The Muncie Redevelopment Commission on June 26 approved a resolution authorizing staff to finalize an interlocal agreement with the Muncie Sanitary District (MSD) that will make sanitary-fee–backed capital available to developers building new housing.

Under the agreement described at the meeting, MSD would advance an amount based on projected sanitary fees (staff cited $30 per unit in the discussion) to mitigate private developer risk and recover the investment through sanitary fees collected from new units over a roughly six-year schedule. Redevelopment staff said MSD approved a resolution at its meeting the previous day to allow final edits to the interlocal agreement.

Redevelopment Director Jeff Howe described the arrangement as an “investment” rather than a grant or a conventional loan: “They should, based on what has been, traditional, rate increases, they should recover their money, in 5 years and 7 months,” Howe told commissioners while explaining the recovery assumptions. Howe said the funding would be interest free and the MSD’s $1 million would scale with the number of homes built under the program.

Commission discussion probed the legal and financial mechanics. Commissioners asked whether the arrangement would be technically a loan, a forgivable loan, or a grant and who would track compliance and quarterly reporting; Howe said the commission would maintain reporting responsibilities and staff would provide quarterly updates. Commissioners also discussed risk: Howe said even in a conservative scenario the commission would have the capacity to cover repayment if necessary and that MSD would only advance funds tied to units actually built.

The resolution to proceed with the interlocal agreement passed by roll call: Commissioner Dale abstained; Commissioners Miller, Prabilla and Wagley voted yes. Commissioners directed staff to confirm the commission’s legal standing in state records and to ensure reporting and payment timelines were clearly documented before final execution.