The city of Parsons will loan Great Plains Industrial Park $100,000 for a road project.
City commissioners approved the no-interest, four-year loan from an industrial development fund during a regular meeting on Monday.
The Great Plains Development Authority plans to use the money as a 20% match on a $500,000 grant from the Kansas Department of Transportation to repair four roads in the park. The city loan is contingent on grant approval.
Brad Reams, Great Plains director, had requested $150,000, which is $50,000 more than the required match. On Monday he said the additional money was requested because the base on a heavily damaged road could require replacement. That won’t be known until the road surface is removed.
Repairs are needed because the transport of wind turbine parts from a laydown yard in the park has deteriorated the roads quicker than anticipated. Reams said over 1,800 heavy loads have arrived or left the park by road, with most of them going out. The turbine parts are delivered to the park by railroad and then unloaded and stored until they are needed at wind farms. The heaviest parts, turbine nacelles, weigh about 300,000 pounds, Reams said.
“This has just gotten worse and worse and worse. We don’t want it to get to a point where we can’t run anything out of the yard,” Reams said.
The loan will come from the city’s Union Pacific Railroad fund. The railroad gave the city $1 million for industrial development upon its acquisition of the former Katy Railroad. The money was part of an agreement between the railroad and the city, which dropped its objection to the takeover. The city at first objected to the purchase because of the resulting loss of hundreds of Katy jobs in Parsons. The fund is invested along with other city funds to build interest and is loaned for specific projects. It now has $752,036.
Commissioner Verlyn Bolinger said he spoke to Ream’s assistant about the roads and also heard from a couple of people in the community about the plan to loan money to Great Plains. With another $200,000 from the fund committed to Mike Carpino Ford upon completion of a new dealership near U.S. 400 and U.S. 59, Bolinger didn’t want to tie up too much of the UP fund. He proposed cutting the request by $50,000 and the time for repayment by a year, and the other commissioners agreed.
Reams said Great Plains won’t have trouble paying the money back, it just doesn’t have the cash flow now to match the grant after spending $250,000 early this year on a railroad project that enabled the laydown operation. That project was funded primarily by a KDOT grant. It was an unexpected expense to allow Transportation Partners & Logistics to invest $1 million in the laydown yard so that it could provide services for wind farms in the area.
Commissioner Tom Shaw said the wind energy industry knows that roads can deteriorate with the heavy truckloads of turbine parts. That’s why Neosho County has an agreement with a wind farm developer to repair roads there. Shaw said he is surprised the cost of road repair wasn’t added into the cost of the TPL project.
Reams said beginning in January, the fee for oversized truckloads will raise from $100 to $200. Labette County will pass along $100 per load to Great Plains. That money will be used to repay the Parsons loan. Reams said in that way, the park’s road repair costs are being pushed down to the users.
Former City Commissioner David Larsen said he would like for the city to require a lien for the loan. Jim Zaleski, economic development director, said even if TPL leaves the park, there still would be a million-dollar investment left behind that makes the park much more marketable.
Ryan Robertson, a former city commission candidate, said the city should charge interest on the loan because the city will be missing out on the interest that money would create if it stayed in the UP fund.
“I’m all for development, but I don’t want to see the city lose money in the long run,” Robertson said.
City Manager Debbie Lamb said the funds are kept in low interest-bearing investments, either in credits of deposit or in the Kansas Investment Pool. The city only gets about 1% interest.
In other business Monday, the commissioners:
— Heard that all city staff who quarantined because of COVID-19 are back on duty. Three police officers recently were infected.
— Accepted a bid of $129,080.32 from Hinman Construction for concrete surfacing in the 1400 block of Morgan Avenue.
— Heard that City Clerk Gaye Evans will retire on Dec. 18 after 32 years of employment with the city. Lamb plans to hire a new city clerk by the first of December.