Ed note: The word "denied" in the title can be misleading without reading the article.
The article suggests a loan is forthcoming after meeting dubious conditions. Which is typical and allows
public officials to give the appearance they are taking the necessary steps to get people paid, while
protecting the public. Dubious conditions when collateral is no more than a list of
equipment, with no provisions or time for any independent appraisal or verification the equipment is not currently
used as some form of collateral elsewhere. Equipment free and clear with value qualifies for loans from
traditional lending sources. But, based on the true market value and free and clear of other encumbrances.
Now a second loan has been uncovered 5 months later.
Million-dollar loan request denied
Altus Times News, August 31, 2008
A request from Quartz Mountain Aerospace for a temporary loan (90 days) of up to one million dollars was denied by the Municipal Trust authority during a special meeting on Friday.
QMA President/CEO Mark Arciero explained that the company is expecting funds from a recent investment banking agreement with Riviere Jenson Securities, Ltd. Of Austin, Texas, to lead the funding of QMA Bonds up to a net amount of $120,000,000.
However, the money will not be available to QMA until the end of September.
After lengthy discussion between board members, City Administrator Mike Nettles and Mayor T.L. Gramling, the Trust Authority decided to instead lend only a portion of the funds requested.
The "down-burst" of June 5 caused a tremendous amount of damage from which the city is still recovering and Nettles revealed that Altus is still waiting on recovery funds from Federal Emergency Management Agency (FEMA) and the state of Oklahoma.
City Finance Director Joe Don Dunham advised that the city was just not in a position to loan QMA that much money.
Meanwhile, Arciero claimed that QMA is so far in the red, it will not even be able to pay its more than 140 employees on the regular pay day which falls on Sept. 5.
Only a portion of the 140 employees mentioned qualify to count toward those meeting the states requirements for
both tax credits and quality jobs. Management and the Coffeyville KS employees do not qualify.
Concerned about the future of QMA, the Trust Authority voted to re-convene in yet another special meeting on Tuesday morning, Sept. 2, to determine exactly how much revenue the City could comfortably lend without causing detriment to itself.
For a brief second, it looked as though Arciero could breathe a sigh of relief.
But then Lindsey Kassin raised her hand to address the board.
A former employee for QMA, Kassin expressed extreme concern at the idea of the City loaning such a substantial amount of money to the company.
According to Kassin, the whole loan process could have been avoided if Arciero and other QMA executives spent money more responsibly.
"They're bringing people to Altus from Coffeyville (Kansas) and putting them up in some of the most expensive apartments in town, and they're paying them on a different payscale," said Kassin. "And they're not selling any of the ‘Air-Worthiness' planes that we've built," she continued.
Arciero said that QMA is a "start-up aviation company, on the verge of finalizing a financing package," that will thrust them into full production mode.
"We're bridging the company through several avenues and one of those is with the City," he said.
QMA signed a lease agreement with Coffeyville Industries that began on July 1.
The merger came about through a desire of QMA to expand its aerospace manufacturing operations by producing the sheet metal subassemblies necessary to support accelerated production of its Model 11E single engine piston aircraft at its manufacturing facility here in town.
The agreement provided immediate manufacturing space for QMA to expand its operations into the state of Kansas.
But Kassin is concerned that QMA and Arciero have plans to move the company to Kansas, and is is already moving a lion's share of its tools and equipment to the Coffeyville facility.
"He's (Arciero) telling you that he has 2.1 million dollars worth of equipment to put up as collateral, but where is all this stuff?" Kassin asked during the special meeting.
Arciero then assured the Trust Authority that he could provide a list of the items that would be used as collateral for a loan.
City Attorney Catherine Coke informed Arciero that a list would definitely be necessary for loan approval as the city would have no jurisdiction over machinery located in Kansas.
What exactly is going on at QMA, where has all its money gone, and why it has not sold any of its air-worthiness planes?
Arciero scoffed at the accusations, claiming that these people have no clue what the business is all about.
"There are people in the community of Altus with an agenda to make QMA look bad," he said. "I don't know why people do what they do..."
Although many might place Kassin in that category, she begs to differ.
"I'm not against the City loaning the money to QMA; in fact, I hope they do get the money. I just want them (QMA) to be held accountable for what they do with those funds once they get them," she said.