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Republicans question using TIF money for new DEI post

Elkhart City Council members are questioning the use of TIF revenues to fund a position for Downtown Elkhart Inc.

Posted on Dec. 17, 2013 at 12:00 a.m. | Updated on Dec. 17, 2013 at 6:59 p.m.

ELKHART — An Elkhart city councilman and other Republican colleagues are questioning plans by the city to fund a new position for Downtown Elkhart Inc. with money from tax increment finance revenues.

DEI, which has not had any paid staff for at least two years, tentatively plans to hire Dan Boecher as executive director.

DEI’s expansion coincides with the establishment of three new positions at Lerner Theatre that will be used to carry out initiatives outlined under the SoMa plan that aims to revitalize Elkhart’s downtown.

On Monday, Dec. 16, councilman Brian Dickerson questioned the city’s plan to use TIF dollars for the DEI position during a city council meeting.

The argument boils down to this:

City officials chose to forgo plans to fund the new Lerner positions with TIF revenues after criticisms from Republican council members and advice from the state board of accounts.

Republicans argue TIF money should be reserved for bricks-and-mortar type economic development, not for city staff salaries.

Dickerson said he believes the same outlook should apply to DEI, which is a quasi-government organization that focuses on improving downtown.

DEI’s role is changing under the emergence of SoMa and will focus more on downtown development and real estate issues, while oversight of the jazz festival and ArtWalk will shift to the new SoMa positions.

Last week, the redevelopment commission and Lerner governing board approved a contractual services agreement for DEI that provides $125,000 in TIF funds that will be used to cover the new position and other expenses for DEI.

DEI’s board of directors is expected to consider approving the contract Wednesday morning, Dec. 18.

Dickerson called the plan a “highly inappropriate use of TIF funds.”

Council member Mary Olson said she had a “ton of questions” about the plan and expressed concern that appointed boards that lack direct accountability to voters are deciding how to use large sums of tax money. Fellow Republican David Henke called the plan “very alarming.”

Dickerson said he believes the DEI board should have the issue reviewed by the state board of accounts beforehand and encouraged council members to contact DEI board members to oppose the funding plan.

DEI President Mike Huber did not attend the meeting, but defended the plan Tuesday.

Huber drew a distinction between TIF revenues being used for city employees and those of third-party organizations and compared it to the funding arrangement used by SoMa when it hired a company to help research its long-term plan for the downtown.

Huber also noted that a letter from the board of accounts that advised against using TIF money for city salaries made a similar distinction.

Charlie Pride, a supervisor with the board of accounts, confirmed a distinction exists. He pointed to a section of state code that says TIF monies could be used to cover “supervisory expenses related to the acquisition and redevelopment of the property,” but declined to issue an opinion.

“We’d have to look at it in an audit situation and see exactly what this person does,” Pride said.

The $85,000 salary being set aside for the position also drew the ire of Dickerson, who noted it exceeds the pay level of the mayor and called it an expansion of government spending “beyond what the city of Elkhart can justify. It’s irresponsible in my opinion.”

Huber said the salary level was based on what they found other communities are paying for similar positions.

Huber said he and Boecher would be reaching out to council members to discuss the issues.

He said SoMa organizers have sought public feedback at every point and never received any calls of concern until Tuesday.

“I respect the questions certain council members were raising last night, but I want to reiterate that this has been an open process from the beginning,” Huber said.

He said it was unfortunate that Boecher’s name surfaced before he was formally hired.

Boecher formerly worked as the economic development director for the city of Elkhart. He’s also a former president of DEI and has been involved in the Horizon education initiative as well as the SoMa planning committee. He’s employed with Lake City Bank as a commercial loan officer and is an assistant vice president.

Boecher said Tuesday he preferred not to comment on concerns aired at a meeting he didn’t attend.

“At the end of the day, I just want people to (make) an honest effort to understand what we’re trying to accomplish here,” Boecher said. “I hope we’re able to get past this quickly.”

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