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Terre Haute Considering $4 Million Loan For Daily Expenses

By Taylor Haggerty

Posted December 22, 2017

Terre Haute's mayor is asking the city council to consider loans to cover short-term spending in the new year.

Council member Earl Elliott says the request is for $4 million in loans, provided by local banks. The city will essentially borrow against its future property tax revenue to cover day-to-day finances. Property tax caps mean local governments can only collect so much in those taxes each year.

Elliott also says the city won't receive any of that revenue until June, and the loans help bridge the gap in funding until then.

He says the council approved $4 million of the same type of loan last year. But he also says the council wants to rely less on this kind of short-term funding as time passes.

"We'd like to ultimately, over time, council would like for the amount that we need to borrow to gradually go down and eventually, to not need to do that," Elliott says.

The city is also borrowing from other sources, including an internal loan from the redevelopment commission. Local banks and the redevelopment loan provided $9 million for the city last year.

City Council President Karrum Nasser says the city is hoping to drop that to around $7 million total for this budget.

"So with us already doing the redevelopment loan at $5 [million], simple arithmetic says that we shouldn't be doing more than $2 million," Nasser says.

And Elliott says the drop in loan amounts shouldn't lead to any gaps in funding for the city.

"I mean, we've been trying to build our cash balances in our reserves a little bit to provide funding that would enable us to borrow a little bit less," Elliott says.

The council has included the loans on its agenda for meetings in January. But Elliott says they might delay any decisions until they know how the city's finances improved in 2017.

He says there's a delay between when 2017 ends and when the council receives feedback on the city's annual finances.

"We really need some of that information, I think, to be able to make an informed decision."

Nasser also says he doesn't want to make any decisions until the state approves the city's 2018 budget.

This story has been updated.

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