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Ask The Mayor: Terre Haute's Bennett on sewer rate increases, convention center opening, gas prices

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Unknown Speaker
Hello and welcome to Ask The Mayor on WFIU. I'm Joe hren with WFIU/WTIU News. This week. We're joined by Terre Haute, Mayor Duke Bennett. It's the second week in March. Hello, and welcome.

Unknown Speaker
It's good to be here. Joe, good to see you.

Unknown Speaker
Don't forget, you can add your question to news at Indiana public media.org. You can tweet us at Ask the mayor. So let's just start like we always do. You know, a month ago, we talked about how high COVID numbers were but they were plateauing. Here it is a month later already, and we're seeing daily counts fall to at least in Monroe County, single digit numbers, hospitals, saying that they're catching their breath. But I think the other thing to keep in mind is hospitals are also having to catch up on other surgeries and elective procedures that they were able to do for a few months,

Unknown Speaker
I don't think there's going to be a lot of a breather for him, and maybe the pressures off of the COVID. But yeah, there's been delays on a lot of you know, like the surgeries and things and just even people just go in and seeing the doctor, which could lead to you know, some more serious issues for people, I think we're gonna see a ramp up in the coming months of that, you know, just people who put something off for a while, and now they're getting it dealt with. And, you know, which I feel for most healthcare workers, because they have worked so hard for the last few years, we're exhausted. And it's just, it's a tough business to be in. But we so greatly appreciate every single one of them, taking care of us and our community. And it's just great to see those numbers down. So once again, that that pressure of the pandemic and in the experience of COVID is primarily behind us. We've learned a lot just had to change a lot of systems to adapt. And, you know, we're better for it. But you know, a lot of people were very horribly affected, and healthcare workers just kind of stood their ground and carried us through.

Unknown Speaker
I wanted to also get your response to, you know, the war, the heartbreaking images, stories, people that we're seeing, and people here locally wanting to so to show solidarity to Ukrainians. Just your response to you know, what you're seeing and and what's happening there in Terre Haute?

Unknown Speaker
Well, you know, I've heard several people, lots of conversations going on about it, they're always the same. I mean, people feel that Russia should know done that. There's no reason for them to cross the border and try to take over another country, no matter what the history was. And I think people just really feel like they were as a country, Ukraine was just minding their own business, if you will. And this has happened. And then you look at the haul out from all this all the death and destruction. And just, you know, you hate more anyway, everybody does. I mean, I don't know if it's not a good thing. But this is going to probably be a lot more than just Ukraine is what my worry is. And that's what I hear from people that what comes next, you know, what, is Russia gonna back off? Probably not, is this going to escalate in some way and draw the United States into it? Hopefully not. But I think there's a lot of money answer questions about where we go from here, you know, from the United States, but just the world. And it's just been great to see that outpouring of support for Ukraine. And, you know, it's just a really ugly thing that falls on top of the fact that we're just coming out of the pandemic, look at the price of oil. I mean, just everything is in turmoil because of this, and the sooner it gets resolved in a positive way, the battle, and I just don't see that happening in the short term. That's just me, though, you know, a little I don't know as much about that, as a lot of people do. But I'm hearing that same message from others.

Unknown Speaker
I know Governor Holcomb is exploring severing ties with Russia, he's in a gathering of data right now. Do you support that? And do you know if that would affect much they're in Terre Haute or Vigo County?

Unknown Speaker
I don't think you ever affect as much in any way. And I think the more sanctions the better. I know that may you know escalate things in different ways. But a message needs to be sent that you just don't go take over other country and I whatever that message however it gets through, that's what needs to happen. And so, you know, Indiana, I'm fine with that. I can't do much here locally, because we just don't have those kinds of relationships or situations. But I think it's important to send a unified message.

Unknown Speaker
You mentioned this, you know, gas prices skyrocketing now one of the effects and it could set off, you know, a chain reaction, your transportation costs, people's cash flow, of course Summer is coming up. So how does the city you know, budget for that? Because obviously, maybe that's something you didn't think about making the budget last year?

