The original Warsaw Public Works Department shop, pictured right, at 794 W. Center St., was built in 1960. There have been several additions since then. The city of Warsaw is looking at building a new Public Works building for an amount not to exceed $14.5 million.

Text and Photos
By David Slone
Times-Union

WARSAW — Discussion on a new Warsaw Public Works building started about 10 years ago, but on Monday, Feb. 3, the Redevelopment Commission and Common Council took the first steps in making the not-to-exceed $14.5 million facility a reality.

The two boards approved resolutions advertising the public hearings on the project for 4 p.m. Feb. 18 and March 3, at which time anyone from the public can speak. Additional financial information also will be presented at those meetings.

The Financing

Andy Mouser, financial advisor with Baker Tilly, said what was being proposed for the project was a “repayment structure that is actually intended to be fully repaid from property taxes.”

There would be an ability in the future the city could contribute other revenues toward it, such as tax increment financing (TIF) dollars, to buy down the obligation.

“Really, what is being proposed on the property tax side is not something new. This is something the city has done many times in the past,” Mouser said, pointing to the 2016 southside fire station and the 2023 parks department building. “The city, being a fast-growing community, not only population-wise but assessed value-wise, as your tax base grows, it continues to push your tax rates down, and that’s what we’ve seen over the last several years.”

Since 2019, the city’s tax rate has decreased by 8 to 10 cents per $100 of assessed value, he said, and that gives the city the ability to issue additional debt service that can be done on a tax rate neutral basis.

“So without increasing tax bills for your property taxpayers because we’ve seen those tax rates continue to come down,” Mouser stated. Worst-case scenario with this project, he said there would be an addition of six to seven cents on the property tax rates. “And then going forward, you would have the ability to either levy for that entire property tax payment each year, or the city would have the ability to utilize local income tax, tax increment or other revenues to the extent that they are available, and then that would reduce what would actually be levied on your property taxpayers,” Mouser said.

Assuming a $13 million project, it would be repaid over a 20-year period, with interest rates ranging from about 3.5 to 4.75%. Total annual payment would be about $1.1 million.

“Again, that $1.1 million is what the city could absorb with about a six to seven cent impact on the tax rate, which again, is filling in where tax rates have declined in recent years,” he explained.

The fire station and park office debt obligations will fall off by 2031.

“Any tax impacts would be limited to your lower-valued homes, and then commercial and industrial property. Many of your taxpayers in the city are already at the property tax caps, and so even an increase in property tax rate, they would not see an increase in their property tax bill. But, again, the intent would be, as your assessed value continues to grow, or as the city would look to other revenues to help buy down that debt service, the actual impact on taxpayers would be much less,” Mouser said.

A rendering of a new Warsaw Public Works building is seen on the screen behind Community and Economic Development Director Jeremy Skinner at Monday’s Warsaw Redevelopment Commission meeting.

Agriculture properties would not be affected. Randy Rompola, with Barnes & Thornburg LLP, said the resolutions Monday were the first action to be taken in the process.

“As the Redevelopment Commission acts, so shall the Common Council. Everything that the Redevelopment Commission will do with this project will be approved by the Common Council,” he said.

The public works project is structured as a lease because of the size of the project, Rompola continued.

“There’s a constitutional debt limit, which is 2% of the assessed value in the city. That worked for projects 100 years ago, it doesn’t work for large projects anymore, so most of the large projects – school corporation renovations or new buildings, county jail or county courthouse projects – are done through a lease financing. Cities are doing it for street department buildings like this, or new city halls, so to be able to finance larger projects, you can’t use general obligation bonds, so communities will use this lease financing mechanism,” he said.

Rompola said it’s anticipated that if the schedule is followed, the bonds will close in early June, which aligns with the anticipated construction timeframe. Warsaw Community and Economic Development Director Jeremy Skinner said the resolution to advertise the public hearings was kind of the kickoff for the project.

“I think the key takeaway, and we’ve talked about these in other meetings, is that it is our intent to kind of keep this a net-neutral impact on the taxes. Whether it be through our growth and through EDIT (Economic Development Income Tax) or TIF, we’ll have flexibility to buy down any – if we don’t achieve the growth we need to cover that six to seven cents in assessed valuation, we could use TIF, EDIT to buy those down so that at the end of the day, the intent is to keep this project net neutral on the tax rate,” Skinner said.

At the city council meeting, Councilwoman Diane Quance asked if the project would affect the city’s debt ceiling. Rompola said it would not and the city would have about $2.6 million remaining.

“Your general obligation debt ceiling, the lease would not affect that at all, so that would still be in place. So you’d have the ability to do a small general obligation bond for some unexpected expense,” Rompola replied.

