Council approves $857,000 for Water to New Project

Reprinted with permission from the Pike County Press-Dispatch, September 11, 2019 edition

By Andy Heuring

The County Council voted unanimously to approve an additional appropriation of $857,000 to build an eight-inch waterline to the River Birch Farms project. They also approved a 10-year tax abatement for real property and a five-year tax abatement plan for personal property.

Paul Wheatley of The Wheatley Group, which is a consultant for the Pike County Economic Development Corp., told the council the project brings investment of $6.4 million in real property and $5.75 million personal property, as well as $5.1 million in post construction improvement. It will also provide 22 new jobs at an average wage of $15/hour.

He said the payback in the property taxes and local income taxes would occur in 2026.

Wheatley said indirect jobs created for vendors and related services to the facili-ty will create an additional 20 jobs with an average wage of $20 an hour.

Besides jobs and tax revenue, Wheatley said other benefits include: promoting a positive cash flow from the TIF districts that can be used for additional infrastructure development. The project will be a large water customer, which will help offset Petersburg’s water rates and costs from new water and wastewater treatment plants. He added by building the waterline to this project that is located on the southwestern corner of the 8,000-acre mega-site, it will provide a waterline to most of the 8,000 acres for future development.

Connie Neininger, Business Development Director for the Indiana Dept. of Agriculture said agri-business projects typically have a much higher multiplier factor in the benefits to a community. She added in rural Indiana communities like Pike County, these are the types of projects that fit. “A new Honda plant dropping out of the sky isn’t going to happen. Communities that are waiting on that to happen are closing schools and roads,” said Neininger.

She gave examples of the payback to communities of various types of development projects. She said residential development typically cost government $1.29 to provide services for every dollar invested in new housing. Typical business development costs the government 48 cents for every dollar invested, while Agriculture development only costs 25 cent for each dollar invested. “It is a much better return,” said Neininger.

“We have been working on attracting capital investment and providing jobs for more than four years,” said Pike EDC Executive Director Ashley Willis. John Mandabach of Bowman Family Holdings said, “We are looking at an agri-hub that allows for more downstream projects, whether that is in food manufacturing or processing. Hopefully this is the start of many more projects to come.”

“We’re looking at a big hit in our net assessed value, one done at one time by the utility industry. I have known Connie for a long time and she truly believes rural Indiana has to be organized and come up with our own types of projects. A lot of what we are doing here with previously mined ground, these are exactly the types of projects that need to be here,” said Councilman Jon Craig.

Councilmen voted 7-0 to approve an abatement plan that would provide a 100 percent abatement in the first year and then drop by 10 percent each year on real property. The abatement is only on the new assessment, not on existing assessment. They also approved a five-year abatement plan on personal property that decreases by 20 percent each year.

Petersburg Mayor R. C. Klipsch said, “The city requested a proposal to develop and build this line. My understanding is there is an urgency to have this development by December. Greg Martz of GM Development has offered to do this at a zero percent interest rate and carry the project himself for four months.”

It was brought up that the project called for a six-inch line, but because they wanted capacity for future projects they are building an eight-inch line, which more than doubles its capacity.

Ashley Willis said increasing the size to eight inches only increased the cost by about $55,000 on the $857,000 project.

“Is that big enough? Did you check into a 10-inch line,” said Councilman Randy Harris, who is a former Mayor of Petersburg. He said they did a similar project when he was mayor and they built a line to Pike Central. He said building it bigger was a very small additional cost. Willis said they didn’t consider costs of a 10-inch line. Klipsch said the project will use about 80,000 to 100,000 gallons of water a day.

“We are undertaking a $10 million project to serve Pike-Gibson and all of Pike County. This is a start to help offset our rates,” said Klipsch of having a large-volume water customer.

The council approved the additional request by a 6-0 vote. Councilman Craig said he had checked with county attorney Val Fleig about a conflict of interest.” I don’t have a conflict, but I work for Midwestern Engineers, so I’m going to abstain,” said Craig.