News From Terre Haute, Indiana

Local & Bistate

July 7, 2013

Terre Haute only has $41K in general fund

City must borrow to meet day-to-day expenses for the remainder of year

TERRE HAUTE — The City of Terre Haute is living on millions of dollars of borrowed money.

According to the city’s controller, Leslie Ellis, the city’s critical “general fund” had a cash balance of approximately $41,000 at the end of June, meaning the city must borrow to meet day-to-day expenses for the remainder of the year.

The actual June 30, 2013, general fund balance has not yet been calculated, but Ellis said it will be about the same as the balance last year on June 30, which was $40,417.

The city’s “general fund” covers most of the city’s day-to-day expenses, such as salaries for city workers. To have a cash balance of just $41,000 means the city has spent much of its June, bi-annual property tax distribution already. That distribution was $11.5 million, according to figures provided by the Vigo County Auditor’s Office.

This situation is not new and is why the city borrowed $5 million in “tax anticipation” loans this year and last year. Using these borrowed dollars, the city has been able to meet its salary and other daily expenses until its next big property tax distribution. That allows the city to avoid laying off large numbers of city workers, said Mayor Duke Bennett, in an interview last week in City Hall.

Indiana local governments receive property tax payments twice a year — in June and December. The June payment is typically the larger, because some people pay their May and November property tax payments all at once.

Not a perfect world

Borrowing money is not free — it involves interest and administrative costs — but it beats making “massive” layoffs, Bennett said.

Last year, the city’s first $5 million loan included just less than $50,000 in interest and administrative costs, City Controller Ellis told the Tribune-Star at the time the loan was approved by the City Council.

Larry DeBoer, a Purdue economist and local government finance expert, wrote in a 2006 essay that a city’s general fund balance on June 30 should equal about half of that city’s expected property tax levy. For Terre Haute in 2012, that would have been about $12 million. However, in a recent interview with the Tribune-Star, DeBoer noted that borrowing, as Terre Haute is doing, can also work, as long as a city receives enough in property taxes to pay back the loan.

Having such a large cash balance, Ellis told the Tribune-Star last week in a joint interview with Mayor Bennett, is possible only in a “perfect world.” She pointed to Indiana’s property tax caps, enacted in 2008, as the reason. Wealthier cities such as Fishers and Carmel may have such large cash balances, she said, but not Terre Haute.

Still, even compared with most other Indiana cities, Terre Haute had a very low cash balance in June 2012 as a percent of the city’s certified budget, according to state figures.

Among roughly 500 cities and towns listed on the Department of Local Government Finance “Gateway” website, only a handful — including Bloomington, New Albany, Greenfield and Hammond — had lower cash balances in relation to their certified budgets.

The Vigo County government, meanwhile, which is separate from the City of Terre Haute, had a June 2012 cash balance of $23 million — approximately half of what it spends in a year’s time and in line with what DeBoer recommended for cities and towns in his 2006 essay.

Where the tax caps hit hardest

When discussing the city’s budget, Bennett repeatedly states that the city’s general fund would be flush with cash if the tax caps did not exist. Indeed, Vigo County was among the hardest hit in the state from the caps, according to a recent Ball State University study.

That study shows Vigo was the fourth-hardest-hit county in the state in terms of the impact of the property tax caps. The three counties hit hardest were Madison, Delaware and Fayette.

Anderson, the biggest city in Madison County, has experienced painful cuts in its budget since the caps took effect, said Sam Pellegrino, the city controller. This year, the city was forced to cut eight positions from the fire department, he said. Other layoffs and attrition have also taken place in the most recent years, and the city is still scraping by. Anderson has had to use ambulance fees, which are supposed to pay for equipment, to pay salaries. It has also been forced to borrow from city-owned utilities, Pellegrino said.

Dealing with the tax caps has been “extremely painful,” Pellegrino told the Tribune-Star last week.

According to the “Gateway” website, Anderson’s general fund cash balance at the end of June 2012 was $6.2 million. Muncie, the biggest city in Delaware County, the second-hardest hit by the tax caps, had a cash balance of $8.9 million. Connersville, a small city of just 13,000 and the biggest city in Fayette County, had a balance of $3.2 million.