Unknown Speaker
Yeah, no, not at all. And you know, prices have been up a little The last year so we kind of anticipated some increase, but nothing like what we're seeing. And so it's always kind of a stab in the dark. Most years, you're fine, you know, but this is going to be the example where we're spending about twice as much a month that we normally spend. And so it's a lot it's going to add up to be quite a bit this year, depends on how long it lasts. Hopefully it will start coming down at some point. But we'll have to appropriate some money because you know, those budgets are most of our budgets are pretty tight anyway, with a little bit of room to play. When you have double the expense on something, I guess, especially for the police department, street Department and others that are constantly, their vehicles are moving all the time. We're going to eat into that budget pretty good. But luckily, we've got reserves, we can deal with that I'm not worried about it other than it makes us do something that we normally don't do, as appropriate new funds. It's pretty rare for us to do that.

Unknown Speaker
So it appears that the Indiana personal business personal property tax is is a big sticking point still between the chambers. A lot of the testimony Monday focused on that tax. And, of course, we talked to Columbus Mayor Jim Linn up last week, he thought maybe that that was going to go away. Business community supports, of course, tax cuts, but say that local governments wouldn't feel the effect for that for years. And I you've said differently in the past?

Unknown Speaker
Well, you know, at least this version is stretched out a little bit or in the past, it wasn't. So that's progress. I guess, from my perspective, um, you know, it's when you step back and just look at it, and you look at where our funding sources come from, we've reduced the amount of reliance on property taxes, okay, we all we dealt with that we've adjusted our budgets and moved forward accordingly. If you take another big piece away, roughly, our amount would be about 20% of our whole property tax pie, which is business, personal property tax and real property tax. I mean, if we lost another 20% of our income, whenever that comes, even if it's done over time, it's still going to be a significant here, because it's pretty much what we pay out those funds, salaries and benefits. You know, we're paying the light bill, we're paying our insurance, we're paying for fuel. It's just the operations of the city. We're not doing anything special with those tax dollars. We're just providing services and paying for the people to do that. And so it's a little frustrating for me, I was at Statehouse last week got had a lot of great meetings with our delegation, to meet with speaker, Lieutenant Governor, we chatted about this talked about ready grants and right and other things. But at the end of the day, move, you know, tech, Indiana is one of the least tax states in the United States, we're in a great spot. And to eliminate this and just say, Well, you know, locals suck it up and raise the local option income tax, we don't want to put that burden on our people here locally, we want to share that. And you know, when the businesses, I realized they want to cut the taxes, I get it, I completely understand. But there's got to be a way to replace that for us. So we don't have to go raise or ask the county to raise local option income tax, or we have to raise fees on people in order to make it up. That's what the awkwardness is. It comes down from envy, and then we're left to deal with it. So I'm hopeful that it won't pass. I mean, we're getting down to the end here. Now we'll see. Or if it does, it's stretched way out. But I'm still looking for replacement revenue, I'd love for them to come up with some way to offset them. Stand on that hill and shout that out as long as I can. Because I feel very strongly about this one.

Unknown Speaker
Yeah, sure. I so it sounds like from what I understand, they did change from being a something that would be cut next year to a more gradual cut.

Unknown Speaker
And I knew that was in the discussions. But until the session is over, I guess, you know, we'll see. And it's changed multiple times over the years really, but even in this session. So I'm hopeful that it'll have a minimal impact or delayed for another year and the conversation will pick up again in the future.

Unknown Speaker
So you might have an update with the sun, maybe the casino progress. Last month, Churchill Downs applied for site off the interstate. I think that happened right after we talked your thoughts on that location.

Unknown Speaker
So it's good location. You know, I've supported that being out east and especially in the TIF district, which provides us some funding sources to be able to make future improvements out there, whether it's needed for the casino or the other businesses out there. They'll feed him to that TIF district which will be really good. It's it's it's a It's a great spot, you know, isn't a secondary spot to where the, you know, the Hard Rock was originally going to be located about two blocks west. So it's right in the same area right on Margaret Avenue with, you know, visibility from i 70. So it meets all that important criteria to, for them to be able to market themselves and, and you know, and contribute back to the community. The City Council approved the rezoning last week area planning and the city council, there's a board of zoning appeals component still left in some subdivision of the property, there'll be going for planning, but those are, you know, just normal steps in the process. So hopefully, that'll be wrapped up here later this month. I know they go in front of the gaming commission this week and with the new site, and so all that should be okay. It's finally kind of, you know, a few little legal hurdles here, if you will, but they're telling us late May, early June, groundbreaking and open up in the fourth quarter of next year. So I'm, I'm excited that we can say that, again, I said that in the past, you know, with the original proposal, but now this new one that's been approved is seems to be moving along at a rapid pace.

