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` / Item 6. <br /> • <br /> ee <br /> CityofElk -..� <br /> River <br /> TO: Economic Development Authority <br /> FROM: MEMORANDUM <br /> Marc Nevinski, Assistant Director of Economic DevelopmentDATE: May 14, 2001SUBJECT: Consider Request by Roma Tool for Temporary Loan Payment <br /> IssueReduction <br /> Roma Tool & Plastics contacted staff in late March requesting a suspension of <br /> payments on their state loan for the period of February 2001 to September 2001. The <br /> company has cited a limited supply of working capital as the reason for their request. <br /> The plastics industry has been hit hard by the recent economic downtown. The EDA <br /> is asked to consider the request. <br /> Background <br /> Roma Tool & Plastics received a $500,000 state loan in 1986 as part of the State's Small <br /> Cities Economic Development Program. As with the State's current loan program, the <br /> City was required to administer the loan, but was allowed to retain the first $100,000 <br /> of principal to build its own economic development loan fund. <br /> In 1991 the loan was restructured. Monthly payments were reduced from $5533 to <br /> $500 per month and then increased annually until 1997 when payments topped-off at <br /> $2643 per month. At this point the City had recouped its share of the loan principal, <br /> with the remaining repayments going back to the State. In 1998 the company was <br /> purchased and moved to Almena, Wisconsin. Concerns by both the buyer and city <br /> staff about the company's viability if full and immediate repayment of the loan was <br /> required resulted in an agreement to allow the continuation of amortized payments. <br /> Records indicate that the loan has generally been kept current since the restructuring <br /> in 1991. However, no payments have been made since January of this year. The <br /> current balance on the loan is $327,000 with an interest rate of 1%. Monthly payments <br /> are $2643. <br />