11-06-08 Personnel and Finance Committee

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Personnel and Finance Committee Meeting Minutes of November 6, 2008 Page 3 legislation needs to be made, especially now that the interpretation of capital outlay has been expanded by the local commission. Dr. Varner also noted that he believes that there needs to have an "absolute accounting of the money available" in order to solve the fiscal challenges facing the city. He noted that the .2% was established by local ordinance; and that every budget has a % left over at the end of each calendar year. City Controller Fanello stated that she too believes that the state legislation addressing TIF needs to be clarified. She stated that she is required to sign checks and has the authority to decline signing if she does not believe expenditures are legal. Council President Rouse questioned the role of the City Controller in this regard, noting that he did not believe that she was the "final decision maker". Ms. Fanello stated that she has the "power to audit" such expenditures. Jeff Gibney, the Interim Director of the Department of Redevelopment noted that at all of the meetings of -the Redevelopment Commission either an attorney from the City Attorney's Office is present of Richard Nussbaum is present to provide legal advice. He noted that by comparison the City of Chicago has 161 TIF Districts, and that each of South Bend's has been done legally. He then summarized the timeline from the creation of the downtown TIF Distrit, the West Washington TIF District, etc. and the public process which took place in each instance by the commission. He stated that without TIF these areas would be worse today. He cited that expansion of the Airport TIF to include LaSalle Square. He stated that the Redevelopment Department is 1.48% of the civil city budget. He further stated that discussion about TIF is "well-worth having". He cautioned however that tax abatement and TIF is "not a nice marriage". Seven (7) years ago the NE Neighborhood was 50% vacant, and with TIF a $200 million development is now in the works for that area. He noted that TIF monies cannot be used for general operating expenses. Council Member White stated that she believes that there needs to be further public discussion on the use of TIF monies and clarification and TIF and of the Rainy Day Fund monies is needed also. She stated that the "best use" of such funds should be the point of discussion which becomes a philosophical issue.. City Controller Fanello stated that she believes that the TIF state law is vague and that city policies should be developed on how TIF monies should be used since other communities interpreting the same state law have varying interpretations. Mr. Gibney stated that he disagrees with the City Controller on this issue.