The Switzerland County Council met in regular session On Wednesday, February 8th; and among a long list of items to discuss was what the county is going to do about the Switzerland County TEC Center.
Rick Hall, of Barnes & Thornburg, came to the meeting to explain the process of refinancing the TEC building. In 2011, the building was financed for a five-year period which expired in May of 2016. The county made payments of about $100,000 in principle per year, and then a balloon payment was due at the end of the five years in the amount of approximately $2.4 million.
Last spring the bank holding the note agreed to an extension of six months; and then again in November. The due date is now May of this year for the $2.4 million payment.
Crowe Horwath, the county’s financial advisor, advised that the county should talk to local banks. If they chose a 15-year payment plan it would cost about $310,000.00 annually. Under the original agreement the county is currently paying between $250,000 and $275,000.
The original loan had a longer amortization period, but Crowe Horwath doesn’t think it could be financed that long today – 15 years would be the longest.
If the loan can only be financed for 10 years, then the payment would be $430,000.
The bonds that were issued in 2009 have annual payments of about $450,000, and they have a reserve fund set up for them. They have a 10-year term.
If the county can make it through the first year, and capitalize the new debt, then the $445,000 and the $275,000 could be replaced with a payment of $430,000 on a 10-year period, or $310,000 for a 15-year period. These numbers are the worst case scenario.
The process that has to be gone through is long and cumbersome, and that is the reason Hall came to the meeting; to get things going if they are going to meet the May deadline.
Commissioner Josh South said they had tried to work with the local banks in the past and did not get much interest in refinancing the TEC building. If the local banks are not interested then Indianapolis banks would be contacted. Hall said Crowe Horwath with help with finding the bank with the best rate.
Council President Glenn Scott asked Hall what he needed at that meeting. Hall walked the council through the process. He asked what length of term the council wanted Crowe Horwath to look for. Scott asked if there would be a penalty for earlier payment and Hall said that would be decided in negotiation of the loan. Scott said he would prefer 15 years and then pay it off early if there is extra money.
Hall informed the council that county government cannot accrue anymore debt that what is equal to two-percent of 1/3 of the assessed valuation. The county debt limit is about $3 million, and currently there is approximately $830,000 – leaving about $2.1 million available. One way to get around the debt limit is to use a lease financing corporation, which is done routinely.
If the council wanted to pay the amount down, then a bond could be issued, which is less cumbersome. If a not-for-profit building corporation is formed, the commissioners would be the ones who would do it and find three volunteers to serve on the board. The corporation would lease the building back to the county who would then pay lease payments from the casino revenue that would pay off the debt.
This would still be a 15-year plan. Councilwoman Lisa Fisher said that she is more in favor of a 10-year plan of repayment. Hall told the council to do what is good for the long term financial plan of the county.
Hall will have more information by the March 8th meeting and hopefully have representation present from Crowe Horwath in attendance.
South said the commissioners needed to start the process of forming the TEC Building Corporation at their next meeting on February 20th, so he needed guidance from council as how to proceed. Council said to go ahead with the corporation formation; it doesn’t have to be used depending on what council decides to do.
In other business discussed by the County Council:
– Commissioner South said one gaming revenue bill is dead the other one (the Huston bill) that affects the held-harmless money which reduces the admissions tax came out as public policy that day. The amendments to this bill are as follows: the held-harmless money will be reduced, they have taken mental health out completely. In fiscal year 2020 the held-harmless money will decrease to $44 million; this is down from the current $48 million.
In 2021 it will decrease to $40 million; in 2019 the admissions tax goes completely way; this equals about $4.5 million. The held-harmless amount will be reduced by $8 million over two years.
The last part of the amendment will increase the wagering tax by three-percent of the Adjusted Gross Revenue.
From 2002 until present, Switzerland County has lost approximately $54 million due to the imposed cap. This is a complicated issue and more amendments will definitely be added later.
South has spoken to the originator of the bill, Representative Huston. It will go to the Ways and Means Committee next and they may not accept public testimony. South will be going up next week and will let council members know when he knows more about the proceedings in case any of them should want to go as well.
John Bond, of the Economic Development Corporation, and Marisa Lynch, of Grounded in Grassroots, are working on what the impact would be to the county. In 2017 the impact will be about $7,500 as the legislation stands now. In 2018 the impact will be about $300,000; in 2019 about $560,000; in 2020 about $715,000; and then in 2021 about $870,000. This is all based upon the 2016 AGR.
Representative Huston did acknowledge that Ohio and Switzerland counties are different from the other counties affected by the bill. His original goal was to put everyone on the same playing field but now knows that there may have to be a special legislation to accomplish this in regards to Switzerland and Ohio counties.
South said that backing a bond at this point and time with gaming revenue is not a bad idea as government cannot pass legislation to take away revenue tied up in county debt.
– Billy Kay of the Salvation Army came to speak to council about funding for 2017. They are requesting $6,000 from the casino revenue for their emergency assistance program. They are in the process of trying to find someone to replace Bert and Debbie Allen who are now just board members and no longer write checks. They are thinking about partnering with SEIOC and a representative from there would work in this county. They are having a hard time finding someone to take over this county who actually lives here. They only raised $495 in this county last year through the red-kettle program. An average of $28,000 is spent annually in Switzerland County. Fisher made a motion to approve $4,000, seconded by Mike Bear and all agreed.
