The Jefferson City Council recently approved a newer measure to help fund projects within the Urban Renewal Plan.

At their November 11th meeting, the Council voted 3-1 to issue an Internal Debt, in order to utilize tax increment financing (TIF) funds for projects that were identified in the city’s Urban Renewal Plan. City Administrator Scott Peterson says the Council approved to borrow $800,000 from the Water Plant Construction Project fund, which would be distributed to four different areas. 

The proposal included a $300,000 forgivable loan for the rental units that are being constructed at the former middle school, $280,000 for projects that are listed in the Urban Renewal Plan, $120,000 for one year to support economic development entities and $100,000 for administrative fees for one year. Peterson points out a caveat with all of those figures.

“Just also it’s important to remember that the City Council needs to still authorize the expenditure of the dollars. Of those projects, the middle school project had already been approved by the City Council. And then the administrative costs and the economic development, those will largely be addressed during our budget process. But the other expense for the projects that are in the Urban Renewal Plan, that will still come up on a project-by-project basis then and would be approved by the Council at that time.”    

Peterson notes that TIF would reimburse the Water Plant Construction Project fund over the next five years and that the Water Treatment Plant is not scheduled to be replaced until the year 2035, of which that account has $3.09 million in it, before any money is expended from the debt issuance. He explains the other option to incur debt so that TIF funds can be used is through issuing a bond, which causes the city to pay for interest and an issuance expense. Peterson reveals that while doing an Internal Debt has not been done with the city of Jefferson in his tenure, he is not unfamiliar with the concept in his other official capacities.

“I’ve personally used it before and found it to be really a great way to incur the debt so you always remain legally compliant. You know, that ultimately is the first requirement is to remain compliant and we absolutely need to do that.” 

The Council members that voted in favor of the resolution included Pat Zmolek, Harry Ahrenholtz and Darren Jackson, the one “no” vote was Council member Chad Sloan and Council member Matt Wetrich abstained, due to being the Jefferson Matters Director and their organization would be one of the recipients of the funding.