Letter: Upset about HdG loan process

January 26, 2012


On Dec. 5, I read the Havre de Grace City Council agenda. Under new business, it read "RAD loan approval—Mary Martin Ltd." The amount of the loan, $100,000, was not posted. At this point it appeared that the loan approval was predetermined.

Despite what has been written in the Dec. 5 city council minutes, I fully support the RAD program, although I do agree with The Record editorial of Dec. 16 stating the city should probably not be in the banking business. This said, the program is in place in Havre de Grace and has been funded by a $392,000 federal block grant in 1990. Most likely it will remain in place if administered properly.

Shown online at http://www.baltimoresun.com is that five of the 12 RAD loans on the books at the June 30, 2011 audit are in default. Most disturbing is the cavalier attitude some members of council seem to have in regard to the loan process. Upon questioning, the majority of council members stated they did not read the RAD committee recommendation. One member went so far as to say that even if he read the report he probably would not understand it. I asked a variety of questions concerning the loan process to gain clarification with audit procedures, financial requirements, applicant's business plan documentation and whether the applicant was required to put the loan funds into a dedicated account to insure that the monies were spent in the manner intended in the application. The city's finance director stated this type of information was not a matter of public record.

Despite the admission by two members that they had not read the report and one whom had read it partially, all three voted to approve the loan. The one member who voted no stated he felt that the entire loan process has too many problems. Some have called the process broken. At this point this prompts more questions than answers. After hearing that the council members did not do due diligence and acquaint themselves with the details, why the big rush to vote? Why could the problems, (if they exist) not have been corrected before a vote was taken? And should the public have a right to know anything in regard to the RAD loan process? Are there any procedures in place to circumvent a vote when it is obvious that council has not bothered to look into the application or recommendations made by any committee?

At the council meeting of Jan. 3, I asked the council president and the mayor to "Do the right thing" and void the vote taken, and revote after the council members have thoroughly read and understood the application and process. Every default prohibits someone else the opportunity to start a business in our lovely town.

I have been asked why I feel so strongly about the RAD loan process. After all, I was told, it is only in this case $100,000 and we were given the money years ago. Well the money came from taxpayers, and we all had to pay for programs like this to be instituted. Finally, is this an isolated incident or is this, business as usual? Given the number of defaults, we as taxpayers should all expect that these applications should be scrutinized more thoughtfully.

Joseph Fiocchi

Havre de Grace

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