Drainage board amends reconstruction financing assistance program; members debate 5% default interest

The Tippecanoe County Drainage Board approved Resolution No. 2025-02-DB, a housekeeping amendment that moves the Reconstruction Financing Assistance program's transactions into the General Drain Improvement Fund and changes the program's default so assistance is available by default for reconstructions unless the board specifically declines for a given project.

Board staff explained the change is intended to reduce administrative complexity by eliminating a separate fund used for reconstruction financing and direct remaining balances into the general drain fund. Staff said the resolution flips the prior administrative default: under the revision, assistance will be available for reconstructions unless the board opts out.

Several commissioners questioned the resolution's continuing reference to a 5% interest rate for reconstruction assistance. One commissioner noted the state's 10% statutory rate previously made the 5% county option attractive when bank rates were lower; more recently banks have been at about 7 percent and the county is earning higher returns on its funds, making a 5% loan less attractive from the county's fiscal perspective. Staff responded that the resolution was intended as housekeeping and that the board could either decline to offer the program on specific reconstructions or amend the resolution later to change the interest rate or tie it to an index.

The board voted to approve the resolution as presented; staff and commissioners said they would revisit interest-rate policy later if market conditions or demand for reconstructions warrants.