ELKHART — A plan to merge four tax increment finance districts in the city of Elkhart will face a vote by city council on Oct. 21.
Council members had their third opportunity to discuss details of the merger on Thursday night, Oct. 10, during a special meeting.
The merger involves four districts on the south side of the city: two that are side-by-side, the South Main and Sterling districts, plus two others known as Pierre Moran district and the southwest industrial district.
All four would be linked by adding into the district a stretch of Hively Avenue that crosses through each area.
Also included in the plan are several parcels at the intersections of Benham and Hively avenues and Prairie Street and Hively for possible future street improvements to those areas.
A TIF district collects additional new tax revenues created from new growth and uses the revenues exclusively within that district for projects generally viewed as promoting economic development.
The city plan commission passed a resolution recommending approval of the merger and the redevelopment commission approved an initial recommendation following suit.
Much of the merger debate fell along party lines in all three of the meetings.
If council votes in favor of the recommendation, the redevelopment commission would finalize the plan.
In previous meetings, some Republicans voiced opposition to the merger and wondered if money from one district would be funneled to another district. Others said they opposed the philosophical use of TIF districts.
Crystal Welsh, director of community development, said the merger of the South Main district with the Sterling district makes sense because the two share a lengthy common border, part of which runs parallel to South Main Street.
Merging all four will allow for larger-scale studies and projects that could benefit a larger area, according to Welsh.
“The consolidation would allow for a larger plan area so that projects with real impact could be developed, and thus spurring significant development in southern Elkhart,” according to a summary prepared by Welsh.
Republican councilman David Henke said he’s philosophically opposed to TIF districts because the districts benefit a small area of the city at the expense of other parts of the city that lose out on the potential use of the tax money.
Henke estimated that the city, on average over the past five years, has collected about $4.5 million annually in TIF revenues. That represents about 9 percent of the entire city budget. He questioned whether that money could have been used in different ways that benefit more of the city.
Democrat Brent Curry said he believes the TIF districts have been good for the city and benefited parts of his district on the south side of town.
Ron Troyer, a Democrat councilman whose vote is often seen as a deciding factor, said he plans to support the merger.