COUNCIL MEETING
JANUARY 19, 2010 7:00 P.M.
THE PLEDGE OF ALLEGIANCE WAS GIVEN BY ALL IN ATTENDANCE.
PRAYER WAS GIVEN BY REV. ADRIENNE CURTIS, TRINITY UNITED METHODIST CHURCH.
MAYOR SMALL OPENED THE REGULAR MEETING OF THE COMMON COUNCIL.
ROLL CALL:
SANDY YORK PRESENT
ANGIE GOODMAN PRESENT
JAMES KIDD PRESENT
MARY MALONE PRESENT
MARK KOGER PRESENT
VAUGHN REID PRESENT
RICHARD HAHN PRESENT
MINUTES WERE APPROVED AS PRESENTED.
PRESIDENT YORK ASKED FOR A MOMENT OF SILENT PRAYER FOR THE WIFE OF PASTOR PAUL DAVIS. SHE SAID THAT MRS. DAVIS PASSED AWAY ON MONDAY. PASTOR DAVIS HAS GIVEN THE PRAYER AT THE COUNCIL MEETINGS SEVERAL TIMES.
RESOLUTION:
RESOLUTION AUTHORIZING TRANSFER OF FUNDS TO GENERAL FUND FROM STORM WATER UTILITY WAS READ IN FULL BY PRESIDENT YORK.
PRESIDENT YORK OPENED THE FLOOR TO DISCUSSION. SHE SAID ABOUT ONE YEAR AGO, SHE MADE A STATEMENT AND WAS GOING TO STAND BY IT. SHE WOULD NOT VOTE IN FAVOR OF THIS RESOLUTION AGAIN. SHE SAID IF THE COUNCIL DOESN'T DRAW A LINE, WE WILL NEVER GET OUT OF THE HOLE WE ARE DIGGING.
COUNCILMAN REID SAID THAT THE COUNCIL HAD THIS DISCUSSION EARLIER THIS YEAR WHEN WE DID THE FOUR MILLION DOLLAR TAX ANTICIPATION WARRANT. WE WERE ASKING FOR ADDITIONAL MONIES BECAUSE WE WERE NOT GOING TO BORROW FROM THE STORM WATER FUND. HE SAID HE MIGHT BE WILLING IF THEY WERE GOING IN THE OTHER DIRECTION, BUT HE AGREED WITH PRESIDENT YORK THAT THEY WERE DIGGING OURSELVES INTO A DEEPER HOLE.
WE ARE GOING IN THE WRONG DIRECTION.
PRESIDENT YORK REFERRED TO THE COUNCIL MINUTES OF DECEMBER 7, 2009, MEETING. THERE WOULD BE SUFFICIENT MONEY TO PAY BACK THE LOAN AT THE BANK, THE FOUR MILLION; WE WOULDN'T HAVE TO BORROW FROM STORM WATER ANYMORE.
MAYOR SMALL SAID THAT THE LINE OF CREDIT WAS PASSED. WITH THAT COMES THE INTEREST. HE SAID LAST YEAR WE PAID $35,000.00 INTEREST TO THE BANK ON THAT LINE OF CREDIT. THERE WOULD BE NO INTEREST IF WE BORROWED FROM STORM WATER. THIS WILL LEAVE US NO CHOICE BUT TO BORROW FULLY FROM THE LINE OF CREDIT. HE SAID A STUDY WAS DONE AND THAT THERE WAS OVER THREE MILLION DOLLARS IN ALL FUNDS THAT WE COULD POTENTIALLY BORROW FROM TO AVOID THE LINE OF CREDIT. THE INTEREST THIS COMING YEAR, HAVING TO USE THE LINE OF CREDIT, INSTEAD OF BORROWING FROM OURSELVES WILL BE IN ACCESS OF $35,000.00. WE ARE TALKING A JOB, A POSITION WITH THE CITY.
PRESIDENT YORK ASKED ABOUT THE PROJECTS THAT STORM WATER HAS TO PAY FOR. WE ARE MANDATED BY THE FEDERAL GOVERNMENT TO GET OUR STORM WATER SEPARATION DONE. IF WE KEEP BORROWING FROM STORM WATER, WE WON'T HAVE MONEY TO PAY FOR IT.
