OWENSVILLE —The Owensville Board of Aldermen on Monday approved removal of $278,489 from the city’s financial statement related to loans given to local businesses through Missouri Development Action Grant (MoDAG) funding from the Department of Economic Development.

The decision to remove the funds from the report was made after review by the city’s auditor this month. Two line items were identified as unpaid and uncollectible due to bankruptcy filings by loan recipients J&L 2 and Rock Island Marketplace, both grocers once located at 101 West Lincoln Street. The unpaid amount owed by J&L 2 is $37,912 and Rock Island Marketplace is $240,577.

Funding was provided through the grant funds as outlined in Owensville Ordinance 630.010, which defines intent, eligibility and procedure. Local businesses are able to apply for funding, after reaching certain requirements, to promote hiring of low- and moderate-income individuals.

The first local business to utilize the funds was Walk Easy Manufacturing in 2010. Since then, several businesses have applied and been approved for the funds including current businesses Central Tire and Old World Creations and around half a dozen businesses which have since closed.

The city currently has $280,290.53 available in MoDAG funds with $276,727.81 of that amount in a certificate of deposit earning interest and another $3,562.72 in a checking account to prevent closure of the account. However, MoDAG no longer exists and the city is unable to locate any information on what the money can be spent on or whether they have to hold it.

“We reached out to multiple resources to try to figure out what we could do with this money and it seems like…nobody either has the resource to answer it or wants to answer it. So, we’re kind of left on our own here,” Mayor Kevin McFadden said.

While local businesses are able to apply for the loan so long as the ordinance is on the books, the city is looking into the legality of how and whether the funds can be used in other ways.

The decision to absolve the debt related to the uncollectable loans was made by Ward 1 Alderman Dan Breeden, seconded by Ward 2 Alderman Denise Bohl and passed with all in favor.