Each of those was far greater than Terre Haute’s $41,000 balance.

However, cash balance figures can be misleading and don’t tell the whole story, warned Vigo County Treasurer Jim Bramble. A city or county may have a general fund balance of $1 million on June 30 and have $1.1 million in bills due the following day, he said.

However, when shown Terre Haute’s June 2012 general fund balance of just $41,000, Bramble indicated it was a possible cause for concern. “If it hasn’t improved [by June 2013], I would say they’ve probably got a problem,” Bramble said.

Another setback to a balanced budget

Terre Haute’s city finances suffered another big blow in 2013: A 7.5-percent drop in assessed land value. That cost the city about $1.7 million in revenue, Bennett said. That means the city will likely end 2013 with a negative balance in its general fund, once again.

Terre Haute ended 2012 with a negative general fund balance of $2.2 million. If not for the drop in assessed values, the city would have broken even by the end of 2013, Bennett said. Now, that may have to wait until the end of 2014, he said.

“We’re not going to be able to make up $2 million,” Bennett said.

To get to a “balanced” general fund budget by the end of 2014, budget cuts and new sources of revenue will be needed, Bennett said. Laying off city employees is “a last resort” and one he hopes to avoid. The city has 52 fewer positions now than it had in 2008, he said. One source of savings could be in opening a city employee health clinic, he said. Bennett also pointed out that the city will continue to receive payments “in lieu of taxes” from the waste water treatment plant to the tune of at least $2 million annually.

Also under consideration is implementing a $9 per month trash hauling fee in the city. That measure, however, would have to be enacted by the Terre Haute City Council.

Bennett said the city may also need to dip into its Rainy Day Fund at the end of 2013 and will need to borrow again in 2014 — although he estimates about $4.5 million, not $5 million the city borrowed each of the past two years.

“So, we made progress,” Bennett said. “We closed the gap.”

According to the “Gateway” website, the City of Terre Haute’s government expenses are in line with similar cities in the state. Government spending in Terre Haute is about $1,400 annually per person living in the city. That’s about the same as Elkhart and Anderson and less than Muncie, where the city government spends about $1,700 per capita.

Reporter Arthur Foulkes can be reached at 812-231-4232 or


Text Only | Photo Reprints
Local & Bistate
  • MET071114  St bens ellis.jpg Annual St. Ben’s community festival kicks off

    The St. Ben's Community Festival kicked off Friday night and continues from 5 p.m. until midnight today.

    July 11, 2014 4 Photos

  • MET 071114 DELISH GREENE.jpg Adding to the mix

    The mix of local food choices will get a fresh stir in the near future, as a café opens a second location, a pizza place moves downtown and a national chain sprouts in two more spots.

    July 11, 2014 4 Photos

  • MET071114 guard bennett.jpg Shift from jets to intelligence

    Loud, impressive fighter jets once zoomed regularly across the sky in Terre Haute, their roars drowning out the sounds of televisions and telephones all around the area.

    July 11, 2014 4 Photos 2 Stories

  • MET 071114 MANN P.C..jpg Candidates’ views clash over more education testing, vouchers

    Indiana needs to change direction to improve education, said Democrat Jim Mann, who will face incumbent Rep. Robert Heaton, R-Terre Haute, in a rematch race for Indiana House District 46.

    July 11, 2014 1 Photo

  • MET071114bad check.jpg Fraudulent checks with an extra ‘t’

    A Terre Haute woman who received a large check in the mail this week wants to warn others that though the check looks legitimate, it is a scam.

    July 11, 2014 1 Photo

  • Truck, van collide, stopping some U.S. 41 lanes for an hour

    Northbound traffic on U.S. 41 south of Terre Haute was blocked for about one hour Friday because of a two vehicle crash.

    July 11, 2014

  • Indianapolis closing nightlife street on weekends

    Indianapolis officials will close the main street through a nightlife district to motor vehicles on Friday and Saturday nights to reduce violence there.