MAYOR SMALL SAID AT SUCH TIME WHEN WE NEED TO DO THOSE MANDATES, WE WOULD THEN BORROW FROM THE LINE OF CREDIT. WE HAVE SEVERAL MILLION DOLLARS OF FREE MONEY. WE CAN BORROW OR GO TO THE BANK
AND PAY INTEREST.
COUNCILMAN REID ASKED WHY THEY DIDN'T REDUCE THE LINE OF CREDIT IF WE PLAN ON BORROWING FROM STORM WATER. HE SAID THE WAY IT STANDS, HE WAS NOT WILLING TO HAVE SIX MILLION DOLLARS OUT ON CREDIT.
ACCOUNTANT CUPP SAID THAT THIS YEAR, WE HAD A LINE OF CREDIT FOR $3.5 MILLION DOLLARS BUT ONLY ONE TIME DID WE GET ABOVE 2.5 MILLION AND THAT WAS ONLY FOR A SHORT TIME. IF YOU BORROW FROM THE BANK, IT MUST BE PAID BACK BY THE END OF THE YEAR AND WHEN OUR TAX DRAW CAME IN AT ONE MILLION DOLLARS SHORT, THE ONLY THING THAT GOT US THROUGH WAS THE STORM WATER. IF WE DON'T DO IT THIS YEAR, WE WILL BE SHORT AT THE END OF THE YEAR.
COUNCILMAN REID SAID THE CITY HASN'T BEEN AGGRESSING ENOUGH IMPLEMENTING CUTS TO DEAL WITH THE FISCAL CRISIS. WE ARE IN TROUBLE BECAUSE WE HAVEN'T MADE THE CUTS EARLY ENOUGH. SHOULD HAVE MADE CUTS TWO OR THREE YEARS AGO AND BEEN PREPARED. IT WOULD HAVE BEEN HARD BUT WHAT HE SAW COMING, WAS GOING TO BE HARDER. HE SAID WE HAVE TO GET OUR BORROWING UNDER CONTROL. HE SAID HE WOULD CONSIDER THIS RESOLUTION IF THEY CUT THE LINE OF CREDIT BY TWO MILLION.
COUNCILMAN KIDD SAID HE WANTED TO REVISIT THE CHARGES FOR STORM WATER.
MAYOR SMALL SAID THEY WOULD NOT REVISIT RESIDENTIAL WHICH IS $6.00. WE WILL BE REVISITING WHAT WE CHARGE BUSINESS AND INDUSTRY. THE CHARGE NOW IS $12.00 BUT WE CAN CHARGE UP TO $99.00. IT IS BASED UPON SQUARE FOOTAGE OF THE PARKING LOTS. THIS COULD BRING IN ABOUT $11,000 PER MONTH.
COUNCILADY GOODMAN WAS IN FAVOR OF THE RESOLUTION. SHE SAID THEY WERE GOING TO HAVE TO DO WHATEVER IT TAKES. THE BUDGET CUTS WERE MUCH MORE THAN ANTICIPATED. WE MUST DO WHATEVER TO STAY VIABLE. SHE SAID SHE WAS NOT COMFORTABLE NOT HAVING THIS AMOUNT. SHE WAS AFRAID OF SOMETHING COMING UP AND NO MONEY.
COUNCILMAN REID SAID THERE WAS GOING TO HAVE TO BE CHANGES MADE IN THE FIRE DEPARTMENT AND OTHER EMERGENCY SERVICES. ALSO, ADDITIONAL CHANGES IN THE NON-EMERGENCY SERVICES. WE ARE GOING ABOUT THIS THE WRONG WAY. WE ARE TRYING TO BORROW WHERE WE SHOULD BE CUTTING. NEXT YEAR, ARE WE GOING TO BORROW SIX MILLION? FOUR AND A HALF MILLION FROM TAX ANTICIPATION WARRANTS AND TWO AND A HALF MILLION FROM STORM WATER? IS OUR BUDGET GOING TO BE ANOTHER MILLION AND A HALF SHORT? WE CAN'T KEEP GOING DOWN THIS ROAD.
