Commission over stepped its bounds

Published 12:00 am Thursday, August 30, 2007

I have always subscribed to the tenet set by the founders of our nation that less government is better government. Unfortunately, over the years, since our country&8217;s founding, this ideal has seemed to fade into the back of people&8217;s minds. Every year government entities, big and small, slowly but surely erode the freedoms of their citizens by gradually taking more and more decisions away from the people they are sworn to represent.

It seems lately the United States of America is less than the Democratic Republic it was intended and more a Republic, in which certain groups make decisions influencing the lives of the masses. As government bodies continue to set precedents by dipping their hands into matters they were never set up to influence, a trickle down effect has appeared.

Since John Adams issued the Alien and Sedition Acts, something our current president would no doubt love to get his hands on, our national leaders have put in place policies they deemed necessary at the time, but which, left in place, gave the government ever increasing control over people&8217;s lives and, later, businesses dealings. Currently, the Marengo County Commission is setting a precedence, which, while brought to fruition through the greatest of intentions, will lead to hard times down the road for the residents of the area I am afraid.

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The commission thought it prudent, in the name of saving the livelihoods of 425 area residents, to approve a loan of up to $7 million to the Linden Lumber Company to keep the company, which is facing foreclosure, afloat. This ambitious move will have grave consequences to not only Linden but also the entire county should it fail.

Commissioners, in the face of such a decision, did try to cover their bases by placing stipulations on the loan prior to its approval. Their stipulations ensure the commission will be at the heart of the company&8217;s loan restructuring with current lenders and calls for audits, which will allow the group a greater understanding of the company&8217;s situation.

Nevertheless the commissioners have, if their stipulations are met, agreed to loan a large chunk of money that defaults back to county residents, not solely those currently in the position to make the decision. If all goes well the county will use a bond issue to borrow up to $7 million for the company that will be paid back in 240 equal installments over the course of 20 years, at 5 to 6.5 percent interest.

Even if the loan is paid back to the county, in a best-case scenario, the commission has opened the door to other requests from both established businesses as well as incoming business to the area. That raises the question, which will no doubt have to be answered at some point, of how many local jobs does it take to make the financial status of a business the concern of the county.

No doubt, other businesses struggling to make ends meet in the future will present their situations to the commission in the hopes for a similar bond issue. Considering the taxes pulled in by the county, such requests will likely face a negative response by a commission that cannot help sustain struggling businesses across the county.

In the worst-case scenario, the commission faces a catastrophe. They have decided to put up capital to save jobs for a company that is defaulting on loans. Apparently, some facet of the company is not meeting expectations and is draining Linden Lumber of its assets.

Company representatives laid the catalyst for their financial woes on a failed attempt to profitably enter the finished wood industry during the past several years, something they have since ceased to attempt.

Yet, even with the loan from the commission, the company will have a $1.5 million annual debt payment, as opposed to their current $4.1 million payment, and the total debt will only be reduced from $21 million to $12 million. So where will the currently un-financially viable company come up with the money needed to repay the county?

Supposing they turn around their current troubles and once again enter the black, the company faces some hefty payments. Then there is the fact that, while the commission is becoming more involved with the company&8217;s business transactions, the same management will be making decisions for the company. The same management who got the company in its current situation of default.

The commission seems to have set themselves up for failure in this regard. It seems some sort of advisory board of elected or appointed positions should have some say in the company&8217;s operation considering the county&8217;s sizable investment, lest bad decisions once again cause the company to fall into debt.

Should the company default on their loan to the commission, the county faces a much larger problem than the loss of 425 jobs. Along with helping provide assistance to those who lose their positions at the lumber mill, county residents will be further burdened with paying back the bond issue used to try and stabilize the company. Considering the commission&8217;s current budget runs $6.7 million, tacking on another $7 million worth of debt will put the squeeze on taxpayers, no matter how the payments are spread.

It seems commissioners would have analyzed the pros and cons of their move to approve this loan, yet it seems to me, while it is tragic that so many jobs will be lost by the close of the company, the commission has made no step to remedy the problems plaguing the company &8212; namely those making the decisions. It seems the county, by involving themselves in something in which they have no business, is patching the hole without any concern to what caused the hole in the first place.

Brandon Glover is the sports editor for The Times. He can be reached by e-mail to