WEDC leader says improved policies already in place

Declaring “our finances are in order,” WEDC chief Reed Hall said the organization will bring 101 management items before its newly created policy committee during a board meeting next week.

This is just one of several steps Hall outlined that the organization is taking to address problems found in a series of audits. Those problems included a failure to track roughly $12 million in loans and issues with credit card use.

Hall, speaking at a Milwaukee Press Club Newsmaker Luncheon on Wednesday, said the policy items will go to the committee, which will pass some on to the board for approval.

But Hall said the WEDC is operating consistently with those policies and will do so unless the committee or board makes changes to them.

He told the press club gathering WEDC has also formed a credit committee and a contracts committee.

“We’re trying to have more external oversight of our organization and those committees are serving that function,” Hall said.

The organization’s roughly $58 million loan portfolio is up to date but is running at about a 6 percent 90-day arrears rate, Hall said. While well-run banks strive to have 1-2 percent arrears rate, Hall said, given the credit situations of the companies that seek help from the WEDC, 5 to 6 percent “is where we want to market ourselves and be at.”

He said the agency is working aggressively with companies to ensure payment on the loans, but acknowledged some will have to be written off.

“I think our finances are in order,” Hall said. “I’m comfortable where we are.”

Hall said the WEDC will also be presenting a detailed compliance program to the board next week.

That plan, which he described as a work in progress, will be the basis of what the WEDC brings before the Legislature’s Joint Finance Committee. The JFC put restrictions on the agency’s budget until it sees WEDC demonstrating regulation compliance.

“I’m fine with that,” Hall said. “Because we need to ensure people that we’re transparent, we’re compliant.”

Hall also said WEDC has finished accepting proposals for its new computer system, with the agency receiving seven bids to replace its 20-year-old system

Hall said the aim is to ensure the new system can run parallel to the old one and to keep the cost of the new system under $400,000. The system is to run commercial software used in the banking industry.

During the hour-long event he also discussed manufacturing and agriculture, upcoming efforts to market to out-of-state companies, jobs moving back from Mexico and overseas, and the WEDC’s work with the Milwaukee Water Council and the Transform Milwaukee initiative.

Listen to audio of the event: http://wispolitics.com/1006/130717Hall.mp3

— By David A. Wise
WisBusiness.com