MAYOR SMALL SAID THE CUTS WILL BE DISCUSSED AT THE WORKSHOP TO BE HELD SATURDAY, FEBRUARY 6TH IN THE COUNCIL CHAMBERS. ALTERNATIVES WILL BE PRESENTED TO US FOR THE COUNCIL TO CONSIDER.
ATTORNEY COPENHAVER SAID HE SENSED THE FEAR THAT MORE MONEY IS GOING TO BE BORROWED THAN A CERTAIN AMOUNT THAT YOU FELL IS APPROPRIATE. THE FOUR MILLION THAT WAS APPROVED LAST WEEK, THE MOST THAT SHOULD BE BORROWED IS THE FOUR MILLION. THERE IS A FEELING THAT THIS WOULD BE BORROWING SIX MILLION. IF THAT IS THE CONCERN, HE THOUGHT A MOTION THAT IS PASSED BY THE COUNCIL, SAYING THE MAXIMUM AMOUNT OF INDEBTEDNESS WOULD COME FROM BOTH SOURCES. A MOTION COULD BE PASSED. THE OTHER ISSUE IS UP TO YOU ALL IF YOU SHOULD BORROW FROM THE INTERNAL ACCOUNTS OF THE CITY. THAT IS DIFFERENT. THAT HAS NOTHING TO DO WITH THE MAXIMUM AMOUNT. WHAT YOU HAVE TO KEEP IN MIND IS YOU ARE FUNDING A BUDGET THAT HAS ALREADY PASSED. WHETHER YOU BORROW ONE MILLION OR NO MONEY OR FIVE MILLION, ALL THAT DOES IS FUND THE BUDGET. IT DOESN'T ALLOW THE CITY TO SPEND A PENNY MORE THAN THE BUDGET ALLOWS. WHATEVER YOU DO HERE DOESN'T EFFECT WHAT THE BUDGET IS. ONLY YOU CAN DO THAT BY AMENDING THE BUDGET THAT HAS BEEN PASSED. YOU HAVE APPROVED ENOUGH BORROWING FOR THE CITY TO OPERATE. THE QUESTION IS, IS THERE A LESS EXPENSIVE WAY TO BORROW, IS IT PRUDENT TO BORROW FROM THE STORM WATER INSTEAD OF A BANK? IT MIGHT BE PRUDENT IF YOU DON'T HAVE ANY PLANNED PROJECTS. THAT STORM WATER MONEY WILL NOT EARN AS MUCH INTEREST AS THE DEBT WILL COST YOU. THAT WILL NOT PRODUCE ENOUGH INTEREST INCOME TO OVERCOME THE COST. HE SAID HE KNEW THERE WAS A QUESTION OF TRUST. IF THE ONLY ISSUE IS THAT WE DON'T WANT THE CITY TO HAVE MORE OUTSTANDING X, AND THE X HAS BEEN DETERMINE, THEN PASS A MOTION TO SAY AT NO TIME THAT THE CITY'S DEBT EXCEED FOUR MILLION DOLLARS FROM ANY COMBINATION OF SOURCES.
COUNCILMAN REID SAID FOR HIM, IT WAS NOT A TRUST ISSUE. IT FEELS LIKE WE ARE PUSHING OFF LAST YEARS DEBT. WE ARE PLAYING SLIDE OF HAND GAMES TO PUSH IT IN TO THE NEXT YEAR SO WE DON'T HAVE TO PAY IT BACK WITH THE PREVIOUS YEARS MONEY. WE DID THAT ONE YEAR WITH A MILLION DOLLARS. LAST YEAR PAID BACK A MILLION DOLLARS AND BORROWED AN EXTRA FIVE HUNDRED THOUSAND ON TOP OF THAT. THIS YEAR PLAYING THE SAME GAME. GOING TO GIVE BACK A MILLION AND A HALF DOLLARS AND TAKE AN EXTRA FIVE HUNDRED OUT. THAT WAS HIS ISSUE. IF IT WAS PAID BACK BY DECEMBER 31ST OF EACH YEAR, HE WOULD BE HAPPY. HE WOULD BE MORE WILLING TO DO THAT.