– Carolyn Miller of the Cemetery Commission came to give the annual report for 2016. She reminded the council that the commission is actually part of the county; they are appointed by the commissioners but funded by the council. Miller explained how they have spent most of the $10,000 that council gave them last year. She has to send a report every year to the DNR explaining what has been done in the previous year. After some discussion, Bear made a motion to approve $10,000, seconded by John Gary Welch, and the motion carried with a vote of 5-1.
– Pam Acton of the Community Foundation of Switzerland County Inc., came to explain to the new council members about the endowment that was set up by the commissioners in the past.
The county received $10,000 for a Quality of Life grant from this endowment. Currently the endowment is worth $553,000, which is permanent. The principle is never touched that is why the amount of the grant fluctuates due to the markets. The commissioners also set up an endowment using the money donated from the Hazel Danglade estate and the check this time from that is $550. A donor also set up an endowment to help the animal shelter; the check this time was for another $550. Acton said she would be glad to explain in further detail just how the Foundation works, all they have to do is contact her.
– Aaron Bell of the Southeastern Indiana Solid Waste District handed out a copy of the District’s annual report. It explains who they are, what they do and some of the statistics for 2016.
They have 21 employees, five of which are full-time. There was about 7.5 million pounds of material collected to recycle in 2016. This is more than 2015. They had to reinstate fees for electronics and increase the tire fee although they did not want to.
They really had a problem with illegal dumping; animal carcasses, etc. They are going to work more closely with law enforcement to help correct the problem. Bell thanked the council for its continued support.
– Katie Collier of the Switzerland County Soil and Water Conservation District gave an update on the programs from 2016.
The “cost share” program paid out over $17,000 for livestock owners. County council supports the district and part of that money goes to cost share payments. The Indian Creek 319 Watershed Project ended in 2016 and there was over $215,000 paid out in cost share. They have received various other forms of income to use within the county for farmers and land owners.
– Keisha Morton spoke with the County Council about the upcoming After Prom event. She thanked council for its past support, and came to answer questions voiced at the last meeting. After Prom had submitted a request for $2,000 to help with the cost of the annual event. Councilman Andy Haskell wanted to know if they did any fund raising or just relied on donations; and the answer was just donations. Whatever money they raise is what they work with.
After some discussion, Fisher made a motion to fund $1,000, seconded by Haskell and the motion carried with a vote of 5-1.
– Vicky Hinman of Vevay Main Street handed out paperwork to back up Vevay Main Street’s request for $10,000 for the 2017 budget. She gave an overview of the grants, etc. received in 2016 and the services/programs they performed. There are currently seven board members. The by-laws state a minimum of seven board members and a maximum of 11 board members is required.
The direction of Vevay Main Street is community involvement, historical preservation, etc. The budget Hinman gave the council was approved the night before at the Vevay Main Street meeting, but could change upon what money is received. They will meet with the Town of Vevay later in February for a funding request. The biggest portion of the budget is for salaries and operation.
Vevay Main Street is the sponsor of the First Friday event. They will be asking the Town of Vevay for $10,000 also. Haskell said that he would like to wait to see how much they receive from the Town of Vevay. Fisher made a motion to table a decision until after Vevay Main Street meets with the Town of Vevay, seconded by Haskell and all agreed.
– Haskell made a motion to reappoint Laura Schroer to the Switzerland County Park Board, seconded by Bear, and all agreed.
The council also signed the documents approving Fred Stave’s and Bernie Gaudin’s appointments to the Switzerland County Redevelopment Commission board. This was voted on/approved at a previous meeting.
– Cori Dawson of the Little League Football organization came requesting funding in the amount of whatever council would approve. Last year council gave $3,000. She is to go to the Town of Vevay as well on the following Monday to ask for assistance. The season starts at the end of May. She was advised to come back at a later date and to fill out an application with the auditor.
– The Hoosier Theater has filed an application for casino funds and is grateful for the past support of council. They are truly a 501(c)3 not-for-profit entity. In March the theater will start showing movies again. Through the generosity of another entity they have been able purchase a projector and screen. They are going to ask different businesses to sponsor the movies due to cost, then the businesses would get advertising in return. The amount requested is $10,000 and they have received $6,000 the last two years. Fisher made a motion to give $5,000, seconded by Rachel Bladen, and all agreed.
– Melody Foucher of Safe Passage came to give an overview of Safe Passage’s services. They go into the schools to promote healthy relationships, teen dating violence education at the high school level, domestic violence training for law enforcement, and case managers to help the victims, etc. They have an office in Vevay but it is not publicized due to safety reasons. The shelter is in Batesville under lockdown conditions. Haskell made a motion to approve $6,000, seconded by Welch, and all agreed.
– Commissioner Mark Lohide came to speak to council about the work the cemetery board does. He said he had a complaint from someone about an overturned/chipped headstone and Carolyn Miller helped him get someone to fix it correctly.
He also came to discuss the East Enterprise Regional Sewer District funding. The commissioners do not want to pay for repairs but they are under an order by the state to do so and really need the funding from council. EERSD never received the OCRA grant the first time but have reapplied.
Lohide also told the council about the countywide cleanup on April 21st, 22nd, and 23rd at the county highway garage but there will be limits as to what can be dropped off.
The commissioners have found a 1997 road grader in very good condition, only 900 hours, from Yazoo, Mississippi and they have the money to pay for it.
-The council discussed the hiring of a Council Attorney. Jud McMillan had put in a resume to be the council attorney but his retainer is more than what was approved in the budget and technically it would be hiring a firm and not just one employee as has been done in the past. Welch asked if council had to have an attorney? Not necessarily, some counties share an attorney with the commissioners.
After some discussion this was tabled until a later date.