The official go-ahead has been given to a $22 million overhaul of the historic Michigan City courthouse.
The renovation and expansion of the 1909 courthouse along U.S 12 at Washington Street will be financed under a 15-year lease without an increase in property taxes, LaPorte County Council President Randy Novak said.
Under the plan given final approval May 8 by the county council, $8 million will be paid up front out of the county’s emergency fund supplied annually with county income tax dollars, known as CAGIT, or County Adjusted Gross Income Tax, he said.
CAGIT revenue also will be used for payments on the $14 million balance.
Novak said there will be enough CAGIT money left each year after the payments to start building the fund back up.
The fund could be replenished enough to retire what’s left of the balance in eight years from a pay-back option contained in the financing package.
Novak said a lease was chosen, because it allows an existing revenue stream to finance the project without a property tax increase required to pay down a bond issue.
"We’re able to pay for it as we go,’’ he said.
A major driver for the renovation is updating an old electrical system considered a serious fire hazard.
Easing cramped working conditions was cited as another factor.
The addition that will double the size of the courthouse will provide room for county offices now housed at a former strip mall a few blocks to the south at 302 W. 8th St.
County income tax dollars also are used for road paving, but none of those revenues will be touched.
"We’re not taking away from paving roads to do this,’’ Novak said.
About $2 million was trimmed off the project’s cost by choosing a more basic design that offers fewer frills, yet bears a closer resemblance to the brick exterior of the courthouse, officials said.
Novak also said the lease keeps the county free of any outstanding bond debt to maintain flexibility in financing other possible major projects, such as restoring the courthouse in LaPorte.
"In the next few years, we’ll start turning our attention to the LaPorte courthouse, because that needs a lot of work," Novak said.
LaPorte County Auditor Joie Winski said about $4 million in CAGIT money comes in annually.
Winski said CAGIT is used to supplement the county’s general fund and other designated purposes.
About $1.3 million of those funds will go toward payments on the lease to start at an interest rate of about 2%, she said.
"It’s an overall better way to finance projects,’’ Winski said.