Budget woes put Payson loan program in jeopardy

PAYSON — A fund used since 1983 to spur business development may be on its way out because of Payson's budget woes.

City leaders recently turned down an application for the "gap funds," historically used to make the difference when private business funding fell short.

Ed Thibaudeau, owner of Shield Card America, applied for $96,000 in funding from the city's revolving loan fund to expand his business. Last week, the Payson City Council turned the application down on a 3-2 vote.

"It threw me," said city treasurer Elaine Openshaw. "I wasn't expecting it. It had nothing to do with the applicant. It was a matter of the current budget crunch."

The fund has $192,000 in uncommitted money. The rest, totaling $300,000, is loaned out to assist other businesses with a three-year deadline to return the money.

Councilman Brad Daley argued that with the city facing another tough financial year, which could lead to layoffs, it needed to conserve the fund for the city budget.

"That's the first time they've decided to use it this way," Openshaw said.

Thibaudeau turned to the city when other attempts to borrow the money failed, officials said. He wanted to expand and add five jobs.

The loan fund originated as a $100,000 Community Development Block Grant to assist local businesses. Over the years, it became the city's money to use as officials decided.

If granted, the loan would have put the city in a second collateral position on Thibaudeau's property, which Daley argued was too risky. However, the city usually is in second position when it loans from the fund, Openshaw said.

Shield Card America prints for law enforcement agencies around the country. Its products include a business card with a metallic shield.

e-mail: rodger@desnews.com