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IDA turns down economic, financial study proposal

POSTED: May 19, 2014 7:42 p.m.

Effingham Industrial Development Authority members are close to approving their fiscal year 2015 budget — and it won’t include a proposal for an economic and financial study of its Research Forest Tract.

IDA members opted not to offer a contract to Xicon, Inc., for a study of the Research Forest Tract. The IDA’s property committee met two weeks ago to discuss the proposal, which came with a price tag of nearly $200,000.

“Our recommendation is we take a pass on it,” said IDA member Charles Hinely.

Board members questioned if there was money in the budget for Xicon’s offer.

“It’s going to be almost impossible to finance that this year,” said IDA Chairman Dennis Webb.

Jimmy Wells, like Hinely a member of the IDA’s property committee, said that was their concern as they made their recommendation. But members supported the idea behind Xicon’s proposal.

“We like the idea and want to pursue it further,” Hinely said. “We didn’t like the price tag.”

Said Wells: “We’ve got to look at doing this differently. We don’t have it in the budget to do it at this time.”

Xicon offered to put together a financial and economic analysis that the IDA could use to make its case in front of private sector and government officials.

“If they were successful,” IDA member Chap Bennett said, “it would be the best investment we ever made.”

Bennett said he didn’t want the board to lose sight of the idea.

“I took a few steps back after our first few rounds of dialogue,” he said. “And we got the price, and that’s what made everybody take a few steps back. We’ve got to do some financial impact study and analysis to make sure that when everything lines up and it’s time to make a larger investment in there, we have the information to share. And then they have the information that this is the best investment in the state.”

Hinely prodded his fellow members for action on the Research Forest Tract.

“We’ve got to get our project out in front of the people who drive the bus,” he said. “The next time we go to Atlanta and they talk up Effingham, we won’t have to show them where we are. They’ll know.”

In the draft budget, the IDA expects to collect $3.15 million in property taxes — it is guaranteed to receive 2 mills in the state constitution — and is projecting $3.55 million in total operating revenue. The sale of timber on IDA tracts and the use of about $2.8 million in capital reserves is projected to push the IDA’s total revenues for the coming fiscal year to $6.5 million.

The IDA isn’t expecting many changes to its operational expenditures but does envision slashing its line item for professional services and consultants from $170,000 to $70,000. But expenditures on I-16 development are projected to jump from $1.79 million to $3.1 million. That figure has been reduced from earlier draft budget versions.

“The I-16 capital outlay line item has been reduced to coincide with long-term planning and what water-sewer obligations may be,” IDA project manager Matt Morris said.

Morris said the IDA could have an update of the I-16 wastewater needs within the next two weeks.

“On wastewater, we don’t have hard numbers and we’re having a hard time learning when those expenditures would play out,” Bennett said. “We’ll estimate the best we know today and throughout the year and true up those numbers.”

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