ANDERSON — The City Council Thursday night unanimously approved a resolution to borrow nearly $2.8 million from utility reserve funds to finance city operations through December.
That’s when Anderson will receive its next property tax draw from the state, at which time the money will be paid back.
It’s part of an annual exercise many county and municipal governments go through this time of year to remain solvent so they can pay their bills.
Many communities have to borrow money from the Indiana Bond Bank at low interest rates to meet their obligations.
Anderson, however, will use money from storm water, water pollution control, water, and Municipal Light & Power reserve funds and won’t have to pay any interest rate.
“This will cover our expenses until we get our next tax draw in December,” Controller Sam Pellegrino told the council.
In other financial news, Interim Economic Development Director Greg Winkler informed the council the city will finalize the purchase of about $6 million in taxable bonds with Star Financial Bank today.
The council approved the sale of those bonds in June.
The money will be used to replenish funds from Anderson Redevelopment Commission accounts last year that helped attract Greenville Technologies Inc. and Hy-Pro Filtration to Anderson.
Star Financial Bank agreed to buy the bonds at an interest rate of 4.2 percent. They will be paid off over 12 years from property tax revenue generated by both companies because they are part of the city consolidated Tax Increment Financing District.
TIF districts are created so that property taxes from new commercial, industrial and manufacturing businesses are captured and spent on infrastructure improvements within the district. Those improvements are then used as an economic development tool to attract more businesses to the city
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