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Coffey County approves resolution of intent for industrial revenue bond for proposed veterinary clinic
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Summary
The Coffey County Board of Commissioners approved a resolution of intent allowing a company building a veterinary clinic to pursue an industrial revenue bond (IRB) sales-tax exemption; commissioners did not decide on any property-tax abatement and required further steps before that incentive could be considered.
The Coffey County Board of Commissioners on Tuesday approved a resolution of intent authorizing the county to support an industrial revenue bond (IRB) application for a proposed veterinary clinic in the county.
Bond counsel Dominic Heck of Gilmore & Bell told commissioners the resolution authorizes the company to pursue the IRB process and — if approved at later stages — lets the applicant apply to the Kansas Department of Revenue for a prospective sales-tax exemption certificate. “The sales tax exemption is prospective only, so that's why you have to come do that at the front of the project,” Heck said.
Heck explained IRBs are a conduit financing tool: the county would be the issuer but would not provide credit support, and the issuing company typically purchases its own bonds and pays the associated obligations. He described three possible incentives tied to IRBs: (1) a rare federal tax-exempt interest rate for narrowly defined projects; (2) a sales-tax exemption on construction purchases; and (3) a property-tax abatement for up to 10 years and up to 100% of the increased assessed value, excluding the school capital outlay levy. “You're approving the incentives that are related to it,” Heck said.
A representative of the applicant, identified only as David, told the commissioners the project construction cost is expected to be between about $850,000 and $900,000 and that the facility would support three full-time veterinarians and additional support staff once operating.
Commissioners approved the resolution by voice vote after a motion from Commissioner Peterson and a second from Commissioner Barker. The resolution that passed was recorded in the meeting as Resolution No. 2025-952 (as read aloud at the meeting). The county did not, at this meeting, approve any property-tax abatement; Heck said that if the applicant requests a property-tax abatement later, the county would prepare a cost–benefit analysis and hold a public hearing before acting on that incentive.
Heck and David answered commissioners' questions about timing and the mechanics: the sales-tax exemption applies only to purchases made to construct the facility and does not exempt the facility from sales tax on taxable transactions after opening; a property-tax abatement would apply only to the increased assessed value attributable to the project and could be structured as a stair-step or fixed percentage for a negotiated term up to the statutory maximums.
Next steps described at the meeting: the company may use the county-approved resolution to apply to state revenue authorities to obtain a sales-tax exemption certificate; if the applicant later seeks a property-tax abatement, the county will come back with a cost–benefit analysis and set a public hearing for any abatement consideration.
No formal vote tally by name was recorded in the transcript beyond the motion and the chair calling the motion carried.
