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03-23-09 Common Council Minutes
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03-23-09 Common Council Minutes
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REGULAR MEETING MARCH 23, 2009 <br /> <br /> <br /> <br />TH <br />COUNCILMEMBER DAVID VARNER – 5 DISTRICT <br /> <br />th <br />Councilmember Varner describes the 5 District as essentially the south east side of <br />th <br />South Bend. The 5 District does not encompass any of the downtown area of South <br />Bend and is unique in that aspect. He stated that the Ireland Road Area has grown, <br />expanded and done quite well in the last few years. He stated that there have been some <br />great points brought up by fellow Councilmember’s who have spoken already tonight. <br />He noted that the State of the Council is modeled from Mayor Luecke and Kernan’s State <br />of the City. He stated that this a good thing to address what has been happening over the <br />course of a year in the City and express those accomplishments to the citizens of South <br />Bend. Councilmember Varner stated that he will address TIF Districts and monies. He <br />stated how does the City pay its bills when all of the new property tax dollars are <br />constrained as TIF dollars. Councilmember Varner showed a map on the screen (A <br />power point map which is on file in the Office of the City Clerk) to show the difference <br />in TIF areas in Ft. Wayne, Indiana vs. South Bend, Indiana. He stated that in Ft. Wayne <br />there are very few TIF areas and in South Bend it is a very large area representing <br />approximately 38.1% of the total square footage or square mileage of the City of South <br />Bend. Each of those areas contains either the Innovation Park, Ignition Park, Portage <br />Prairie, Eddy Street Commons, Downtown South Bend, Airport Industrial Park & <br />LaSalle Square, Southside Development Area, Erskine Commons and Erskine Village are <br />all in TIF Districts. He stated that there is nothing wrong with TIF Districts; however the <br />City needs to simply look how they administer them and approach them from a different <br />fashion. He stated that if you look at the revenue which is proposed for the TIF Districts, <br />the City of South Bend receives on an annual basis somewhere between 10 to 15 million <br />dollars in those districts. He advised that those uncommitted dollars become <br />discretionary dollars that can be used in the future and use them annual for discretionary <br />use. He stated that there is expected growth in the Portage Prairie Area, Airport <br />Industrial Park and in both tech parks, for which enormous dollars have already been <br />spent, and all those dollars are constrained as TIF dollars, that number of 10 to 15 million <br />is only going to get larger. In his opinion and in 10 to 15 years that number could even <br />double. Once a piece of property is in a TIF District, it becomes unavailable for general <br />city expenses. In his opinion that is just too much money to be in a TIF District which is <br />property tax derived and not available for city operations. In this case, it has become <br />nothing more than a tax shift in responsibility for city services and city operations for <br />those occupy the TIF District to those who do not live in a TIF District or for that matter, <br />businesses. Any and all new growth is going into TIF Districts, all that new growth has <br />cost attached to it with regard to the operation of the City, it is undeniable. Those <br />increase costs unfortunately have to be absorbed by the rest of the city, without <br />compensation from the TIF Districts. He stated that he does not like to be critical of the <br />way TIF Districts have evolved because there have been other things driving it, but such <br />a model as it exists, as far as he is concerned is unfair to a vast majority of the people <br />who don’t live in a TIF District. It is unrealistic and unsustainable. So what exactly can <br />be done? Well, there have been a number of things happen over the last couple of years <br />and seen some different communities do something different things and it is time for the <br />City of South Bend to consider doing some of these things. In fact, as a TIF becomes <br />mature, releasing some of the increment could be done by releasing millions of dollars <br />which could then reduce property taxes throughout the City. Capital costs incurred by <br />the City could be charged the TIF District if in fact the cost serves in that district. He <br />suggested that the Police Department Central Station and the Fire Department Central <br />Station and Public Works Facility combined as a 32 to 35 million dollars project and cost <br />allocate a portion of those which serve the TIF and the capital, the City could pay those <br />expenses for those in a mortgage going forward out of the TIF District. What that does is <br />relieve the pressure on the COIT and EDIT which is paying those costs right now. It <br />makes more money available in the General Fund to help pay bills for the City. He stated <br />that the City of South Bend can do what the City of Mishawaka did in providing some <br />relief to city residents by utilizing the TIF dollars. Recently, the City of Mishawaka <br />reduced their water bills to their residents by 1.7 million dollars a year by using capital <br />costs incurred in the TIF. He stated that he believes that the City could enter into an <br />agreement for a provision of services with the Redevelopment Department or perhaps the <br />City could contract with the Redevelopment Department to provide PILOT’s (Payments <br />in Lieu of Taxes.) All of these are ways to make dollars available to the general fund for <br /> 7 <br /> <br />
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