News From Terre Haute, Indiana


December 12, 2013

Council OKs Bennett’s 3-year loan

$5M general fund support plan, budget approved 5-3

TERRE HAUTE — The Terre Haute City Council handed Mayor Duke Bennett a minor victory Thursday night by approving a three-year, $5 million, short-term loan to help float the city’s general fund between bi-annual property tax payments from the state.

For each of the past two years, Bennett has asked the council for a $5 million loan, called a “tax anticipation warrant.” Each of those years, the council has voted for a one-year term for the loan, which is repaid at the end of each calendar year.

This year, Bennett asked for a three-year term in which to pay back the money. That will lock a current interest rate for three years and will save the city loan origination fees in the tens of thousands of dollars, the mayor said.

Five members of the council supported the three-year term.

“My gut feeling is that interest rates will not get lower than they are today,” said Councilman Bob All, R-2nd, in explaining his vote. Also voting for the three-year term were council members George Azar, D-at large, Jim Chalos, D-at large, Amy Auler, D-1st and Norm Loudermilk, D-3rd.

Those against were councilmen Todd Nation, D-4th, Neil Garrison, D-5th and John Mullican, D-6th.

The $5 million loan allows the city to pay its bills between its property tax payments from the state, Bennett said. Those payments normally come in June and December. Without the loan, the city would need to lay off dozens of employees, mostly police officers and firefighters, Bennett has stated.

“I woke up this morning troubled by this,” Mullican said before proposing an amendment to the loan ordinance shortening it a one-year term. That failed by a 3-5 vote with Mullican, Nation and Garrison supporting the amendment.

A one-year loan would promote better transparency and accountability in government, Nation argued.

“It is about accountability,” Mullican agreed. “It is about transparency.”

In October, Bennett presented a plan involving several measures that could, over three years, eliminate the need for an annual loan. That plan included, among other things, a potential fee for trash hauling in the city. Speaking after the meeting, Bennett said the trash hauling fee remains a possibility but would require council approval.

Bennett has said he hopes the loan can be paid off early and will not be needed after 2016.

n The council also approved an ordinance designed to help keep tobacco and drug paraphernalia out of the hands of kids. The ordinance requires shops to keep pipes, rolling paper and other tobacco accessories out of easy reach of minors. It also requires those shops to buy an annual city permit for $60. The permits can be revoked if stores are found to be in violation of the ordinance.

n The council also approved a request from the department of engineering to remove 20 mph zones around the former Chauncey Rose Middle School. That speed limit was in place due to the area being a “school zone,” which is no longer the case.

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

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