The Brown County Council has postponed voting on an ordinance that would approve a $3 million loan until next week, after three county residents and some council members questioned the reason and the need for it.
A special meeting was set for Monday, Aug. 2 at 6 p.m. to have more discussion, vote on the ordinance and receive an updated financial plan from the county’s financial adviser, Baker Tilly.
The Brown County Council approved a resolution for the loan at the June 21 meeting which came from county commissioner Diana Biddle. The county has been borrowing $2 million every two or three years for capital improvement projects. The last such loan they took out in 2018 is set to be paid off within the next month.
Residents asked what projects would be funded with this loan and why the county was seeking it in addition to the COVID-19 relief funding it is getting. The ordinance states that there are “insufficient funds” available to cover the cost of projects.
“How do we know that if there is no list? What did you look at to decide you did not have sufficient funds?” resident Sherrie Mitchell asked the county council.
“I looked at the budget. We don’t have enough money to run this county. It’s very simple,” council Vice President Dave Critser said.
Mitchell and other residents had not seen the plans for the capital loan money ahead of the July 19 meeting when the council was asked to approve the loan. Council members Scott Rudd and Darren Byrd said they had not seen the plans either.
“I have constituents I have to answer to when they ask what money is being used. I cannot vote yes if I can’t tell people what the money will be used for,” Byrd said.
Biddle said the plan had been circulating among council members. A draft plan was explained in the July 20 newspaper.
The biggest expense would be an estimated $500,000 to buy the CRC building if the school board decides to sell the property. The CRC would then be home to the prosecutor’s office. Another $100,000 was estimated in the loan plan to cover the cost of tearing down the current prosecutor’s office.
There would also be an estimated $94,000 in fees for securing the loan.
The second-largest expense would be $400,000 to update the county’s 911 system, including new antennas and 911 consoles. That also would cover new highway radios that come with GPS tracking to monitor what roads are being mowed or plowed in real time.
Another large expense, $250,000, was allocated to replace the air conditioning at the Brown County Law Enforcement Center.
Paying for ambulance contracts with Columbus Regional Health and Indiana University Health Lifeline also is in the plan. The county would pay CRH about $281,000 out of the loan for the remaining 2020-2021 contract, then $360,000 to IU for service from April through December this year.
“How is that a capital improvement?” resident Tim Clark asked about the contracts. Typically, “capital” items are tangible things, not services.
“The capital improvement loan is simply unfunded items we cannot pay for any other way. They just call it a capital improvement loan in terms of how it’s established through getting the bonding,” Biddle said.
Of the remaining loan plan, $60,000 was budgeted for technology updates and $20,000 for security improvements. Another $35,000 was estimated for replacing the siding and roof at the Sycamore Valley Senior Center.
Rounding out the rest of the money was $50,000 for leasing a coroner’s office, and the $850,000 remaining would go to the Brown County Highway Department for paving and bridge projects, including paving Four Mile Ridge Road which recently had a “pavement failure.”
All costs are subject to change as plans are finalized and materials are ordered.
Jason Semler, from Baker Tilly, told the council on the phone during the meeting that the loan would be tax-neutral, affecting current property taxes at less than a penny per $100,000 of assessed value.
Ambulance expenses
Mitchell asked for more clarification on the ambulance service contract bills.
The commissioners budgeted $550,000 this year to cover an ambulance service contract. About $20,000 now remains in that budget line. About $620,000 still has to be paid to CRH and IU, including what was owed to CRH at the end of 2020 and the first part of this year before IU Health Lifeline took over as the new provider. The commissioners owe IU Health $350,000 for providing ambulance service the rest of the year, which is included in the $620,000.
The CRH bill was not a set amount. The hospital billed the county twice a year for any ambulance costs not covered by health insurance. The last bill came at the end of each year for whatever insurance did not cover during that year, and the county would pay that bill the following year for services already rendered.
Biddle explained that when the budget was submitted last summer, the commissioners were not aware that CRH didn’t want to keep serving Brown County and that the contract would be changing. Also, when the new contract was signed with IU Health, it was not yet known how much CRH was still owed for working in Brown County for the first part of 2021. So, Biddle said she did not ask the county council for additional money to cover the IU contract until she had the CRH bill, too.
For a full year of service, IU Health will charge $540,000. That will need to be paid in four installments starting next year..
Biddle can ask the county council for money to cover the $640,000 in not-yet-paid ambulance costs because there is about $1 million in unappropriated funds in the county’s general fund. But Biddle said she would not like to do that because that money could instead cover other expenses related to storm damage and other issues in the county.
The county’s rainy day fund — another place from which ambulance fund overages had been paid in previous years — now has about $65,000 in it, Auditor Julia Reeves reported at the July 21 commissioners meeting.
