Darrell Smith, Connersville News-Examiner reporter
The latest proposition for funding the installation of a water line to the ethanol plant near Glenwood requires $205,300 in EDIT funds annually for the first few years of the project development, according to Richie Pflum, Fayette County Council president.
The Indiana State Revolving Loan Fund will buy the water utility bonds to fund installation of a 30-inch water line from the Connersville Utilities to the Whitewater Valley Ethanol site, but they require Economic Development Income Tax funds to repay the loan, Pflum explained.
The water line project is estimated to cost $16.2 million and would be adequate to supply water to the ethanol plant and small businesses that may locate around the plant, he said. If a large dairy - proposed at 25,000-50,000 head - located near the plant, then Connersville Utilities would need to upgrade the pumping system at a cost of some $3 million, he added.
Currently, the county receives $1,303,729 in EDIT revenues annually. Off the top, $422,831 is taken for replacement of the inventory tax and for homestead credit.
Through 2009, $365,000 is used to pay the lease on the Fayette County Government Center expansion and renovation bonds.
That leaves $415,598 for distribution, with the city of Connersville receiving 52 percent of that amount. Fayette County receives nearly 48 percent, and the remainder goes to the town of Glenwood.
The city of Connersville's 52 percent share equals a little more than $216,000, to be used for economic development projects, including the Roberts Park swimming pool, he said.
Of the portion the county government receives, it has already pledged $110,000 to fund the Economic Development Group and $5,000 to the Fayette Senior Center to support the cooperative transportation system.
Pflum said that in 2009 the property tax-funded lease payments on the Fayette County Jail will be completed and those funds will be applied to the government center project, reducing the EDIT funds required to $160,000 annually.
Pflum said the State Revolving Loan Fund representatives at first wanted a pledge of all the EDIT tax revenues, including the $160,000 government center lease payment.
"At a Sept. 19 meeting, Harold Ellison (department head for the Connersville Utilities) and I asked 'Why would we want to give all our EDIT money to the State Revolving Loan and then not be able to fund our own EDG or do anything to promote economic development?'" Pflum said.
The current plan that has been proposed in cooperation with financial advisor H.J. Umbaugh & Associates and legal counsel Ice Miller, both of Indianapolis, is to pledge $105,300 in cash payment for the water utility bonds annually and $100,000 in back-up payment for the water utility bonds, he said.
He said if the ethanol plant is constructed and operating, the tax increment financing revenue from the development on the project could lower the $100,000 back-up payment pledge. If small businesses come into the agriculture-park near the ethanol plant, those jobs will create additional EDIT and County Option Income Tax revenues.
Those revenues will be needed to offset the likely annual loss of $75,000 in EDIT revenue and $300,000 loss in COIT revenue when Visteon is closed, Pflum said.
He said the State Revolving Loan Fund representatives believe EDIT to be a county tax, and any amount used for the ethanol project would be prior to the split with the city, county and Glenwood; therefore, the decision to use EDIT for the water line is a county decision.
Pflum said he would inform the city of the all the details.
No deadline for a decision has been established, he said.