Unknown Speaker
Any, and I know the location is not something that is brought up by the city or has any impact on it, I guess you could say it or recommend any place you want. But it's really up to the Gaming Commission and the casino.

Unknown Speaker
All we could do was make suggestions and the public made those same suggestions but strictly up to them and the gaming commission that was 100% accurate.

Unknown Speaker
Do you worry about or just curious about your thoughts about though not bringing that downtown and bring business downtown.

Unknown Speaker
Now you know, that's that was the old model, you know of casinos a long time ago to either be on the riverfront, you know, being that downtown vicinity. But I think casinos have figured out the best place for them to be is out by the interstate somewhere where they can, you know, people can easily get to them. Yeah, you lose a little bit of the ability to sell the community and show off the community when they're not somewhere in the main heart of the community. But I feel like this is going to do what it needs to do and be successful in that location, which in turn, that means more revenues for the city, and the county and school corporation, everybody that participates in this, that we can all invest in ourselves. And so I think it's the best fit to generate the most local income for us.

Unknown Speaker
The Convention Center is expected to open next month. How's that looking? And will the public be able to get a chance to take a look?

Unknown Speaker
Yeah, we'll have a ribbon cutting. And very soon on the ninth of April, and I'm excited for the public to see it. You know, some people want to take some pictures and things they wrote, but it doesn't really do you justice until you walk in there. And you know, it's it's first class, it looks gray. That whole area is improved with this addition. It's going to be exciting, you know, and I still get a few people saying, well, how are we going to bring a convention to tariff war, we know that they're coming. And this gives us a tool that we've never had before a place for them to go and the Holiday Inn used to have some small convention space. And when they remodeled years ago, we have nothing now. So you know, people can run home and center and sit on the floor. But there's no big space that we need to be able to do the kind of things we'd love to do. And so it's going to take off. And once we get it open, you begin to market it in a different way. So people can come and use it, you start getting the word of mouth, it's going to take off. And so I'm excited. It's been a long process. I've been involved in this, probably about seven years now. And just to see it come to fruition is an awesome feeling for me personally, and the entire community.

Unknown Speaker
Any word on how bookings are coming?

Unknown Speaker
Yeah, I think they got six booked for this year. You know, we're intentionally pacing ourselves, we need more hotel rooms. So we're working with the hotel developer, in order to bring the bigger stuff. We need many more hotel rooms than our two hotels and provide and so that'll be the next big part of all of this is getting the two new hotels built. And then we'll be able to really go for the bigger events. And so you know, it's a process.

Unknown Speaker
Just curious if you have any advice to the people and officials in Monroe County who've been trying to get a convention center off the ground for many, many, many years to and just can't seem to turn the corner.

Unknown Speaker
Well, it was a challenge for us at first to just because it was kind of a new concept. I mean, it was really people were like the convention center in Terre Haute. I mean, we started out with that to where we are today and it was a process to create the CID. Find the funding sources You know, that was that was a challenge, right? You get that food and beverage tax, we had to have a commitment from the city and the county and from the convention tourism bureau to commit to, you know, invest every year, the money to make the bond payments. And so we put a good package together. We had a few bumps in the road along the way, but we we overcame all of those getting a bill soon to be open. And there's a great success story there. But you it's one of those that doesn't happen overnight, and you got to have a lot of local collaboration.

Unknown Speaker
Um, you had your annual city update couple weeks ago, something I saw making headlines, the sewer rates going up and not for a couple years due to these unfunded mandates. And this is just something we've talked about, probably before we I was even on this show, covering in Terre Haute was all the sewer infrastructure that had to happen there in Terre Haute. Now you're looking to the next step.

