Umbaugh & Associates leading way
With an estimated $4.5 million to $4.6 million cost for what is proposed as the first city-county building in Adams County history, paying for it is a major matter.
At a two and a half hour special meeting of the Adams County commissioners on Tuesday to unveil the plans, and the reasons for such plans, Todd Samuelson of H.J. Umbaugh and Associates, an accounting firm in Plymouth, reported on how financing might operate.
He told an audience of some 45 people that an interlocal agreement between the county and City of Decatur could be employed to set cofinancing that would allow each side to pay for its share of the building separately.
Property taxes are primarily the way projects are paid for, he said, and the county has an $8.8 million limit on its bonding authority, which is well above the possible $2.1 million cost of the county's part of a new building. The city's share has been estimated at $2.5 million.
Samuelson said he used $5.5 million as the cost estimate and also used a five percent interest rate, two percent higher than at present.
He said that, based on the current assessed valuation of all taxable property in Adams County, a $5.5 million project at five percent interest would involve repaying $440,000 per year over 20 years, which comes to three cents more per $100 of assessed valuation.
For a house worth $100,000, said Samuelson, the owner would pay $9.25 more per year.
Decatur has a different tax base, but he said a $100,000 homeowner would pay five cents per $100 of assessed valuation, which would be $15 per year.
A city resident would also pay county taxes, as Adams County Auditor Bill Borne noted, so the total would be $24.25 annually per homeowner with a $100,000 house.
A 10-year repayment plan, said Samuelson, would pay the project off more quickly and allow the county to be ready sooner to take on construction and payment for a new jail.
Under a 10-year plan, he stated, the payments would be $680,000 per year, which would be five cents per $100 of assessed valuation, meaning $14 per year for a person owning a $100,000 home in the county and eight cents per $100 of assessed valuation ($22 per year) for a person owning a $100,000 house in Decatur.
Samuelson said the entire state must now contend with tax caps, also called circuit breakers, under a 2009 law that says no homeowner can be forced to pay more than one percent of a home's assessed value in taxes in any one year. On a $100,000 house, said Samuelson, the cap is $1,000, so once the owner reaches that level, he or she pays no more.
Samuelson said he was told by Borne that Adams County last year lost $200,000 in property tax revenue due to the tax cap system.
Overall, reported Samuelson, the financial impact would be "not overly dramatic," with "some increases" in taxes.
He noted that no referendum is allowed in regard to this project, but there could be a remonstrance filed by those opposed to the idea. "The time is never right for some taxpayers," he stated.
In regard to the jail, Samuelson said income taxes and property taxes have been used in the past five to 10 years around Indiana when jails have been erected.
Commissioner Doug Bauman said he has heard that only 50 percent of the public pays taxes and pointed out that public officials do not want to "overburden the taxpayers."
Samuelson mentioned that "grants are drying up fast," although Adams County Attorney Mark Burry said the county would seek whatever grants might be available.
Commissioner Kim Fruechte suggested using a "food and beverage tax," which Samuelson called "a fairly unusual way" to finance a public building.
Fruechte also said it might make better sense to leave the police department out of the city-county building so the police could be housed in a new jail site.