City Amends Sewage Bond Ordinance To Iron Out Differences With State
November 7, 2017 at 6:42 p.m.
Two people can have different interpretations of the same thing, and that’s what’s happening with part of the city’s sewage works bond ordinance approved in October.
The bond counsel and the state are having a little difference of opinion on part of the language in the ordinance.
In an attempt to clarify the language in the sewage works bond ordinance relating to the flow of funds used to repay bonds and outstanding funds, the Warsaw City Council on Monday night approved on first reading an ordinance to amend it.
The second reading of the ordinance amending the bond ordinance approved in October will be given at the Nov. 20 council meeting.
The city is anticipating selling bonds for the sewer pipe rehabilitation project to the State Revolving Fund program. The sewage works bond ordinance provides for bonds in an amount not to exceed $10.5 million at an interest rate of up to 5 percent. The bond maturity is set not to exceed 20 years, but could be extended to 35 years.
“I didn’t understand this one,” Councilwoman Diane Quance said of the ordinance presented Monday.
Randy Rompola, with Barnes & Thornburg LLP, bond counsel, explained, “The ordinance that is in front of you makes a very technical amendment to the bond ordinance that was previously adopted. We are currently having discussions with the lawyer for the (State Revolving Fund).”
He said a portion of the existing sewage works bonds are payable from a pledge of tax increment finance revenues made by the Warsaw Redevelopment Commission.
Section 19(h) of the ordinance deals with the pledge. The prior language in 19(h) would allow for the SRF to have an approval with respect to any future TIF bonds.
“I think we had some discussion with the state’s lawyer and there’s some confusion about exactly the extent of their approval requirement. Given the confusion, I think we felt it necessary to have an amending ordinance to make it more clearer exactly what role the SRF could have,” Rompola said.
At this point, he said the issue hasn’t been resolved with the SRF.
“So we prepared the ordinance that is in front of you and took out the ability of the SRF to have any approval over any future TIF bonds,” he said. “It’s possible the state would like to have some authority, so I would ask that you pass this on first reading tonight, and I’m hopeful, confident that before the next meeting on the 20th, we’ll have this resolved with the state. And if we need to fine-tune the language based on what the state is telling us, then we’d come back with a substitute version of this ordinance.”
Rompola said there is approximately $600,000 a year used from TIF to help pay for the sewage works bonds that are outstanding.
“The way I interpret the commission’s action is that it is not a pledge of all of the TIF, it is just simply a pledge of $600,000. I think the state may view it somewhat differently so we just need to resolve the language, so that is the purpose of the amending ordinance that is before you,”?he said.
Quance asked, “So do they still have authority over that portion that is pledged to be paid (for the) 2015 (bonds)?”
“That’s kind of the outstanding question we’re trying to resolve with the state. The way I would look at it is that $600,000, we couldn’t divert that $600,000,” Rompola said.
In other business, the council:
• Approved a resolution making line 2 2017 budget cuts as suggested by department heads.
The cuts from the 2017 budget total $548,790 and include $349,100 from the general fund; $95,500 from the Warsaw-Wayne Fire Territory; $72,500 from Parks and Recreation; $21,390 from cemetery; and $10,300 from aviation.
Clerk-Treasurer Lynne Christiansen said, “They did a really good job diving into their budgets to see what they could go without for the rest of the year.”
Mayor Joe Thallemer noted that $75,400 was cut from the common council’s 2017 budget.
• Approved on first and second reading an ordinance establishing stop signs at the northwest corners of the intersection of Anchorage Point Drive and Anchorage Road on the west and east sides. The Warsaw Traffic Commission recommended the stop signs at its meeting Nov. 1.
• Heard from Christiansen that the Comcast and Mediacom franchise fees were down about $300 and $100 respectively compared to this time last year.
The city received a franchise fee of $13,604.59 from Comcast for the third quarter and $261.17 from Mediacom.
• Heard a thank-you from Councilwoman Cindy Dobbins to G & G Hauling & Excavating for its help in sponsoring November’s First Friday.
“I think they made a lot of children happy. They got to dig in the sandbox for coins. They had tons of volunteers, and I can’t say enough about the effort they put into it,” she said. “Just a big thank-you to them.”
