Abraham asks Finance Committee to review loan status
NORWICH – At least one politician wants to keep a closer eye on the city’s outstanding business loans. Tuesday night, First Ward Alderman A. Anthony Abraham attended the City of Norwich Finance and Personnel Committee meeting to discuss his recommendation that economic development loans be monitored more closely.
Abraham wrote a letter to the mayor and each of the Common Council members suggesting a motion be passed that would give the Finance Committee the responsibility of monitoring all economic and community development loans and presenting the information to the full council. He presented his idea to the committee Tuesday night.
“That way we can be informed of the status of each loan, decide who is in default and decide what action needs to be taken,” Abraham said.
According to Abraham, there were nine separate loans that had no payments made between Jan. 1 and May 31. The nine loans totaled $363,383.52.
In a later conversation, Finance Director William Roberts explained it was more likely seven loans without payments, saying one loan balance remained the same over that time period because the company had made a year’s worth of payments in advance, while another loan was written off by the city when the company holding it went bankrupt.
“We do have about seven loans that are behind in various ways,” Roberts said. Roberts explained currently at least one of those loans is in the process of being restructured and brought current. “We’re discussing two kinds of loans,” Roberts said, “economic development loans and housing rehabilitation and emergency repair loans.” He explained many of the problems lie in the second category.
“Some of these loans are delinquent, and we’ve been following up with the people involved,” Roberts said.
Abraham said also, despite a stipulation in the contract which calls for late charges if a payment is overdue more than 15 days, no penalty charges were levied on the delinquent accounts. Roberts confirmed that was the case, but said the council will begin reviewing the loans closely and making determinations on each. “We will be assessing the penalties and interest at that time,” Roberts explained.
“If this was a private corporation, every one of us would be fired,” Abraham told the committee.
The committee made a recommendation to the council to approve Abraham’s motion.
“This is something that should have been done all along,” said Fourth Ward Alderman Walter Schermerhorn.
When asked in a later discussion why Abraham felt so strongly about this issue, he said, “I’m only trying to protect the taxpayers’ money. If I didn’t bring this to a head, I don’t know how long it would have gone on and how much money would have been lost.”
Abraham wrote a letter to the mayor and each of the Common Council members suggesting a motion be passed that would give the Finance Committee the responsibility of monitoring all economic and community development loans and presenting the information to the full council. He presented his idea to the committee Tuesday night.
“That way we can be informed of the status of each loan, decide who is in default and decide what action needs to be taken,” Abraham said.
According to Abraham, there were nine separate loans that had no payments made between Jan. 1 and May 31. The nine loans totaled $363,383.52.
In a later conversation, Finance Director William Roberts explained it was more likely seven loans without payments, saying one loan balance remained the same over that time period because the company had made a year’s worth of payments in advance, while another loan was written off by the city when the company holding it went bankrupt.
“We do have about seven loans that are behind in various ways,” Roberts said. Roberts explained currently at least one of those loans is in the process of being restructured and brought current. “We’re discussing two kinds of loans,” Roberts said, “economic development loans and housing rehabilitation and emergency repair loans.” He explained many of the problems lie in the second category.
“Some of these loans are delinquent, and we’ve been following up with the people involved,” Roberts said.
Abraham said also, despite a stipulation in the contract which calls for late charges if a payment is overdue more than 15 days, no penalty charges were levied on the delinquent accounts. Roberts confirmed that was the case, but said the council will begin reviewing the loans closely and making determinations on each. “We will be assessing the penalties and interest at that time,” Roberts explained.
“If this was a private corporation, every one of us would be fired,” Abraham told the committee.
The committee made a recommendation to the council to approve Abraham’s motion.
“This is something that should have been done all along,” said Fourth Ward Alderman Walter Schermerhorn.
When asked in a later discussion why Abraham felt so strongly about this issue, he said, “I’m only trying to protect the taxpayers’ money. If I didn’t bring this to a head, I don’t know how long it would have gone on and how much money would have been lost.”
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