Should redevelopment funds pay for Portage's daily expenses? issue debated

2013-12-21T18:20:00Z 2013-12-21T20:24:48Z Should redevelopment funds pay for Portage's daily expenses? issue debatedJoyce Russell, (219) 762-1397, ext. 2222

PORTAGE | For the last several years, the city has approached the Redevelopment Commission for financial assistance. The commission has usually complied.

Mayor James Snyder has proposed a more formal contribution from the commission to help pay city expenses. He floated the idea last week for the commission to contribute $457,000 from its general fund to pay for several items, including adding an additional police officer and firefighter, to paying for paving and the city's newsletter as well as  providing discretionary funds for the community development department.

It's being met with mixed reviews.

The Redevelopment Commission, while a part of the city, is a separate entity. Snyder serves as chairman on the five-member commission. It has its own revenue sources and budget, separate from city funds which are controlled by the City Council.

Within the Redevelopment Commission are two funds. The allocation fund derives its revenue from property taxes paid within the allocation or tax increment financing district and has restrictions on how it can be spent.

The commission also has a general fund.

The general fund, explained economic development consultant John Shepherd, is like an endowment. It was created prior to the city creating a TIF district. Revenue back then came from the sale of property and grants.

The revenue today for the general fund remains limited to any sale of commission-owned property and lease payments from land or buildings owned by the commission. No property taxes are contributed to the general fund.

The current balance of the general fund is slightly more than $400,000. So far this year, it has seen revenues of nearly $1.2 million, but $605,000 of that came from the sale of property. The commission has spent slightly more than $923,000 of the general fund so far this year.

Snyder told the commission the city's budget continues to be tight and that there are no requirements that the RDC general fund money be spent within the allocation district.

He suggested that officials stop looking at the various entities within the city as separate units, but to look at them all together and that their funding should be placed in one bucket.

Snyder had suggested 10 percent of the RDC's general fund be set aside for equipment because 10 percent of city roads are within the TIF district and are patrolled by police and plowed by city trucks.

"I can't philosophically agree with that," said RDC member Susan Kelly-Johnson, adding that RDC money is suppose to be used for redevelopment, not support the city's day-to-day expenses.

Member Steve Nelson also issued a concern.

"We've been doing that quite a bit," said Nelson about providing funding for city expenses. He added that if the $457,000 were a top amount, he might agree. He didn't, he said, want the city to keep coming back for more and more funding.

Clerk-Treasurer Chris Stidham also issued some concerns about the idea.

"To say the city budget is under distress is not accurate. We are in a good position. We're not flush by any means, but we're not destitute," he said.

Stidham said he doesn't believe some of the issues were accurately portrayed.

Snyder said during the meeting last week, when defending the idea of paying for equipment, that various departments' 400 budget categories for equipment were empty.

Stidham said, while that is true for equipment funds in the general fund, the city has been able to purchase equipment through its EDIT funds.

He also issued a concern with depending on the RDC's general fund for recurring expenses such as police and fire personnel.

The income to the RDC general fund is not guaranteed from year to year, said Stidham. It it is not replenished, it could be depleted, leaving no funding for extra personnel.

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About Portage

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6070 W. Central Ave. Portage, IN 46368
(219) 762-5425

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2693 Irving Street Portage, IN 46368
(219) 762-3122

Fire Department
3401 Swanson Rd Portage, IN 46368
(219) 762-7404

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6240 U.S. Highway 6 Portage, IN 46368
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