What appeared to be favorable news of “underspending” by the Valparaiso Streets Department in 2024 for overly-optimistic street repairs generated spirited discussion among the Valparaiso City Council at Nov. 25 and Dec. 9 meetings with impact on city-purchased bonds.
In May, the council approved a lofty $8 million dedicated to expansive street repairs and resurfacing throughout the city.
With the primary months for road work now over as winter temperatures reign, City Administrator Bill Oeding reported to council members at the Nov. 25 meeting that an unused surplus of $1.6 million would be returned to city coffers.
“At the end of the paving season, we found we had a surplus of $1.6 million from the original $8.8 million the council had approved for paving projects for 2024,” Oeding said.
“I’ve offered two options, the first being that you stay with the $6 million short-term bond that you have already approved, and we’ll just add on this additional amount on top of that and continue our paving in 2025 and even 2026. For option two, you could reduce the planned bond amount from $6 million to $4.4 million, knowing you have this $1.6 million carryover amount. We are running into our deadline now with Baker Tilly to let them know of our bond purchases amount, so we need to get them that answer since they are preparing the bonds for sale.”
Council member Barb Domer, D-3rd, stated that despite looming deadlines, she had proposed a third option to Oeding and the council.
“I understand Bill (Oeding) that you have alerted Baker Tilly to reduce our bond amount as explained in option two even though during the recent email discussion between the council and you prior to tonight’s meeting, I had proposed a third option,” Domer said.
“I believe our third option is to reduce the general obligation bond by even more. We could be issuing even a lesser debt if we have all of the information, maybe a reduction of even $2 million, if you consider the recent Indiana Community Crossing grant we hadn’t anticipated.”
Council member Emilie Hunt, D-At-large, said the unfolding council discussion and the order of events which led to the council’s approval of $6 million in anticipated bonds “was uncomfortable.”
“On a Monday, after six weeks of talking about these bonds, asking where leftover funds would fall, we had no answers, and so we voted on this $6 million of debt to our taxpayers, only two days later, being told we have $1.6 million of leftover money,” Hunt said.
“Now, this money can only be used for paving, rather than using restricted funds first. This takes this money out of our discretion for paving.”
Oeding said the intent was not “to hide anything.”
“If you’re looking to place blame, then blame me, I don’t care,” Oeding said.
“We told you about these excess funds as quickly as we did. I don’t think the timing is so terrible. I seem to be celebrating that we have this $1.6 million and everyone else is saying ‘God, where’d you screw up with this?’”
Domer said she agreed with Hunt with shared “surprise” that such a large excess of funds would be available.
Mayor Jon Costas reminded the council that Oeding and the street department management have a history of dedication “and stretching money to save whenever possible.”
City Attorney Patrick Lyp introduced Ordinance No. 32, 2024 at the Nov. 25 meeting as amended to lower the amount of requested general obligation bonds to use for general projects, from $6.35 million reduced to $4.4 million. It had a unanimous vote for the first reading on Nov. 25 and passed for final approval for a second reading at the Dec. 9 final council meeting of the year.
Philip Potempa is a freelance reporter for the Post-Tribune.
