The Versailles City Council convened earlier than normal on May 7 to allow time for a lengthy agenda involving four significant matters: the first reading of an ordinance for the city to issue general obligation bonds to assist with the development of a standardbred horse training center (harness racing) as part of the development of the Edgewood Farm property; a revamp of four sections of the code of ordinances to address gaps and housekeeping related to zoning, variances, conditional use applications and medical cannabis (marijuana); a synopsis of Mayor Brian Traugott’s proposed budget for fiscal year 2024-2025; and, the purchase by the city of 6.16 acres of property between Paynes Mill Road and U.S. 60 still owned by the Hardin Field Family Trust.
Harness Racing training facility
The council heard the first reading of an ordinance to transfer ownership of 134 acres of city-owned land at Edgewood Farm to the Versailles Public Properties Corporation (PPC). This will then allow PPC to enter into a lease-purchase agreement with the privately owned Versailles Standardbred Group, LLC (VSG) for the construction and operation of a state-of-the-art standardbred training facility.
Stan Kramer, who has been contracted by the city to “look out for (the city’s) financial interests” according to Mayor Brian Traugott, provided a summary of the financial deal and answered several questions.
Councilmember Lisa Johnson asked given the city has “a general fund carryover of $12.3 million and a carryover of $12.8 million in the enterprise fund, why would we bond the project instead of paying for it?” Kramer explained, “First, some of the money (in those funds), as you just heard from the auditor’s annual report, is tied up from a project in 2022, $9 million. Also, the entire cost and liability of doing the project can be transferred off the city by entering into the lease-purchase agreement with VSG because it will be paying back the principal and interest of the bond issue which means the city will get all of its money back it spent (acquiring the land). Also, the city (through the PPC) still owns the land until the bond issue is paid off and is involved in what happens there.”
This led to a discussion between Councilmember Gary Jones and Kramer on the issue of bonding a privately owned project. Jones said, “I don’t think we should be bonding out for private entities.” Kramer replied, “That’s why it’s taxable.”
Traugott asked if this type of financing was rare around the state and Kramer said, “Local governments are always involved in economic development projects. We just did a project like this in Owensboro.” Jones responded, “They are getting a better (interest) rate for the project, (the city) is bonding to help them.” Traugott replied, “Along with a substantial return on our investment (profit over original purchase price), payroll taxes and economic development.”
City Attorney Bill Moore also pointed out that this proposal “means the city complies with the settlement agreement (in which the city obtained the Edgewood Farm property originally) by keeping it (zoned) A-1 (agriculture). The discussion concluded with Jones saying “I’d like to know if we are voting on this, I’d like to know the people involved are financially secure.”
Alex Riddle, one of the principals in VSG, said the group would be happy to provide any personal or business financial records for the city to review, and said a lot of those have already been shared with the city.
“We have had several conversations with the city and we understood the city wanted to keep control. We also want to keep the use agriculture and this does that. This is a long-term holding for us. We want this to be something the city is proud of,” said Riddle.
Jones said, “I like the project and am for it . . . I’m just not sold yet on city bonding.”
In response to a question from Johnson about risk to the city if the bond is approved, Kramer said, “The worst-case scenario is the city will still own the land and it has been improved . . . This is not anticipated as a long-term lease as (VSG) will purchase the land sometime within 20 years, the length of the bond.”
“I’d like to see it happen as long as it’s an agricultural use,” said Johnson.
The next step in the process is the second reading of the ordinance. It is scheduled to be taken up by the city council at its next meeting on May 21.
Mayor’s budget
Traugott unveiled his proposed budget for the 2024-2025 fiscal year and provided a summary. The council will go into detail on it at a work session next Tuesday, May 14, when all of the city department heads will be present to provide particulars and answer questions.
Ordinance revamp
Versailles-Midway-Woodford County Planning Director Steve Hunter presented a proposal to repeal and readopt four sections of the code of ordinances to address gaps and housekeeping related to zoning, variances, conditional use applications and medical cannabis (marijuana). The Planning Commission unanimously approved the proposal for the city’s consideration.
Hunter said this is the result of “three months of hearings and a lot of work by the planning staff.”
Proposed changes include exceeding state requirements on providing notice of applications for conditional use permits and zone changes; requiring more detailed road plans for grading and paving permits; requiring surveys on all variance applications and setting out a baseline standard an applicant must meet to obtain the variance; remove any possible intrusion into a legislative function by the Planning Commission on variances and conditional uses by requiring explicit city council approval before the proposal can go into effect; the requirement of a site development plan for any permit application on a commercial use where the building is larger than 4,000 sq. feet; and an ordinance structure that will regulate medical cannabis facilities that are licensed by the state.
New land purchase
Versailles City Council went into an executive session to consider the purchase of property. Following this, the council voted to approve the purchase of 7.8 acres of land at the Edgewood Farm project, which has remained owned by Hardin Field III Family Trust/Edgewood Farm, LLC. The sale price is $1.04 million plus up to an additional $200,000 for the construction of turning lanes at a future Paddock Drive.
Audit
The city accepted the annual audit report from its outside auditor. The auditor said it was a “clean opinion,” which is the goal.