03-23-09 Common Council Minutes - Laserfiche WebLink

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REGULAR MEETING MARCH 23, 2009 TH COUNCILMEMBER DAVID VARNER – 5 DISTRICT th Councilmember Varner describes the 5 District as essentially the south east side of th South Bend. The 5 District does not encompass any of the downtown area of South Bend and is unique in that aspect. He stated that the Ireland Road Area has grown, expanded and done quite well in the last few years. He stated that there have been some great points brought up by fellow Councilmember’s who have spoken already tonight. He noted that the State of the Council is modeled from Mayor Luecke and Kernan’s State of the City. He stated that this a good thing to address what has been happening over the course of a year in the City and express those accomplishments to the citizens of South Bend. Councilmember Varner stated that he will address TIF Districts and monies. He stated how does the City pay its bills when all of the new property tax dollars are constrained as TIF dollars. Councilmember Varner showed a map on the screen (A power point map which is on file in the Office of the City Clerk) to show the difference in TIF areas in Ft. Wayne, Indiana vs. South Bend, Indiana. He stated that in Ft. Wayne there are very few TIF areas and in South Bend it is a very large area representing approximately 38.1% of the total square footage or square mileage of the City of South Bend. Each of those areas contains either the Innovation Park, Ignition Park, Portage Prairie, Eddy Street Commons, Downtown South Bend, Airport Industrial Park & LaSalle Square, Southside Development Area, Erskine Commons and Erskine Village are all in TIF Districts. He stated that there is nothing wrong with TIF Districts; however the City needs to simply look how they administer them and approach them from a different fashion. He stated that if you look at the revenue which is proposed for the TIF Districts, the City of South Bend receives on an annual basis somewhere between 10 to 15 million dollars in those districts. He advised that those uncommitted dollars become discretionary dollars that can be used in the future and use them annual for discretionary use. He stated that there is expected growth in the Portage Prairie Area, Airport Industrial Park and in both tech parks, for which enormous dollars have already been spent, and all those dollars are constrained as TIF dollars, that number of 10 to 15 million is only going to get larger. In his opinion and in 10 to 15 years that number could even double. Once a piece of property is in a TIF District, it becomes unavailable for general city expenses. In his opinion that is just too much money to be in a TIF District which is property tax derived and not available for city operations. In this case, it has become nothing more than a tax shift in responsibility for city services and city operations for those occupy the TIF District to those who do not live in a TIF District or for that matter, businesses. Any and all new growth is going into TIF Districts, all that new growth has cost attached to it with regard to the operation of the City, it is undeniable. Those increase costs unfortunately have to be absorbed by the rest of the city, without compensation from the TIF Districts. He stated that he does not like to be critical of the way TIF Districts have evolved because there have been other things driving it, but such a model as it exists, as far as he is concerned is unfair to a vast majority of the people who don’t live in a TIF District. It is unrealistic and unsustainable. So what exactly can be done? Well, there have been a number of things happen over the last couple of years and seen some different communities do something different things and it is time for the City of South Bend to consider doing some of these things. In fact, as a TIF becomes mature, releasing some of the increment could be done by releasing millions of dollars which could then reduce property taxes throughout the City. Capital costs incurred by the City could be charged the TIF District if in fact the cost serves in that district. He suggested that the Police Department Central Station and the Fire Department Central Station and Public Works Facility combined as a 32 to 35 million dollars project and cost allocate a portion of those which serve the TIF and the capital, the City could pay those expenses for those in a mortgage going forward out of the TIF District. What that does is relieve the pressure on the COIT and EDIT which is paying those costs right now. It makes more money available in the General Fund to help pay bills for the City. He stated that the City of South Bend can do what the City of Mishawaka did in providing some relief to city residents by utilizing the TIF dollars. Recently, the City of Mishawaka reduced their water bills to their residents by 1.7 million dollars a year by using capital costs incurred in the TIF. He stated that he believes that the City could enter into an agreement for a provision of services with the Redevelopment Department or perhaps the City could contract with the Redevelopment Department to provide PILOT’s (Payments in Lieu of Taxes.) All of these are ways to make dollars available to the general fund for 7