The hot topic on the agenda at Warsaw Common Council’s Monday, Sept. 6 meeting was Ordinance Nos. 2014-09-05 and 2014-09-06.

These two ordinances, both approved with a 6-1 vote, would allow the city of Warsaw to sell general obligation bonds for the purpose of procuring funds for street department equipment.

“The revenues coming into our city have been reduced drastically, and we have serious needs,” said Councilman Charles Smith. “We really need this.”

The ordinance provides for a three year term of the bonds. Interest rates are not to exceed 5 percent, and the aggregate principal is not to exceed $1,200,000. Bonds will be sold publicly, and maturity will be set at once bonds are sold.

“This gives us the ability to protect tax payers, provide services that are in great need for that department,” Councilman Jeff Grose said. “I have to support it,” added Councilman Mike Klondaris.

“There’s flexibility in the ordinance,” said Mayor Joe Thallemer. The mayor is expecting to hear back on a 50/50 grant that would go towards a new garbage truck. He said that should this go through, the bond terms may be reduced to two years.

However, one council member was opposed to the ordinance and was the only “nay” when it was put to a vote. “I am opposed to bond issues going towards equipment. I feel their were other avenues where that revenue would be coming in,” said Councilwoman Elaine Call. “By doing this, we are putting that tax back on the public.”

Call was vocal about opposition at the council’s Sept. 15 meeting, where the ordinances were first read. “My thoughts on this are very complicated,” she explained on Oct. 6. “I still don’t support it for a lot of reasons.”

“I would have rather seen leases done,” Call stated. “The expenses you have in doing a bond, that is not a small number.”

When the council opened the discussion to the public, Craig Rocker spoke up with cautionary report. “I see where this would help with cash flow,” he said, but he continued indicating he thought this fiscal strategy was a slippery slope. “Let’s not do this too many times.”

“We’re not taking this lightly,” said Councilwoman Diane Quance. “You never want to borrow money if you think what you’re investing in is risky. We wish we weren’t in this position, but because we are, we need to do something.”

The city used a similar strategy to acquire a new fire truck back in 2008. That bond had a term of five years, and will be paid off in February of next year.

Upon passing the bond ordinance, Thallemer said, “We’ll be prudent with that bond and what we spend it on.” More information on purchasing bonds will be available when the clerk-treasurer publishes a notice of intent to sell.

Electronic copies of each ordinance is available below:
ordinance 2014-09-05
ordinance 2014-09-06