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Alyce Maragus

Millinocket - Revolving Loan Alert
By Alyce Maragus
May 26, 2009 - 6:36:53 PM

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Tomorrow, Wednesday, May 27th, the town councilors will meet in Executive Section to discuss releasing $20,000 from the town's revolving fund for Mike Brown Custom Builders, Inc.

Following approval of the municipal and wastewater budgets, they will then vote on whether or not to approve the recommendation (in favor of) of the Revolving Loan Committee.

So many questions come to my mind. A January 2007 article in the Bangor Daily News reports that Brown and Preo received a combined total of $560,000 in loans from the Maine Rural Development Authority, Key Bank and Coastal Enterprises.  Where has that money gone in only two years? In addition the company receives rent from Portland Glass, Pine Tree Treasures, and has had a contract with Matt Polstein to redo kitchens at his Twin Pines Resort. Where has that money gone?

There is some question as to whether the company has been consistent in paying its employees. Word also suggests that Ron Preo is trying to cash in on Mike Brown's reputation of being a home-town boy. It is also rumored that Ron Preo will produce a letter from Lowe's hardware chain endorsing the business. Even should that occur, our economic condition in the entire state does not bode well for people to be remodeling their kitchens.

The outstanding debt to our Revolving Loan Fund is currently $113,000. to date, however, $83,000. of that is probably uncollectible. How many more "loans" are we going to give that ultimately become uncollectible?

In case of default, the town is scheduled to be second in line for the building and the machinery. What would we do with it even if we were able to collect? We are also second in line for any accounts receivable.  Question: If there are any accounts receivable, why doesn't Brown and Preo make an effort to collect them instead of requesting additional funding from the taxpayers?

I believe the council should either deny this request or table it until further investigation takes place. What is the status of Brown LLC's outstanding debts? Has he indeed been paying his employees? And just what will $20,000 be able to accomplish when $560,000 hasn't done the job?

As an aside, has anyone out there missed my words of wisdom?


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