News From Terre Haute, Indiana

December 7, 2012

Mayor asks Council to help with deficit

Money transfer would help balance General Fund

Arthur Foulkes
The Tribune-Star

TERRE HAUTE — Mayor Duke Bennett is urging the Terre Haute City Council to make three big ticket transfers to bring the city’s “general fund” into balance by the end of this year.

The mayor asked the nine-member council to move approximately $7.7 million into the city’s critical general fund at Thursday night’s council “sunshine” meeting.

The transfers would come from three sources: The Economic Development Income Tax fund ($2 million), the “rainy day” fund ($3.5 million) and from the city’s Waste Water Utility in the form of a “payment in lieu of taxes,” of PILOT ($2.189 million).

At the start of this year the general fund, which pays for most of the city’s day-to-day expenses, was $4.5 million in the red. If all three transfers are approved, the city will end 2012 “really close to finishing the year with minimal loss or break even,” Bennett said.

Speaking after the meeting, Councilman Neil Garrison, D-5th, said he believes the council is “more than willing” to help deal with the deficit. He added, however, that the council would prefer to know well in advance in the future when such measures are needed.

Some council members also questioned using Economic Development Income Tax (EDIT) dollars for ordinary city expenses. Bennett said the EDIT money in question came from an unexpected disbursement from the state and is “excess money.” He also noted that state law now allows EDIT dollars to be spent in virtually any way a city wishes.

Still, Garrison said he worries using EDIT money for a non-economic development project sets a bad precedent. “I know it’s legal, but that’s not how [EDIT] was sold to taxpayers,” he said.

Councilman Jim Chalos, D-at large, also said he worries about using EDIT dollars for the general fund since EDIT money can help draw new business to the community. “That’s an extremely important fund,” Chalos said.

Between $2 and 3 million will remain in the EDIT fund after the transfer, if it is approved, Bennett said. “Our EDIT fund is in a very good cash position,” the mayor said. “We don’t propose to do this regularly.”

• Also Thursday, the council heard a proposal from Councilman Todd Nation, D-4th, to convert Cherry Street between U.S. 41 and North Eighth Street into a two-way street. Several city officials, citing safety, traffic, air quality and other concerns, urged the council to reject the proposal. Nation, however, said the idea would slow traffic on Cherry and would, by allowing access from U.S. 41 to the downtown, help businesses. Diann McKee, a vice president at Indiana State University, also urged the council to consider the idea.

As a possible compromise, Councilman John Mullican, D-6th, proposed ending two-way traffic on Cherry Street at North Seventh instead of North Eighth Street. That would address several of the objections raised, he said.

• Finally, the council also heard a request from Mainstreet Terre Haute, LLC, to vacate Fourth Street between Seventh and Eighth avenues near Union Hospital. This would allow for the construction of a large, new, senior care facility at the site of Memorial Park and the Second Christian Church. There were no objections raised to that proposal.

The council could vote on these and other matters at its regular meeting, Thursday at 6 p.m. in City Hall.



Reporter Arthur Foulkes can be reached at (812) 231-4232 or arthur.foulkes@tribstar.com.