01-23-40 Council Meeting Minutes

Home Browse Search

Be it remembered that the Common Council of the City of South Bend met in regular session in the Council Chambers of the City Hall, Monday, January 22, 1940, at 7:37 P.M. President McCarthy presided. Councilman Richardson was absent. The reading of the minutes of the previous meeting was suspended. President McCarthy stated that all committees as set up the previous year would continue through 1940. COMMUNICATION Honorable Common Council of South Bend, Jan. 22 -1940 South Bend, Ind. Gentlemen: Your attention was no doubt attracted to the article which appeared in the Sunday edition, January 21st, 1940, of the South Bend Tribune, publicising a purported statement from the State Tax Board that they, by reducing the budget in South Bend, would save the taxpayers the sum of $265,728.00. Included in this item was an item of $133,095.00, which was taken from the budget of the Civil City for 1940 for Barrett Law liquidation. This statement is misleading. It is incorrect for the State Tax Board to claim that there was a savings to the taxpayers of any amount by elimination of this item of $133,095.00. Actually the elimination of this item will cost the taxpayers of the City of South Bend not only the sum of $133,095.00, but an additional penalty of 6% on twice this amount, as it was anticipated that this amount plus a fifty percent return on the bonds, which had been used as offsets against the city's liability, would reduce the city's liability in the total amount of $266,191.25. Actually the State Tax Board, by eliminating this item from the budget, has simply deferred the liquidation of this amount of city's liability for a,period of time, r ather until money can be raised by some means in which to t ake care of it, during which time the taxpayers of the City of South Bend must continue to pay the interest of 6% on the total amount. No saving has been effected, but rather a penalty added. At the time the budget was formulated, the full amount of the city's liability, as a result of the decision of the Supreme Court in-the Barrett Law Case, was uhknown and still is. However, the item which was included in the budget_was to take care of an item which was definitely fixed by the decision of the Supreme Court and was an obligation that definitely existed at that time, and required no audit to determine. It was my desire that as quickly as these matters were determined, we should pay out of present revenue, at as smal an outlay-on the part of the taxpayers as possible. It was our thought that when the audit was completed and the total amount of the city's liability determined, that the balance could then be taken care of through a bond issue or certificates at a small rate of interest spread over a period of years so as to not place too great a burden on the taxpayers_in any one year. However, since it has been eliminated from the budget, and the item continues to bear interest at the rate of 6% until paid, it seems that it would be more economical to try and work out some method so that it can be paid as promptly as possible, so that this high rate of interest will not continue to run to the detriment of the taxpayers We have on hand some $500,000.00 of Barrett Law Funds on which we are required to pay interest at the rate of 6% until these funds are disbursed. I had hoped that by this time, the audit of the rolls would be completed to such a point that this amount of money could be distributed to the bondholders and thus eliminate the continued accumu- lation of interest on the money which we have on hand, but which has not been distributed as yet. With the idea of determining how soon these funds could be distributed, and the interest stopped on this amount, I called a meeting last week and was informed by the County Treasurer and the chief Barrett Law Clerk, that within a few days they would be ready to s tart disbursing funds now on hand, so that the fU rther accumulation of interest would be stopped. ,The only thing which would interfere with the program of distributing this money within these few, days, would -be -'the fact that a controversy has arisen over the rights of certain attorneys to f ees payable out of these funds before the balance is distributed to the bondholders. It is hoped that this controversy will not delay the distribution of the funds. It is not possible at this time to determine what the total liability of the city will be. However, as *stated before, we do know definitely that this item of $266,191.25 is a liability which the city will have to meet and since this amount is definitely fixed, it is my thought that some ways and means should be immediately considered to liquidate at least this part of the city's liability. I suggest therefore, that you give this matter your serious consideration. Yours . very truly, (Signed) J. I. PAVEY Jesse I. Pavey Mayor of South Bend Councilman Hull made a motion that the Board of Works., Mayor, Barrett Law Clerk, Ways & ideans Committee, have a meeting and prepare a plan of action on matter. Councilman Niezgodski seconded the motion. Motion carried. COI]RUJNICAT ION To the Common Council City of South Bend, Indiana Gentlemen: January 18, 1940 I am bringing to your attention, a condition that has existed since the meeting of the County Tax Adjustment board, and would appreciate your group making a study of the situation and assist in making a decision. These items: Electric Department Traffic Signal Installation $ 2300.00 Street Traffic Commission 11245.00 were removed as separate items from the appropriation for 1940 and the City tax levy lowered accordingly. The County Board in striking out these items, recommended that their be financed out of gas tax refunds. The above totals are represented by the following items: $ 900.00 for paint 180.00 for use of car 200.00 for file and used typewriter 600.00 for replacing "No Parking" signs 1800.00 for replacing stated speed signs, "Dead End" signs, "Slow" signs and etc 200.00 for time limit parking signs 4500.00 for modernizing of eight overhead signal lights