Elkhart City Council approves appropriations to front Hively Avenue overpass loan

Elkhart City Council approved two related appropriations to advance federal funds for the Hively Avenue overpass, moving $214,697.37 from the capital outlay fund into the Hively Avenue overpass account and authorizing the city to make the first loan payment.

The measures — Proposed Ordinance 26-22 (appropriating $214,697.37 to the Hively Avenue overpass fund) and Proposed Ordinance 26-23 (appropriating $214,697.37 for the first loan payment) — were discussed in council and passed on roll-call votes. Controller Christy Wendorf identified the interest rate on the advance as 3.75 percent and said the city had to front federal funds and would be repaid principal by the federal source but would be responsible for the interest.

“3.75,” Christy Wendorf (Controller) said when the council asked about the interest rate. She clarified that the transaction was not a municipal bond in the traditional sense but a fronting of federal funds that the city must advance and for which the federal source will reimburse principal.

Council members pressed for context on the total financing. The council heard an in-meeting figure for the project’s loan amount of $19,818,219 and a higher “total fiscal cost” figure noted in the discussion; the controller confirmed the advance-and-repay structure while noting interest costs would remain with the city. Council members raised whether prepaying the interest or using reserve dollars would be advantageous given the city’s internal earnings rates.

There were no public comments during the hearings on the ordinances. Both ordinances were adopted by unanimous roll-call votes.

The council did not direct staff to change the financing approach in this meeting; the actions approved the appropriations and the first payment as described. Future budget or financing decisions were not finalized in the record of this meeting.