News and Tribune

October 15, 2012

$50 million in sewer bonds approved by Jeffersonville City Council


JEFFERSONVILLE — The Jeffersonville City Council approved up to $50 million in bonds that can be sought for wastewater projects throughout the city at its meeting Monday night.

The bulk of the bond money — about $34 million — would be used to install a combined sewer overflow interceptor to bring the city into full compliance with an Environmental Protection Agency consent decree.

Wastewater Utilities Supervisor Len Ashack said the city would look to issue three series of bonds, beginning with a $7.5 million bond to construct a south — or Lentzier Creek -- pump station and a north wastewater treatment plant in River Ridge. The cost to complete the north and south pump stations and the force mains for the sewers is about $11.4 million.

The second bond would be for the combined sewer overflow interceptor at about $34 million. And the third series of bonds would be to cover any unintended or unforeseen costs in the projects. The cushion is being sought because of the costs changes that could and have occurred.

Sewer Board Member Dale Orem offered an example and said that when the north and south lift stations began, the project estimate totaled about $3 million, but the actual cost is nearly $12 million.

But he added, “we’re not asking for the money, we’re asking for the authority to issue the bonds.”

And without the completion of the north pump station, Orem said economic development would be slowed.

“Without that plan, River Ridge is stymied and cannot move forward,” he said.

The money to pay for the bonds would be paid back through the city’s current sewer bill rate structure. City council members approved an ordinance in 2009 that set rates on a 200 percent increase to be incrementally adjusted throughout 2015 to help fund the projects. The sewer board has repeatedly pledged not to raise those sewer rates beyond the rate structure in place through 2015.

“We’re not going to go beyond the present rate structure,” Orem said.

City Council President Ed Zastawny asked Ashack about the rate structure and whether or not it will be enough to cover the costs to pay for the project.

“It’s a function of where we get the money and the interest rate on the money,” Ashack said.

Bonds are being sought through Indiana’s State Revolving Fund and carry a “conservatively” estimated 3 percent interest rate, he said.

To pay back the bonds, Orem admitted, will take a long time.

“We’ve invested almost $10 million in the newly annexed area and we’re still going,” he said. “It’s going to be a long time before we get that money back, but we have to do that,” he said of extending sewer service.

But he added the sewer board plans to recover some costs by pursuing those who have not paid their sewer bills or are late on payments, as well as forcing those who are in the newly annexed areas to tap onto the city’s sewer system.

“We just never forced connection, now we are,” Ashack said.

The city council unanimously approved on its third and final reading the city’s sewer board allowance to seek up to $50 million in bonds to complete the sewer projects.

2013 budget

The city council approved an ordinance for appropriation and setting the tax rate for 2013.

According to the ordinance presented, Jeffersonville’s total budget request equal $47.7 million, with the general fund total at $25.6 million.

Even with the cuts made to the budget before it was submitted, the council is expecting that more will have to be trimmed out when an approved amount is returned by the Department of Local Government Finance and when the circuit breaker tax caps are taken into account.

City Controller Monica Harmon said she plans to work with the city departments to identify areas that can be cut when the circuit breaker totals are returned to the city.

Councilman Nathan Samuel said they are putting together a working budget to operate off of during the first few months of next year.

“We’ll put in a budget that very well may be more realistic,” he said.

Another impact that may hit the budget figure Jeffersonville can operate off of for 2013 is an anticipated drop in assessed values for homes in the city.

Harmon said she spoke with the Clark County Assessor Vicky Kent-Haire who said the expectation is that property values will decrease, but could not offer by how much.

With a lower assessed value, a the 1 percent total -- for a residential homeowner — that can be collected in property taxes is also lowered.

The 2013 budget, which is required to be submitted to the DLGF by Nov. 1, was unanimously approved on its second and third and final reading.

Salary ordinance

The first vote was taken on the city’s salary ordinance, which must also be approved and submitted to the state by Nov. 1.

Jeffersonville’s City Council approved the salary ordinance on its first reading with three changes, all positions to be added to the city’s staff next year. Harmon previously removed all of the additions to city departments and to the salary ordinance at the request of the council at their previous meeting.

But three positions were added back in including a full-time kennel attendant for the J.B. Ogle Animal Shelter that would total about $27,000; a full-time human resources generalist for the city’s Human Resources Department that would total about $39,000; and a request to increase the pay grade, up one grade, for a deputy clerk in the city clerk’s office.

The first reading was unanimously approved. The second and third readings of the city’s 2013 salary ordinance will take place at a special meeting called for Monday, Oct. 22, in order for the ordinance to be submitted before the state deadline.