left to lend. We do have a few projects that have expressed interest in additional loans, and since we didn't have any, we directed them to the county. That's when we learned that the county was interested in lending directly to municipalities to reduce their risk."
During a discussion on the measure, Davidson said there should be a limit set as to how much money the county would loan a municipality. However, Kellogg said the measure being voted on would just change the language of the county's revolving loan policy to allow such loans, and that the county could "hash out those details" if a local government approaches them about a loan. Kellogg also said the measure would allow the county to access the funds in case of an emergency.
"This frees up the money so we can manage it more properly," Kellogg said.
Hendrix said there are projects that could go forward but that their respective municipalities or other local governments have depleted revolving loan funds. She referred to a loan from the county to a hotel complex in Sandwich in which the county only recovered 10 percent of its original $750,000 loan.
"Those private ventures could come to us and ask us directly, but we took a bath the last time we did that, and by loaning to municipalities we lower our risk to a point that makes it very, very comfortable, but also relieves us of the administrative burden of having to administrate those loans and it puts the expertise of what those communities need and want in their areas in the hands of the people that are closest to it," she said.