COUNCILMAN KOGER SAID, WE CAN PASS SOMETHING SAYING THAT THE CITY CAN ONLY BORROW THE TWO MILLION FROM THE BANK?
ATTORNEY COPENHAVER SAID YES. THE LANGUAGE ON REPAYMENT IS IDENTICAL IN THIS AS IT IS IN THE DEBT FROM THE BANK. THEY HAVE TO BE PAID BACK WITHIN 30 DAYS AFTER YOU RECEIVE YOUR TAX ANTICIPATED DRAW.
COUNCILMAN REID SAID WE WENT TO LONG WITHOUT A RATE INCREASE IN UTILITIES. WE HAVE SHIFTED DUTIES INTO THE UTILITIES AND DISCUSSION OF SHIFTING MORE DUTIES INTO THE UTILITIES. THE MORE WE STRETCH THE UTILITY, THE MORE THEY ARE GOING TO HAVE TO HAVE FROM WHATEVER IS LEFT. IF WE DON'T DO THE SHIFTING, THEN WE ARE BACK TO MAKING ADDITIONAL CUTS.
COUNCILMAN REID ASKED THE STATE BOARD OF ACCOUNTS WHAT WOULD HAPPEN IF THE CITY DEFAULTED ON PAYING THE STORM WATER FUND. THEY SAID IT WAS A VIOLATION AND WE WOULD BE SLAPPED ON THE HANDS. IF WE BORROW TO THE POINT, TWO YEARS FROM NOW, FIVE OR SIX MILLION DOLLARS OF OUR EIGHT MILLION DOLLAR BUDGET, PROBABLY DOWN TO THAT BY THEN, MONIES FROM THE STORM WATER UTILITY AND THEN AT ONE POINT IN TIME, WE DECIDE WE CAN'T PAY IN BACK, WE JUST DEFAULT AND THERE IS GOING TO BE A LOT OF BAD THINGS HAPPEN TO THE TAX PAYERS.
#1%u2026%u2026%u2026GET SLAPPED ON THE WRIST BY THE STATE BOARD OF ACCOUNTS.
THEN WE ARE GOING TO BE ABLE TO MEET OUR BOND SERVICE AND DEBT SERVICE PAYMENTS ON ALL THE BOND MONEY WE GOT OUT IN THE UTILITIES. WHEN THAT HAPPENS, THE PRIVATE INVESTOR THAT OWNS MOST OF ALL THOSE BONDS IS GOING TO COME A KNOCKING AND REPOSES THE NEW CASTLE UTILITIES AND THE UTILITIES WILL BECOME A PRIVATE ENTITY. THAT IS WHEN EVERYBODY'S RATE WILL GO UP. THAT WAS HIS LONG TERM CONCERN WITH THIS.
ATTORNEY COPENHAVER SAID THE DOWN SIDE YOU HAVE ALREADY DISCUSSED. BY USING THIS MONEY, THIS WAY, YOU COULD NOT USE IT FOR A STORM WATER PROJECT UNLESS YOU BORROW FROM THE BANK. THEN YOU WOULD INCUR INTEREST. YOU WOULD HOPE THAT THIS WOULD NOT CAUSE US A DELAY IN THE STORM WATER PROJECT THAT SHOULD BE STARTED NOW. HE SAID HE DIDN'T THINK THAT WAS AN ISSUE WITH THE LONG TERM CONTROL PLAN SINCE IT HAS NOT BEEN APPROVED YET BY THE EPA. ONCE IT IS, IT WILL BE USED TO PAY OFF BOND PAYMENTS. WE THEN WILL HAVE TO DO THE FEDERAL MANDATED PROJECTS. WE DON'T KNOW WHEN THIS WILL COME BUT WE KNOW SOMEDAY AND WE WILL HAVE TO DO SOME MASSIVE STORM WATER SEPARATION PROGRAMS. NOW THEY ARE SMALL PROGRAMS.
