INDOT delay affecting Lapel budget plans

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LAPEL — Lapel approved temporary loans of almost $150,000 to its Motor Vehicle Highway Fund from other town funds to make up for a shortfall the town expected to receive from the state.
During a special meeting Tuesday, July 27, the town council voted to borrow almost equal amounts from the sewer improvement and Olevia Cascadden funds, to get its MVH fund out of a negative balance.
The loan from the sewer improvement fund is for $75,000. The Cascadden loan is for $74,300. The Cascadden fund is a trust left by the former resident who passed away in 2015.
In addition to the loans — which are interest-free — the council voted to transfer an additional $30,700 from its MVH savings account for the same purpose.
The financial dilemma involving the fund used for street repairs came up earlier in the month.
Janet Alexander, a budget consultant for the town, addressed the council at its Thursday, July 15, meeting to discuss current and future budgets and the possibility of the need to borrow from other accounts to solve financial concerns.
The issue hinges, according to Alexander and town council president Chad Blake, on an agreement with Indiana Department of Transportation to reimburse the town for the resurfacing of roads that were heavily damaged, west of the State Road 13 intersection, during the state’s 2019 bridge replacement project on State Road 38.
“INDOT agrees, when you have an unofficial detour, to pay for repairs for that road,” Blake said. “At the time, we had an agreement to pay for a complete resurfacing, somewhere in the $170,000 to $180,000 range.
“We repaved the road and, fast forward to now, they have never paid for it. They have not reimbursed (the town), and the town is ultimately on the hook for what was promised to us from INDOT. That is what (Alexander) is talking about and how it is going to adversely affect our budget for this year and the next year going forward.”
Blake said INDOT has proposed a payment in the $40,000 range.
He added, at Tuesday’s special meeting, recent calls with INDOT about complete reimbursement were productive.
At the regular July meeting, Alexander suggested to the council — after she had reached out to the state board of accounts — that Lapel could borrow from the utilities account to fund the 2022 MVH Fund on a temporary loan.
She said the council could borrow $120,000 and put a repayment plan in place, beginning in 2023, for $40,000 per year.
“Unless you get the money back from INDOT. If you get that, it’s over. We’re golden,” Alexander said.
Another suggestion, from a council member, was to borrow from the Cascadden Fund.
SWIF Update
Rob Bellucci of Commonwealth Engineering updated the town on its application for funds through Indiana’s State Water Infrastructure Fund (SWIF).
The town has a $4.7 million water project in the works, which is being funded by a $700,000 Indiana Office of Community and Rural Affairs (OCRA) grant. Lapel is also pursuing additional funding through Indiana Finance Authority’s State Revolving Fund (SRF) to help pay the rest.
Indiana General Assembly has allocated $100 million of federal Coronavirus State and Local Fiscal Recovery Funds to Indiana Finance Authority (IFA) to provide grant funding to Indiana utilities wastewater, drinking water and stormwater projects that either protect or improve public health or water quality. The SWIF program will allocate the money in two rounds, one in 2021 and the other in 2022.
The state finance authority received SWIF applications until July 15; announcement of grants is set for Aug. 6.
With more than 200
applicants, Bellucci said, he would not be surprised if the large number of candidates leads to the announcement being delayed.
“Obviously, anything we do would reduce the amount we have to borrow from the state’s revolving fund and ultimately passes savings on to our citizens,” Blake said.