Published: November 07, 2007 10:54 pm         

County Council considers Canal Road project bid

Officials must decide within 60 days how to pay for construction costs

TERRE HAUTE — With a $19.8 million construction bid in hand, Vigo County Council members must decide within 60 days on how to pay for the two-phase Canal Road project.

The bid from Walsh Construction Co. must be awarded as a contract within 60 days, or costs could rise.

Some council members favor using cash on hand and paying off any bond issue as fast as possible, avoiding a long-term bond issue. The council’s special project committee met Wednesday to discuss the matter.

Councilman Brad Anderson, R-4th, said he would like to see a 10-year funding plan.

“Whatever we do, we can’t wait any longer because the cost has nearly doubled from what we originally figured this would cost us because of the time delay,” Anderson said. “We definitely have to get this thing started or we will never be able to afford to do it.

“We have to look at money on hand to borrow, or bond less,” he said.

Anderson asked the auditor’s office to provide figures on the County Economic Development Income Tax, commonly called EDIT, for 2006 and 2007 and on money in a Pfizer bond issue that could be used for Canal Road.

The council earlier this year issued a $4.52 million Tax Increment Finance bond to pay for road and traffic signal improvements around Pfizer as part of an incentive for the company’s Exubera project. Pfizer announced last month it was ceasing production of its inhaled-insulin product.

The county still has $4.3 million of that bond money, after bond issuance expenses and some early engineering costs.

“We have to look at all the options, but we have to act because we only have 60 days from the bid letting, so we have to make a decision pretty quick,” Anderson said.

Councilman Mike Morris, R-at large, said he thinks the council “can come up with a good deal of the money needed for the project and keep borrowing to a minimum. If we come up with other projects, then we can do our borrowing there.”

“It will limit what we can do on other projects, but we have bonding capability if we need to do something else,” Morris said.

The special project committee will meet again Wednesday to determine what it will recommend to the full council as a funding plan.

Morris said the committee also is looking at other funds, such as about $4.5 million in a newly created Rainy Day fund. “We have to look if there would be any early withdrawal fees,” he said.

That fund has $2.5 million invested until December and about $2 million invested until April 2008, according to the auditor’s office.

The committee is considering issuing a $21 million bond that could be paid off in 10 years using EDIT funds, or over a 17-year period with less EDIT funds.

The entire Canal Road project is projected to cost $40.7 million, with federal aid accounting for just over $14 million, based on figures from the county Engineering Department.

That leaves the county to pay $26.7 million, the Engineering Department’s figures indicated. Local officials are projected to have to provide $12.2 million for the first phase and $14.4 million for the second phase.

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 reached at (812) 231-4204 or howard.greninger@tribstar.com.

     

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