JEFFERSONVILLE — About $700,000 will be saved over the next decade based on actions taken by the sewer board and city council, but Jeffersonville is also having to grapple with a $1 million cut to its 2021 budget.
Both items were addressed Monday by the Jeffersonville City Council.
The body approved refunding two sewer bonds from 2010 and 2011 worth almost $18 million. The original State Revolving Loan Fund bonds will be resold on the open market in a move estimated to save the sewer utility about $70,000 annually over the next 10 years.
A premium charged for refunding the bonds is included in the estimates, and the life of the financing package won’t be extended past the initial 2031 sunset date.
But in the same meeting, the city council began addressing a $1 million cut to its 2021 budget.
In January, the News and Tribune obtained a copy of a letter issued by the Indiana Department of Local Government Finance notifying the city that its 2021 budget had been rejected over incorrect advertisements.
According to the DLGF, the city’s required advertisement stated the council would approve the budget on Oct. 5, 2020, but it actually adopted it on final reading on Oct. 19, 2020.
As a result, Jeffersonville was ordered to revert to its 2020 budget, which city officials said would result in a loss of about $1 million.
City officials objected to the ruling with some stating it was a harsh penalty for essentially what was a clerical error. The city still met its deadline for approving the budget during a public meeting, they countered.
But the DLGF responded in its letter that there were no state statutes that would allow for relief, and that Jeffersonville could seek a legislative adjustment to its 2022 maximum levy to account for the tax revenue loss.
City officials were hopeful state leaders could step in and solve the problem, but that didn’t occur. Councilman Scott Hawkins said Monday he was perplexed, confused and angry by the lack of a resolution.
“In fact, it seems to me there were actions taken to prevent us from being able to correct this clerical error,” Hawkins said.
“This is something where every time I think about it, I think I get a little angrier, and I’m not one that’s very prone to anger.”
Hawkins said that in dealing with fire and police contract negotiations, the “$1 million dollars made a difference.”
Council President Matt Owen concurred with Hawkins’ comments.
“Something as simple as a clerical error cost the city $1 million and could have cost us a lot in city services if we didn’t have the ability to dip into these reserves to restore this budget,” he said.
The first steps taken Monday to rectify the differences were to appropriate about $400,000 in reserves to make up for cuts in parks, sanitation, cumulative capital and general fund 2021 budgets.
“Rather than go back and look at where we could cut for the budget and cut city services, we made the decision to go ahead and absorb those cuts out of our reserves and refund the budget in each of those line items,” Owen said.
The council didn’t address Mayor Mike Moore’s veto of a sewer rates and fees ordinance the body approved last month.
Moore vetoed the ordinance last week stating it wouldn’t raise the necessary funding to expand the River Ridge Commerce Center wastewater treatment facility.