Elmore officials are going to court in an effort of getting the city's Economic Development Authority functioning again.
In early December, three loan default cases involving two separate parties went through conciliation hearings in Faribault County District Court.
Neither party showed up to dispute how much they owe the EDA, so Judge Douglas Richards automatically ruled in favor of the city to proceed with collections.
City Clerk Diane Nowak says taking civil action is "the last step" of a long process involving sending out letters seeking repayment.
"It's nothing any city wouldn't do to collect funds. It's unfortunate this had to happen. We just want to get the EDA going again," Nowak says.
"Our EDA just fell apart because of no funds. The loans were given out in good faith," she adds.
Attorneys Chuck and David Frundt represented the city during the hearings.
The first case on Dec. 11 involved loans awarded to former Mayor Floyd Ford and his wife Evelyn.
The loans were made while Floyd Ford was a councilman. However, Nowak says he abstained from voting on his loan requests.
Ford was elected to the council in November 2004 and mayor in 2008.
Court papers show the Fords were approved for two $5,000 loans and assumed another for $1,500.
But, city officials are suing for only $7,500.
According to court papers, a summons was sent by certified mail to the Fords living in Kila, Mont.
In the second "small claims" case, the EDA is seeking slightly more than $4,500.
"There are a couple more out there. They are $5,000 or less," says David Frundt.
Council member Edrys Viland says it's been a long time since the EDA has issued a new loan.
She says the city had no choice but to go to court.
"If you're not getting funds coming in, you don't have any to redistribute," says Viland. "We were left holding the bag."
Newly-elected mayor Bill Hurd will take office during a special meeting on Jan. 2.
Hurd says he wants to research how the EDA functions because he expects the issue will be discussed at the council's first regular meeting in January.
"We have to find a way to resuscitate our EDA and make it work. To make it viable and vital in the community again," he says.
A favorable judgment does not guarantee Elmore officials will receive what is owed to them.
The losing party has 20 days to appeal the judge's ruling.
If the appeal period expires and no payment arrangements are made, the city may garnish wages, bank accounts or other assets. A lien also could be filed against any real estate owned by the debtor.
The judgment goes into effect 20 days after a notice is mailed and extends for 10 years from the date it is issued.
A judgment may be renewed if done before the 10-year period is over.