    July 11, 2014

  • Man revives 3-year-old who was face down in pool

    Authorities in central Indiana say a man revived his 3-year-old son after spotting the boy face down in an apartment complex pool.

    July 11, 2014

  • Vigo County Jail Log: July 11, 2014

    The following individuals were booked into the Vigo County Jail by area law enforcement on Thursday and Friday, based on jail records.

    July 11, 2014

  • New exhibits set to open at Red Skelton museum

    VINCENNES (AP) — Events are being planned for the opening of new exhibits at the museum celebrating the career of the late comedian Red Skelton in his southwestern Indiana hometown.

    July 11, 2014

  • Solar Roadways_Morg.jpg 10 Things to Know for Friday

    Your daily look at late-breaking news, upcoming events and the stories that will be talked about today:

    July 11, 2014 1 Photo

  • council mtg 013.JPG Mayor: City will not file bankruptcy

    The Terre Haute City Council took well more than  an hour to ask questions and discuss the health of the city’s finances with top city officials in a special meeting Thursday night. A few councilmen expressed grave concern about the financial picture, while Mayor Duke Bennett said things were improving.

    July 10, 2014 2 Photos 1 Story

  • State official threatens prosecution of city leaders who talk about audit

    A state official has threatened to pursue the prosecution of city officials if they violate a confidentiality agreement signed last month.

    July 10, 2014

  • MET 071014 181 02EXPO.jpg ISU, 181st Intelligence Wing show off capabilities at expo

    Communication and getting unmanned eyes in the sky can be vital parts of responding to a natural or man-made disaster.

    July 10, 2014 3 Photos 1 Story

  • Feds relent: Military to restore equipment program for fire departments

    An agreement has been reached to keep surplus military equipment rolling into rural fire department bays in Indiana and 47 other states.

    July 10, 2014

  • united way.jpg UW kicks off pilot campaign

    Dottie King remembers the day she saw a young man leaving St. Ann’s Dental Clinic after having 17 teeth pulled. He had not received sufficient dental care before that day so his need was dramatic. That was unlike King, who had visited the dentist regularly since childhood, but still found getting a tooth filled not on her list of fun things to do. “I thought to myself, ‘I never have thought about the blessing of dental care,’” King recalled, sharing that story on Thursday morning with other volunteers for the United Way of the Wabash Valley.

    July 10, 2014 1 Photo

  • MET 071014 181 HILL.jpg Indiana’s director of homeland security sees unmanned systems’ potential

    Integrating unmanned flight systems into use for domestic surveillance can provide first responders with key information in responding to fires, earthquakes and man-made disasters, said John Hill, director of the Indiana Department of Homeland Security.

    July 10, 2014 1 Photo 1 Story

  • Stunt performer scheduled to be at Wigwam

    A celebrity stunt man named Jim “Crash” Moreau is scheduled to perform at Terre Haute’s Wigwam Skate and Event Center on Saturday.

    July 10, 2014

  • Rain barrels offered for sale

    The Vigo County Soil and Water Conservation District is taking orders for 55-gallon rain barrels.

    July 10, 2014

  • Ash.jpg Tips lead to meth lab bust

    Two people were arrested after police busted a clandestine methamphetamine lab Thursday in the 2200 block of Fourth Avenue in Terre Haute.

    July 10, 2014 2 Photos

  • 071014 meth lab items.jpg Police bust meth lab in Terre Haute

    Police busted a clandestine methamphetamine lab today in the 2200 block of Fourth Avenue in Terre Haute.

    July 10, 2014 1 Photo

  • UPDATE: Ethics panel approves $5K fine against Bennett

    INDIANAPOLIS (AP) — Indiana’s State Ethics Commission has approved a $5,000 fine against former state schools Superintendent Tony Bennett for using state resources in his 2012 campaign.

    July 10, 2014

  • Vigo County Jail Log: July 10, 2014

    The following individuals were booked into the Vigo County Jail by area law enforcement on Wednesday and Thursday, based on jail records.

