Former county official says loan forgiveness was never promised

Mariposa County’s former economic development manager said she never told anyone forgiveness of micro enterprise loans was a foregone conclusion, disputing claims from at least two of the business owners who took out the loans.

“At no time did I have the authority to promise forgiveness, nor was it my intention to represent loan forgiveness as automatic or guaranteed,” Tara Schiff, the county’s former economic development manager, told the Mariposa Gazette.

The loans were part of a $500,000 Community Development Block Grant (CDBG) Mariposa County received after the 2022 Oak Fire.

The Oak Fire Relief Loan program included grants of $10,000 as well as larger amounts that were loans at 2 percent interest.

Lori Dixon, owner of Where the Wild Things Play Preschool, received a $100,000 loan.

“Tara all but guaranteed that my loan would be forgiven after the first year,” Dixon wrote in an email to the Mariposa County Board of Supervisors.

Dixon said she considers the program 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.

Brenda Ostrom, owner of Mountain Meadow Farm, is 10 months behind on loan payments for a $50,000 loan.

“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.

Supervisors were divided earlier this month when they considered Ostrom’s request for loan forgiveness.

Supervisor Rosemarie Smallcombe said the county wasn’t clear about the rules.

“To some extent, we are at fault for misleading people about the funding and the parameters for use and repayment.”

But Supervisor Miles Menetrey said the business owners knew they were loans “from the get.”

“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.

No one apparently thought to ask Schiff, who as the county’s economic development manager ran the program until she left the county in August 2023.

The Mariposa Gazette reached out to Schiff last week. She responded with an email offering some context around the decision making at the time.

The program came about during a time of severe economic hardship after the 2022 Oak Fire and two years of global pandemic.

“My role was to help implement a program aimed at mitigating significant economic injury and supporting local business recovery during an exceptionally difficult period,” Schiff said.

During discussions with CDBG, Schiff said, “staff explored whether loan forgiveness could be considered for larger loan amounts due to the severe economic impacts businesses had experienced.”

In October 2022, the board of supervisors said loan forgiveness was a “possibility for future board consideration, not a guaranteed outcome,” Schiff said.

Borrowers were told they needed to make one year of payments before returning to ask for loan forgiveness.

“I also advocated for forgiveness as a tool to assist businesses recovering from unprecedented losses; however, the authority to approve, deny or modify any forgiveness terms rested solely with the board of supervisors,” Schiff told the Gazette.

The criteria for loan forgiveness seems to have evolved over time.

In December 2022, supervisors passed a resolution that said, “Forgiveness will be evaluated on the consistency of payments, as well as the viability of the business.”

But by April 2025, supervisors approved new guidance that said, “loan balance forgiveness may be granted if the business experiences significant financial hardship due to external disasters or emergencies.”

Six local businesses received the 15-year loans at 2 percent interest, these 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 has recused herself from the supervisor’s discussion.

Since the county offered the CDBG loans it has received $95,000 in payments. About $450,000 is outstanding. The idea is that money paid back is to be used for awarding new loans.

Ostrom is the only borrower who is currently behind on payments.

The board has taken no action on forgiveness or forbearance, so far.

County Administrative Officer Joe Lynch said staff needs the flexibility to put the loan on pause if someone is having difficulty with repayments.

Supervisors instructed staff to work with Ostrom to negotiate some kind of payment plan.