The Brown County Council will vote Monday, June 18 on borrowing $3 million to fund capital improvement projects.
That, and borrowing for a new justice center project, could result in an increase to property taxes of about 2½ cents per $100 of assessed property value.
The Brown County Council voted unanimously on June 4 to move forward on looking at two separate loans, for $1 million and $2 million. That much would cover several capital improvement projects on the commissioners’ list, but not the justice center or renovating the current courthouse.
A public hearing on the borrowing will take place at 6:30 p.m. June 18 in the County Office Building’s Salmon Room.
Taking out a bond was what the county originally announced it was doing in a required legal ad. Jason Semler, with accounting firm Umbaugh & Associates, told the officials on June 4 that issuing a bond would be more expensive than taking out a loan. He also said that counties which do a bond issue instead of a loan payable with property taxes can’t use that money for road work, and road work is one of the uses for some of this $3 million.
“If you go beyond that $2 million, I think you would have to do a bond issue, then proceeds would be restricted to something other than roads. Or we could do a combination of both if you get to that point,” he said.
Semler estimated that if the county paid back its new loans over three years, it would result in property taxes going up to about 13 1/2 cents per $100 of assessed property value; however, he did not have an analysis prepared on that exact scenario. His 13 1/2-cent estimate also factored in bonds that may be taken out in 2019 to build a new justice center.
For 2018, the county property tax rate is almost 11 cents per $100 of assessed value, according to Umbaugh’s report.
What’s it for?
Commissioner Diana Biddle presented a list of capital improvement projects to be completed with the $3 million before a vote was taken.
It includes $940,000 for a new radio transmission tower to help cover “holes” in coverage for police, ambulance and fire workers.
Council President Keith Baker said cost estimates had increased by about $100,000 since the county first considered funding that project last year. Now, the project also would include buying three new radios per volunteer fire department plus the volunteer fire trucks, because their current radios would not be compatible with the new tower.
An estimated $125,000 of the $3 million loan would go toward replacing the grandstand bleachers at the Brown County 4-H Fairgrounds and making them compliant with the Americans with Disabilities Act.
“They would actually have ramps on them and you could get wheelchairs up into those bleachers. I don’t know the extent of the damage there, but there is a major support beam there that is not in good shape,” Biddle said.
She called the bleachers a county liability issue. “$125,000 is a lot less money to spend than somebody ending up in the hospital because we don’t fix it,” she said.
The county plans to get that work done before the loan is issued, possibly before the fair starts at the end of July. If and when the county gets this planned loan, it would reimburse itself, she said.
Of the $3 million loan, $65,000 would go toward replacing wooden light poles at Deer Run Park. “What I understand is the woodpeckers have had a field day with some of them, so they are afraid they are actually going to break in half,” Biddle said.
Then, $185,000 would be used to put a new roof on the highway department’s salt barn, pour a concrete floor in the new truck barn and buy a fuel pump apron and tank lids.
Biddle said the Brown County Veterans Hall is in need of additional parking spaces, so about $35,000 would be set aside to buy 20 feet of adjoining property. That would be enough to add 15 more spaces.
The loan money would also be used to repair the courthouse’s bell tower, which is estimated to cost between $50,000 and $100,000. A $2,500 grant may be available through Indiana Landmarks to go toward the repairs.
An additional $30,000 would be spent on security measures for the courthouse and for the Brown County Emergency Management Agency office in the ambulance base, such as cameras and doors with keypad locks. Even though the county is considering building a new justice center, the historic courthouse would still be used by county government entities.
Repairing mortar on the courthouse bricks also would be paid for with the loan money. A cost estimate was not included in the plan.
The final project to be funded would be making the ramp and porch entry at the Sycamore Valley Senior Center ADA compliant and re-siding the building for $50,000. Last year, the interior was remodeled.
The remaining money — approximately $470,000 — would go toward roads, bridges and other projects the county highway department will plan, Biddle said.
All costs are preliminary at this point until bids are received on each project, she said.
Paving plans
A $2 million road loan that the county took out in 2016 will be paid off at the beginning of 2019.
Baker said he wanted to see some of the new capital improvement loan money be earmarked for highway projects.
Brown County was not awarded any state Community Crossings road paving money last year. It will try again for funding for 2019.
By borrowing money, restructuring the budget and getting that grant money, the county has been able to get 80 miles of roads paved in three years, said Brown County Highway Superintendent Mike Magner.
“If we don’t keep this funding source going, we’re back to paving five to 10 miles a year. That doesn’t even keep up with maintenance,” he said.
Magner said the highway department plans to repave every county road every seven years. “That allows us to look at improving other roads in the county, like gravel roads, but also being able to maintain,” he said.
“If we were only able to pave a road in a 10-year cycle then we have very short gap to do any other improvements before it’s time to go back, start all over and repave them again.”
What are the costs?
Baker had asked for a joint meeting between the council and commissioners on June 4 to learn more about the projects to be funded with this possible $3 million.
Biddle said the reason she wanted to look into borrowing $3 million instead of the $2 million the commissioners discussed earlier was because of the extra cost to the county of getting a $1 million loan later.
That other $1 million could be used to repair or rebuild the prosecutor’s office and parks and recreation office if a new justice center isn’t built. “With the justice center concept, what we do with it, what we don’t do with it, we’re going to need about another million dollars for either Plan A or Plan B,” Biddle said.
Resident Sherrie Mitchell questioned the council and commissioners about why maintenance was not included in various department budgets.
Regarding the highway department’s buildings, Biddle said that money for roads which the highway department receives through its budget from the state are to be used for roads only and not for building maintenance. Building maintenance is the county commissioners’ responsibility, she said, and there are 13 of them.
During budget hearings last summer, the commissioners had requested $250,000 for buildings in their cumulative capital development fund, but the council approved only $50,000. “We just don’t have the tax money, the budget for it,” Baker said.
After this meeting about the $3 million loan, the council and commissioners heard a presentation by architecture/engineering firm DLZ about building a new justice center and remodeling the historic courthouse for another county use.
Even if the county decides not to build a justice center, the prosecutor’s office will need to be repaired, remodeled or completely replaced, and that isn’t the only building that needs work, Biddle said.
“That building is functionally obsolete,” she said about the prosecutor’s office. “… We’d still have to repair or replace the parks and rec office. We still have to do some renovations and some repairs in the courthouse building itself.
“It makes no difference to me whether the council approves a $2 million bond or a $3 million bond. I only bring it to you in terms of saving the taxpayers approximately $50,000 in a year or year and a half to do this again,” she said.
This would be the fourth time the county has taken out a loan since 2012, Baker said. Previous loans were taken out to fund bridge and road repairs.
Brown County’s debt limit is $8.4 million, according to Umbaugh’s report at the May 21 meeting.
The county has about $1 million more to pay on its last road loan. Taking that into consideration, the county’s available general obligation debt limit is $7,471,631.
