City Looks At New Way Of Procuring Public Works Projects
By Dan Spalding
InkFreeNews
WARSAW — City Council is looking at adopting a new process in how it develops and controls costs associated with major public works projects.
Municipalities already have different options in how they oversee capital works proposals in terms of development and funding, but the city of Warsaw is exploring a process called BOT, which is short for build-operate-transfer.
Such an arrangement allows the developer to plan, design, construct, operate, maintain and finance a public facility on behalf of the city, then transfer the public facility to the city on a future date. In some cases, tax increment financing revenues are used for the project’s repayment source.
Another key factor is that the developer operates under a total dollar amount that cannot be exceeded. Public works projects often have overruns as they delve into the work and find unexpected issues. Many are deemed acceptable and end up costing the city more money.
Mayor Joe Thallemer said the framework of the approach provides flexibility and also lowers the risk for the city.
“The one big advantage to me is the guaranteed maximum price. Once the council approves that project, that’s it. And if there’s overruns or problems with materials, it’s the operator’s responsibility,” Thallemer said.
The process has been available under state law for years but is being used more often for different kinds of projects.
“The BOT law has been used occasionally since it was put on the books but the uptick in activity may be linked to elected officials’ desire to meet the needs and wants of their constituents,” according to a story published on Theindianalawyer.com.
Council heard a presentation on the matter Monday, Dec. 18, from Cam Starnes, a redevelopment attorney with Taft law firm in Indianapolis.
Often, public works projects have add-on costs that sometimes pile up. This method would be one way to control that, Starnes said.
Council appeared to like the idea. They voted unanimously in support of a resolution that would allow the city to adopt the state law policy for future consideration.
Officials repeatedly referred to the idea as “another option in their toolbox.”
Thallemer said they are considering whether to use the BOT approach with the park department’s future maintenance building and offices along Central Park. Long-range, he said, it could also be considered when the city decides to upgrade the street department campus.
“We’re going to dig a little deeper and see if this makes sense,” Thallemer said.
In other matters, the council:
- Approved the first step in establishing a riverfront district in downtown Warsaw. By expanding the redevelopment district, the city can then establish a riverfront district, which opens the door for businesses to seek a special alcohol permit. The redevelopment commission has final approval on the matter.
- Took the first of two votes needed to vacate unimproved portions of two alleys and a skewed portion of Miami Street. The land is part of a housing redevelopment project near the old Madison Elementary in Warsaw. The alleys are northwest of Center and Miami streets. A public hearing and a final vote will be held at the next council meeting Jan. 4.
Monday’s meeting was held online. The only two people working from the council chambers were the mayor and Clerk-Treasurer Lynne Christiansen.