Erin Jamison-Koenig, Communications Director
Located in Wabash County, the Town of North Manchester sits alongside the Eel River and is known for Manchester University. Around 5,300 residents call North Manchester home.
The town recently broke ground on a large community pavilion and is mid-construction on the project at Ogan’s Landing. The pavilion is located just outside of downtown and near the town’s newest park and canoe launch. Getting the project started was not easy, however. One large problem stood in the town’s way – down payments for materials.
Most notably, a 50% down payment for the steel needed for construction was requested by the supplier and that down payment was not able to be paid with town funds. Clerk-Treasurer Carrie Mugford responded to the company by saying, “No, we’re not doing that. It’s against the law. We can only pay for material after it’s delivered.” The provider would not initiate the delivery until they received the down payment. They were at a standstill.
Mugford’s experience highlighted the disadvantage local units have by not being able to place deposits on goods and services. The current economic climate has further hindered locals from securing contracts as demand for contractors is high and not all companies are willing to defer payment until the project is complete and all goods and services have been delivered. In the past, companies would front the costs or take out loans to be able to prepay for material until the town would be allowed to pay them. The increased cost of materials creates a hardship for small local contractors who would like to bid on local municipal public works projects.
Around the time the project the was on hold, Mugford attended a legislative update meeting featuring Senator Andy Zay and Representative Craig Snow. Mugford spoke about this issue, saying “We cannot get this project started because this company is refusing to order the steel until they get 50% down. We can’t do that.” Not only did the current law affect North Manchester’s project, but it also affects other communities by limiting the number of contractors that are able to submit bids due to the lack of prepayment.
In addition to her important conversations with Senator Zay, Mugford introduced the topic to the Aim legislative team as something that could help not only North Manchester but all Hoosier municipalities. The Aim statehouse team, Legislative Committee, and Board of Directors were all in agreement and the matter was included on Aim’s 2023 Legislative Agenda.
Senator Zay took the idea to his team and introduced a bill during the 2023 Legislative Session. The bill, SB 317, is currently moving through the legislative process. The language allows cities and towns to provide up to 50% advance payments for goods and services with council approval. Large prepayments over $150,000 would require insurance to guarantee public funds.
At the time of posting, SB 317 had passed out of the Senate and was referred to the House.
Mugford credits her relationships with both Senator Zay and Aim in making the bill happen. “A combination of Senator Zay coming from his side, Jenna [Bentley] coming from the Aim side, and everyone putting these pieces together. It’s worked out well.”
For Mugford, her experience highlighted the importance of being active and paying attention to the state legislature. “Getting to know the legislators and letting them know who you are so that when you’re in a meeting, you’re comfortable having these conversations. Most of the legislators I’ve talked to say these ideas come from us because we’re the ones doing the jobs, we’re working with the people, and we’re the ones encountering the problems or find places in the law that could be modified. If you have the idea and you don’t have the confidence or that relationship, then it’s just an idea. You need to talk to Aim, talk to your legislators.”