Vigo County Council members next week will vote on a proposal that will drain a rainy day fund to allow the county to more quickly pay off construction costs for the Canal Road project.
In addition, more than $4 million would be tapped for Canal Road from a bond issued to pay for road improvements to benefit Pfizer’s production of Exubera, an inhaled insulin. Pfizer announced in October it would cease any more investment in Exubera.
The county still would have about $1.5 million to pay for any improvements, if needed, around Pfizer’s Vigo County manufacturing plant next year. If that money is needed at Pfizer, the county would increase its borrowing for Canal Road in 2008, said Vigo County Auditor Jim Bramble.
The entire Canal Road project is projected to cost $40.7 million, with federal aid accounting for just over $14 million. That leaves the county to pay $12.24 million for the first phase and more than $14.4 million for the second phase.
The proposal, which goes before the council at 5 p.m. on Nov. 27, calls for $4.74 million in funding from the county Economic Development Income Tax; more than $2.49 million from the county’s rainy day fund; more than $3 million from the Pfizer bond; and then $2 million in a bond anticipation note to pay for phase 1.
“A bond anticipation note is essentially a construction loan, like when an individual builds a house. They get a construction loan to pay the contractors until the house is built, then you get permanent financing. We don’t know for sure yet what phase two will cost,” Bramble said. “The length and terms of financing will be determined when we know what phase two costs.”
Under the proposal, the county would pay for Phase II with $405,000 in EDIT funds; $2 million in rainy day money; $1.5 million from the Pfizer bond; and $10.5 million in a bond anticipation note.
The bond would be paid off from the county’s cumulative capital development fund. That fund is already a part of the county’s property tax, at less than one cent per $100 assessed value. Bramble said the county is projecting it will be about $70,000 short in total funding, causing an increase in that cumulative fund. “That increase would not even be measurable, less than one tenth of one percent,” he said.
The rainy day fund was created in January after the county received a special distribution of income taxes first collected in mid-2003. Vigo County received more than $4.4 million, but under state law, it required the county to establish and place that money into a rainy day fund.
“I guess it’s raining,” Bramble said of the council proposal that spends down the rainy day fund. “When the construction bid for phase one was about $10 million over the estimate, I’d say that’s a typhoon.”
Under the proposal, Vigo County could pay for Phase I and Phase II of the Canal Road project in five years.
The sole bid for Phase I came from Walsh Construction Co. of Chicago at $19.8 million. That company is already working for the state on the 641 bypass project in Vigo County. Walsh Construction had bid the same in a previous bid, one which was nearly $10 million more than an estimate from Bernardin-Lochmueller & Associates, an engineering firm Vigo County hired to design the Canal Road project.
The first phase connects near McDaniel Road, which includes constructing a 40-foot-tall bridge over CSX railroad tracks, and building a new Canal Road turning north to intersect Feree Road.
The second phase would extend and widen Canal Road to Interstate 70.
Howard Greninger can be contacted at (812) 231-4204 or howard.greninger@tribstar.com.
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Rainy day fund could be used for Canal Road
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