By Travis Gulbrandson
The Vermillion City Council approved a resolution that will provide for the accumulation of $500,000 of general fund reserve for the Prentis Pool expansion.
This will be enabled through state statute 9-21-14.1, which allows setting aside up to $4 per $1,000 of assessed value of all property within the municipality.
City finance officer Mike Carlson said the estimated taxable value for 2012 would allow “just over $1.2 million” to be set aside in reserves.
The statute allows the accumulation of funds, but also requires their expenditure.
If they are not spent in 60 months, they will revert back to the general fund, Carlson said.
City council member Tom Davies asked if the decision would be binding for future councils, and if money could be used for anything if necessary.
Carlson said it would, stating, “It’s not appropriating, it’s just setting it aside. If a future council wants to change its mind, reduce the amount, increase the amount or use it for something else, of if nothing is done after 60 months, the statute puts it back in the general fund.”
An expanded water park facility was designed two years ago with assistance from the city and area residents. The final design was estimated at $6 million.
“While the financing package for the pool project has not been determined, discussion has included using several sources of funds such as reserve funds, private donations and bond proceeds,” Carlson said.
The city council moved unanimously to approve the resolution at their regular meeting Monday night.
At that same meeting, the council members also approved a resolution for the issuance of up to $1,732,000 of tax incremental revenue bonds for TIF District Number 6.
The TIF district was created this summer and is made up of blocks 1-6 in the Bliss Pointe Addition, an area that is planned provide a mixture of housing options, as well as light commercial use.
To finance development and infrastructure improvements, the TIF plan provides the issuance of a Tax Incremental Revenue bond.
Bonds will be issued by the city and the proceeds will be provided as grants to the Vermillion Chamber of Commerce & Development Company to fund the improvements.
According to a memo given to the council members, the city will “disburse the tax increment funds to the bond holders as interest and principal payments until the bonds are retried and any other advances are repaid or 20 years, whichever comes first.”
The TIF plan asks that the city consider making advances to the TIF fund for an interest-only payment to bond holders until the TIF revenues are enough to make the payments.
“The City is not guaranteeing the bonds,” the memo reads. “Should the tax revenue not be generated or be insufficient to fully repay the bond holders, the City is not responsible for the different.”
Monday’s resolution provides the issuance of up to $1,732,000 of tax incremental bonds to be repaid from the tax increment collections of TIF 6.
The resolution was adopted unanimously.