Over the course of five years, El Paso County has lost $459,000 in failed loans.
In 2007 the El Paso County Commissioners Court looked to revitalize funds from a Texas capitol grant. The Family and Community Services Department partnered with the Hispanic Chamber of Commerce to package 17 loans, five years later 15 of the loans have failed and Director Rosemary Neill says the money cannot be recouped.
On Monday, Neill came before the El Paso County Commissioners Court to ask those 15 failed loans be wiped off their record. According to Neill it hurts their portfolio when they look to offer future loans.
Neill said the loans they offered in 2007 were traditionally "unbankable," high-risk loans that banks would not take on. As a result, she said many of the loans began failing in 2008 shortly after the loans were made.
At issue with Commissioners, including Dan Haggerty, was that liens were not taken out on equipment purchased by the businesses that received loans. As a result, roughly $100,000 dollars were recouped on loans worth more than $500,000, and it appears like no further money will be recouped.
Neill declined to comment on which businesses failed, but said each loan carried a requirement of creating one job per $25,000. She didn't have numbers available about how many jobs were created by the loans, but based on the money that was not repaid back it appears another 18 jobs should have been created.
Haggerty referred to the failed loans as ridiculous, openly laughing when Neill commented that a bank wouldn't have taken on these loans.
"Somebody is going to jail over this, Rosemary," said Haggerty as he chuckled from behind his seat on Commissioners Court.
"These loans went pretty quickly South," said Neill.
The issue commissioners, including County Judge Veronica Escobar, took with the loans were that the County never received liens on their loans. Of the 15 failed loans, no money can be recouped according to a collection agency that has been working with the County.
"I'm with Commissioner Haggerty," said Escobar, "If we can't repossess the equipment is there anything else we can do to recoup?"
According to a member of the County Attorneys Office, legal action can be explored. It's an option that was apparently presented to Neil, and her office, when asked about it she said they had already explored all their options through the collection agency but welcomed the attorneys office to continue research.
The item was tabled for a few sessions. County Commissioners say they'll review the item again after they determine whether they can recoup any of the $459,000 that has not been paid back.