Two county projects that were approved last year are now on hold with some elected officials voicing concern on whether or not the projects should proceed.
A joint meeting of the LaGrange County Council and LaGrange County Commissioners Monday morning was somewhat dismal as the shell building and CR 200N road project both met with a strong headwind.
The shell building project at Fawn River Crossing was approved with a revenue stream from the Tax Incremental Financing (TIF) pledged to pay the possible interest costs should the building not sell within one year from completion until the 10th year should the building remain unoccupied. The $210,000 (2011) to $227,000 (2012) tax revenues from the TIF are expected to drop to $123,000 for 2013 and forward. The assessed value of the land and buildings in Fawn River Industrial Park have been greatly reduced by County Assessor Pat Monroe and the county property tax assessment board of appeals.
With this lowered amount of revenue, there will not be a sufficient revenue stream to support both the operating funds for the LaGrange County Regional Utility District and the interest. The utility district has first claim on the money and has indicated they are not willing to subrogate their position. Council and commissioners are now faced with other choices.
One option presented is to self-fund the building project by loaning Major Moves money to Garman Construction for the project, thereby saving the interest should the building not sell within a year. It was pointed out that the county is receiving about ½ percent interest on money in the bank and the interest rate on the $3.5 million loan proposed for the shell building is at a rate of 5 percent per annum.
New council member Richard Yoder voiced his concerns about using some of the $25 million the county has on hand instead of saving it for future projects. Since the original project passed on an 8-1 vote with Commissioner Larry Miller voting against and Yoder apparently lining up for a no vote, Commission President Jac Price allowed a motion to self-fund the project with interest of up to 1 percent to come from the TIF district die for lack of a second.
Price appointed a committee of Charles Ashcraft, Ryan Riegsecker, Michael Strawser and Larry Miller to work out a plan for directly lending the money to Garman Construction for the shell building and bring the proposal back to a joint meeting of council and commissioners to be held following the regular council meeting on March 11.
Council and commissioners had agreed to reconstruct CR 200N at a cost of some $3.2 million in November 2012.
That plan will not be possible because there is not a sufficient revenue stream in the EDIT account to fund the proposed bond issue.
An options of enacting a LOIT (local option income tax), which would be in addition to the current county adjusted gross income tax of 3.25 percent and EDIT tax of 1.4 percent now in effect, was presented. There would be a need for an additional 0.35 percent income tax to fund the project.
Both LaGrange County Highway Superintendent Jeff Brill and LaGrange County Surveyor Rex Pranger spoke out against the proposal. Both said in essence, “Let’s not raise taxes again. If we want to do the project, use Major Moves money that is decreasing in buying power every day.”
Councilman Strawser noted that he still has trouble spending $3.2 million on a 1.9-mile stretch of road. It will cost some $120,000 to $150,000 to repave the section.