Unknown Speaker
Yep. So we're renegotiating our long term control plan with IBM beginning those negotiations as we speak. And it's probably going to be $300 million worth of work, hopefully over the next 30 years. Which stretching it out. Normally, they commit to 20 year plans. But we're asking for 30. So we can delay some of those rate increases. We have no choice, you know, they make you do this. It's it's an unfunded mandate. Maybe someday there'll be some funding that will work its way down to communities like ours. But right now we have to generate our own revenue to pay the bills. And there's a lot more work that needs to be done, our sewer system was built back in 1800s. And so as you can imagine, our collection system needs work, the plants are in great shape, but we have to build some facilities to hold tore water, and then treat it later. So you know, we've done a lot, but there's a lot more to go. And so I mentioned that in my update, because I want people to know that we're not done, I had people walk up to me periodically and say, now that you've done all these investments, when will our sewer rate go down? I'm like, it's not gonna go down, you know, it's not going down anywhere. And fortunately, you know, our bill is still our residential bill is under $50 a month, it's still there. And it's, it's going to have to go up some but we want to move that out and do small increases along the way instead of do the bigger ones that we had to do in the past. Because we've got a more strategic plan, as long as it improves that we'll be able to stage those out over the coming years and not having all at once.

Unknown Speaker
And you know that think the number one question people ask when they hear oh, my my rates are going up? Do you have a little bit of more data on what that would be?

Unknown Speaker
No, because we're still doing the research, we kind of know roughly what it needs to be. But we're required to spend 2% of the household median income, that's a federal requirement, that's the minimum can't be below 2%. Some communities that make you spend more than 2%. And so that's one of our negotiating tools is to look at that. And we kind of know what we need, depending on if they approve the plan. If they move some of those big projects out farther for us to allow us to do that, then we'll have very small increases. But if they make us do some big stuff up front, we'll have to have a little bit larger increase. So that's why we still don't have the unknowns until the plan is approved by the state and the EPA basically, more to come on that. As always, for fo it's gonna be way I'm, I don't think we're gonna have to do anything until 24. I really don't. And because we just need time, you're gonna have to design the stuff that they approve, and we have money on hand to do a lot of that. And there's no reason to hurry up and raise rates when we don't need that. And so we want to do it when it's when we must do it in order to bond out to do the next big thing.

Unknown Speaker
And we're getting short on time, I always want to get a budget update to any end of 2021 general fund update. Now remember, we talked about in tax anticipation warrant loans to meet a deadline, I think in April, any update on that.

Unknown Speaker
So we've reduced our borrowing. You know, just a few short years ago, we borrowed $9 million of short term loans. But we've reduced that now down to two and a half million. And so we need a little cushion, because once again, we don't get our big paychecks till May from property taxes. And so we get a little bit of income each month. So the first six months of the year, always the toughest for any municipality unless you've got significant reserves. So one thing that's happened is we've reduced our borrowing because we our reserves continue to grow. At the end of this year. I'm hopeful that I'll have a 12% cash reserve on operating funds. That's the state's target. And that's what our targets man so we're right in where we need to be We ended the year pretty well about 3.4 million roughly in the general fund 3.2 3.4. There's some final adjustments to be made before the audit. But so we've turned that around from a negative 9 million, almost 10 million in 2015, to a positive 3.4 million just in the one general fund. But we've got 90 other funds, too. So all of them are doing much better. We're very solid ground financially.

Unknown Speaker
We got about a minute or so left, I would like to kind of leave the stage open to you any announcements or things that you'd like people to know?

Unknown Speaker
Well, there's some things I'm really excited about our economic development. And as I announced last, you know, a couple of weeks ago in light city update, we've had $561 million of investment announced in about eight different companies that are coming here, just in the last 12 months, those have been announced 900 new jobs, that does not include the casino, that's going to be 185 million of investment and 600 new jobs, not counting the 100,000 construction workers for the year and a half. But didn't just just this week, I've found out about three or four more that were either finalists for and the final two or three, or they're just waiting to sign the paperwork. And so we've got more jobs coming more investment. I still worry about workforce. I mean, our pool needs to be bigger. We need more folks over here in West Central Indiana, but we're doing really well on that economic development front in spite of COVID You know, these businesses are beginning to move forward with their projects and invest and that makes me very excited because they're going to continue to see more and more investment Terrewode Vigo county

Unknown Speaker
Alright, well, thank you very much for your time. Appreciate it and we'll see you hopefully maybe in person if you're okay with that. And we're all you know, and still on good ground in in April.

