Two public hearings took place and two resolutions were approved Monday by the Warsaw Redevelopment Commission for the city’s public works building project, with no members of the public present.
The first public hearing Monday was the second public hearing on the preliminary determination for the commission to enter into a lease with the Warsaw Redevelopment Authority. The prior hearing was on Feb. 18.
On Feb. 3, the Redevelopment Commission and Warsaw Common Council heard presentations on the building project and approved resolutions to advertise the public hearings.
Randy Rompola, with Barnes & Thornburg LLP, explained Monday, “This is all part of the process to complete the approvals necessary to do the financing for the municipal services garage. And so, the first hearing, there was no resolution adopted. Tonight, after the public hearing, there would be a resolution. The resolution essentially indicates your preliminary determination to enter into a lease that will cause the Redevelopment Authority to issue bonds.”
He said the Redevelopment Authority met earlier Monday afternoon and adopted its resolution approving a form of lease and authorizing the issuance of bonds.
The resolution sets out the bond amount, which is a maximum of $14.5 million, and lays out all the other information that Andy Mouser, with Baker Tilly, laid out at the Feb. 18 meeting.
After approving the preliminary determination resolution, the notice of it will get published later this week. Rompola said a second public hearing at Monday’s meeting related to the lease between the Redevelopment Commission and the Authority for the lease of certain streets in the city. The roads to be leased include a portion of Center and Parker streets and Husky Trail in the city.
“Recall we’re structuring this as a lease financing, so that you would be leasing certain streets from the Redevelopment Authority. The city will transfer its interest in those streets to the Redevelopment Authority. That’s just the financing mechanism to allow the Authority to issue its bonds. You then would pay lease rentals under that lease, and the source of revenue for those lease rentals would be the tax levy that would be levied to pay the debt service on the bonds,” Rompola said.
Mouser then reviewed the preliminary determination information again as he had at the Feb. 18 meeting.
The maximum lease rental payment payable under the lease is $1.3 million, but that payment could be below $1.1 million. The maximum term of the lease is 20 years. The interest rate on the financing is not to exceed 4.77%, but is anticipated to be around 4-4.5%. The bonds have a total projected interest cost of just under $6.8 million.
The Redevelopment Commission could use TIF (tax increment financing), EDIT (economic development income tax) and other revenues to buy down the debt service, Mouser said.
Redevelopment Commission President George Clemens opened the meeting up for the public hearing with no one present to speak for or against it.
Redevelopment Commission member and former Warsaw mayor Joe Thallemer asked if what’s going on down at the state legislature regarding property taxes and the state budget could impact the public works building project.
Rompola said Monday was the halfway mark of the legislature’s budget session.
“Lord knows how it will end up. Between the bill as it is and what the governor wants, there certainly will be changes to the residential side, with the deductions and all of that,” he said. “I think, from an approval standpoint, we’ll have completed the approvals basically for the bonds themselves. The question would be, as we get into April and May, what the final version of the legislation looks like, Senate Bill 1. So we would always have the opportunity at that point to take a look and see how, whatever the impact is.”
Based on those assumptions, Rompola said Mouser and Baker Tilly could then update their numbers.
“But at this point, from a financing standpoint, the approvals are fine. We’re not envisioning any changes there. And from a tax impact, I think because of where things are with the circuit breaker on the residential side, there probably wouldn’t be much of an impact ... it may be have some impact on the rate on the commercial side. I think most of the property tax relief is more on the residential and commercial,” Rompola stated.
Mouser said they’ve talked about the new debt for the building project being tax rate neutral. “I think some of the changes working their way through the statehouse could actually make this moreso tax rate neutral. One of the big pieces of Senate Bill 1 is a cap on what is known as the max levy growth quotient. So the ability for the city to raise your property tax levy year over year, that will limited to no growth in 2026 and then 1% in ‘27, 2% in ‘28 if Senate Bill 1 passes as it is,” he said.
As the city is limited in what it can raise in property taxes, but its assessed value continues to grow, that could potentially push tax rates down more than what the city’s seen in the last few years, Mouser indicated.
Resolution 2025-03-1, the preliminary determination to enter into a lease, was unanimously approved by the commission.
They then had the public hearing on the proposed lease with the Redevelopment Authority.
Rompola explained, “This relates specifically between the lease between the Redevelopment Commission and the Redevelopment Authority. ... The lease mechanism allows the city, the Redevelopment Commission to issue debt or cause debt to be issued on their behalf that aren’t subject to the constitutional debt limit. The 2% debt limit in the Indiana Constitution was created a long time ago, and 2% of the assessed value back then probably would finance most projects. But these days, a dollar doesn’t go as far as it used to, and so ... schools, counties, cities, redevelopment commissions all have the ability to enter into lease financings. And so using the lease financing mechanism is very common.”
With Resolution 2025-03-2, he said the Redevelopment Commission was approving the form of the lease. The public hearing on the resolution drew no public comments and the resolution unanimously was approved.