GARY — A group of city council members Tuesday discussed total elimination of the community's contribution to the proposed South Shore rail extension and possibly joining other communities in any legal battle over the issue.
There was no action taken Tuesday and council members attending the meeting talked about having an executive session prior to the next regular council meeting to further discuss their legal options.
Mayor Karen Freeman-Wilson attended the meeting and expressed support for a reduction if legally possible. She and council members talked about the dire financial straits the city is in as the reason for reducing their contribution.
"If it's legally possible I do support some level of reduction right now in the absence of some type of assistance to the city of Gary," Freeman-Wilson said after the meeting.
She said there are conflicting opinions about whether they can legally reduce their commitment to the South Shore railroad and she has asked the city's corporation counsel to weigh in. Freeman-Wilson expects that opinion to be ready prior to Tuesday's council meeting.
Freeman-Wilson said she is also looking to see if the city can get some relief from the Indiana General Assembly to assist the city's financial situation.
Councilwoman LaVetta Sparks-Wade last week brought forth the resolution to reduce the amount of money Gary has pledged to the West Lake Corridor extension project from its share of the County Economic Development Income Tax.
In June, 2015, the council by a narrow vote approved contributing 7.5 percent of its share of CEDIT money to the project. The new resolution speaks of reducing the contribution to 5 percent. For calendar year 2017, such a reduction would cut the annual contribution from $347,308 to $231,538.
At Tuesday's committee meeting, several council members talked about eliminating the contribution entirely, although Freeman-Wilson didn't want to go that far. She said the city, however, is in a totally different financial position than when it made the commitment.
"Our financial situation is very dire," said Freeman-Wilson outside the meeting. "And while I wouldn't like to see it (the contribution) zeroed out I can see reducing it substantially."
Sparks-Wade noted that an amendment to a Senate Bill appears to allow for the State Treasurer to automatically take out money committed for such projects. Freeman-Wilson said while that is the case, she questioned whether that action would be legally enforceable.
Earlier this month, the Merrillville Town Council, citing financial reasons, voted to reduce its annual pledge from 22 to 8 percent.
U.S. Rep. Pete Visclosky, D-Merrillville, said after Merrillville's vote the reduction would be overturned in court.
On Tuesday, Freeman-Wilson told council members there is an opportunity to join with Merrillville if there is litigation. There was also discussion at the committee meeting that perhaps other communities might be interested in joining in such a battle.
John Parsons, a spokesman for the Northwest Indiana Commuter Transportation District, said earlier Tuesday that the CEDIT money is a critical part of the entire financial package for the West Lake extension. The other three pegs of the financing package, he noted, are money from the federal government, the state and the Northwest Indiana Regional Development Authority.
Visclosky issued a statement after last week's Gary council meeting that contended the "initiative to address each community in Lake County and request their participation in the rail extension and recapitalization was done in an open and transparent manner. The communities that participated entered into an Interlocal Agreement that has allowed NICTD and the RDA to pursue federal and state dollars to design and submit for funding approval to build the South Shore Rail Line West Lake Extension.
"This project will return hundreds of millions of our federal taxes to our region and direct $180 million of our state taxes to Northwest Indiana. I understand the fiscal concerns municipalities face, which is why I am a strong proponent of investing in our region to create new economic opportunities for current and future residents.”