Clarks Hill seeks clarity on county loan for wastewater design as funding source shifts to SRF

Kathy Vernon, identifying herself as the county council representative for Clarks Hill, told the Tippecanoe County Board of Commissioners on Oct. 20 that the town urgently needs a county loan to begin design work on its wastewater treatment project and faces an Oct. 24 deadline.

Vernon said she had understood the county's prior verbal commitment would be repaid from bond proceeds. After recent conversations with the town's financial adviser, Sean Klein Peter, she learned the project now expects repayment from State Revolving Fund (SRF) financing rather than bonds, and SRF awards are competitive and not guaranteed. “We just need to make a decision on whether or not we're gonna do the same thing we'd intended to do with bond proceeds, with SRF funding instead,” Vernon said.

Commissioners and county counsel discussed options. One commissioner said privately they were "okay with proceeding" to lend from an appropriate rainy-day or short-term fund but noted appropriation and council involvement could be required. County legal counsel said a short-term loan often includes an appropriation or a resolution of county council approval and that the executive (the commissioners) must have available funds to make the loan; counsel advised that whether both council and commissioners must sign depends on the form of the promissory note and prior practice.

Vernon said the town has been waiting since August and needs an answer so it can proceed with design work; she described the town's wastewater plant as “hanging on by a thread” and said the town had been told verbally the county would help. Commissioners noted that if the county made a short-term loan with the expectation of eventual SRF or bond repayment, repayment timing could be delayed if SRF funds are awarded later.

No formal action was taken at the meeting. Commissioners and counsel said steps for moving forward could include a county council appropriation or a promissory note that clarifies repayment conditions; counsel said he would look into precedents such as similar past loans. Vernon and other town representatives were advised to pursue formal requests with amounts and proposed terms so the county could consider appropriation or a formal loan agreement.

Why it matters: Clarks Hill's wastewater treatment needs design work to pursue a larger financing package; the town requested county assistance to bridge initial design costs. The shift from anticipated bond repayment to SRF financing changes the county's risk profile because SRF awards are competitive and could affect timing of repayment.

What to watch: Commissioners asked that Clarks Hill provide a formal loan request including amount and terms; counsels' review of past practice and whether both county council and commissioners must act will determine the legal path forward. No appropriation or loan was approved at the Oct. 20 meeting.