ELKHART -- The city will accept millions of dollars in low-interest loans from the Indiana Finance Authority for three significant projects, despite efforts by some city council members to amend the loan repayment method.

The council unanimously approved at a special session Tuesday the restructuring of a bond ordinance passed earlier this year. The 20-year bond, originally authorized to pay for the first phase of a sewer project, will now also cover the cost of two brownfield remediation projects.

Republican council members, however, said some of the changes to the bond ordinance are a violation of the public's trust. When originally passed, they said, the ordinance raised water and wastewater rates in 2010 and 2011 to pay for a storage and pump facility at High Dive Park, the first step in a federally mandated combined sewer overflow remediation process.

Now, that same rate increase will pay for the sewer project, but also the acquisition, demolition and contamination remediation of the LaBour Pump and Elkhart Foundry facilities. While the Republicans said they're delighted the state has offered to finance that work, they don't like that the money will come from water utility customers.

"I think some of us are looking out for the people who can't afford one more cost of any kind," said councilman David Henke, R-3rd. "I don't find it so easy to retax the public for what they've already paid for -- that would be the sewer rate increase."

Henke and councilwoman Mary Olson, R-at large, introduced a series of six amendments, each offering alternatives for how the $1.5 million in loans for the brownfield projects could be repaid. The proposals included, among others, the use of funds in the downtown tax increment finance district, the sale of the foundry property, the Greater Elkhart Fund, the rainy day fund and Major Moves interest.

All the amendments were defeated, 5-3, with all Republicans in favor and all Democrats opposed. Councilman Ralph Bean, D-at large, was absent.

Mayor Dick Moore, a Democrat, contends that all city funds should remain untouched, as property tax caps will create further revenue hardship for the city in coming years. Other council Democrats said they wanted to see money in certain funds used for other projects.

The High Dive facility would have cost $20.5 million through the original ordinance. The IFA offer will cost the city $19.5 million for all three projects, including interest.

The loans will come at a 2.56 percent interest rate from the IFA's state revolving loan and brownfields programs, which include some federal funds. According to an IFA spokeswoman, though, federal stimulus dollars are not part of the package.

The IFA made the offer to Elkhart, the spokeswoman said, because federal brownfields funds were available and not applied for. The agency recognized that the city had projects pending, and worked with Elkhart economic development staff to develop a loan plan.

Though the Republicans ended up supporting the ordinance revision, Olson said it was critical that they propose alternatives. To not do so, she said, would be an injustice to the constituents they represent.

"I respect the IFA and the administration and what they're doing," she said. "We're just saying, there are always options. And when you're using the public's money, we're not doing our job if we don't look at options."