Archbold, OH
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Village Prepares To Loan $400,000 To Ruralogic Firm



The Village of Archbold is in the process of making a $400,000 loan to Ruralogic, a start-up Information Technology Company.

Archbold Village Council approved giving $400,000 to the Archbold Community Improvement Corporation at its Tuesday, July 6 meeting.

The CIC revolving loan fund committee was to consider the request at a meeting yesterday, Tuesday. The committee will then make a recommendation to the CIC Board.

Ruralogic plans to use the money to create 50 new jobs in Archbold, with up to 135 over a five-year period.

The company plans to retrain unemployed Northwest Ohio workers, with the goal of taking business back from overseas IT firms.

The village and the company have been negotiating a loan agreement, including a repayment schedule and a guarantee the money will be used to create jobs.

The whole project is contingent upon Ruralogic getting a job creation tax credit from the State of Ohio. The board that controls the credits will meet the end of this month.

Eight-Year Repayment

In response to a question from Vaughn Bentz, councilman, Dennis Howell, Archbold village administrator, said if the loan is approved by the CIC, it will probably be repaid in seven to eight years, with an interest rate in the neighborhood of 2%.

Bentz said he would want some kind of security for the loan, but Howell said in the IT business, there are not a lot of physical things that can be used for security.

He said village officials will talk with Mark Hagans, village law director, about ways to secure the contract.

Kevin Morton, councilman, said there’s nothing to guarantee the loan, other than the track records of the partners who are creating Ruralogic.

“They did something similar with Realogic. They made it into something, then sold it for a lot of money.”

Kenny Cowell, councilman said he was “a little skeptical at first, but after listening to Joe Burmester (chief executive officer of Ruralogic), even with the risk involved, I think this is worth it.”

Afford?

Howell said the village had over $2 million in carryover funds at the beginning of 2010. Carryover money is a form of “savings account,” money the village uses to pay the bills for the first few months of the year until revenue from property taxes is sent by the county auditor.

He said in the past, he had carefully guarded the carryover fund. In fact, just a few years ago, the balance in the carryover fund was less than $1.5 million.

Howell said he wants to see a minimum of $1.5 million in the carryover account.

Kathy Rupp, village fi- nance director, estimated the village will receive about $1.522 million in additional revenue from June 18 until the end of the year.

Expenses, he said, are estimated to be $1.18 million.

“That will bring in almost $400,000 more than what we will spend for the rest of the year,” he said.

“There are a couple things that make me feel good,” Howell said.

First, the village had planned to receive $184,000 to make up for losses by the phase-out of the tangible personal property tax. Brett Kolb, county auditor, told village officials to expect $368,000.

The only significant expense the village faces is $30,000 to match a grant obtained by Jennifer Kidder, director of Parks & Recreation.

“I’m confident the general fund can afford $400,000,” Howell said. “We should have $1.2 million left. I think it will be closer to $1.6 million,” he said.

Support

Howell noted that Williams County and the City of Bryan had agreed to loan $600,000 to Ruralogic.

He said Dean Spangler, chairman and chief executive officer of Spangler Candy, Bryan, “is excited about this. He feels good about it.”

Jeff Fryman, councilman, said council had taken a conservative approach to the current economic downturn. That conservative approach has put council in a better position to make the loan to Ruralogic, he said.


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