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IDA OKs its budget

POSTED: July 24, 2007 5:02 a.m.

The Effingham County Industrial Development Authority approved an $8.7 million budget at its meeting Thursday.

“We’ve worked on this budget the last couple of months,” IDA Chief Executive Officer John Henry said.

Included in its nearly $5.7 million for non-operating capital expenditures is $4.7 million in escrow for work on the I-16/Meldrim tracts. Also included is $500,000 to act as a buffer for the costs.

“We’re going to try to stay within that escrow account,” Henry said.

The IDA’s budget calls for $756,050 in operating expenses and this year’s travel expense line item was increased to $17,000.

“We’ve got two people who might have to go to Europe at some point,” Henry said, noting he and project manager Ryan Moore may have to go overseas as part of the Project Supreme negotiations.

The IDA projects to receive $3.2 million in property tax, which makes up the bulk of the expected $4 million in operating revenues. The sale of phase one of the IDA’s I-16 tracts to DP Partners accounts for $4.7 million on capital income.

IDA members discussed ways of letting the public know what it does. Vice-Chairman Chap Bennett said the IDA used to provide a return on investment notice for the public.

“I think we owe it to them,” he said.

Board member Rose Harvey also called for n annual report to taxpayers.

The IDA’s budget grew 5.85 percent over last year’s.

“I think that’s a pretty good number,” Bennett said. “We’re a $90 million entity today.”

He pointed out that the IDA’s assets have grown by nine fold while the operating expenses are only 5.85 percent more than the previous year.

“I think that’s being very diligent,” he said.

As part of its financing for the I-16 project, IDA members approved, after months of work and study, the use of swaps in $30.9 million in loans from Wachovia. The IDA has three separate loans totaling $38.2 million for its purchase of the two tracts at I-16 near Meldrim.

The use of a swap is a relatively new financial instrument, analyst Doug Carter told the board.

Because of the swaps, which limit the interest rate volatility for the IDA, the board had to secure the services of a financial analyst to determine what would be more effective, caps or swaps.

Wachovia advised the IDA a swap would work best and Carter was retained to determine if that was the case.

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