Thallemer said Mike Loher, with G & G, worked very hard.
Two people can have different interpretations of the same thing, and that’s what’s happening with part of the city’s sewage works bond ordinance approved in October.
The bond counsel and the state are having a little difference of opinion on part of the language in the ordinance.
In an attempt to clarify the language in the sewage works bond ordinance relating to the flow of funds used to repay bonds and outstanding funds, the Warsaw City Council on Monday night approved on first reading an ordinance to amend it.
The second reading of the ordinance amending the bond ordinance approved in October will be given at the Nov. 20 council meeting.
The city is anticipating selling bonds for the sewer pipe rehabilitation project to the State Revolving Fund program. The sewage works bond ordinance provides for bonds in an amount not to exceed $10.5 million at an interest rate of up to 5 percent. The bond maturity is set not to exceed 20 years, but could be extended to 35 years.
“I didn’t understand this one,” Councilwoman Diane Quance said of the ordinance presented Monday.
Randy Rompola, with Barnes & Thornburg LLP, bond counsel, explained, “The ordinance that is in front of you makes a very technical amendment to the bond ordinance that was previously adopted. We are currently having discussions with the lawyer for the (State Revolving Fund).”
He said a portion of the existing sewage works bonds are payable from a pledge of tax increment finance revenues made by the Warsaw Redevelopment Commission.
Section 19(h) of the ordinance deals with the pledge. The prior language in 19(h) would allow for the SRF to have an approval with respect to any future TIF bonds.
“I think we had some discussion with the state’s lawyer and there’s some confusion about exactly the extent of their approval requirement. Given the confusion, I think we felt it necessary to have an amending ordinance to make it more clearer exactly what role the SRF could have,” Rompola said.
At this point, he said the issue hasn’t been resolved with the SRF.
“So we prepared the ordinance that is in front of you and took out the ability of the SRF to have any approval over any future TIF bonds,” he said. “It’s possible the state would like to have some authority, so I would ask that you pass this on first reading tonight, and I’m hopeful, confident that before the next meeting on the 20th, we’ll have this resolved with the state. And if we need to fine-tune the language based on what the state is telling us, then we’d come back with a substitute version of this ordinance.”
Rompola said there is approximately $600,000 a year used from TIF to help pay for the sewage works bonds that are outstanding.
“The way I interpret the commission’s action is that it is not a pledge of all of the TIF, it is just simply a pledge of $600,000. I think the state may view it somewhat differently so we just need to resolve the language, so that is the purpose of the amending ordinance that is before you,”?he said.
Quance asked, “So do they still have authority over that portion that is pledged to be paid (for the) 2015 (bonds)?”
“That’s kind of the outstanding question we’re trying to resolve with the state. The way I would look at it is that $600,000, we couldn’t divert that $600,000,” Rompola said.
In other business, the council:
• Approved a resolution making line 2 2017 budget cuts as suggested by department heads.
The cuts from the 2017 budget total $548,790 and include $349,100 from the general fund; $95,500 from the Warsaw-Wayne Fire Territory; $72,500 from Parks and Recreation; $21,390 from cemetery; and $10,300 from aviation.
Clerk-Treasurer Lynne Christiansen said, “They did a really good job diving into their budgets to see what they could go without for the rest of the year.”
Mayor Joe Thallemer noted that $75,400 was cut from the common council’s 2017 budget.
• Approved on first and second reading an ordinance establishing stop signs at the northwest corners of the intersection of Anchorage Point Drive and Anchorage Road on the west and east sides. The Warsaw Traffic Commission recommended the stop signs at its meeting Nov. 1.
• Heard from Christiansen that the Comcast and Mediacom franchise fees were down about $300 and $100 respectively compared to this time last year.
The city received a franchise fee of $13,604.59 from Comcast for the third quarter and $261.17 from Mediacom.
• Heard a thank-you from Councilwoman Cindy Dobbins to G & G Hauling & Excavating for its help in sponsoring November’s First Friday.
“I think they made a lot of children happy. They got to dig in the sandbox for coins. They had tons of volunteers, and I can’t say enough about the effort they put into it,” she said. “Just a big thank-you to them.”
Thallemer said Mike Loher, with G & G, worked very hard.