CLINTON — Because Clinton fell short of a job-creation goal, the city will have to repay a portion of an Iowa Department of Transportation grant received for construction of the Mill Creek Parkway.

The city’s bill: $721,900 that would be paid to the state incrementally over a nine-year period.

The issue goes back to August 1996, when the Transportation Commission approved a RISE, or Revitalizing Iowa’s Sound Economy, grant of up to 62 percent of the total project cost for the construction of 5.4 miles of the Mill Creek Parkway. The grant was contingent upon the creation of 714 jobs in the corridor within two years of the project’s completion.

The Mill Creek Parkway project was estimated to cost $12,822,794 and the state commission approved a grant in the amount of $8,483,600. Because the completed project cost was less than expected, the total grant money received was $7,947,356.

The Mill Creek Parkway opened in November 2001 and the city was to issue a report detailing the jobs created by November 2003. The DOT allowed the city two additional one-year deadline extensions to report the data, with the final report due in November 2005.

Stuart Anerson, office manager of the IDOT Office of Systems Planning, said in March that according to the information the DOT had obtained, only 381 of the required 741 jobs were created within the four-year period. The DOT allowed the city to present additional information regarding the actual numbers of jobs created, but the figure still fell short of the required number.

In order to figure the amount the city may have to repay, the DOT calculated the amount based on the shortfall percentage. Anderson said that generally, the RISE program offers grants of up to 50 percent of the total project cost without a job creation requirement. Because the total cost of the Mill Creek Parkway project was $12,822,794, a 50 percent grant would have equaled $6,411,397.

The city actually received a grant of $7,947,356, so the DOT calculated that Clinton received $1,535,959 based on the job creation contingency. When 47 percent of the jobs required were not created, the DOT multiplied that percentage by what the city received to create those jobs, resulting in an expected $721,900 that may have to be repaid.

At the meeting of the Committee of the Whole on Tuesday night, City Administrator Gary Boden said the issue of repaying the grant is a “difficult thing to talk about.” He said he thinks every avenue to get the payback amount reduced was explored and exhausted and state officials indicated there is a strict policy in place dictating payback of the grant if requirements are not met.

Boden said more than 20 cities have had to pay back RISE grants due to not meeting program requirements.

Boden said that the payback amount of $721,900 is a large number, but noted it needs to be taken in context with the fact that Clinton received the second largest RISE grant ever in the state. He said the city can pay back the loan over a period of time and without interest

He added that the Mill Creek Parkway project was “wildly successful” because it improved the local quality of life and aided in job creation. Boden said he and Anderson have discussed tentative arrangements for the payback and the city will have nine years to pay the full amount at no interest. The city will begin making payments next year and pay approximately $35,950 for the first two years, $75,000 for the following two years and $100,000 for the final five years of the payback schedule.

Boden said repaying the grant shouldn’t negatively impact the city’s financial position or incur additional costs to taxpayers as the funding may come from new property tax money generated by new construction projects at ADM.