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Terre Haute Council Discusses Sanitation Bond, Redevelopment Loan

The Terre Haute city council in the courtroom at City Hall

Photo: James Vavrek

The Terre Haute city council met for its regular monthly meeting Thursday night at City Hall.

Terre Haute city officials Thursday night withdrew a request to the city council for a bond to fund improvements to the city’s sanitation system.

The city initially asked for the $70 million bond to help fund a long-term control plan for the wastewater treatment and sanitation system, which would help the city to meet federal mandates through the Clean Water Act.

Currently, the city is on phase two of five in that control plan and is approaching $120 million in costs, the total amount budgeted for all five phases. The bond was proposed to assist in funding the remaining three parts.

City council members had expressed concerns over the bond proposal, which was originally projected to be for just $42 million. The council has repeatedly asked city officials to explain the increased cost.

The bond proposal includes $15 million for the design of the project, and $60 million for the construction.

City attorney Eddie Felling, who represented the city at the council’s meeting, says the city is still working on a contract for the design. But the bond request was withdrawn because the proposal didn’t have the support it needed to move forward with the current cost.

City attorney Eddie Felling

Photo: James Vavrek

City attorney Eddie Felling represented the city at the meeting Thursday night, and spoke on both the sanitation bond and the loan from the redevelopment commission.

“The general idea was, we don’t want to issue a bond for a design if we don’t have a willing council there to issue a bond for the construction itself,” Felling says.

Felling says the city’s tentative plan now is to finish a design for the sanitation plan and accept bids from contractors to complete it. They will come back to the council with the “lowest responsible bidder,” in order to lower the price tag.

Mayor Duke Bennett said previously that without the bond, the city would have difficulty staying on schedule to complete the control plan. Felling repeated that sentiment when withdrawing the proposal, but says moving forward with the project will show the city is trying to comply with the mandates.

“We’re showing good faith, obviously, that we’re pursuing the project,” Felling says. “Hopefully it would be more of an update, as opposed to an extension for a purely stalled reason. We would be clearly moving still at that point.”

Council president Karrum Nasser has been critical of the $70 million bond since it was proposed. He cites concerns over a lack of communication and transparency.

“When we’re being asked to vote on something that was double the amount we were told the project was going to be last year, as well as almost two thirds the budget we vote on – our budget was $90 million this year, and they were wanting us to vote on a $70 million bond,” Nasser says. “The council is not just going to rubber-stamp things, they’re going to be diligent and protect the taxpayers.”

 

Terre Haute resident Pat Goodwin also voiced his concerns with the sanitation bond at the meeting, asking if the city planned to move forward with the plan even without adequate funding.

“I’m disappointed by the gamesmanship we’re seeing tonight, which is, ‘Doesn’t look like it’s gonna pass, well, we’ll withdraw it, get it to the point where you can’t get the toothpaste back in the tube, and then the council will have to say yes,’” he says.

Felling says the issue of the sanitation bond will not be brought back to the council until late summer or fall of next year, when they have more information on the updated cost. He says the city will communicate clearly with the council throughout the process.

The council also discussed the city’s more than $8 million deficit, including plans to eliminate it to comply with a state order. One aspect of that plan is delaying the payback of a $5 million loan from the city’s redevelopment commission. The council barely approved that proposal with a vote of 5-4.

Nasser was one of the council members who voted no. He says the money borrowed from the commission shouldn’t be used for paying back the deficit; instead, it should be used for economic development and improvement in the city.

“Our redevelopment money is to be used for redevelopment purposes,” Nasser says. “It’s supposed to be a tool to increase our tax base.”

Council members Nasser, Todd Nation, Neil Garrison and Martha Crossen voted no on the proposal.

The city now hopes to pay back the redevelopment commission by June 30, 2018, but Felling says it may later request to further delay payment of $2 million of the loan.

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