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February 21, 2013

$11 million bond for Jeffersonville police station approved

Plans amended to include 25 city projects

JEFFERSONVILLE — The first step to construct a new $11 million Jeffersonville Police Department station on 10th Street was approved Wednesday night.

The Jeffersonville Redevelopment Commission approved two resolutions that designate the city’s Inner City Road and Falls Landing Tax Increment Finance funds to back the bond being sought for the construction of the police station.

However, the redevelopment commission was not asked to pay for the new police station.

“The reason why it’s going through redevelopment is because it’s going to be a bond that’s going to be backed up with TIF dollars,” said Redevelopment Commission Attorney Les Merkley.

He explained that the city’s plan is to pay off the bond debt using public safety Local Option Income Tax funds. However, a state restriction will not allow the money to be pledged as the source of funds to repay the bond. As a result, the city, and subsequently the redevelopment commission had to approve the TIF money as the source of the bond’s repayment.

“No TIF dollars will be used to make the bond payments, unless for some reason LOIT would not be there,” Merkley said.

Financial reviews offered by the city and accounting firm  Umbaugh and Associates show that the LOIT funds will be sufficient to cover the bond payments.

Brian Colton, adviser with Umbaugh and Associates, offered the repayment schedule for the bond. The total being sought to construct the police station equals $11 million, with a maximum annual bond payment of $800,000. 

The 2013 disbursement of LOIT money to Jeffersonville is $2.2 million, leaving a $1.4 million remainder after the bond payments have been made.

“The only impact would be on our ability to bond further money ... in terms they would look at this as an obligation,” said City Controller Monica Harmon.

With the approval Wednesday night, Merkley offered a hopeful schedule on the construction of the project if a number of hurdles are cleared to seek the funding.

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