Unknown Speaker
Yeah, I am and look forward to seeing you in person Joe. Okay, same

Unknown Speaker
here. Thank you very much.
Terre Haute Mayor Duke Bennett

Terre Haute Mayor Duke Bennett (Zoom)

Terre Haute's new convention center is getting ready for an April 9 grand opening, the city will have to adjust budgets for higher gas prices, and increasing sewer rates will help fund the city's long term control plan.

On this week’s installment of Ask The Mayor, Terre Haute Mayor Duke Bennett addresses these issues and more on a Zoom interview. Listen to the full conversation with Indiana Newsdesk anchor Joe Hren by clicking on the play button above, or read some of the questions and answers below. A portion of this segment airs 6:45 and 8:45 a.m. Wednesday on WFIU.

This conversation has been edited for clarity and conciseness.

Hren: Governor Holcomb is exploring severing ties with Russia, he's gathering data right now. Do you support that? And do you know if that would affect Terre Haute or Vigo County?

Bennett: I don't think it'll affect us much in any way. And I think the more sanctions the better. I know that may escalate things in different ways. But a message needs to be sent that you just don't go take over other country. I can't do much here locally, because we just don't have those kinds of relationships or situations. But I think it's important to send a unified message.

IU students and community members supporting the Ukrainian people after the Russia invasion.
The IU community rallies for the Ukrainian people at the Sample Gates.

Hren: Gas prices are skyrocketing now and could set off a chain reaction - a city's transportation costs, people's cash flow, etc. How does the city budget for that? 

Bennett: Prices have been up a little last year so we kind of anticipated some increase, but nothing like what we're seeing. And so it's always kind of a stab in the dark. But this is going to be where we're spending about twice as much a month that we normally spend. And so it's going to add up to be quite a bit this year, depends on how long it lasts. Hopefully it will start coming down at some point.

READ MORE: Indiana Democrats propose more immediate tax relief for Hoosiers

But we'll have to appropriate some money because most of our budgets are pretty tight anyway, with a little bit of room to play. When you have double the expense on something, especially for the police department, street department, we're going to eat into that budget pretty good. But luckily, we've got reserves, we can deal with that.

Further changes made to House Bill 1134 Wednesday focus on the mental health sections of the bill, as well as reviewable materials by curriculum committees.

Hren: It appears that the Indiana personal business personal property tax is a big sticking point still between the chambers. A lot of the testimony Monday focused on that tax. The business community supports tax cuts, and says local governments wouldn't feel the effect for years. And I know you've said differently?

Bennett: At least this version is stretched out a little bit. In the past, it wasn't. So that's progress from my perspective. You look at where our funding sources come from, we've reduced the amount of reliance on property taxes, okay, we all dealt with that - we've adjusted our budgets and moved forward accordingly.

If we lost another 20% of our income, whenever that comes, even if it's done over time, it's still going to be significant here, because it's pretty much salaries and benefits. You know, we're paying the light bill, we're paying our insurance, we're paying for fuel. It's just the operations of the city. We're not doing anything special with those tax dollars.

READ MORE: Mayors want replacement revenue for proposed House business tax cuts

So it's a little frustrating for me. I was at Statehouse last week got had a lot of great meetings with our delegation, to meet with speaker, Lieutenant Governor, we chatted about this. But at the end of the day, Indiana is one of the least tax states in the United States, we're in a great spot. And to eliminate this and just say, well, locals suck it up and raise the local option income tax, we don't want to put that burden on our people here locally, we want to share that.

So I'm hopeful that it won't pass. I mean, we're getting down to the end here. I'll stand on that hill and shout that out as long as I can. Because I feel very strongly about this one.

