Somerset Council

Somerset City Council met Monday via Zoom due to current COVID-19 conditions. Council approved the creation of two Tax Increment Finance districts.

Somerset’s City Council granted approval for two Tax Increment Finance (TIF) districts to be created, but each took a different voting path to reach the same end-goal.

Over the past few weeks, council members have listened to Chris Girdler, President/CEO of the Somerset-Pulaski Economic Development Authority (SPEDA) as Girdler explained the process and potential rewards for the city to create these districts.

TIF districts are special designations given to areas by local governments that can be used to raise funds to revitalize those areas.

Some TIFs are used to build up lands that are not developed at all – empty properties that the government wants to attract new business to – while others are used to renovate areas that are considered blighted.

A percentage of the revenues generated through the development of those districts can be used to fund improvement projects in those areas, such as roadways or water lines, or can be used to incentivize more businesses to move into the area.

Girdler and Somerset Mayor Alan Keck proposed two different districts. One, called the Downtown Prosperity Development Area TIF district, would encompass the Cundiff Square area and the surrounding buildings, and extend into the property in which the former Continental Refinery sits.

The other, called the Education and Convention Center Local Development Area TIF district, focuses on empty properties in and around the Center for Rural Development, Somerset Community College and Lake Cumberland Regional Airport.

Most councilors were on board with the overall concept, but differed on how long the city should designate the district to be in effect for.

The ordinances, as presented during the first reading, said the TIF districts would last 30 years.

However, in a workshop held last week, councilors learned that there were other time-frames available – 15-year TIFs and 20-year TIFs. Many decided that a 20-year term would be long enough.

Which is why during Monday’s meeting, some councilors suggested the change to a 20-year term before approving the plans.

Up first was the vote on the Downtown Prosperity TIF vote. City Attorney John Adams mentioned the discussion of changing the term and asked councilors if anyone would make a motion to amend it. Councilor Jimmy Eastham made a motion to change the 30-year term to a 20-year term. The motion was seconded by Councilor Amanda “Bean” Bullock.

But when it came time to vote, Adams explained that the motion was to approve the TIF ordinance as presented with the time amended. That led to a bit of confusion among council whether they were voting on the amendment only or on passing the ordinance.

This led to Councilor David Burdine to vote no against the passage of the ordinance due to the term change.

“I’m fully in favor of the TIF, but I’m in favor of 30 years, so I’m going to vote no,” Burdine said.

When it came to voting for the second TIF ordinance, councilors requested that there be two separate votes, one for the amendment only and one on the ordinance as a whole.

Adams explained that his reasoning in the first ordinance was to streamline the process, but if council members preferred, he could separate the two votes for the second TIF process.

Keck and Adams agreed that either pathway would lead to having the ordinance approved.

As with the first ordinance, Burdine voted against the change in time but voiced approval of the project as a whole.

Councilor Kevin Slone voted against the change in term.

Councilor John Ricky Minton passed on both ordinances. He did not give a reason during the meeting, but during last week’s workshop, Minton pointed out that he had property within at least one of the TIF districts.

For his part, Mayor Keck approved of the change. “I think it’s a happy medium. I know 15 years was mentioned. Thirty is as it’s written. I believe 20’s a sweet spot that protects the long-term integrity but also gives us plenty of time to utilize it.”

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