Tippecanoe Watch #2: Wall Street

It’s been just over a month since we last updated you on Tippecanoe County, Ind., and its proposed new $17.3 million juvenile justice center. Not much has happened in Tippecanoe since then. The county parks department held a picnic to promote fishing. Local fans of Purdue University’s football team have endured a tough 2-4 start to the season.

But when it comes to Tippecanoe Watch, it’s not about local happenings. It’s all about what’s happening on Wall Street: The future of the juvenile justice center hangs on the city’s ability to use bonds affordably to build it. 

The county council joined the county commissioners this week when they unanimously approved moving forward with the proposal. But that was a first reading: A late-October public comment session will be followed by a final vote on funding in early November.

Right now, the county has the second highest credit rating in the state, which usually means that it is able to use bonds for construction at a relatively low interest rate.

But credit is hard to come by for everyone these days, even those with good credit. So if the county’s upcoming bond rating review in mid-November changes the county’s standing for the worse, it may mean Tippecanoe will have borrow for this, and other projects, at higher interest rates.

At its current rating, says County Councilman David Byers, “we can build the center without a tax raise.” That may not be true if the interest rate for the bonds is higher. And paying for the center with a tax hike is out of the question, Byers says.

The other issue, which will certainly come up at the public session, is whether the county can pay for the day-to-day operation of the center once its built. We say it will certainly come up because the county is home to a taxpayer watchdog named Michele Blaas, who is watching. And she does not want the juvenile detention center; Blaas has already requested virtually all of the public documents and files related to the project, including all e-mails sent by some county officials involved in the center’s development.

(JJ Today tried to contact Blaas but to no avail. A public phone listing was disconnected, e-mails bounced back, and her outfit – Taxpayers Advocacy Group – has no online presence).

Byers says the plan is to pay for operation of the new center with what the county spends now to farm out juvenile justice, which is about $1.6 million per year. But the estimated annual budget for the new center is between $2.3 and $2.4 million per year.

Tippecanoe Youth Services Director Rebecca Humphrey says the county will be able to more than make up that gap. The state took financial responsibility for secure commitments, so the county can put some of the $1 million it would have paid to the state for that service toward pre-commitment juvenile services. Also, some of the beds at the new center would be rented to nearby counties at a low per diem; that should bring in just over half a million, Humphrey says.

Another nice boon from the center, as we head into an economic morass: close to 40 new full-time jobs and eight part-time positions, by Humphrey’s calculations.

We’ll update you again once the public, the council and the bond raters have spoken.

 

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