Churchill Downs proposed rendering of Terre Haute casino

Churchill Downs proposed rendering of Terre Haute casino, The Queen of Terre Haute. (Courtesy photo)

Hren: Last time we talked about the Churchill Downs site location decision off the interstate. Do you worry about not bringing that downtown and bringing business downtown?

Bennett: That's the old model of casinos a long time ago to either be on the riverfront or being in that downtown vicinity. But I think casinos have figured out the best place for them to be is out by the interstate somewhere where people can easily get to them. Yeah, you lose a little bit of the ability to sell the community and show off the community when they're not somewhere in the main heart of the community. But I feel like this is going to do what it needs to do and be successful in that location, which in turn, that means more revenues for the city, and the county and school corporation, everybody that participates in this, that we can all invest in ourselves.

Hren: The Convention Center is expected to open next month. How's that looking? And will the public be able to get a chance to take a look?

Bennett: Yeah, we'll have a ribbon cutting. And very soon on the ninth of April, and I'm excited for the public to see it. It doesn't really do you justice until you walk in there. It's first class, it looks great. That whole area is improved with this addition. It's going to be exciting, and I still get a few people saying, well, how are we going to bring a convention to Terre Haute? We know that they're coming. And this gives us a tool that we've never had before, a place for them to go.

Once we get it open, you begin to market it in a different way. So people can come and use it, you start getting the word of mouth, it's going to take off. And so I'm excited. I've been involved in this, probably about seven years now. And just to see it come to fruition is an awesome feeling for me personally, and the entire community.

I think they got six booked for this year. We're intentionally pacing ourselves, we need more hotel rooms. So we're working with the hotel developer in order to bring the bigger stuff. We need many more hotel rooms than our two hotels can provide. And then we'll be able to really go for the bigger events.

Terre Haute Convention Center rendering
Terre Haute Convention Center rendering courtesy photo

Hren: You had your annual city update a couple weeks ago, something I saw making headlines, the sewer rates going up eventually due to unfunded mandates. How much and what's the next step?

Bennett: So we're renegotiating our long term control plan with IDEM. It's probably going to be $300 million worth of work, hopefully over the next 30 years. Normally, they commit to 20 year plans. But we're asking for 30 so we can delay some of those rate increases. We have no choice, they make you do this. It's an unfunded mandate.

There's a lot more work that needs to be done, our sewer system was built back in 1800s. And so as you can imagine, our collection system needs work, the plants are in great shape, but we have to build some facilities to hold storm water, and then treat it later. We've done a lot, but there's a lot more to go.

Our residential bill is under $50 a month. We want to do small increases along the way instead of the bigger ones that we had to do in the past. We've got a more strategic plan, as long as it improves that we'll be able to stage those out over the coming years.

We're required to spend 2% of the household median income, that's a federal requirement. And so that's one of our negotiating tools is to look at that. If they move some of those big projects out farther for us to allow us to do that, then we'll have very small increases. But if they make us do some big stuff up front, we'll have to have a little bit larger increase.

I don't think we're gonna have to do anything until 2024. I really don't. You're gonna have to design the stuff that they approve, and we have money on hand to do a lot of that. And there's no reason to hurry up and raise rates when we don't need that.

sewer-plant.jpg
Terre Haute water treatment plant. (Joe Hren, WFIU/WTIU News)

Hren: I want to get a budget update to the end of 2021 general fund update. We've talked about tax anticipation warrant loans to meet a deadline, any update on that?

Bennett: We've reduced our borrowing. Just a few short years ago, we borrowed $9 million of short term loans. But we've reduced that now down to $2.5 million. And so we need a little cushion, because we don't get our big paychecks till May from property taxes. So the first six months of the year, always the toughest for any municipality unless you've got significant reserves.

At the end of this year, I'm hopeful that I'll have a 12% cash reserve on operating funds. That's the state's target. So we're right where we need to be. We ended the year pretty well about $3.4 million roughly in the general fund. There's some final adjustments to be made before the audit. So we've turned that around from a negative almost $10 million in 2015, to a positive $3.4 million just in the one general fund. But we've got 90 other funds, too. So all of them are doing much better. We're very solid ground financially.  

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