At the beginning of 2019, the rainy day fund held $1.4 million. At the beginning of 2020, the fund balance was at $300,000 to $400,000. Nearly $1 million was spent out of that fund in 2019 on unexpected expenses from employee health insurance, the probation department, the public defenders and the ambulance service contract.
Planning ahead
“I pay one of the highest income taxes in the state,” Mitchell told the council.
“What are you doing with the budget to protect us from having to borrow money year after year?” she asked. “Are you borrowing money to make home improvements? Why is it happening here? I pay an incredibly high tax.”
Critser said that if the council cut the budget to have enough to pay for the listed projects, they’d have to lay off county employees or reduce funding to emergency services, like the sheriff’s department.
“When you don’t have enough money to actually fund these projects, then you go outside the rate to find the money,” he said about the loan.
Mitchell said it was “incompetent” for the county council to vote for the loan instead of reducing taxes for residents by not having to pay $1 million or so a year toward the loan.
Biddle said that the $2 million loan taken out in 2018 was paid back over three years. She pointed out that residents pay less than 30 percent of the amount that could legally be collected in property taxes.
“To Sherrie’s point, if the council would increase their budget by $1 million to $1.5 million a year, we would not have to go out and get a loan every year,” Biddle said.
Resident Kevin Fleming said that borrowing at less than 1 percent interest rate is a good financial move for the county, but borrowing without publishing a plan for the funds ahead of time or taking the time to see if COVID relief funds through ARPA could cover some of the projects listed “does not make sense.”
Critser asked Fleming and Mitchell if they thought the council and commissioners would unnecessarily spend the money. “Are you questioning if we’re going to go out and buy Cokes with it?” he asked.
“The nature of your question is, ‘Trust us.’ That’s not good government. That’s not the way it should work,” Fleming said.
“Why are you asking for so much trust? … The public deserves the right to have a say on what they think about it. I can’t do that because I don’t know exactly what will you do with it.”
Clark said that the council had not identified priorities in a capital improvement plan. Biddle said earlier this month that she was going to talk to Baker Tilly about doing that so they could better plan for large expenses.
“We’re not doing the commissioners’ jobs up here folks,” Critser said about setting priorities. “We’re trying to give them the money so they can do their job.”
Council President Dave Redding said that the council does have influence over projects.
Council member Scott Rudd said after looking at the county’s budget, financial plan and operating reserves, there is a “downward trend” in the budget.
“There’s not enough money to fund the things we currently have on our plate, in my opinion,” he said.
“There’s also no question in my mind moving forward there will be more difficult decisions to make to right that decline, not fewer. We have massive influx of additional funding. That’s the curve ball, the variable, the unknown that gives me pause on this, because we don’t know how that money will shake out.”
“I don’t like it,” Rudd said about getting the loan, “but I think it’s needed. I also think this process needs to change moving forward, and you will hear me talk a lot more about that.”
Other funding
The county has received part of its money coming from the American Rescue Plan Act (ARPA), totaling around $1.4 million. Nearly $3 million in relief funding is coming to Brown County, but split into two payments.
Governments can use the money for revenue shortfalls; responding to negative impacts on housing, nonprofits and small businesses due to the pandemic; paying salaries of essential workers; or paying for necessary investments in water, sewer or broadband infrastructure.
Biddle said that until the final interpretation is released at the federal level on how ARPA money can be spent, the county should not spend it, because if an expense is not allowed in that final report, the county would have to pay that money back.
She said the commissioners have already received requests for funding from the Brown County Community Foundation, Susie’s Place in Bloomington, Brown County Water Utility, and Brown County Regional Sewer District, and those requests together exceed the $1.4 million the county has coming this year.
Commissioners President Jerry Pittman said the list of projects to be paid for with loan money changes often as other expenses pop up that have to be prioritized — for instance, roads that need to be paved.
“I’m not saying, ‘Trust us,’ I can give you a list, but it’s changing on almost a daily or weekly basis,” he said.
Fleming discouraged the council from taking out the loan until they figure out how to spend ARPA funds and see an updated financial forecast.
Biddle said if the loan does not happen, the council will need to find $350,000 in the county’s budget to cover the IU ambulance contract for the rest of the year.
“You either want to do these projects you feel are necessary, or you don’t,” Critser told the council.
“If you don’t, vote against this and you’ll lower property taxes. There’s no two ways about it. (It will be) about a $10 or $15 a year (decrease). When a 911 call comes in down there, somebody’s life just happened and died because the 911 thing wasn’t working, and you’re going to say, ‘I saved you $15.’ Who cares about that life? You want projects to happen or lower taxes? If you want to lower taxes, go for it, man.”
Council members Rudd, Byrd, Judy Swift and Redding did not vote for suspending the rules and having a second reading, which would have pushed the loan ordinance through in one meeting if the vote were unanimously in favor.
