The Park Rapids City Council is considering moving the management of the city’s revolving loan fund to the Heartland Lakes Development Commission, based in Park Rapids.

Mayor Ryan Leckner told the council Tuesday that at a recent HLDC board meeting, executive director Mary Thompson said they now have the ability to handle the fund, which is currently managed by the Bemidji-based Headwaters Regional Development Commission (HRDC).

In the past, Leckner said, it has been difficult for business owners applying for a revolving loan to get hold of HRDC. “People would have to go to Bemidji to meet with them, to get it started,” he said.

Leckner added that he and other city representatives have had difficulty getting HRDC to tell them the fund balance available for lending, “which is kind of scary,” he said.

Leckner said the city’s Economic Development Authority board has the authority to turn the contract over to the HLDC, “and it would be kind of a one-stop shop.”

Also, he noted, the change would save a little money, since the city already contributes to the HLDC and therefore wouldn’t be changed loan administration fees.

Interim city administrator Betty Thomsen explained later that the HRDC’s role in managing the fund is to collect application data, underwrite the loan, present the application to the loan committee for approval and close the loan.

By contract, Thomsen said, the city has agreed to pay HRDC a loan administration fee of $750 for up to five borrowers per year, or $1,100 for six to 10 borrowers.

Leckner said the city paid HRDC $1,500 in 2019, $2,300 in 2018, and amounts ranging from $956 to $2,600 in previous years for these administration fees and related costs.

“With the shutdown and the restaurants being closed, a lot of the businesses in Park Rapids (maybe) needing assistance, this might speed up the process for them, and make the money a little bit more available to our community and more usable,” said Leckner.

Council member Erika Randall said the council needs more information before making a decision. She moved to refer the matter to staff for further study, and the motion passed unanimously.

Rouse made full time

In other finance-related business, the council appointed Dawn Rouse as a full-time accounts payable clerk, effective Nov. 25.

Rouse was previously hired as a part-time accounts payable clerk effective Sept. 23.

Thomsen said Rouse is already working almost full-time, and her added responsibilities are meant to help resolve the “segregation of duties” issue mentioned annually in the city’s audit report.

“We definitely needed her even without that,” said Thomsen, “but now we can have more than one set of eyes looking at payroll, accounts payable, etc.”

According to the council’s resolution, the schedule change does not affect Rouse’s pay, currently $15 per hour, or her six-month probationary period. However, it does provide her with a full-time employee’s benefit package.

Thomsen said the funds for the full-time position are in the city budget.

Randall moved to approve the resolution, and the motion passed unanimously.