The Kentucky Capital Development Corporation will again seek help from the city and county to cover an $111,000 loan payment it can’t make.
However, instead of asking for a 50-50 split, KCDC is seeking a $37,000 loan from each government after its board unanimously approved $37,000, about a third of the total, toward the payment in this year’s budget at a meeting Friday.
The $111,000 payment is due in May. The final one, $113,000, will come next year and retire the debt.
The budget, about $220,000, includes $1,500 for interest on last year’s payment loaned by the local governments.
The city and county, which each allots $107,500 for KCDC, have loaned the development authority about $310,000 to cover loan payments to the Kentucky Association of Counties since 2009.
Fiscal Court took out a 10-year, $900,000 loan from KACo in 2003 so KCDC could make infrastructure improvements at an industrial park on Duncan Road near Interstate 64.
Although the city isn’t named in any of the loan documents that would require its help, the City Commission has felt obligated to help cover loan payments since KCDC is a joint city-county agency.
This year marks the first time KCDC has covered a share of the loan payment since asking the city and county for assistance.
The development board is also paying 1 percent interest on money previously borrowed for the KACo loan from both local governments.
“That’s an attempt to try to get a little bit more solid on our feet regarding our finances so that we can meet our obligations,” said KCDC treasurer Clay Hulette, who worked on the budget with interim Executive Director Kim Smth.
“We will still need the help of the city and the county to make that debt service payment absent sale of any of the lots, but that’s an effort to try to show good faith on our working through this situation and keeping a balanced budget.”
KCDC had previously met its loan payments by selling parcels of land in the industrial park.
However, sales stopped when the recession hit in 2008, and prospects of future sales are slim, Hulette said after the meeting, though he said he expects them to pick up once the economy fully recovers.
KCDC has promised to repay the city and county as it sells lots in the industrial park.