Marion City Council members are attempting to obtain millions in excess tax increment financing revenue for the city’s General Fund, though the way it’s attempting to do so is putting itself in murky legal waters.
The council, on a 8-1 vote, choose Tuesday to take “oversight” of the Marion Redevelopment Commisison and to revoke a resolution passed by the commission in 2005 that stipulated TIF revenue from the then-to-be-built Dollar General distribution center be collected and held by the Redevelopment Commission to make sure at all times enough TIF revenue is available to make two bond payments. According to Council Attorney Phil Stephenson, the 2005 resolution also stipulated all of the excess TIF revenue be held as a cushion just in case there’s a future shortfall in paying off the debt.
Members of the city’s Compliance Committee, which includes Councilman Steve Henderson and Dave Homer and Councilwoman Lynn Johnson, want the city to exercise its right given to it by the State of Indiana to capture excess TIF revenue if the TIF revenue collected in a district is 200 percent more than what’s needed to pay of the annual debt service. According to Johnson and documents provided Tuesday, the bank trustee for the bond, Regions Bank, has nearly $3 million it has set aside as being excess TIF revenue that is waiting to be claimed either by the city or Dollar General.
Johnson, Homer and Henderson proposed at the beginning of the council meeting to revoke the 2005 resolution and begin the process of acquiring the excess revenue, which would amount to collectively around $2.5 million for the city and other affected taxing units this year and potentially millions more for the foreseeable future.
The request sent the Tuesday meeting into a frenzy.
Johnson, Homer and Henderson didn’t have a written resolution of their request for the council and public to see and for the city clerk to have, prompting the council to have Stephenson write up a resolution on the spot using an upstairs computer in City Hall.
Councilman Alan Miller criticized the spontaneous nature of the resolution since Tuesday was the first time many council members and general public had even heard of the excess TIF revenue and questioned what the hurry was to pass this new resolution. Johnson told Miller that if the city doesn’t act to claim the excess TIF, Dollar General could request it. Miller was the sole “no” vote.
There’s also the question of whether or not the council is able to revoke a resolution passed by a different body.
State law gives the council “oversight” of the redevelopment commission, but Stephenson said the law is unclear what exactly that entails.
If there’s excess revenue of 200 percent or more, state law says a redevelopment commission must report that fact to the council by June 15. That hasn’t been done in at least the past two years, according to council members, and that, along with the commission not meeting regularly, has angered some council members, including Homer, Johnson and Henderson. The resolution, they say, is a way to force the issue and do what the commission has not or doesn’t know it can do. The three have also asked Stephenson to research if the council can take over some of the responsibilities given to the redevelopment commission.
After more than an hour of discussion, the majority of the council expressed support of the proposed resolution because if it meant there was a chance the city could collect millions of additional revenue and not have to consider raising taxes, raising residents’ utility bills to bring in much-needed revenue or make personnel cuts in the future, then it’s worth it.
The worst-case scenario, Henderson said, is the city is not able to collect the money and, instead, the excess revenue is used to pay off the bond debt at a faster rate than originally planned.