07-13-09 Common Council Minutes - Laserfiche WebLink

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REGULAR MEETING JULY 13, 2009 What is it about those 89 counties that allow them to operate their governments without reaching their property tax caps? In some cases it was a high local option income tax, in others it may have been the way they ran their government in the county, do they have less spending per capita, what is it in those other 89 counties to have enough growth in development whether it is business or residential to keep their caps below the 1%. He doesn’t believe they have all the answer to those questions. He questioned whether the City of South Bend has too many not-for-profits? He questioned whether the City of South Bend’s TIF Districts are too large? He stated that 40% of the square area of the city is in some sort of a TIF District. He stated that he is completely in favor of using TIF District for good economic development purposes, but some of the dollars that have been thrown at projects in TIF districts leave him concerned, because when you don’t have that money from the TIF District in the general fund it comes up short. He stated that if the city continues to do the same thing that it has done for the last 20 years there are not going to be a lot of changes. He stated that he wanted to clear up that the State only is allowing for local option income taxes to make up for the loss in revenue, however, there is another alternative. The legislature provided a Distressed Unit Appeals Board. It has been kind of given a bad name by one particular county who utilized it and now has far more problems than St. Joseph County has. He stated that St. Joseph County is not like them other than we have a shortfall in revenue because of the property tax caps. He stated that he believes using the Distressed Unit Appeals Board is the way to go. He stated that the economy goes up and down and we will come out of this economic recession/depression in the next five or ten years and income for people will grow. He stated that the shortfall is $22 million dollars, nobody disputes or denies that figure that is the difference between what the property tax caps did. The Mayor set the bar at $16.5 million dollars, and the City can allow property taxes to reduce at a slower rate over the next five or ten years and allow the economy to grow to fill in the gap. It won’t happen fast and it isn’t easy, but it allows that $16.5 million dollar short fall if it is granted by the Distressed Unit Appeal Board to cut the losses, let the county go and to rethink some things and the most important thing about this is that once this tax is adopted tonight it is highly unlikely that it will ever be lowered, rescinded or decreased. He stated that if the City took the Distressed Unit Appeals Board they would come up with a plan every year, present it, and one of the best things is that there is a third party who would look at it and has no reason to make a judgment other than does it make sense. As the economy grows then the City is back to where it was. He stated that is unpredictable, but by letting a third party look at it and if that third party looks at it and thinks that this is good or suggest that is a bad decision, it would alleviate some of the distrust that has been associated in government. He stated that this would be a good procedure to have in place to hold the government’s feet to the fire and be accountable. He stated that in his fifteen years in office, every five years they revisit the tax issue because there doesn’t seem to be enough money. He stated that the Distressed Unit Appeals Board won’t make taxes any less, but it allows the City to grow out of it in an organized fashion rather than one $16.5 million dollar swoop. He stated that the City needs the $16.5 million dollars and he feels that it can be done through the Distressed Unit Appeals Board. Councilmember Rouse stated that he feels Councilmember Varner has brought up some points that deserve some discussions. He stated that if the Council would go to a Distressed Unit Appeals Board, there is some question of lowering the City’s Bond rating and credit. It’s like going and saying that the City cannot manage our City. He stated that he believes they can address that right now tonight, with the passage of a resolution that mandates the very same thing that Councilmember Varner is talking about along with one other point. He believes that Graham Richards has presented to the State of Indiana the High Performance Government (HPG) Network that says that we need to be more business like in how the City does business. He stated that with those caveats as well as the three resolutions that are relative to the South Bend Common Council and separate from the resolutions that the St. Joseph County Council has to pass, he thinks that those issues can be addressed tonight. Guaranteeing that the citizens of the City of South Bend should the economy turn around, that they have the mechanisms as well as by using the HPG Network mandated by this Council they can guarantee that they will be looking at ways to make it more efficient. He stated that they would actually be accomplishing two issues by addresses the issue that Councilmember Varner made 31