U.S. Sen. Dan Coats: Proposed Mounds Lake Reservoir can't rely on federal funds

Coats, R-Ind., was in Anderson on Thursday for a business round table sponsored by the Madison County Chamber of Commerce at the Anderson Public Library.

“If the reservoir were dug, you would fill it up today,” Coats said of the heavy downpour that rolled through Anderson.

When asked about the proposed reservoir, Coats said Indiana is blessed with an abundant supply of water.

“There are concerns with ground water in the long term,” he said.

Coats said he has been telling local officials around the state if they have projects that require a lot of federal funding that those dollars won’t be available in the future.

“You can’t base infrastructure projects on federal dollars,” he said. “The pot of money is declining every year because of entitlement spending.”

Coats said proponents of the reservoir should look at creative financing, such as bonds and income generated by the project.

Rob Sparks, executive director of the Corporation for Economic Development, said construction of the reservoir will have to come from revenues generated by the project.

“We will seek federal grants and dollars to offset the cost of construction,” he said. “We’re looking at 10 different federal budget cycles.”

Sparks said a variety of funds could be available from different grants and agencies.

Coats said projections are that 93 percent of all federal revenues will be used for entitlement programs, leaving 7 percent to fund defense, health and education.

“There will be a lot of competition for money and the pot is smaller,” Coats said. "You can’t factor in federal funding. Plan as if there weren’t federal funds available.”

As an example, Coats said, the proposed new interstate around Chicago is being funded by Illinois and Indiana through a public/private partnership.

“If they waited on the federal funding, it might take 30 to 40 years,” he said.

The proposed Mounds Lake Reservoir, which would cost an estimated $350 million to $450 million to create, would stretch approximately from Anderson east by northeast around Chesterfield and Daleville into Delaware County, ending just north of Delaware County Road 300 South. It would create a 2,100-acre lake and is not expected to be completed until 2021 pending state and federal approval.