The Mariposa County Board of Supervisors wants to draw a firm line on whether or not to forgive six loans that were given out to help small businesses.
The question is whether the county was clear about where that line was drawn to begin with.
The micro enterprise loans were from a $500,000 grant Mariposa County received from the Community Development Block Grant Program (CDBG).
Six local businesses received the 15-year loans at 2 percent interest. They include: Mountain Meadow Farms ($50,000), Dixon’s Fixin’s ($50,000), Lemon Drop ($50,000), Local Grape ($50,000), Where the Wild Things Play Preschool ($100,000) and Mountain Fitness ($250,000).
Supervisor Jenni Kiser, who owns Mountain Fitness, got the loan before she was elected and recused herself from the supervisor’s discussion.
Brenda Ostrom, owner of Mountain Meadow Farms, is 10 months behind on her payments after her business was derailed by a dog attack on her chickens.
Ostrom said she was told that after a year of payments, her loan would likely be forgiven.
“It was presented as a grant that required one year of payments. I met those requirements, and when I went to the board the rules changed,” Ostrom said.
Lori Dixon, owner of Where the Wild Things Play Preschool, said the former manager of the Economic Development Division, Tara Schiff, made forgiveness seem like a foregone conclusion.
“Tara all but guaranteed that my loan would be forgiven after the first year,” Dixon wrote in an email to the board.
Dixon attached a copy of the December 2022 Mariposa County Board of Supervisor’s resolution approving her loan that said, “Forgiveness will be evaluated on the consistency of payments, as well as the viability of the business.”
But in April 2025, the board of supervisors approved new guidance for loan forgiveness, which said that “loan balance forgiveness may be granted if the business experiences significant financial hardship due to external disasters or emergencies.”
“I believe I speak for most recipients when I say this certainly feels like a double bait and switch. First, we were enticed with a grant that suddenly became a loan and then again when new forgiveness criteria was implemented that makes it near impossible to achieve,” Dixon wrote.
Supervisor Rosemarie Smallcombe seemed to agree, in part.
“We were not clear,” Smallcombe said.
“To some extent we are at fault for misleading people about the funding and the parameters for use and repayment. I don’t know how we go back to remedy that but I think we are responsible for a lack of clarity,” she said.
Supervisor Miles Menetrey strongly disagreed.
“These folks who took these loans knew they were loans from the get,” he said.
“You have a contract for a loan and you signed it. If you didn’t read it, it’s on you. I’m pushing back that we miscommunicated,” Menetrey said.
County Administrative Officer Joe Lynch said CDBG has informed the county that loan forgiveness should be rare, and only when meeting the conditions of the loan itself.
Will Fassett, a county planner who has taken over managing the program, said CDBG does not consider inability to make a payments by itself a valid reason for forgiveness.
Fassett brought several options to the board for their consideration:
• Offering a three month grace period of non-payment before declaring the loans in default and pursuing collections.
• Incentivizing repayment by offering forgiveness on the last $10,000 of the loan if all other payments are made in full.
• Offering temporary forbearance of loans for businesses experiencing financial hardship.
Lynch said the problem is staff doesn’t currently have the ability to put the loan on pause temporarily to look for solutions.
“You either pay or you’re out,” he said.
Lynch said almost by definition micro enterprise loans are risky.
He suggested the county work with Ostrom to see if it can determine why her business was not successful.
The county has heard Ostrom’s story several times during the debate over the animal ordinance. “The narrative has been the same before and after” the loan, Lynch suggested.
The idea behind the CDBG grant to Mariposa County is that money paid back could be used for awarding new loans.
Since the county offered the CDBG loans it has received $95,000 in payments. About $450,000 is outstanding.
Leigh Westerlund, assistant county administrative officer, credited staff who stepped in to manage the CDBG program. “There’s been a lot of cleaning up they’ve had to do.”
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