City leaders have approved a plan to borrow nearly $2.4 million to assist a major local company with its ongoing expansion.
In return, the city will receive funding in the same amount from Cummins Inc. for education initiatives through the Jackson County Education Coalition.
The Seymour City Council gave approval Monday to an ordinance issuing $2.375 million to help finance Cummins Inc.’s expansion of its Seymour Engine Plant. That growth is expected to create 290 jobs locally by 2015 with an average wage of $38 per hour, said Jim Plump, executive director of Jackson County Industrial Development Corp.
The ordinance was introduced in September.
This past month, Cummins announced due to weakening international markets, it would take steps, including reducing its global workforce by up to 1,500 employees, to counter lower than expected revenue and profits this year.
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Cummins still plans to spend $248 million to expand the Seymour plant off East Fourth Street both east onto property currently being used by the city for the Department of Public Works and south onto the former Big Blue department store and Indiana Department of Transportation properties.
The city will repay the bond debt using payroll and sales tax revenue generated by Seymour Engine Plant through its recent designation by the state as a certified technology park.
“That designation allows municipalities to capture up to $5 million,” Plump said.
The first $2.375 million will be issued to Cummins for its capital expenses before the end of the year, Plump said, and the remainder, or $2.625 million, in the next three years.
For its part, Cummins has pledged up to $5 million or the same amount of the bonds to the Jackson County Education Coalition for projects and initiatives to improve the overall education of the county’s population.
Projects are expected to range from preschool and early childhood education to college and post-secondary opportunities and training of existing workers.
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