In a unanimous vote, Lowndes County supervisors tabled Monday a proposed agreement that would set aside part of the county’s property tax revenue to fund Lowndes County Industrial Development Authority (LCIDA) — the county’s economic development arm responsible for recruiting and managing businesses at the Industrial Park.
The deal aims to establish a steady cash flow each year toward an “underfunded” LCIDA, said Golden Triangle LINK CEO Joe Max Higgins, who helps manage the day-to-day business for the agency. However, some supervisors questioned the language and the necessity of the agreement Monday, with District 1 Supervisor Harry Sanders arguing LCIDA has a rich reserve and has received “every single thing they ever need” from the county.
A subdivision of the county, LCIDA was formed by state law decades ago and oversees and maintains industries located at the Industrial Park, LCIDA President Thomas Lee said. The agency is governed by seven board members appointed by the supervisors, including two at-large members and five members each from a supervisor’s district. Members each serve a two-year term, he said.
Decisions by the LCIDA board require the approval of supervisors, Lee said, and the county is also a primary source of funding for the agency and is responsible for any debt LCIDA has accrued. The agency sometimes needs to buy land for economic development or take out loans for sizable repairs, he said.
According to the proposal, LCIDA is asking supervisors to designate one mill’s value — however much revenue one mill generates — each year to cover the agency’s operational expenses. Mills are used to calculate property taxes, and one mill equals $1 of property tax levied on $1,000 worth of assessed value. Lowndes’ mill value this year is $750,000, according to the county’s Fiscal Year 2021 budget.
Under the proposal, if the supervisors wish to terminate the agreement, they must give LCIDA a “three-year notice” before the agreement expires, Higgins said. That means if the supervisors give the notice on Aug. 1, 2021, the expiration date will be Sept. 30, 2024, the agreement says.
Questions and concerns
Some supervisors, however, were hesitant to sign the agreement.
Board of Supervisors President Trip Hairston said he’s not opposed to the agreement but has several questions about its language. Meryl Fisackerly, administrative assistant to LCIDA and vice president of the LINK, was scheduled to show up at the Monday meeting but did not attend after Hairston told her Friday that supervisors were unlikely to vote on the matter, Higgins said.
Hairston said it’s not clear whether the county should levy an extra mill for LCIDA or simply designate the equivalent to a mill toward the agency. He said he’s also concerned about the three-year notice, because the agreement could outlive current supervisors’ terms and carry into the next board of supervisors.
“I’m very supportive of the (IDA). I do want to be careful, though, signing an agreement that we are obligating future boards, because we only serve four-year terms,” he said.
Higgins said it is up to the county how to distribute the mill revenue. The board of supervisors also should not be worried about binding their successors to the agreement, he said, because it “makes financial sense.”
Hairston also said he hopes there’s a cap on LCIDA’s cash balance so that it does not receive money more than what it needs.
“If things get really tight with the tax revenue, the (IDA), they are sitting on a large amount of cash balance,” he said. “That may not be the best use of those funds.”
Sanders told The Dispatch the agreement should not exist.
“There’s no reason in the world why Lowndes County needs to have an agreement with Lowndes County,” he said. “Why? We already own it, 100 percent.”
LCIDA has $3 million in the bank, Sanders said, and the organization has historically received all the funds it has requested.
“We have never not given them every single thing they ever need,” he said. “There’s no reason in the world to guarantee a certain amount of money.”
Of the $3 million, Higgins said, $1.3 million is designated funds required by Rural Development Authority — which has loaned LCIDA money for various water and sewer system improvements — in case LCIDA becomes delinquent. The remaining $1.7 million needs to be there for expensive project repairs, such as water tank maintenance, he said.
“Plantation Harry thinks that’s too much,” Higgins said, apparently referring to racist comments Sanders made to a Dispatch reporter in June claiming Black Americans were “dependent.” “Understand that $1.3 million of that has to be set aside because the lenders make them have operational and debt service reserves.”
Additionally, LCIDA has been “underfunded” for several years, Higgins said.
When Steel Dynamics, Inc. (SDI) first came to Lowndes County, the company entered into a fee-in-lieu agreement with the county, under which it would only pay one-third of the county and school property taxes for 10 years before paying full taxes. Meanwhile, Higgins said, the company also entered into a 10-year lease with LCIDA, which guaranteed the agency $400,000 a year in rent. The county paid LCIDA roughly $250,000 a year at the same time to cover its expenses, he said.
In 2017, the lease expired, LCIDA stopped collecting rent and SDI began paying full taxes. There were talks with county officials then, Higgins said, where LCIDA asked the county to increase the annual funding by $400,000. Each year, however, LCIDA would request the additional funds from the county but never received them, Higgins said.
This July, LCIDA asked for $1.3 million in operational funding but were only budgeted for $285,000, Higgins said. Setting up a steady cash stream, he said, would help address the problem.
“What we intend on doing is memorialize the commitment on the long-term debt and memorialize the annual amount the Industrial Authority could depend on for doing special projects, or paying for costs,” Higgins said.
The agreement also set up a payment schedule for all the debts on LCIDA’s books, for which the county is responsible. For every payment, the county should give LCIDA the money 30 days before it’s due, the agreement says.
Higgins said that’s to address some late payments from the county in the past, where LCIDA had to dip into its own cash balance to pay the debt.
“In the last few years, it’s been harder and harder and harder to get, on a timely basis, the loan fund from the county to LCIDA so they can make those payments,” Higgins said. “In some cases … from the time the Industrial Authority would make their loan payment out of their money they had on hand, but it might be six months before the county might reimburse us.”
District 5 Supervisor Leroy Brooks said he’s supportive of the agreement.
“I was shocked this morning that there was any disagreement,” he said. “… I’ve always advocated that there should have been more (mills dedicated) to economic development.”
Yue Stella Yu was previously a reporter for The Dispatch.