In a City Commission Meeting on Monday, officials deliberated and ultimately approved Ordinance No. 23-11184. The ordinance grants the City of Salina, Kansas the authority to issue taxable Industrial Revenue Bonds, Series 2023 (Dominion Project), totaling a maximum of $3,729,417.31. These funds will be allocated to finance the acquisition, construction, and equipping of a new manufacturing facility in Salina. The project also secures exemptions for sales tax on construction materials and a decade-long property tax break.
Background:
Dominion Resources, LLC, parent company of Geoprobe Systems, obtained preliminary approval on September 26, 2022, through Resolution 22-8079. This allowed them to initiate proceedings for the issuance of Industrial Revenue Bonds (IRBs) to facilitate the expansion of their Wall Street facility by 57,600 sq. ft. The resolution granted a 10-year, 100% abatement of property taxes and exempted applicable construction materials from sales tax for the expansion. Geoprobe Systems specializes in manufacturing drilling equipment for various industries.
Initially projected at $5 million, the expansion's final cost amounted to $3,729,417.31. Although the facility's equipment is yet to be installed due to ongoing design considerations, all 17 new jobs anticipated in the project have been successfully created.
Project Status Review:
On November 29, 2023, the Salina Community Economic Development Organization (SCEDO) assessed the project's status and the capital investment shortfall. Despite the reduced capital investment, the economic benefit analysis increased from 1.7 to 1.9, affirming the positive impact on the City of Salina. The updated economic benefit analysis was finalized on the same day.
Fiscal Note:
The issuance of these bonds incurs no direct financial cost for the City, and they do not contribute to the City's legal debt limit calculation. The future financial effect involves a 100% property tax abatement for up to ten years, albeit at the reduced amount of $3.8 million due to lower capital costs.
Approval Motion:
The motion to approve Ordinance No. 23-11184, authorizing the issuance of Industrial Revenue Bonds, Series 2023 (Dominion Project), in the aggregate principal amount not exceeding $3,729,417.31 for the acquisition, renovation, and equipping of a commercial facility, was unanimously approved with a 5-0 vote on first reading.
The motion to approve Ordinance No. 23-11184 on first reading authorizing the issuance of Industrial Revenue Bonds, Series 2023 (Dominion Project) in the aggregate principal amount not to exceed $3,729,417.31 for the purpose of the acquisition, renovation and equipping of a commercial facility and authorizing certain other related documents and actions, was approved 5-0.
