Indiana State Budget Committee approves Lebanon Water Pipeline funding
The Indiana State Budget Committee on Thursday approved a total of $101 million for a water pipeline, land and infrastructure for a controversial industrial park.
The Indiana Economic Development Corp. (IEDC) also received approval to increase its Deal Closing Fund by an additional $101 million for a $6 billion battery factory project.
The 90-minute committee meeting in Bloomington saw a heated exchange between skeptical and supportive lawmakers.
Senator Fady Qaddoura (D-Indianapolis) said he would be “personally uncomfortable” with increasing funding while low-income Indiana residents face a Medicaid “crisis.” He is a non-voting surrogate candidate.
The latest budget allows the IEDC to increase its Deal Closing Fund for projects with a planned capital investment of US$5 billion or more.
“From corner to corner, across the state, Indiana residents are contacting us… We gave some of these examples yesterday at the Medicaid Advisory Committee and were unable to help them because of budgetary constraints,” Qaddoura added. “And then we show up here today and ask for a $101 million increase in economic development funding. That really reflects values.”
Senator Chris Garten (R-Charlestown) responded that the IEDC would pay back the money, “but Medicaid would not.”
Shortly thereafter, however, he urged IEDC representative Mark Wasky to “push these (land sales) forward as quickly as possible” and to repay the state’s debt within the 2025 fiscal year.
Progress on the pipeline
The IEDC asked for permission to spend $50 million from its deal closing fund on a water pipeline that would run from the Indianapolis area to the town of Lebanon in Boone County.
The quasi-public agency said it would hand over the funds to the Indiana Finance Authority (IFA) for bond financing. The money will cover the first five years of debt service.
Lebanon is home to the Limitless Exploration/Advanced Pace (LEAP) Innovation District, which is designed to be a massive, advanced industrial park. Its only confirmed tenant is local pharmaceutical giant Eli Lilly & Co., with a $9 billion project.
But Lilly and other tenants sought by the IEDC need a lot of water to do their work, and Lebanon, whose water capacity has reached its limits, wants to continue development.
According to IEDC, the pipeline will deliver about 25 million gallons per day to Lebanon. Citizens Energy Group, which operates Indianapolis’ water and stormwater system, would supply the pipeline.
“They have several well fields and several wastewater treatment plants that they are currently constructing to figure out the optimal way to produce water,” said Jim McGoff, IFA’s chief operating officer.
According to McGoff, the pipeline would “meet” the water needs of the LEAP District and Boone County for the next 15 to 20 years.
Wasky said the long-term costs of the pipeline would not increase bills for existing ratepayers. He told the committee the impact would be “limited to new tenants of LEAP and new users added to the Lebanon water system.”
A larger, 50-mile pipeline from Tippecanoe County to the district that could transport 100 million gallons a day is on hold while the IFA studies its feasibility.
The expanded studies are expected to be completed by the end of the calendar year, McGoff said.
The IEDC also requested $36 million for land acquisition, down payments and option payments for approximately 1,850 acres of land earmarked for three LEAP District projects.
Although the contracts have not yet been finalized, Wasky said he is “very confident” that IEDC will be able to complete them.
Finally, the IEDC requested the use of US$15 million for infrastructure works under LEAP: improving roads, building a roundabout and installing utilities.
Further approvals
The Committee considered a separate request from the IFA to spend $25 million on housing-related infrastructure assistance.
The IFA operates a revolving loan fund that provides low-interest loans for public infrastructure that support housing construction.
Program Director Sherry Seiwert said the agency hopes to complete the 13 loans it made in the first round of lending by year’s end.
“On the basis of these allocations, a second round of funding will be available to us,” she said. Applications can be submitted from October 15.
With the program, lawmakers wanted to help developers build homes that would otherwise not have been profitable and pass the savings on to homebuyers.
However, the program does not require a specific number or percentage of affordable units.
“It really depends on what the community tells us about their needs,” Seiwert told Qaddoura. “They have to present a housing market study that has been done over the last five years and tell us what kind of housing their community really needs. Is it rental housing? Is it single-family housing? Which income group really needs to be provided with the housing?”
Qaddoura also asked whether there was any evidence that the cost savings were being passed on to homeowners and renters.
“We will know in a year,” Seiwert replied. She said that the municipalities would have to demonstrate cost savings as part of their reporting obligations.
This story originally appeared in the Indiana Capital Chronicle at https://indianacapitalchronicle.com.
