The Anderson Redevelopment Commission on July 8 approved a resolution authorizing Anderson Municipal Light and Power to borrow, on an as‑needed basis, up to $7 million from the commission's ARC fund to cover operating cash needs while the utility seeks a rate increase.

Comptroller Tom, speaking for the comptroller's office, told commissioners the resolution (ARC 6‑25) authorizes a line of credit, not an immediate transfer. “It's not like tomorrow we're gonna transfer $7,000,000,” he said, adding that any draw would accrue interest from the date of drawdown and that the loan carries a 3% interest rate. He said the loan will be reviewed and may be renewed after one year "by statute." The comptroller said the ARC fund had a cash balance of $8,249,000 and that the fund receives interest earnings tied to the city's TIF balances.

Why it matters: the loan is intended only to prevent the utility's operating fund from going negative while the utility completes a multi‑month rate case. The commission emphasized the money for this loan will come from ARC (non‑TIF) funds; commissioners repeatedly stated TIF funds may not be used for operations and are reserved for capital projects.

Details cited by staff and commissioners include that the ARC fund balance was reported at roughly $8.25 million and that the city’s TIF balance was reported at about $70.7 million. The comptroller described the ARC fund's primary revenue as interest credited from TIF balances; he said the fund also carries an annual ARC budget of about $300,000 for professional services. At one point the comptroller said the ARC interest credited would amount to about $300,000 per month (about $3.6 million per year), and he discussed how drawing on the ARC fund would reduce the ARC balance while interest continues to accrue on the remaining balance.

Commissioners asked how the loan would be repaid. The comptroller said repayment and a formal amortization schedule would be set after the rate case is resolved; until then interest would accrue on any amount drawn. He also said the commission will receive monthly reporting in its regular financial statements showing any drawdowns.

Several commissioners raised caution about precedent and fiduciary risk, asking whether the commission should adopt written guidelines about internal loans to city utilities and other departments. One commissioner stated that internal lending had been used in the past for other utilities and capital projects and that in the past such loans had been repaid. Commissioners also asked whether other city funds might need similar treatment; staff said governmental operating funds appear sound and that the ARC loan was being proposed specifically because the requested funds are for operating (not capital) uses.

Commissioners also asked whether the utility received any ARPA (American Rescue Plan Act) funds; staff said municipal power was not eligible under the ARPA rules the city followed (ARPA money had been limited to water, wastewater and broadband in the city's application of the rules).

Formal action: A motion to approve resolution ARC 6‑25 was made and seconded; commissioners voted in favor and the resolution passed. The commission instructed staff to include monthly disclosures about any drawdowns in the financial packet and to review the loan again in one year as stated in the resolution.

Next steps: staff will finalize the promissory note and signature documents, report drawdowns in monthly financials, and return to the commission with repayment/amortization details after the utility’s rate case is complete.