FORTVILLE – Fortville officials plan to seek a $1.3 million loan to cover the cost of improving sidewalks and constructing a trail system between downtown and the Mt. Vernon Community School Corp. campus.
Town leaders have been promised a nearly $9 million matching grant from the federal government to help cover the cost of the project, provided the town puts up $1.8 million toward that total sum, officials said.
The town has allotted $500,000 from the town’s stormwater utility fund for a portion of the work; a loan is the only way to cover the town’s end of bill, town council member say.
But they’re assuring taxpayers the loan won’t increase property taxes for residents. Town officials will cover the 15-year loan payments with revenues from town-owned utilities.
Last year, Fortville unveiled plans for a 2-mile trail to connect its downtown to Mt. Vernon Middle School, with the path traveling about a half mile down Maple Street, continuing south along County Road 200W for 1.5 miles and ending near the school, just north of State Road 234.
At the same time, town leaders had been eyeing ways to improve walkability in Fortville, particularly in the downtown district. Sidewalks improvements, which included lighted crosswalks, are planned for along main thoroughfares of Broadway and Main streets, among others, as part of the project.
Construction to improve downtown sidewalks has already begun and will continue throughout the summer. Construction on the trails system is expected to begin later this year and will wrap up by May 2020.
Jared Hall, a representative from financial consulting company O.W. Krohn and Associates, recently gave a presentation to the town council that outlined how the loan payments will affect the budget.
The town has already put $47,000 toward sidewalk improvements, so that amount will be deducted from the town’s overall $1.8 million contribution, Hall said. Additionally, the town will use another $500,000 from its stormwater utility fund, he said.
The town will need $1.3 million loan from a local bank to cover the rest, Hall said.
The bond would likely carry a 3.5 percent interest rate, with $9,400 monthly payments, and would be paid back over the next 15 years, Hall said.
Bond payments will not increase property taxes for any Fortville residents, town manager Joe Renner said. Instead, town leaders will use money collected from utility customers, thanks to a program called PILOT, or “payment in lieu of taxes.”
PILOT programs allow municipalities that own their own electric, water, sewer and stormwater utilities – as Fortville does — to transfer extra cash built up from customer payments into their general funds. Those dollars — expected to be about $120,000 for Fortville in 2018 — then can be used to cover various expenses.
The loan proposal received preliminary approval from the town council during a recent meeting with a 4-1 vote. Councilman Lenzy Hendrix voted against the measure, wondering aloud if cutting utility costs for current customers is a better route.
The town council meets again on 7 p.m. May 15 at town hall, 714 E. Broadway St. Members are expected to discuss the proposal again before making a final decision on whether to seek the loan.