The city of Valparaiso won't have to borrow as much money for road repairs as initially thought, but how much less remained a topic of debate at the last city council meeting.
Last month, the city council agreed to borrow about $6 million — $4 million for paving and $2 million to replace the irrigation system at the Forest Park Golf Course. That was after city officials repeatedly said there wouldn't be a significant amount of money left over from this year's record paving budget, in response to concerns from council member Barbara Domer. But just two days after the bond was approved, City Engineer Max Rehlander discovered that there would likely be $1.6 million leftover.
"Generally speaking, there was multiple locations of streets that we were under the assumption that we were going to do, like, a four-inch mill with a four-inch overlay and come to find out, as we were milling, multiple streets didn't even have the four inches of asphalt in order to mill," Rehlander told council members.
That sudden change drew frustration from some council members, including Emilie Hunt. "It's somewhat unbelievable that we had no idea that one-and-a-half million dollars was sitting there, for this purpose only," Hunt said.
City Administrator Bill Oeding said he instructed municipal advisor Baker Tilly to lower the bond amount to $4.4 million, after seeking input from the council by email. He said they were on a time crunch to keep the bond sale on schedule for a December 15 closing.
"These things just take time, and so I'm pushing it to a decision, so we can get these bonds put together and get them sold," Oeding explained.
But Domer felt it could have been reduced even more, due to leftover local income tax revenues and the higher maximum on state Community Crossings matching grants. "I'm just saying, I think we could've gone another million dollars less, so instead of reducing the general obligation bond for paving by $1.6 million, we could've very comfortably reduced it by $2.6 million."
Meanwhile, Hunt was also frustrated that unrestricted funds — like cigarette tax and riverboat revenues — were spent before dedicated paving funds this year. "It could've been used for the housing initiatives we've talked about; the housing initiatives you're working on, Mr. Oeding; bus shelters; the shade at the skate park, which everyone knows is incredibly important to me."
But even if the city ends up borrowing more than it needs, officials don't expect much of a negative impact. The city could pay off the bond earlier, invest the proceeds or simply do more paving — all while the city's property tax rate would actually go down slightly.
Oeding said he didn't see a problem. "The worst-case scenario, I don't have one," Oeding told council members. "The best-case scenario is we miss the number and we've got a lot more paving dollars than we anticipated and we could carry those over for a couple years, or we under-budget and we catch up the following year."
City Attorney Patrick Lyp suggested redoing the bond ordinance with the lower amount. "For housekeeping, you want to have a clean ordinance, and so, as close without going over of the maximum number is what we like to have in here," Lyp said.
But the process is a bit complicated. Lyp presented council members with an exact copy of the ordinance they already adopted and had them amend it to reflect a lower maximum of $4.4 million. That amended ordinance will be up for final approval on Monday.
