Legal action filed against unpaid loans
By Greg Bird
The McCreary County Fiscal Court has started legal proceedings against three individuals in an effort to collect more than $90,000 of unpaid debts through the County’s Revolving Loan Program.
Judge Executive Doug Stephens announced during Thursday’s Fiscal Court meeting that lawsuits are to be filed against three individuals/businesses that had taken out low-interest loans through the program, but have failed to make payments and are in default.
The first suit, filed against William Michael Jones, proprietor of the M&L Mini Mart, contends Jones agreed to a $40,000 loan in November 2013. The loan carried an interest rate of 3.25 percent, and was to be paid in monthly payments of $533.05 over a seven-year period. According to the suit Jones made only one payment of $530 in May 2014.
The Fiscal Court is seeking recovery of $44,778.17 plus filing costs and any accrued interest between now and the time a judgment is issued.
The second suit, filed against David Marcum and Marcum’s Pressure Washing, stated Marcum obtained a loan of $21,000 in November 2016 with an interest rate of 7.25 percent. The five-year loan called for monthly payments of $418.31. The suit contends Marcum made his first scheduled payment; then ceased any payment to the County.
The Fiscal Court is asking for a judgment of $37,583.61, plus filing costs and interest.
The final lawsuit seeks judgment against Jack Winchester who obtained a loan of $5,000 in August 2006 for a woodworking business. With a 7.25 percent interest rate, Winchester’s loan carried a monthly payment of $155.53. According to the filing Winchester made five of the first six payments, but has failed to remit any money since January 2007.
The suit seeks a judgment of $7,976.67 plus costs and interest.
The Fiscal Court had taken several steps to avoid litigation with debtors, including offering amnesty and restructuring of loans. Some previously delinquent account holders had taken advantage of the offers, but others did not.
In December the Fiscal Court published a list of five delinquent loans, including the three named in the lawsuits. Judge Stephens confirmed Monday that two of the loan holders named in that listing are in the process of settling those debts, and thus not included in the most recent legal action.
The Revolving Loan program was established to provide assistance to small local businesses with low-interest loans to help foster economic development.
In recent years the program has come under criticism as collections on several loans seemed to be non-existent and many older loans were written off as bad debt due to an apparent lack of proper documentation.
In December it was announced that the program would be revived after nearly two years with new guidelines established to ensure better compliance. The Fiscal Court passed new regulations on any new loans issued: capping the maximum loan at $15,000 with a 3 percent interest rate on an 8-year term. The loans must also be fully secured with the Fiscal Court listed as the primary lien holder.
In other Fiscal Court actions Thursday:
The Court heard from Todd Hopper, President of Poff Carting, who provided an update on garbage collection service for the county.
Poff Carting was awarded the garbage contract last year and has been providing collection service since January. Hopper noted that participation in the program has reached 60-percent, with 3,704 customers subscribed for household pick-up as of last week. That number represents an increase of more than 700 from December, when Poff Carting took over the contract.
Hopper urged residents to take efforts to clearly mark their address either on their home, mailbox or garbage can, to better ensure drivers can clearly identify the residence when on their route.
He also noted that anyone who has yet to sign up for regular service can do so until the end of the month and would only have to pay for services for one month, instead of three. Poff Carting bills on a quarterly cycle, with payments due every three months.
During citizen participation the Court was asked about the status of the County budget.
Treasurer Mark Sewell noted the county was in the best financial condition it has been in the past four years. He added the County had over $1 million in deposits at the end of the month.
Monday Sewell clarified his statement, noting the $1 million was spread across 13 different accounts, such as the Jail Fund and Grant Fund, and more than half of the money was in the Road Fund. The deposit total also does not take in to account all expenses, such as bills, that will be paid this month.
Judge Stephens announced the County is the target of a lawsuit filed on January 16 in McCreary Circuit Court. The suit, filed by Ronnie Ross, contends Ronnie Ross Road should not be part of County Road Inventory and is not a public road. Further, it states, he has suffered property damage as a result of the county’s actions in maintaining the road and public use.
Ross is seeking damages and to void the road from the county inventory. The County is preparing to file a response challenging the lawsuit.
Mark Foster with the Kentucky Transportation Department announced plans for road improvements on Day Ridge Road and Sand Hill Road this year. An additional $877,000 is available for work at the request of the Fiscal Court.
The Fiscal Court also approved the hire of Crystal Michelle Perry as an Administrative Assistant for McCreary County Tourism at a rate of $11 per hour. Perry will replace Christy Hill who held the position until her resignation last year.
The next regular session of the McCreary County Fiscal Court will be on Thursday, April 12 at 6:00 p.m. at the Courthouse.