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September 5, 2013

Bridge fund, loan to plug funding shortfall in Floyd County

$475,000 to come from bridge fund; Camm, Gibson trials stretch dollars

NEW ALBANY — The Floyd County Commissioners voted 2-1 Tuesday to transfer $475,000 from the Cumulative Bridge Fund to help make up shortfalls in the CAGIT and Economic Development Income Tax funds, and to pay for the murder trials of David Camm and William Gibson. Now it will be up to the Floyd County Council to accept the offer.

The money will be combined with two road reimbursement checks totaling $148,000, a $100,000 loan from the Floyd County Recorder’s perpetuation fund, and $100,000 from the auditor’s illegal settlement fund.

That totals $823,000, which will be added to the $152,000 the county will receive next month from the state for its share in funding murder trials.

The council had asked the commissioners if they would consider loaning the $475,000 last month. The commissioners control the bridge fund.

The council, by state ordinance, has nine months to pay back the loans. But unlike a loan from a bank, it will not have to pay interest.

However, Commissioner Chuck Freiberger, a Democrat who voted against the loan, said it’s bad economics.

“It is robbing Peter to pay Paul,” Freiberger said. “We could also suffer an emergency in that nine-month period which would cause even more severe problems financially. Infrastructure is very important and once you get behind you can’t get caught up.”

Commissioners Steve Bush and Mark Seabrook, both Republicans, said the loan made more sense than paying back interest, especially since the council has to pay back the funds next year.

“At first I was against it, but as long as they are guaranteed to pay it back I don’t have a problem with it,” Seabrook said.

Council President John Schellenberger said he favors the inter-departmental loan since there will be no interest on the funds borrowed.

Bush said the loan would also allow the county to borrow money in case of an emergency.

“Either way was a short-term fix,” he said. “I just think the interlocal agreement is a little easier to deal with.”

The county would have only been able to borrow $255,845, far short of what it needed, since under state statute a county can only borrow up to 5 percent of its total tax levy, Auditor Scott Clark said. Since a loan was taken to purchase a new dump truck for $122,111 recently, only $255,845 could be borrowed before the county hit its 5 percent limit.

The next bridge to be repaired out of the bridge fund is on Pamela Drive. Don Lopp, director of operations and county planner, said that bridge is now slated to be replaced in 2015. He said the loan also did not deplete the bridge fund.

Floyd County has faced several financial challenges in 2013. The two murder trials, purchasing new voting machines, and the fact that council members were given wrong figures when figuring the 2013 budget from former Auditor Darin Coddington, causing a $2.4 million deficit which had to be repaired. Coddington has since resigned and was replaced by Clark.

“The previous Republican auditor has caused most of this problem, and the commissioners office worked very hard with its personnel to help the council get more financially stable surrounding those problems,” Freiberger said.

Bush said the council will have to take a hard look at the numbers on Tuesday and Wednesday when preparing budgets for 2014. He said the county is also hampered by property tax caps which will cut county revenue in 2014 by $228,000.

“You have to see what revenues you have coming in, and what expenditures you have going out. You have to look at those hard numbers. You have to look at everything,” he said.

The council has to submit its final budget to the state by the end of the month. Meetings with each office holder will be held all day Tuesday and Wednesday where budgets will be submitted. Schellenberger said the council will likely hold a meeting Sept. 24 to make adjustments to the final budget.

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