SCOTT CITY OKs BOND CONTRACT FOR UTILITIES

SCOTT CITY -- The Scott City Council Monday finalized a city contract that authorizes a 12-year, $360,000 bond issue to fund water and sewer lines to the Nash Road Industrial Tract.

Revenue from sale of the bonds, along with a $203,500 grant from the Department of Natural Resources, will pay for the approximately $563,500 cost of constructing the lines. City officials hope the project will lead to more businesses situating on the tract and expansion of ones already there.

Before its acceptance, Councilman Jim Cauble warned the council that the city will face a tight budget in the coming year as a result of the agreement.

"This is not a gamble," Cauble said. "But we are going to have to consider our budget very, very carefully."

Councilman Jay Cassout voiced objections to the agreement and was the only council member to vote against its acceptance.

The city will contribute $60,000 toward the project. Seven of the businesses that operate at the tract have collectively contributed $120,000.

The businesses' money and the city's will be held as cash collateral for the bonds, and will be paid back over the 12-year period of the agreement.

The bond issue came after the city failed to secure a $290,000 grant it had requested from the Department of Economic Development. The city has been trying to fund the line construction since the industrial area was annexed in June 1989.

City officials said construction of the lines is vital to the economic wellbeing of not only the area but the city.

"We have an industrial tract that already has the tenants on it, and they generate the income to pay" for the line construction, said Mayor Shirley Young. "This is the best shot Scott City has ever had. We expect a lot of growth there."

The approximately $48,000 annual payments on the bonds will be made by the city using tax revenue from businesses at the tract, Young said.

The bond agreement states the city is in effect leasing and then leasing back the land on which the industrial tract sits. The agreement was made with Mercantile Bank of St. Louis and First Financial Bank of Southeast Missouri. Final contracts with the banks will be signed by April 30.

Young said once the lines are in place there is potential for other industries to build there.

"We have the river, rail, interstate and air (transportation) right there," she said. Small businesses, especially foreign ones, are looking to the Midwest to locate because of the strong work ethic among the people who live there," she said.

Young appointed Councilmen Jim McClintock, John Smith and John Rogers to the city's budget committee.

Council members also approved setting up a separate city fund for tax revenues received from businesses in the area.

In other business, a public hearing to consider rezoning a four-acre section of the tract, owned by Gene Rhodes, was scheduled for May 6 at 8 p.m.

Council members Cauble, Jerry Cummins and Smith were sworn in to serve another term on the council and Brenda Moyers was sworn in to serve a first term. The four were elected April 2.