Inside the March 2008 issue:
Projects: Mayor Duke Bennett (above) looks over a list of projects with Chuck Ennis, city engineer, and Darrell Zeck, public affairs director. WVJB photos by James Hehman

By Jonathan Moore
WVJB Writer

     Everyone wants progress.
     The problem always is how to pay for that progress.
     In 2003, the Vigo County Council voted to implement CAGIT and CEDIT, designed to help fund needed infrastructure improvements through tax dollars.
     The Burke Administration used these funds to begin unprecedented series of infrastructure projects throughout Terre Haute.
     The Burke plan included seeking additional funding through another bond.
     When Duke Bennett took office in January, one of the first problems his administration had to solve was a $5.6 million shortfall in funding for infrastructure problems already underway.
     According to Chuck Ennis, city engineer, The Bennett administration wants to find funding for these projects within existing monies. The current plan is to use an existing bond from Terre Haute Sanitary District to cover with the $5.6 million shortfall.
      "It was pretty well known in the [engineering] office that was the plan," Ennis said. "It has fallen on us as to whether we should go through with the bond or not." Since the start of the year, the Bennett Administration has been consulting with the city's bond council, accountants, and the controller's office on different options available without borrowing any additional money.
     Ennis said the city recently received approval to shift an existing $20 million bond that addresses the combined sewer overflow to under funded projects associated with the sanitary district.



      "We can use the money we have already borrowed," he said. "It's like an equality loan. We can use that money to pay off the shortfalls in the other projects. So we aren't going out and borrowing more money."
     The city's Bond Council is Patricia Miller, an Ice Miller attorney from South Bend specializing in municipal finance. She said she approved of the use of the bond for sanitary-related projects, but was not available for further comment.
     The city currently has six bond issues outstanding and maintains a "AAA" bond rating from Moody's Investors Services.
      "That $20 million dollar bond we are borrowing from is basically an unfunded mandate," Ennis said. "It is our combined sewer overflow bond. The schedule to do that work has been pushed back."
     EPA originally called for all cities with combined storm and sanitary sewer systems to have those systems separated by 2009. IDEM and city officials are currently in discussions concerning Terre Haute's plans for that system. According to an IDEM spokesman, the EPA has asked Terre Haute and IDEM to enter into judicial agreement no later than September.
      "But the schedule has been pushed back," Ennis said. "We don't need that money now." The city has decided to borrow the $5.6 million from the $20 million bond
      Projects scheduled to start this year are

• 12 Points Champions Park,
• Enhancement to I-70 Interchange
• Seventh and Chestnut roundabout.

     "Some of the $5.6 million was planned I think," Ennis said. " The plan was to borrow more money. Some of it you can make an argument that some of that costs was due to inflation because these projects were started years ago and the cost estimates on those projects were probably a little shy of the total cost was going to be. But most of it could be contributed to the plan was to go out and borrow more money."
     Former Terre Haute Mayor Kevin Burke said he planned to borrow additional money through a bond issue and fund his projects. He said it would be "disingenuous" to call $5.6 million a shortfall. Because the current administration was told at a transitional meeting about his plans to fund the projects for the next four years.
     "The bond issue was scheduled because it was the next," Burke said. "We have retired two [bonds]. There were no surprises."
     Ennis said the city would not delay any of the projects currently under way.
     "We can't delay these anymore," he said. "Contractors are out there working right now. Our job is to figure out how to pay them. We are not talking about not starting new projects. We are talking about how we are going to pay for the projects we have already got started. We don't feel like that is an option."
      "We have come up with some ideas to streamline some things and gone through our budgets. We know how much money we have and done what we can to reprioritize some things," Ennis said.
     Ennis concluded by saying that Terre Haute is in a good financial shape to move the infrastructure projects forward.      "They are going to see as much construction as they probably want to see. We are going to take their tax money and spend it wisely. I think we are going to take their tax money and going to spend it wisely as possible."
     Terre Haute Mayor Duke Bennett said he has two options open to him. Shortfall will be paid either borrowing money from an existing bond or a proposal for a new bond package.
     "We are able to access that particular bond with those sanitary related projects. That is the direction we are going," said Bennett. "At the next sanitary board meeting, We'll have to let them to decide if they want to adopt that philosophy which we believe they will and then we'll move on there. So right now, we have two options. Our preference is to use money from the existing bond and not take out a new bond at this time."

     Jonathan Moore can be reached at jonathanm@thjournal.com