The Fulton City Council approved a resolution "expressing the official intent of the city to issue its Industrial Development Revenue Bonds to finance an Industrial Development Project for Danuser Machine Company" during its regular meeting Tuesday night.
Bruce Hackmann with the Fulton Area Development Corporation spoke on behalf of the Danuser project.
"Danuser is proposing a $3 million expansion with 32,000 square-foot addition to the plant," Hackmann said. "They have already added seven new jobs, and could add five to 10 more jobs when it is built.
"This is a 103-year-old company in this community. They have never been on the city's doorstep asking for a lot. They have been a good, sturdy employer in this community for many, many years."
Hackmann went on to explain to the council how the Industrial Revenue Bonds work.
"This would have been a perfect project for EEZ, but that process is tabled, so we had to start looking at other options," he said. "Chapter 100 Industrial Revenue Bonds have been used effectively throughout the state. It's an opportunity for real and personal property tax abatement on the improvements - it does not affect the existing tax base."
Hackmann said the length of the abatement is decided later on during the multi-step process of approving and issuing the bonds.
He explained that upon issuance of the Chapter 100 bonds, the city retains ownership of the real and/or personal property and leases it back to the company under a lease-purchase agreement. The company (in this case, Danuser) is responsible for making payments that are sufficient to pay the principal and interest on the bonds as they come due.
"There is no credit risk to the city - you are merely a conduit for the bond money," Hackmann said. "All of the costs for the bond go to the company."