CHICAGO - Mayor Stephen Goldsmith of Indianapolis announced a $519 million three-year capital improvement plan Tuesday night that includes the issuance of $187 million of bonds.
In a speech before the City-County Council, the mayor called his proposal "the most ambitious plan in history to rejuvenate the city of Indianapolis and rebuild our city's infrastructure."
"It is time for a new vision - one that invests in the future and that recognizes that the needs of our children and the competitive survival of our city demand that we consume less of our budget operating for today and more preparing for tomorrow," Mayor Goldsmith said.
Jim Snyder, the city's director of strategic and financial planning, said yesterday that the plan mainly targets the maintenance and improvement of the city's infrastructure, such as roads and bridges. and some new construction.
The plan, which does not rely on any tax increases, calls for the issuance of $150 million of general obligation bonds by the end of the year, pending the approval of property owners and the combined city-county government council.
Mr. Snyder explained that under Indiana law, Indianapolis must get a minimum of 50 property owners in the city to sign petitions in order to issue GO debt.
He said, however, that anyone opposing the bond issue could also petition property owners to reject the issue, and the petition with the most signatures would win.
"We'll try to collect 50,000 signatures on our petitions," Mr. Snyder said, adding that the Goldsmith administration expects the petition drive to be successful because the plan does not call for a property tax increase.
If the petition drive succeeds and if the council approves the bond issue, it would be sold through the Indianapolis Local Public Improvement Bond Bank in a negotiated deal headed by Merrill Lynch & Co., he said. Co-managers would be announced later, he added.
Since the mayor is opposed to raising property taxes, the deal would include the use of capital appreciation bonds to increase debt service payments in later years, when some of the city's $230 million of outstanding GO debt will be retired.
"By doing that, the level of debt service payments should stay constant," Mr. Snyder said.
He added that the 20-year bonds may also include some college-saver bonds.
Last year, Chicago became the first city to issue the zero coupon bonds, which many states have issued since 1988 to help parents save for their children's college education.
The plan also calls for the issuance of $137 million of revenue bonds. Mr. Snyder said that $40 million of the bonds would be backed by the city's share of state vehicle license fees.
Another $9 million of bonds would be backed by revenues from the city's golf courses. The remaining $88 million of bonds would be secured by an increase in sewer fees.
However, Mr. Snyder said the city was still studying whether to sell its wastewater treatment plant and use that money to improve sewer lines or sell the bonds based on an increase in the user fees.
He explained that the revenue bond issues would need approval from the city-county council.
The remaining $232 million of the $519 million capital improvement plan would be funded with the proceeds of previously issued tax increment financing bonds and local, state, and federal revenue sources.
Last year, the Indianapolis Chamber of Commerce released a study identifying $1.1 billion of infrastructure needs over the decade.
Mr. Goldsmith, a Republican who took office on Jan. 1, supported the chamber's study during his campaign.