COUNCILMAN REID SAID THE REASON THAT FEE WAS PASSED ON TO THE USERS WAS TO GET MONEY INTO THE BANK SO IT WAS AVAILABLE AS NEEDED TO DO STORM WATER PROJECTS. PAY BACK THE MILLION AND A HALF, LEAVE THE TWO MILLION THERE FOR PROJECTS OR WHAT. THIS IS AN OPEN QUESTION.
ATTORNEY COPENHAVER SAID THAT IN THEORY, THE PRACTICE FOR THE BANK AND ANTICIPATION WARRANTS AND THIS KIND OF BORROWING ARE THE SAME. THEY ARE DESIGNED TO ALLOW YOU TO PAY YOUR BILLS, UNTIL YOU GET YOUR TAX DRAW. IN THEORY, THE REASON IS THAT IS NEEDED IS YOU DON'T GET YOUR FIRST PAY DAY UNTIL SPRING. THIS HAS BEEN ALL THROWN OUT OF WHACK BECAUSE OF THE REASSESSMENTS WERE. WHERE YOU GET INTO TROUBLE IS WHEN YOU DON'T GENERATE YOUR TAX MONEY TO PAY YOUR BUDGET, WHICH INCLUDES THIS PAYING THIS BACK. THAT IS WHAT YOU WILL DO IN YOUR WORKSHOP. THE LAWS THAT ALLOW YOU TO DO THIS IS A WAY TO DEAL WITH HOW INDIANA LOCAL GOVERNMENT RECEIVES its MONEY. TWO PAYMENTS A YEAR. AT ONE TIME WE WERE ALLOWED TO SAVE MONEY SO WE DIDN'T HAVE TO BORROW BUT THAT WAS TAKEN AWAY FROM US. NOW WE HAVE NO CHOICE BUT TO DO THIS. GOVERNMENTAL UNITS THAT HAVE NEVER HAD TO DO THIS IS NOW BEING FORCED TO DO THIS. THE PROBLEM IS, WITH YOUR DECLINING REVENUES EACH YEAR, IT IS HARDER AND HARDER TO PREDICT IF YOU WILL GENERATE ENOUGH REVENUES TO PAY EVERYBODY BACK BY THE END OF THE YEAR.
COUNCILMAN KIDD ASKED IF THIS RESOLUTION COULD BE TABLED UNTIL AFTER THE WORKSHOP.
COUNCILMAN REID SAID WE OWE THE UTILITIES A MILLION AND A HALF DOLLARS. THIS HAS TO BE PAID BACK BY JANUARY 30TH. YOU BORROW A MILLION AND A HALF; PAY THAT BACK BY JANUARY 30TH FROM THE TIME ANTICIPATED TAX WARRANTS. IF WE MEET IN FEBRUARY, AND WE ALL DECIDE THAT THIS MAY BE AN ACCEPTABLE IDEA, WE GIVE YOU THE AUTHORIZATION TO GO OUT AND BORROW A MILLION AND A HALF PLUS HOWEVER MUCH IS IN THE STORM WATER UTILITY, OUT OF THIS FUND, AS A LOAN TO OURSELVES, CAN YOU PAY BACK THAT MILLION AND A HALF THAT YOUR JUST BORROWED IN TIME ANTICIPATED TAX WARRANTS. YOU STILL PAY THE SAME OUT INTEREST AS IF YOU WOULD AS IF YOU DIDN'T PAY THAT BACK UNTIL THE FIRST TAX DRAW OF THIS. HE FELT AS THOUGH A TOTAL CAP SHOULD BE PLACED ON WHAT THE CITY CAN BORROW.
MAYOR SMALL ASKED IF THERE WAS A MOTION TO ESTABLISH THE CAP.
MAYOR SMALL ASKED IF THERE WAS A MOTION TO BORROW FROM STORM WATER.
COUNCILADY GOODMAN MADE THE MOTION.
MAYOR SMALL ASKED IF THERE WAS A SECOND.
NO RESPONSE.
