An Indianapolis City-County Council panel Tuesday evening unanimously approved a measure that would allow the city to be reimbursed with future bond proceeds for expenses related to the planned community justice campus.
The measure — which essentially allows agencies to earmark certain ongoing expenses for future repayment — will still need to be approved by the full council.
But preliminary work on the justice center, which will include a new jail, an arrestee processing and engagement center, and a health facility, has already started. For instance, the Indianapolis Bond Bank has hired financial advisors to help the court system decide whether it is financially feasible to move with the rest of the complex.
The council’s lawyer, Fred Biesecker, said the measure was a procedural step “to satisfy the IRS.”
“This is not committing the council to do anything either by way of [issuing] bonds or additional appropriations,” Biesecker said. “If and when bonds are issued, probably next year sometime, … the proceeds can be used to reimburse preliminary expenditures — design, environmental, that kind thing — that you’re going to have to incur in a project of this scope.”
The final project is expected to cost up to $575 million, IBJ previously reported, and will be built on the southeast side of the site of the former Citizens Energy coke plant.
Andy Mallon, corporation counsel for the city, said he anticipates coming back to the council this summer with a funding request of between $29 million and $31 million to cover preliminary costs of the project “through bidding.”
Mallon also said the council in the first quarter of 2018 will tackle whether to issue a bond to cover the remainder of the project.
Preliminary expenses that could be reimbursed with the bond proceeds include “costs of professional fees, necessary records, architecture and engineering expenses, publication of notices, and other expenses and the costs of land, right-of-way and other property, equipment and systems” for the project, according to the council proposal.
Sarah Riordan, director of the Indianapolis Bond Bank, said that the bond bank was fronting some initial expenses out of its budget.
“Ideally, the less we spend, the better,” Riordan said. “The bond bank is here to take care of the first couple of months of expenses. I would prefer it not to go above $2 million in the next two months.”
The measure was approved by the committee unanimously, although Republican council members Marilyn Pfisterer and Colleen Fanning did question the administration on the costs of the planning for the project. Fanning tried unsuccessfully to amend the proposal to limit reimbursements to up to $4 million.
Mallon told the council that it would be transparent in spending for the project.
“We’re in this together,” Mallon said. “We’re the investors in this project and the owners of this project and we’re going to move it forward together.”