    July 10, 2014

  • Group: 5,000 same-sex marriages in Illinois

    A survey indicates thousands of same-sex couples are marrying in Illinois.

    July 10, 2014

  • Study: Hunting restores forests in state parks

    A study by a Purdue University research team has found that regulated deer hunts in Indiana state parks have helped restore forests damaged by too many white-tailed deer.

    July 10, 2014

  • MET070914 house exterior.jpg Historic Ohio Boulevard house inspired by 1948 Cary Grant movie

    Spurred in 1948 by a newly released movie staring Cary Grant and Myrna Loy, coupled with a growing post-World War II housing market, General Electric partnered with Hollywood’s RKO Studios to build “dream homes” throughout the country.

    July 9, 2014 4 Photos 1 Story

  • Detour ahead

    A panel of public and private officials is calling for $10 billion in projects to upgrade Indiana’s aging roads and bridges, but its members concede there’s no money to pay for it all.

    July 9, 2014

  • MET070814 barrels.jpg MARK BENNETT: Making road work a barrel of fun for drivers

    We’re lucky orange barrels can’t talk.

    July 9, 2014 2 Photos

  • City Council to take up city finances tonight

    The Terre Haute City Council will have a chance in a special meeting tonight to delve deeply into the city’s financial health. However, council members are being asked to avoid raising the most controversial subject of recent weeks: The city’s use of Redevelopment Commission tax increment finance (TIF) money.

    July 9, 2014

  • Bennett accepts $5,000 fine in ethics settlement

    Former Indiana Schools Superintendent Tony Bennett has agreed to pay $5,000 as part of a settlement with Indiana’s ethics watchdog in which he admits to using state resources for campaign work but is cleared of formal ethics violations in the grade-change scandal that cost him his job as Florida’s schools chief last year.

    July 9, 2014

Latest News Poll
AP Video
Police: Prostitute Linked to 2nd Death Chimp-attack Victim Lobbies Congress Texas Shooting Suspect Collapses in Court LeBron James Says He's Returning to Cavaliers Raw: Israel, Gaza Exchange Rocket Fire More Immigrants Detained Along Rio Grande Obama Responds to Hecklers on Immigration Soft Robot Fish Lead New Wave of Robotics FIFA Rejects Suarez Appeal Against Biting Ban Downside of Low Mortgage Rates? Less Selling Raw: Rebel Leader Weds in Eastern Ukraine Man Flees Police in World Cup Scalping Scheme Robot Writes Jewish Torah Scroll World Cup Final Pits Argentina Against Germany Art of Haitian Machete Fighting Revived Death Toll Tops 100 As Israel Offense Continues Thousands Attend NYC Firefighter's Funeral Raw: Australia Hosts Annual Beer Can Regatta Israeli-Palestinian Tensions, Attacks Escalate Joy Fills Streets of Cleveland As LeBron Returns
NDN Video
Cleveland welcomes home LeBron Houston Killer Collapses in Court When Read Capital Murder Charges for Allegedly Killing Family of Six Worst Valet Ever Wrecks $500K Lamborghini Glee Star Becca Tobin's Boyfriend Matt Bendik Found Dead in Hotel Aerial fish restocking in Utah ScarJo Channels Marilyn Monroe Obama Responds to Hecklers on Immigration Tiny Hamsters Who Ate Burritos are Back for a Tiny Hedgehog's Party Watch Kelly Ripa Get Soaked! 'Referee' Hands Out Yellow Cards for Social Faux Pas in NYC 2014 Emmy Nominees: 8 Snub Shockers Emma Watson Is Va-Va-Voom in Valentino 7 Infamous Sports Blowouts Argentina tops Holland in World Cup semifinals News flush: Japanese toilet exhibition making a splash Emmy Nominations: What to Watch For 'Game of Thrones' Leads 66th Emmy Awards Nominations Photographic 'Proof' That LeBron Is Leaving Miami - @TheBuzzeronFOX Elephant Pool Party at The Oregon Zoo Must-See! Berry and Fallon Form Human Hamster Wheel

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
  • -


    March 12, 2010