The Need

As the city’s bonds are being paid down for the fire station and park building, the city’s debt limit would increase. Public Works Superintendent Dustin Dillon gave the commission and council similar presentations on why a new public works building was needed. There’s a lack of room at the department. Everything has to be parked outside.

“There’s not room in the current facility to be able to get in out of the cold, work on things, check on blades,” he said.

Dillon explained what the public works department is, noting it’s not just a street department that plows snow, picks up leaves and patches potholes.

“We still do our own refuse collection operation, we do our own paving – at least 80% of our own paving, we have a concrete sidewalk replacement program. We usually are replacing about a mile of sidewalk with our in-house crews a year,” he said.

The public works department takes care of the entire city’s fleet of vehicles, though the police and parks departments do have mechanics for smaller items. The public works mechanics staff last year worked 2,500 hours for other city departments.

Averaged at $200 per hour – doing everything from engine overhauls, engine replacements to transmission replacements – Dillon estimated cost savings for the city totaled about $500,000. Public works also provides oversight on contracted projects, traffic signal and flow operations and other work.

“Our biggest challenges are capacity issues,” Dillon said. “… Growing fleet, growing abilities, growing responsibilities, as well as growing pains.”

City of Warsaw Public Works Superintendent Dustin Dillon explains Monday to the Warsaw Common Council why a new public works building is needed.

The original shop at 794 W. Center St. was built in 1960. There have been several additions since then, but Dillon said a lot of those were more needs-specific than what they would like. The equipment for public works has changed since 1960, there’s not enough storage space and the maintenance shop is undersized. There’s limited employee locker space and the facility is old and inefficient.

With the growth of the city, Dillon said they have more roadway, more neighborhoods, more assets, more employees and more maintenance.

“Since 2017, we’ve averaged 3.5 miles of roadway added per year. In 2013, we had 88 center lane miles of road. That number has grown to 104 currently, in 10 years. We went from 217 total lane miles to now we’re at 240, so huge growth here in the last six years,” he stated.

After showing the two boards what the current facility looks like, Dillon showed them what the rendering of a new facility by Robinson Construction would look like. The new building would be “L” shaped with everything under one roof.

The current shop is about 6,400 square feet, with the new one proposed right at 20,000 square feet. It would grow to the east on three pieces of property purchased by Robinson Construction.

“It should allow us to, indeed, hold everything inside and be able to park all of our vehicles inside,” Dillon said.

The Reactions

During the Redevelopment Commission meeting, Councilman Mike Klondaris said it’s important to remind people and themselves that as the city and its population continues to grow, “We, as a city, have embarked on what I feel is a responsible course of action over the last decade. Building a new wastewater plant. A new park office. And moving the police station – before I came on the council. Building a new fire station. And now we need to address our public works department. I think people have come to expect our public works department to do a five-star job, and they do, and we need to continue to support that so people will get the service they demand and require. And at the same, not raising property taxes on people’s homes … yet still make it happen. A well-thought-out plan. I appreciate everyone’s efforts. I say we move forward.”

Council President Jack Wilhite said when he looked at the size of the project, his eyebrows went up a little bit. Then when the plan was presented, they went up again.

“To be able to do a project this size, and keep it net neutral on the property taxes, it is fantastic. And to even have the backup afterwards of EDIT and TIF dollars, should there be a downturn in the economy or problems that are unforeseen, I think that’s our insurance that we got in our back pockets. Like Mike said, a very well-thought-out plan,” Wilhite stated.

Mayor Jeff Grose said about 10 years ago, discussions on the project were started. They are managing out at the public works department, but with growth and expectations and responsibilities, “is it time to make a decision to benefit the city, and what are the costs if we don’t? It is, like Jack said, a massive amount of money, but the services that are provided by Dustin and his crew are essential.”

During the council meeting, Quance asked how long was the construction of the building anticipated. Dillon said right now, if things move forward, it’s projected to be finished in 2027. Councilman Juergen Voss told Dillon he did an incredible job of pointing out why the new building was needed.

“When you look at all the functions the public works, the street department does, it’s overwhelming. When I looked at the price, I was kind of appalled, but when I look at what this will possibly do for you, I could see that it makes sense. Not only for the safety and well-being of our employees, but for everything you do, I figured you could do it much more efficiently, so I think you easily convinced us this is something that is necessary and for the greater good of our community,” Voss said.

At the Redevelopment Commission meeting, member Bill Curl made the motion to approve the resolution, Klondaris seconded it and it passed 4-0. Member Joe Thallemer was absent. At the council meeting, Councilman Jerry Frush made the motion to approve the resolution, Klondaris seconded it and it passed 7-0.