News and Tribune

Clark County

June 6, 2014

Jeffersonville sewer project debate jeopardizes large project

Board votes to halt most design work on sewer interceptor project

(Continued)

JEFFERSONVILLE — FUNDING ISSUES

Moore said he was unhappy with Saegesser for telling the council that the sewer board’s bonding capacity was $16 million lower than the $37 million estimated price for the CSO Interceptor.

The most recent reports that Umbaugh and Associates, a financial advising company, released did not include drainage funds or sewer capacity fees as income when considering bonding power.

In its studies dating back to 2009, Umbaugh has always included those two factors, which totals $35 million in bonding capacity fees today.

“This isn’t something new or different,” Moore said in a news release issued this week. “To suddenly not use those revenues makes no sense. Our sewer utility is financially strong.

However, Saegesser said in an interview that neither of those sources are guaranteed.

“The only funds that we have available to us are sanitary sewer funds,” he said.

The drainage board has not given any verbal agreements that it would give money to the sewer board, and Saegesser said he doesn’t want to get into the business of doing that anyway.

“I think the chances of that happening are slim to none,” he said.

Capacity fees are paid to the city when a new sewer is built on an empty property. Umbaugh calculated the amount raised in capacity fees at Jeffersonville’s current rate of growth in its report.

Though he said that River Ridge Commerce Center is growing at a rapid pace and more capacity fees are likely to come in, the amount is still hypothetical.

“There’s no guarantee those fees will be available,” he said.

Saegesser said that if all capacity fees are used to pay back bonds, there won’t be any money for future sewer expansion and sewer rates will have to be hiked again.

Ashack said he is confident that the already-approved sewer rate increases — the last of which comes in January — will be sufficient to pay back bonds over the next 20 years. The bonding capacity that Umbaugh quoted is based on potential sources of revenue, but doesn’t necessary mean the city must use all of those sources, he said.

“The numbers are close enough for use to move forward with this project,” Moore said in the release. “It would be irresponsible for us to ignore our obligation with the EPA. This project has been discussed and planned for several years. We don’t need any more delays.”

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