One final comment on the request for $20,000. from our revolving loan fund for Michael Brown's Custom Builders.
At the June 24th council meeting, the majority of your sitting council approved a $20,000 loan from our Revolving Fund to Michael Brown Custom Builders. The vote was 4-3 in favor of approval with no further comments allowed from the public. It seems that the decision had already been made at their Executive Sessions. I applaud the three councilors who exercised prudence by opposing this decision.
I'm sure people in the community are sympathetic and supportive of Mike Brown's endeavor to keep his business afloat and I can't fault anyone for feeling that way, especially since he is a local person, born and brought up here in Millinocket. However, what you need to know is that Ron Preo (who is not a Millinocket native) is basically the financial force in this partnership.
Approximately 2 and 1/2 years ago this company received $560,000 in loans from the Maine Rural Developent Authority, Key Bank and Coastal Enterprises. In addition, they are currently receiving rental fees from Portland Glass and Pine Tree Treasures. They also were awarded a contract to manufacture kitchen cabinets for Twin Pines and are the recipient of a host of tax breaks and benefits from having been allocated "Pine Tree Zone" status. And yet they need another $20,000 from the taxpayers of Millinocket?
Unfortunately any business either succeeds or fails depending on a number of factors. Among them are the company's efforts; the quality of their product; the availability of distribution of its product, and especiallly good financial management.
Brown has never gave the public an accounting as to where all this money went. There were rumors of non-payment of worker's wages and liens against the business for non-payment of expenses. Again, none of this was addressed publically. Therefore, I question the decision of the council majoritiy. Were these questions addressed during council's Executive Sessions; and if so, why wasn't the public informed? It is our money, after all.
Mr. Preo can be very persuavise and aggressive. Michael Brown is a "local boy". Neither of these factors should have influenced the council. The decision should have rested solely on the financial viablility of repayment of this loan.
The collateral offered, as I have previously stated, would be of no use to Millinocket even if the town were able to stake a claim.
Our town manager has stated how successful this program has been; however, in the last five or so years that has not been the case. The fund now stands at $83,300 in arrears of what is probably uncollectable debt. Have we now added another possible $20,000?
I believe that it is the responsibility of the Revolving Loan Committee and the Council to disregard personal friendships and relationships with the applicants, and to exercise more caution and financial responsibility before approving any more loans of town money from this fund.