City council to review annual abatement paperwork

City council will host two meetings to review compliance paperwork for companies receiveing tax abatement.
Posted on June 25, 2012 at 1:00 a.m.

Editor's note: This article previously gave an incorrect meeting time. Both Monday and Thursday's meetings start at 6 p.m.

ELKHART — City Council will meet twice next week in special session to review annual tax abatement agreements for 19 companies.

The meetings are set for Monday and Thursday and will begin at 6 p.m. at council chambers and come one week after council approved a new policy for reviewing tax abatement forms for individual companies.

The new policy, sought by Mayor Dick Moore and economic development director Barkley Garrett, no longer requires companies to appear before council when submitting annual paperwork during the first two years of the abatement agreement. Companies are also exempt from appearing before council if the company has reached or exceeded a 95 percent level of compliance in meeting projections for jobs, wages and investment stated in the original abatement agreement.

The so-called grace period during the first two years was established because companies are often still in the midst of expansion and often don’t meet the 95 percent threshold.

The change in policy was an attempt to assure the city is acting with a business-friendly approach.

Garrett said requiring all companies to appear before council was often cumbersome for himself and the companies to work out a time for the meetings.

Some opponents to the idea suggested the chance to meet with company representatives was important, especially since council is responsible for validating the figures provided by the companies.

As a result of the new policy, eight companies won’t be required to send a representative to appear before council.

Garrett said some of the companies had already expressed appreciation for the policy change.

Garrett noted that other surrounding counties have a similar policy.

The measure was supported by the finance committee prior to council’s review.

After some debate last week, city council approved the policy change by a 6-3 vote. Republican councilman Kyle Hannon joined five Democrats in supporting the change. Those opposing it were Republican council members David Henke, Mary Olson and Brian Thomas.

Abatement compliance forms must be approved annually by June 30.

The annual meetings give council a chance to hear an update from the companies about how their expansion plans are progressing before voting on whether to continue the abatement agreement.

Garrett said it is not that uncommon that some companies have not achieved full compliance.

Most of the 11 other companies required to appear before council were probably just short of meeting the 95 percent compliance standard for jobs, wages and investment, Garrett said.

Rarely has council taken action to revoke an abatement agreement because the company was found not to be in compliance, he said.

State law stipulates that an economic downturn or other events outside of a company’s control are not a sufficient reason for a government body to revoke the benefits of an abatement agreement.

“In 2010, 2011, there were lots of companies missing their projections, but it was not because they were doing anything improper, illegal or immoral. It was because the economy took over,” Garrett said.

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