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REGULAR MEETING
<br />JANUARY 23, 2017
<br />Councilmember Oliver Davis asked, You said, regarding the special exception, as long as it
<br />passes the smell test it's okay, but do we need to have more teeth? So, can it pass the "teeth
<br />test "?
<br />Mr. Schmidt responded, I think, for my own benefit, whenever you have some guidelines to
<br />build off of, it allows you to be more transparent with the customers. It allows you to be more
<br />transparent with Public Works. It allows you to hold people accountable for the deal so people
<br />know how to approach the Board and say, "This is why...," instead of every customer coming
<br />out and saying, "I think I deserve this."
<br />Councilmember Davis asked, Would you initiate that or would we have to initiate that?
<br />Mr. Schmidt responded, It would be appropriate for the City to initiate that.
<br />This being the time heretofore set for the Public Hearing on the above bill, proponents and
<br />opponents were given an opportunity to be heard.
<br />There were none from the public who wished to speak in favor of the bill.
<br />Those wishing to speak in opposition to the bill:
<br />Tom Caiya, President of UN Tek and UN Kote, 1833 Pucker Street Drive, Niles, MI, stated that
<br />he and his organization oppose this bill.
<br />Richard Nussbaum, 225 South Sunnyside Avenue, South Bend, IN, stated that he provided the
<br />Council with information that would be helpful in speeding up the process. Mr. Nussbaum
<br />stated, I am here on behalf of UN Tek and UN Kote, which was originally a joint- venture of
<br />Inland Steel, but now ArcelorMittal —which is a European company —and Nippon Steel —which
<br />is a Japanese company. The plants have been in operation since 1990. In 1987, there was a New
<br />Carlisle economic development area established by St. Joseph County which allowed for the TIF
<br />District to pay for all of the infrastructure. The waste water that is coming from this area in the
<br />UN Tek and UN Kote plant to the Wastewater Treatment Plant is through a conduit that was not
<br />paid for by the City of South Bend. It was paid for by UN Tek and UN Kote with the taxes that
<br />they paid that went toward the TIF bonds. The plant could not be located within the City of
<br />South Bend. This is not a situation where someone is trying to avoid taxes for the City by
<br />locating out of the County. It was way ahead of its time in a sense of regional development
<br />because the City was involved in terms of providing its Wastewater Treatment Plant at a very
<br />favorable rate, with all the other partners —the County, and New Carlisle, and the private
<br />sector —to make this all happen. That was back in 1987. The plant now employs five- hundred
<br />and twenty (520) employees and many of these employees are South Bend residents. Over two -
<br />hundred (200) businesses within the City of South Bend benefit from business that they do with
<br />this plant. The waste water that comes from the UN Tek and UN Kote plant goes through a
<br />dedicated conduit, which means that that is the only thing that passes. There is nothing that goes
<br />out of it, nothing that goes into it, until it reaches the Wastewater Treatment Plant. It does not
<br />contribute to the combined sewer overflow issue. So, when people come to Councilmember
<br />Kelly in my neighborhood and are upset with flooding in their basements because of those kinds
<br />of issues, it is caused by the UN Tek and UN Kote plant.
<br />Mr. Nussbaum explained that the plant is the premiere plant in the ArcelorMittal system and that
<br />there are 10,000 employees in Indiana working in other plants throughout the state. He stated,
<br />The sewer rate paid by UN Tek and UN Kote is the largest of any other customer inside or
<br />outside of the City. The increase in rates has been over $1,000,000 since 2010. It was about
<br />$1,400,000 then —it's $2,400,000 now. Based on the latest sewer rate study produced by the
<br />City, the operational revenues for the Wastewater Treatment Plant for 2016 was projected to be
<br />$35,000,000. Of that $35,000,000, $11,000,000 was allocated toward debt service to take care of
<br />the combined sewer overflow, which is roughly thirty -one percent (31 %) or thirty -two percent
<br />(32 %) of the rate. Everyone is right: that percentage is in there. The rate that UN Tek and UN
<br />Kote pays is in there, but IN Tek and UN Kote does not contribute to that issue. The results
<br />show $3,500,000 that was allocated of that $35,000,000 for PILOT payment in lieu of taxes —
<br />so that of the rate - payers paying into the Wastewater Treatment Plant, about $3,500,000 goes
<br />towards the City budget to help pay for other services. The current ordinance is not fair. If this
<br />passes this evening, there really is nothing that UN Tek and UN Kote can do other than contest
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