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02-11-02 Council Meeting Minutes
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02-11-02 Council Meeting Minutes
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City Council - City Clerk
City Council - Document Type
Council Mtg Minutes
City Counci - Date
2/11/2002
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REGULAR MEE'T'ING FEBRUARY 11, 2002 <br />and Economic Development Committee for their findings which stated the case. He noted that tax <br />abatements have been an important tool in this community for encouraging investment by the private <br />sector, for creating new jobs, retaining existing jobs and for building payroll in this community. <br />Tax abatements are a contract entered into between the City and the businesses that receive the tax <br />abatement in which they agree to the phase in of taxes over a period of time in exchange for certain <br />benefits that they will provide. More particularly, for the creation of jobs and the establishment of <br />a certain payroll and their investment in the community. When a business fails to live up to their <br />part of the bargain, the administration feels that it is appropriate to rescind the remainder of the tax <br />abatement. That is the action he is asking for tonight with Accuride. Mayor Luecke reiterated <br />Councilmember King's comment about the fact that the City did receive a letter from Accuride <br />telling of their determination to close the plant and therefore they will no longer meet the promises <br />that they made in terms of payroll or level of employment. Therefore, under state law as cited by <br />Councilmember King, the firm no longer qualifies for the tax abatement incentive that had been <br />granted. The Mayor asked for the Council's favorable action on this Resolution to rescind the <br />remaining two (2) years of tax abatement for Accuride. <br />A Public Hearing was held on the Resolution at this time. <br />There was no one present wishing to speak in favor of this Resolution. <br />Mr. Richard Deahl, Barnes and Thornburg, 100 North Michigan Street, South Bend, Indiana, spoke <br />in opposition to this Resolution. <br />Mr. Deahl advised that he is present on behalf of Accuride and thanked the Community and <br />Economic Development Committee who provided him with the opportunity today to discuss certain <br />objections they have with consideration to the proposed Resolution. He stated that it is their belief <br />that the proposed Resolution is premature in that the finding under 6- 1.1 -43 that Accuride has failed <br />to comply with the wage and benefit levels that they originally proposed has yet to occur. He <br />requested that the Council follow the provisions that are set forth in I.C. 6 -1.1- 12.1 -5.9 where the <br />Council would take action at a future date to consider compliance with Accuride's Statement of <br />Benefits. Second, he requested that the proposed Resolution be amended to clarify that the <br />abatement to which this Resolution applies is only for taxes that are payable in 2003 and 2004 which <br />are the last two (2) years of the subject abatement. Mr. Deahl requested that consideration of the <br />proposed Resolution be continued until a future date and that the proposed Resolution that would <br />be considered have specific language that it only applies to terminate any benefits that would be <br />received for taxes payable in 2003 and 2004. <br />There was no one else present wishing to speak in opposition to this Resolution. <br />In rebuttal, Mayor Luecke stated that the Council has the authority under state law, as cited, to act. <br />He noted that the section of state law that Mr. Deahl referred to is for an annual review that happens <br />all the time. However, state law provides a different provision for this type of situation and that is <br />what they are requesting that the Council act under. As to the suggestion that Accuride has not yet <br />fallen out of compliance, he reminded the Council that when Accuride was first given the abatement <br />they were not in compliance but it was based on the expectation that they would meet those numbers. <br />The City now has firm expectations that Accuride will not longer meet the numbers they provided <br />and therefore this is a timely action. <br />Mr. Chuck Leone, City Attorney, 1400 County -City Building, South Bend, Indiana, stated that he <br />concurs that Council action on this Resolution is appropriate at this time. He further stated that state <br />law does allow this action to be taken if in fact the recipient of an economic development incentive <br />fails to comply with wage and benefit levels that the recipient proposed or promised. Under those <br />circumstances such an action by the Council is appropriate. <br />-8- <br />
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