The city of Valparaiso is looking at borrowing money to pay for road paving.
The city was able to set aside $8.8 million dollars for paving this year, by dipping into cigarette tax and riverboat fund revenues. But City Administrator Bill Oeding says officials were only able to find $4 million in the proposed 2025 budget.
"I think that in order to do a quality job with our paving program and to get on top of it, we need the $8 million next year," Oeding told the city council last week.
To make up the difference, the city council is considering a short-term general obligation bond. It would bring in $6 million: $4 million for paving and $2 million to replace the irrigation system at the Forest Park Golf Course. That would be paid back over five years at an expected interest rate of about three percent.
Andrew Mouser with municipal advisor Baker Tilly said the city's property tax rate would actually go down slightly, due to an increase in the city's tax base. "Over the last five years, your tax rates declined from $1.27 per $100 of assessed value to just over $1.17, so about 10 cents over a five-year period, and then even with the new debt layered in, you can see that that tax rate would continue to decline," Mouser told council members.
He said the tax base is set to increase by 10 percent from 2024 to 2025, but the state only allows the city to increase its property tax levy by four percent, unless it issues new debt.
Mayor Jon Costas sees the funding increase as a temporary measure to catch up on road work. "We're talking about really getting them in excellent shape so that we can maintain them well with the standard $4 million that we typically have," Costas said.
No official action was taken on the short-term bond, but council members unanimously approved the 2025 budget and salary ordinance. That includes a $3,000 raise for city employees, the mayor and city council members.
Oeding said Valparaiso's compensation compares favorably with other communities, as well as the private sector. "I think we're sitting pretty good on most of our stuff," Oeding said. "By the time you figure in gross wages, all the benefits, everything that the employee gets, we're pretty competitive across the board."
Still, some council members said they wanted a more active role in the budgeting process. They suggested creating a subcommittee to hold public budget discussions with department heads.
Barbara Domer said she's interested not just in the numbers, but also in the long-term plans behind them. "I would just like to be able to talk to the department heads and be part of the conversation," Domer said.
As it stands, Valparaiso's 2025 budget adds up to $56.6 million, including a $25.6 million general fund. It now goes to the Indiana Department of Local Government Finance for final approval.
