When Middle Tennessee Electric Membership Corporation (MTEMC) purchased Murfreesboro Electric Department (MED) from the city last year for $245 million, the Community Investment Study Group was formed to recommend to the City Council how the funds should be managed in the long term to best serve the interests of the community.
Chaired by Rick LaLance, a Senior Vice President with Pinnacle Asset Management, the committee is also composed of Bob Mifflin, former executive director of Christy-Houston Foundation; Amy Farrar, a Murfreesboro attorney; Eric Meriwether, a financial advisor for Northwest Mutual; and Andy Womack, a former State Senator and a local State Farm insurance agent. In addition, City Manager Craig Tindall, City Attorney Adam Tucker, and Financial Director Jennifer Brown are serving as non-voting, ex-officio members.
The funds received will be placed into a trust. In the end, funds from the sale plus interest are expected to grow to $302.4 million over the next 15 years. With an initial payment of $43 million, the rest will be paid in $17 million annual installments. In 30 years, the interest produced will expand to $150 million.
Mayor Shane McFarland recently explained to local business leaders that the city’s goal is to keep the profits from the purchase invested at an estimated conservative rate of 4%. They plan to keep the principal invested and only spend the interest. The interest monies will go toward keeping the tax rate low and using the funds to pay for community development capital projects so bonds will not have to be passed and debt service paid.
“This will have the greatest impact on our community over time,” explained McFarland. He went on to say that the city’s charter is being changed ensuring that the funds will not be able to be used for pet projects in the community, but it will go towards finding solutions to community concerns.
Growing traffic issues are one of the biggest concerns in the community currently, so having $40 million go towards state road projects is one of the initial plans, and this money will be matched by the state. Providing some of the funding for local state road projects helps to get them done more rapidly. Some of the projects this funding will help move along include widening Memorial Boulevard to Cherry Lane, Lascassas Pike to DeJarnette Road, and Old Fort Parkway from State Route 99 to I-24. It may also fund construction of a long-planned bridge over I-24 to reduce ever increasing delays at I-24 interchanges.
Twelve million more will go towards strategic partnership projects that will further increasing the reach of this funding without costing the city.
“We were a donut hole surrounded by MTEMC,” explained McFarland. “In some areas of the city one side of a road would be a MED customer and homes on the other side would be an MTEMC customer. There was no room for growth, and it was confusing to the community.” The sale made good sense to the city, and it was a win/win for both parties as MTEMC was able to gain access to new technology that will improve customer service.
MTEMC is one of the nation’s largest electric cooperatives, serving about 200,000 residential and business members in one of Tennessee’s fastest-growing areas. Founded in 1939, it was formed as a municipal utility owned by its ratepayers. It distributes power purchased from the Tennessee Valley Authority.
