5. Business Loan Write-Off201 'Ist Avenue East
Kalispell, MT 59901
406.758.7740
Fax: 406.758.7758
City of Kalispell • www.kalispell.com
Office of Community & Economic Development
To: Honorable Mayor Kennedy, Kalispell City Council Members
Cc: Interim. City Manager Myrt Webb, Finance Director Amy Roberston
From: Kellie Danielson, Director, Community & Economic Development
Meeting Date: March 2, 2009
ICE: write-off of Business Loan
Background and Issue
In 2007 one of our revolving loans from our Intermediary Loan Program (IRP)
entered into the default stage. One of our staff members worked alongside with
the lender with attempts to work with the borrower to revitalize the business.
The business became unsuccessful and liquidated its assets.
The amount of the default is $35,424.53. The Community Development
Department requests the City Finance Director to write-off the receivable of
$35,424.53 from the loan loss reserve established for the program and from the
interest earnings of the loan program. The write-off does not affect General
Funds. The effect will be on the IRP program earnings balance of $332,000 as the
department allocates a portion of the interest earnings to create a new loan loss
reserve. The IRP program regulations stipulate a 6% loan loss reserve account.
Action Recommended
Council authorizes the Finance Director to write-off the $35,424.53 from a 2007/08
default business loan from the City's IRP Revolving Loan Program. (The funds
for the write-off are completely tied to the Community Development Department
IRP Revolving Loan Fund budget).