New prison to need funding
Published 1:18 pm Thursday, May 3, 2007
NATCHEZ — The new prison needs $4 million in water and sewer infrastructure, but if all goes as planned, the county and city won’t have to shell out a penny of their own.
If plans fall through, the money may come out of taxes the company would be paying to the county.
Adams County Water Association plans to provide the water, and Natchez Water Works will provide the sewer for the Corrections Corporation of America private prison near Cranfield.
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However, they need the money for things like labor, pipes and a water tank.
So the city and county are looking to get money through grants that private CCA can’t get.
The county board of supervisors approved the project Tuesday and asked the Southwest Mississippi Development District to hunt for grants and loans.
Such grants could come from several places, including federal funds and the Delta Regional Authority, attorney Walter Brown said.
Hopefully, the grants won’t require matching funds, said Brown, who represents CCA locally and Natchez Water Works.
“A 10 percent match is normally required, but we’ve asked for it to be waived,” Brown said. “If not, we’ll figure out how to handle it. Most logical would be a tax increment financing bond.”
Such a bond would use the company’s future taxes to pay off the debt. That way, the county isn’t losing any money it currently has, Brown said.
Previously, CCA and county representatives said no city or county money would be required if the prison located in Adams County.
The change worries Supervisor Henry Watts.
“Full disclosure is always my concern — full disclosure on the front end, letting the supervisors know,” Watts said. “Give us a good idea what kind of money the taxpayers of Adams County are having to put up, not only on the prison but on any proposal.”
Tuesday’s supervisors meeting was the first time Watts said he had heard the county might need to play a role in the prison project.
“Am I scared of that? No. But right now, we have no idea how much money we’d have to put up.,” Watts said.
If the county used the TIF bonds for matching funds, the county would not have to pay money, but nor would they receive any, Watts said.
“It means taxes generated from (the prison) wouldn’t go to the county, they would go toward paying off the debt,” Watts said. “It would be like if you had a loan on your car, it would go toward your car payment instead of going in your pocket. I don’t know if I’d agree with that or not.”
But officials aren’t considering the options without grants.
“We’re going to get the grants,” Natchez Water Works Superintendent David Gardner said. “We are pretty sure we’re going to be eligible for them. We wouldn’t have committed this deep into it if we weren’t pretty certain.”
Using grant money to fund infrastructure, enticing economic development, is common, Gardner said.
“It’s common practice for governments to provide goodies as incentives for large companies to locate in their jurisdiction,” Gardner said.
CCA spokesman Steve Owen said the water and sewer services were a big part of why they chose Adams County. “We can’t build if we don’t have the infrastructure to tap into,” Owen said.
The city and county have used TIF bonds before.
“When they built the Armstrong (tire) plant, it was built entirely from tax increment financing,” Brown said. “And I’m sure we’ll do something like that for Rentech. It’s going to be done in Tupelo (for Toyota), and I know it was done for Nissan. A TIF arrangement is a way to pay for infrastructure without having local governments spend their money.”