Batesville Herald Tribune, Batesville, Indiana

May 2, 2014

BEDC ponders grant application

Diane Raver The Herald-Tribune
The Batesville Herald-Tribune

---- — Mariann Dickman, owner and president of Advance Nitriding Solutions, 1688 Lammers Pike, asked the Batesville Economic Development Commission in February to get behind her application for a $1 million Lawrenceburg Regional Economic Development Grant. On April 18, members asked for more information.

BEDC President Andy Saner explained, “Lawrenceburg has recently changed the process by which a grant request can be approved through them .... The grant must receive a sponsoring entity prior to being considered (typically governmental units). This comes as a result of grants that have been awarded, but did not meet requirements of the grant request, ultimately resulting in loss of grant dollars by Lawrenceburg.”

According to Dickman’s proposal, the total project is $2.39 million – $2.2 million to purchase equipment, $90,000 for packing and shipping and $100,000 for installation and training. It also includes adding employees.

Dickman said, “I have a bank that will give me a loan, and I’ll sign the paperwork after I know what the grant is for.”

Currently, “our guys are working seven days a week .... We just put an ad in the paper to hire more people, and if we get the grant approval, we’ll hire five in the first week.

“In 2012, we did $2 million in sales. In 2013, we did $1.6 million. Sales have been increasing since then .... This will be a really good year for us, and when we get the new equipment, we can do even more.”

BEDC member Gene Lambert pointed out he was hesitant to approve the grant because he still had some questions for Lawrenceburg officials about the city’s liability. “If you only hire half the people, does that mean we have to pay the grant back in full?”

Saner also had some concerns, including the owner taking large distributions (payouts over $1 million) each year instead of re-investing that money into the company. “ANS received a grant previously from Lawrenceburg and did not ultimately meet the requirements of the grant. Additionally, as part of the (current) review process, the financial information provided was reviewed by the Indiana Small Business Development Center and several financial risks were highlighted regarding the sales, revenues and retained earnings.

“There have been character concerns raised, through unsolicited feedback, from our community regarding previous financial dealings and projects that have taken place between the owners of ANS and employees, family members and business partners,” he later stated in an e-mail.

“These red flags make it difficult for me to support the grant request when it puts the city’s money at greater risk than we believe is necessary. We understand that most grant requests will come from small- or medium-sized businesses, who may need the money to help fulfill orders, production or equipment purchasing needs, so there is inherently some risk. However, those risks, combined with additional financial concerns and character issues of the requestor, in this case, cannot be overlooked and would be reviewed in any request.”

Mayor Rick Fledderman added, “We have to do our due diligence ... and scrutinize things very closely. Our reputation is on the line.”

Members were going to hold a special meeting April 25 to make a decision on the grant request. However, prior to that, ANS officials provided updated financial information for members to review. “In fairness to all parties, we felt it was best to postpone this meeting,” the mayor revealed.

A decision will be made at a later date.

Diane Raver can be contacted at diane.raver@batesvilleheraldtribune.com or 812-934-4343, Ext. 114.