Indianapolis could borrow $70 million for infrastructure work under a proposal that will get a City-County Council vote Monday night.
The plan is similar to Mayor Greg Ballard’s Rebuild Indy II proposal, unveiled more than a year ago, but involves less borrowing and places more restrictions on how the Department of Public Works spends the money, Public Works Committee Chairman Zach Adamson said.
Democrats refused to pass Ballard’s plan, which initially called for borrowing $150 million and was later scaled back to $105 million. Adamson, a Democratic councilor at-large, said the borrowing was scaled back even further because the council received conflicting projections about the amount of gas-tax revenue that would be available to support the bond issue.
The proposal that's up for a public hearing and vote Monday is based on the assumption that the city will continue to receive about $6 million more a year in gas-tax revenue, which is allocated by the state, Council Chief Financial Officer Bart Brown said.
Total state and federal gas-tax revenue is declining because of better vehicle fuel efficiency and less driving, but Indiana passed legislation in 2013 that diverted to the Indiana Department of Transportation a share of gas-tax money that previously had flowed to the general fund. The move boosted local government road budgets across the board.
Brown projects annual debt service on the $70 million, 20-year bond at $5.3 million.
DPW could use the borrowed money only to pay for the longest-lasting improvements, such as concrete sidewalks, but not asphalt, Adamson said. Democrats opposed using borrowed funds to pay for asphalt paving, which might not last as long as the 30-year bond that Ballard wanted.
DPW is working with council members to identify priority projects in their districts, Adamson said.
Council Democrats are touting the $70 million bond issue as part of their proposed $300 million, three-year IndyRoads program. Its other sources of money are not new. The figure includes roughly $40 million that remained at the start of the year in the Rebuild Indy fund, created from the 2010 sale of the city water utility.
Also included in the $300 million is $19 million from the cumulative capital-projects fund, derived from property taxes; $70 million in transportation general funding; and $100 million in projected federal grants.
Democrats would like to pull $45 million from the downtown tax-increment finance district, but Brown said the administration has not agreed to that component.
If the council approves the bond issue, $35 million would be available for spending next year.
Also Monday night, the council is set to vote on a $1 billion budget.
Correction: An earlier version of this story incorrectly stated that the annual debt service on the bonds would be $3.5 million, plus a total interest cost of about $37 million. As the story now says, the annual debt service, including interest, would be $5.3 million.