Project costs increased

Cash balances in the city’s water and wastewater funds are well above the minimum recommendation.

But with the capital improvement projects upcoming, especially on the wastewater side, rate increases are likely to be needed.

That information was part of an overall report Ross Hagen of public accounting and consulting firm Baker Tilly provided Monday to Portland City Council.

The key note of Hagen’s report was that the cost estimates for a wastewater treatment plant improvement project planned for this year and the second phase of the upgrades tentatively scheduled for 2027 have both gone up.

This year’s project — a new raw pump station, equalizing basin and other improvements — is now estimated at $15.6 million. That’s up from the $10.8 million it was estimated at in the fall. (The city is paying for nearly all of the cost via the State Revolving Loan Fund.)

“So with that increase, obviously that would require a larger bond size and larger debt service payments,” said Hagen.

City council put into effect two rate increases — they totaled almost $16 per month for the average user, about half implemented in January and the other half in April — to cover the cost of the project at its previous estimate.

The report from Baker Tilly indicated that an additional 6% increase would be needed in order for the city to cover the cost of the project without spending down its cash reserves.

The 2027 portion of the wastewater treatment plant improvements — creating a new oxidation ditch — are now estimated at $14.7 million, which is up from the previous estimate of $8.1 million.

The impact of planned water department capital projects is far less hefty, coming in at an average of about $400,000 per year over the next five years. (The largest expenditure comes at $800,000 in 2025, which includes a water main replacement.)

Hagen said the city could cover all of the water projects by spending down its cash reserves, could increase water rates to cover them and maintain cash reserves or could consider bonding to spread the cost out over a longer period of time.

The Baker Tilly report recommends that the city keep minimum cash balances of $949,000 in the water fund and $1.5 million in the wastewater fund. Those balances are currently about $4 million and $3.06 million, respectively.

Hagen recommended that council members review the full report and ask any questions they might have.

Also Monday, city council members Kent McClung, Don Gillespie, Janet Powers, Dave Golden and Mike Aker, absent Matt Goldsworthy and Michele Brewster, forwarded a tax abatement request from Pioneer Warehousing to the city’s tax abatement advisory committee.

Susan Kohler of Pioneer explained that the company is planning on constructing an 8,100-square-foot facility at a cost of about $1 million at the north end of Wayne Street, east of Strohl Appliance and Electronics. The facility would have space to house daycare services for 48 children.

“There’s a great need in Jay County as well all know,” said Kohler. “We hear it from all of our employees, and all of the community and all of our friends and everyone we talk to.”

Pioneer Warehousing would lease the facility to be operated by Pioneer Toddler Town, the company’s daycare entity. It would serve children from infants until they are ready for school. The goal, Kohler said, is to break ground in mid-June.

Travis Richards, executive director of Jay County Development Corporation, explained that the project qualifiers for a five-year tax abatement that would save the company about $80,000 in taxes. The company would pay about $220,000 in property taxes, with 10 new jobs expected to be created.

The advisory committee will review the abatement request and make a recommendation to city council.

In other business, council:

•Heard the following from Boggs:

—Rusty Inman, executive director of John Jay Center for Learning, has said he would prefer that the alley behind the facility not be closed for the Jay County Locals Market that is planned to move to the east 100 block of Main Street in June. Council approved the closure last month. Boggs asked council members to consider Inman’s thoughts and address the issue at their May 15 meeting.

—The asbestos investigation at the Bailey Building at 201 to 205 W. Main St. is underway. It is part of the process of the city’s effort to tear down the dilapidated structure.

—Paperwork is complete to facilitate the sale of the former Sheller-Globe south building at 510 S. Bridge Street to Fifer Services.

•Answering a question from Powers, Boggs said Indiana Department of Transportation’s current schedule calls for removal and replacement of the Indiana 26 (Water Street) bridge over the Salamonie River on the eastern edge to begin June 26. He added that those who were organizing an effort to save the structure have written letters to Gov. Eric Holcomb asking that the bridge be donated.