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Now he’s not so sure.
Witt traveled to St. Paul to watch legislators draft the bill in a special session on Sept. 11.
“I walked away from that feeling very good until the point it was introduced at the local level,” Witt said.
Like the owners of 60 other flooded businesses in Rushford, Witt owner of Witt’s Pharmacy is watching closely the city’s proposal to use state relief dollars for loans to damaged businesses.
They say the plan was assembled with little local input, diverts too much state money back into government coffers and forces business owners to take on more debt to receive state aid.
The Rushford proposal was given a preliminary go-ahead by the Department of Employment and Economic Development on Monday. DEED officials described it as offering the most generous terms on record for business loans to flood victims in Minnesota.
But lawmakers like Rep. Ken Tschumper, DFL-Houston, worry that DEED has “subverted” the flood relief bill that is funding the loans.
“The plans were supposed to be put together by the local community, not dictated to them,” Tschumper said.
The Rushford proposal is more ambitious than Winona County’s preliminary plan for business loans. It offers up to 75 percent loan forgiveness after a nine-year deferral. It prevents a larger percentage of the loan funds from being returned to state coffers. It would allow business owners to borrow less from the Small Business Administration to cover rebuilding costs.
But it also contains elements that concern business owners such as Witt.
Under the Rushford plan, Witt would need an SBA loan to cover at least 10 percent of rebuilding costs. Witt said when he lost much of his inventory in the flood, he also lost his only collateral to secure a loan.
“For those loans, you have to be dollar-for-dollar collateralized,” Witt said. “That’s an impossible situation.”
DEED director Dan McElroy said the amounts forgiven in the Rushford plan exceed previous flood-relief efforts. Only once in 2002 in Roseau did the Minnesota Investment Fund offer disaster loans with more than a 50 percent forgiveness rate.
Some of the Roseau applicants received 75 percent forgiveness, McElroy said, but in amounts no greater than $25,000. Like the bulk of southeast Minnesota flood victims, most of those recipients didn’t have flood insurance.
“We’re trying to balance meeting the needs of the community with a need to be fair,” McElroy said.
Regardless of the controversy, Witt stresses that his pharmacy will remain a fixture in Rushford.
“I’m committed to this community,” he said. “I’ll find a way to make it work. But they certainly aren’t making it easy.”
You may reach Winona Daily News reporter Mark Sommerhauser at msommerhauser@winonadailynews.com or (507) 453-3514.