MAYOR SMALL SAID THE RESOLUTION DIED FOR A LACK OF A SECOND.
RESOLUTION:
RESOLUTION REGARDING SLUM AND BLIGHT AREA DECLARATION WAS READ IN FULL BY PRESIDENT YORK.
PRESIDENT YORK MOVED TO PASS THIS RESOLUTION. COUNCILMAN HAHN: SECOND.
DISCUSSION: EDC DIRECTOR DAVIS SAID THIS WAS THE LAST PIECE OF INFORMATION THAT WAS NEEDED TO MOVE FORWARD ON FILING THE GRANT. SHE SAID THE NEW CASTLE REDEVELOPMENT COMMISSION WILL GIVE $5,000.00. SHE SAID THE GRANT WOULD TAKE ABOUT FOUR MONTHS TO COMPLETE. AFTER THIS GRANT IS COMPLETED, A $500,000.00 GRANT FROM OKRA CAN BE APPLIED FOR.
ROLL CALL VOTE: SEVEN VOTES AYE PASSED AND ORDERED.
COUNCIL REPORTS:
COUNCILMAN KOGER ASKED FOR AN UPDATE ON GARNER STREET PROJECT.
ATTORNEY COPENHAVER SAID THAT AS OF TODAY, THE LAW SUIT WAS FILED TO CONDEMN A PORTION OF THE REMAINING HOLDOUT INDIVIDUAL THAT HAS BEEN FILED. WE MADE AN OFFER WHICH WAS REJECTED SO NOW THE COURT WILL APPOINT 3 APPRAISERS, THOSE APPRAISERS WILL COME UP WITH AN AVERAGE AND THAT AVERAGE WILL BE PAID INTO COURT AND THE LAW SUIT WILL CONTINUE BUT CONSTRUCTION CAN START.
PUBLIC:
CONNIE HALE, MIDDLETOWN, INDIANA, SAID SHE CAME TO THE BOARD OF WORKS THIS MORNING BUT WAS TOLD TO COME TO THE COUNCIL MEETING. SHE SAID THEY WERE OBJECTING TO THE CHANGING THE NAME OF MONROE STREET TO CHARLIE'S STREET. SHE PRESENTED A LETTER AND A SIGNATURE PAGE OF MANY WHO WERE OBJECTING TO THIS. THE LETTER WAS READ BY THE COUNCIL PRIVATELY.
SHE ALSO PRESENTED PICTURES.
PRESIDENT YORK TOLD MS. HALE THAT THE COUNCIL WOULD LOOK INTO IT. THERE WAS NOTHING ON THE AGENDA PERTAINING TO THIS AT THIS TIME.
DALE COLE SAID HE WAS THERE TO ASK FOR A FAVOR. HE SAID THE UNION HALL COULD BE LOOKING TO CLOSE. HE SAID THE 371 UNION WOULD LIKE TO KEEP IT OPEN AND MAINTAIN IT. HE ASKED FOR A LETTER FROM THE COUNCIL TO BE SENT TO MOE DAVIS TO RE-EVALUATE THE BUDGET AND HOLD OFF FROM SELLING THE LOT.
MAYOR SMALL SAID HE WOULD HATE TO SEE THE HALL BE SOLD ESPECIALLY NOW WHERE THERE IS INTEREST SHOWN IN THE METALDYNE PLANT AND IT WOULD BE UNION. HE SAID THERE WAS A STRONG COMPETITOR FOR THE BUILDING.
MAYOR SMALL TOLD ABOUT THE HAITI RELIEF EFFORT THAT HENRY COUNTY IS LAUNCHING. HE SAID THEY WOULD BE COLLECTING ITEMS AT THE COURT HOUSE ALL WEEK FROM 8:00 A.M. TO 6:00 P.M.
HE ENCOURAGED EVERYONE TO CONTRIBUTE.
COUNCILMAN KIDD SAID MONEY DONATIONS MAY BE DONATED TO THE HENRY COUNTY COMMUNITY FOUNDATION.
PRESIDENT YORK MOVED FOR ADJOURNMENT.
COUNCILMAN REID: SECOND.
