Cherokee County admits to borrowing almost $500K in illegal loan - KTRE.com | Lufkin and Nacogdoches, Texas

Cherokee County admits to borrowing almost $500K in illegal loans

CHEROKEE COUNTY, TX (KTRE) -

For years, Cherokee County officials say they were buying equipment with illegal loans. County Auditor L. H. Crockett says they are now doing whatever they can to fix the high dollar mistake.

Texas statute does not give counties the authority to borrow money, but that's exactly how some commissioners, and even the sheriff, were paying for tractors, mac trucks, even patrol cars.

The loans totaled almost $500,000.00. About $115,000 will be paid off immediately by transferring money from reserve budgets. The county is working with banks to refinance the rest through lease-purchase agreements.

"Recently a couple of our commissioners went to a seminar. During the course one of the speakers mentioned that counties could not merely borrow money. They came back and one of them went to see our county attorney... He dug into it and called it to my attention," said Crockett.

Lease-purchase agreements are allowed since the lender owns the merchandise until it's completely paid for.

The county auditor says the rates being offered so far are actually better than they had with the regular bank loans.

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