Council passes tax breaks for Lakeshore firm
The Midway City Council Tuesday unanimously approved two tax breaks for Lakeshore Learning Materials, the California company that plans to open a distribution center at Midway Station, employing 262 full-time workers. The first vote was for a 10-year payroll tax cut for up to 262 workers that will allow the company to keep half a cent of the city's two-cent payroll tax. (Lakeshore Learning will also apply for the .5 cent payroll tax break from Woodford Fiscal Court.) The second was an inducement resolution to issue up to $50 million in industrial revenue bonds (IRBs). State law allows local governments to issue the bonds at a lower rate and give the company a property tax break to help finance construction costs. Bondholders use revenue from the projects to cover debt service. "The city will take title to the improvements, that for the course of the issue, will exempt them (Lakeshore Learning) from property tax. When the bond issue is over, then it gets unwound very simply," said Mark Franklin, a bond attorney for Stoll, Keenen and Ogden. Franklin said the bonds would not be a liability for the city of Midway, which merely serves as a conduit in the process. A pilot program in the agreement exempts school taxes from the property tax break. Council member Dan Roller asked if the company was considering opening a child care facility to serve its employees. Paul Chisholm, vice president of distribution for Lakeshore Learning, said the matter had been discussed, and that no decision had been made. He added that there was such a facility at the company's California headquarters. Chisholm said he'd be working at the Midway plant and was looking forward to returning to Kentucky, where he'd lived more than 30 years. Mayor Grayson Vandegrift said Lakeshore Learning would be the biggest employer in the history of the city. Property taxes After second readings, the council unanimously approved a personal property (motor vehicles and watercraft) tax rate of .14 cents per $100 of assessed value and a real property tax rate of 10.2 cents for 2017. The latter is down from 10.7 cents this year. Providence Montessori The council heard first reading of an ordinance that will allow the city to issue $1.8 million in Educational Facilities Refunding Revenue bonds to help pay for the refinancing of a private school in Lexington. Franklin said four students from Midway or Woodford County go to Providence Montessori and several local residents work there. A city of Midway's size is allowed to issue up to $10 million annually of these tax-exempt bonds, which are purchased at a lower rate than the school could otherwise receive. "We can't go to Lexington and do that, because they issue too many bonds per year. That's why we're here in Midway," Franklin said. Moloney said the city would not be liable for paying off the bonds, to which council member Bruce Southworth said, "That's all I needed to hear." A required public hearing on the matter is expected after the council's Oct. 3 meeting. A second vote could be held Oct. 17. Parks board The council heard first reading of an ordinance to establish a city parks board consisting of between five and seven members, who will be appointed by the mayor. Two will serve one-year terms, two will serve two-year terms, two will serve three-year terms, and one will serve a four-year term. The board will elect a park manager from among its members. Snow removal bids The council unanimously approved a renewal of its snow removal contract with Wright's Farm Services of Richmond, whose work the last few winters was praised by several council members. The bid was approved after Southworth suggested amending the contract so that the company would no longer use a city backhoe to load highly corrosive salt onto its trucks. Wright's bid was on a per-event basis, as compared to that of Parks Landscape Group of Versailles, which bid $30,000 for the entire winter. Vandegrift said last winter, the tab for Wright's Farm Services came in a little above $20,000.