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Tuesday, November 19, 2019

City Council votes to make Midway debt-free

Midway, call Dave Ramsey. You're about to be debt-free, just like those happy callers to his financial-advice radio show.

The City Council voted Monday night to pay off the city's remaining debts, totaling about $184,000. "Anytime you can be debt-free, it's good," said Council Member Bruce Southworth, who made the motion for the payments.

Mayor Grayson Vandegrift said City Clerk-Treasurer Cindy Foster suggested that the city pay off its remaining two debts, $176,311 for a sewer project and about $8,400 on a fire truck. He said the city's "number are good, and they're going to get better," with jobs to be added at Midway Station. "We've got more than enough rainy-day funds."

Nationally, local-government "rainy day funds" average about one-third of spending, according to a 2013 article in Governing magazine. The City of Midway's bank balances total $1,182,490, according to a list Vandegrift provided. Its budget for the fiscal year that will end June 30 calls for General Fund appropriations of $1.9 million and a projected surplus of $488,601. That surplus is expected to be larger.

The city's finances have been boosted by its occupational tax on wages and net profits, mainly through the approximately 250 jobs created at Midway Station by the Lakeshore Learning Materials distribution center, which is starting an expansion that is to add 100 more jobs.

Vandegrift said the city collected about $300,000 in occupational taxes in 2015, the first year he was mayor, and "It's only a matter of time before our occupational-tax revenue is $1 million a year." In response to a question from Council Member Stacy Thurman, he said he didn't see any downside to paying off the debts and eliminating the city's interest payments.

In other business, the council heard first reading of an ordinance for an industrial revenue bond to finance the Lakeshore expansion. In an arrangement typical for local governments, the city will take title to the property, thus exempting it from property taxes, and lease it back to Lakeshore. (The company makes payments to the county schools equal to the amount it would pay in taxes.) The lease payments will be the sole source of revenue to pay off the bonds, and "The city's not pledging its taxing authority," Tim Eifler, a Louisville lawyer representing Lakeshore, told the council.

"Lakeshore's already turning dirt," Vandegrift noted earlier.

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