Extra cash is a good thing — it's just not something the Knox County Redevelopment Commission is used to having.
So when members met Thursday morning they had to answer a question several years in the making.
“We were expecting to have (excess funds) this year,” said RDC legal counsel Andrew Porter. “So the question now is, what do we do with them?”
The county's Tax Increment Finance Zone was drawn years ago, its boundaries the footprint of the Duke Energy power plant in Edwardsport.
Per the agreement went: the RDC collects the additional property tax revenue generated from the increase in the assessed value within the district. Duke, via the RDC, captures 45 percent of that revenue, which is then used to slowly retire the $27 million in bonds sold to help finance construction.
The other 55 percent has always been allowed to pass through to the appropriate taxing entities, such as the North Knox School Corp., township fire departments, etc.
But for many years, all of the 45 percent kept by the RDC was used to pay Duke's bonds. In some years, there was even a shortfall; just over $511,000 will be paid out this year to close left open since 2017.
As time has passed — and a 10-year abatement granted to Duke nears its expiration — the amount collected by the RDC has increased, enough to now give them a little extra to spend.
But the excess funds —likely just over $1.3 million this year — can't be spent just anywhere, Porter pointed out. It must be spent either directly within the TIF zone — which is pretty limiting — or in an area directly affected by the zone.
The commission has had a few years to think about this, and the North Knox School Corp., a beneficiary already allowed by state statute, is at the top of the list.
“As long as I'm here, I will — and I would ask us all to — support the school corporation,” said Kellie Streeter, RDC member and president of the Knox County Commissioners. “In my opinion, I just think it's the right thing to do.”
“We don't ever get to discuss good news like this,” said RDC and county council member Randy Crismore. “So I'm in favor, too.”
The RDC can, per state law, give to the school corporation 15 percent of the total revenue it collects — this year that’s just over $283,000.
There are, however, stipulations in how the money can be spent — stipulations that had RDC members chuckling.
“It must be spent on educational or worker training or a program that benefits the global economy,” Porter read aloud.
What does that even mean, they wondered with collective shakes of their heads?
They don't know for certain, but the interpretation is likely somewhat open-ended, meaning the North Knox school board has a variety of options.
“Well, we appreciate it,” said North Knox school board president Elaine Pepmeier. “And we'll certainly figure it out.”
School board members, knowing this day would likely come, have floated several ideas as to how to spend the TIF revenue coming to them, she said.
There exists a North Knox Scholarship Foundation, she said, from which students not going on to college can receive money for things like vocational training or even clothing, whatever they deem necessary to prepare young people to enter the workforce.
“And there's always technology. We could always use it on technology,” she said.
A plan for spending the money must be approved by the RDC before the funds can be released.
HEAVILY TRAVELED ROADS
RDC members also on Thursday voted to designate $500,000 from the excess funds this year to repave “all the roads” inside Edwardsport and several in Westphalia, all of them routes heavily traveled as a result of the power plant.
Streeter will now extend an inter-local agreement to the Edwardsport Town Council to see the roads included in the county’s current asphalt contract with E&B Paving. That contract, Streeter said, is left open-ended each year for such additions as county elected officials deem necessary.
The roads in Westphalia, she said, can be added without such an agreement as Westphalia is an unincorporated town.
Residents in each, Streeter said, have been greatly affected in recent years by plant traffic — everything from workers and contractors to trash and scrap metal hauling — but officials have lacked the funds to keep up with their infrastructure needs.
“This would be a Godsend to these communities,” Streeter said. “I can think of a million community projects that are needed but perhaps nothing more important to these communities than having streets that are passable.
“And right now, some of them aren’t,” she said.
Doing these road projects, to be done yet this summer, would also show Edwardsport and Westphalia “something tangible” from the Duke plant.
“You’re all welcome to come with me to Edwardsport to tell them,” Streeter told her fellow RDC members. “But I’ll tell you, they will probably cry.”
Moving forward, Porter cautioned RDC members against what he assumes will now be multiple requests for these annual excess funds. Next on his to-do list, he said, will be establishing a kind of policy reflecting the state statute allowing for TIF districts that can be handed out to those who come with a hand out.
The Edwardsport and Westphalia projects, he said, were a great place to start as both are directly related to the plant and the TIF zone.
“This helps us to establish that precedent,” he said. “And now we need a policy moving forward as there will be others who want (money) knowing we have excess funds.
“We just can’t get into a ‘blank check’ type of situation here.”