City Council considering guidelines for Legacy funds

FORT WAYNE, Ind. (WANE) – Some city leaders are ready to set hard guidelines for how Legacy money should be spent. So far, a little more than $25 million of the $79 million of Legacy money has been allocated.

Legacy funds come from two sources. The first is an agreement between the city and Indiana and Michigan Power, called the City Light Lease Settlement. Under the terms, I&M is scheduled to pay the city $39.2 million over 15 years. The final payment is set to come in 2025.

“We set aside funds for transformational projects,” said city spokesperson John Perlich.  “They’re projects that are going to make a very big impact on our community.  Projects not only for this community but for generations to come.”

However, more and more groups have been putting out their hands, asking for a piece of the pot.

“More requests are coming our way that go far beyond some of the areas we originally approved,” Councilman Tom Smith said.  “Everything needs to be fine-tuned.  I think it’s very important that we setup hard, firm, fast guidelines.”

The latest request came at Tuesday’s council meeting.  City Controller Pat Roller requested $5 million that would be used only for emergencies in her office.  Roller could spend the money when she needed to, without council’s approval, but would have to repay the loan, at an interest-free rate.

“This reserve would give me at least some access to additional dollars if something were to happen that was unanticipated,” Roller said to council.  “Cities have to react to unanticipated difficulties, usually weather related.”

Roller said part of the reason for the request was because Circuit Breaker, gas, LR&S, and CCDF taxes were below what they were projected.  In all, it was about a $2.8 million loss in city revenue.

Council voted the request down.  Only councilmen Geoff Paddock and John Shoaff voted yes.

Council’s decision surprised Perlich.  “We don’t anticipate on using it, but it would be there as a safety for us, in case a catastrophic event happened in our community,” he said.

“I think you would probably be better if you took a difference approach,” Councilman Tim Didier said.  “I don’t think in the 10 years I’ve been on council we’ve ever denied you when you come down here.  We’ve always said okay.”

“This goes against, I think, what the state has in terms of accounting and particularly after Fort Wayne had the largest tax increase in its history,” councilman Mitch Harper said.  “It seems odd to be coming back and looking at changing the Legacy fund fundamentally for what it was designed to do, which was to be preserved for future generations.”

“I’ve never agreed that Legacy money should be used for our operating cost,” Smith said.  “Our City Controller, who is a fine person and I trust her completely, yet, she would have full power to make the decisions about who gets that Legacy money.  That goes contrary to everything we’ve ever attempted to do with Legacy.  We’ve always been open, transparent and involved the community.  Council should always have the decision-making power of how Legacy money is spent.”

Several councilmen said they’d like Roller to make a similar request once guidelines have been established.  Guidelines could be brought up by council later this summer.

“When people want to apply, they know in advance, shall we say, the hoops they’ll have to jump through that are fair to them,” Smith said.  “This money is money of the last resort.  If you come to us for money, the city or the community, you have to have a very good project and the need must be there.  Not every project will be super-duper transformational, but some projects will be very good.  Whether they are big or small.  I want to have the best possible guidelines to guide people and what this money can be used for.  Then when we measure their requests, and evaluate it, we have better information than we’ve ever had before.”

Click here to learn more about how Legacy dollars have been spent so far.

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