County loan priorities, need under discussion

A decision could come sometime this week on whether or not the Brown County Council will agree to take out a $3 million loan to be paid back by property taxes over the next three years.

The council discussed it on Aug. 9, for the third time, during a three-hour-long special meeting to prepare for this week’s budget hearings. They did not vote last week because they were still discussing how the money would be spent, how much each project would cost and other details.

So far, it sounds like a lot of it is being budgeted for paving — possibly as much as $1.6 million, which, at current materials prices, would allow about 12 miles of roads to be paved per year.

Brown County Highway Superintendent Mike Magner told the council that if he were able to get an extra $283,333 per year for the next three years, plus $1 million each year from Community Crossings grant and the regular taxes he gets for local roads, within seven to 10 years, he could resurface all 114 miles of county roads he hasn’t been able to repave yet since he started with the highway department in 2015. From then on, county roads would be on about a 20-year rotation for repaving. If he were able to get more than $850,000 from this bond, the catch-up process may be able to go quicker.

Other projects on which the council and commissioner Diana Biddle came to a general consensus, but are still being discussed, were:

  • Buying the Career Resource Center of Brown County building from the school district and turning it into the prosecutor’s office, which would replace the current office that sits in the courthouse parking lot (this is dependent on the school board and superintendent agreeing to the sale), estimated at $500,000;
  • Paying off the rest of the Columbus Regional Health ambulance contract which was severed in April when the county contracted with IU Health, estimated at $281,000;
  • Paying off 911 system equipment which has already been purchased and installed, $360,000; and
  • Possibly replacing about half of the 11 air conditioning units at the jail, estimated at $250,000.

The $3 million loan would replace a $2 million loan from 2018 which was to be paid off this summer. Biddle told the council that the new tax rate would be more than it is now, but slightly less than it was in 2020.

The tax rate was 0.0979 in 2020, 0.0797 in 2021, and is estimated to be 0.0969 in 2022 with the loan factored in, said Kaitlin Cheek who works for the county’s financial adviser Baker Tilly.

A couple council members had wanted to see if it was “tax-neutral” before deciding whether or not to support it. Several also had voiced questions in the July council meeting about how the money would be spent. Four of the seven members voted against sending the ordinance into a second vote at July’s meeting, opting instead for more time to receive information.

How the loan would be spent isn’t set in stone yet, and might not be.

The county also is getting nearly $3 million from the American Rescue Plan Act (ARPA), split into two payments, and the ARPA money will come with restrictions on how it can be used. County council President Dave Redding handed out some project ideas he’d heard or been presented with and tried to get a conversation going about which projects could fit into the ARPA parameters and which couldn’t so that a budgeting strategy for the two sources of money would become clearer.

Biddle said that the ARPA guidance is still changing, so she was not comfortable committing that money to anything yet in case it would be spent wrongly and have to be paid back. Also, the council and commissioners don’t have a selection matrix yet to guide their decisions on which groups will get ARPA money.

As with the last loan, projects and needs may change with time, Biddle said. They also may learn about other potential funding opportunities from agencies such as the Office and Community and Rural Affairs.

The air conditioning units at the jail — which are original to the building and could cause legal liability if they stop working — are an example of why the county needs a capital improvement plan, said council member Scott Rudd.

“These were things we could anticipate 25 years ago and I don’t see anything in our budget, and we’re now adding to the increased costs by taking on debt to deal with them,” he said. “… I am dead set on this being a critical piece of our plan to get on track with these expenses.

“… The question in my mind is, is this the only vehicle we have to pay for them? … It sounds like yes,” he said about the loan.

Biddle said she’d been looking at starting a local income tax to build up money for jail maintenance.

The commissioners have been talking about doing a capital improvement plan for years, she said, but it costs money. The financial projections that Baker Tilly also presented at this three-hour council meeting are a part of that process.

Council member Darren Byrd suggested that the cumulative capital development fund is what should be used for expenses such as replacing the jail AC. Years ago, it was intended to replace the courthouse or build an annex, but it has since been used for IT and other expenses.

Rudd also asked if the 911 equipment could be paid for out of the 911 fund, which, according to Baker Tilly’s projections, would have $296,392 left in it at the end of this year. Cheek said she’d have to look into it. Biddle said it wouldn’t be enough.

Baker Tilly’s report projected that the county would have cash balances in many funds by the end of 2021, several of them well over the 15 percent cushion recommended for government units.

The council will discuss budgets for 2022 for four straight nights this week, Monday to Thursday, at the County Office Building.