Rockford City Council: Funding for The Element approved after reduction

• News and notes from the Aug. 9 Rockford City Council meeting

By Stuart R. Wahlin
Staff Writer

After weeks of delay, aldermen approved funding for The Element, a group geared toward downtown growth, but the allocation for operating costs has been cut significantly from the $75,000 originally requested.

After being sent back to committee, aldermen decided to reduce the funding to $60,000. When the request came back before the full council Aug. 2, Ald. Joe Sosnowski (R-1) successfully laid the matter over after a second from Ald. Pat Curran (R-2). When the measure returned for a vote Aug. 9, Sosnowski moved to reduce the funding amount to $50,000. Curran again seconded.

Citing a $10,000 deficit facing the upcoming On the Waterfront festival, Sosnowski suggested the money he proposed to trim from The Element’s funding request could close that gap, which would otherwise come from the general fund.

“It’s still important, I think, at this point, if we can reserve some of that money, which I believe potentially can come from that TIF district, just as we fund The Element for activities such as movies,” Sosnowski explained, “I believe that On the Waterfront is also an activity in which can receive funding from a TIF district.”

Legal Director Patrick Hayes, however, said he was inclined to believe such a use of TIF dollars would not be proper, but that his department would look into it during the coming week.

Although it has been stated for some time that the funds would be allocated from the Seventh Street Tax Increment Financing (TIF) District, much to the chagrin of Midtown District President Jim Phelps, the funding source was not stated on the Aug. 9 agenda. When asked, the mayor and staff instead suggested the funds would come from the collective resources of the interconnected TIF districts in the downtown area.

Notably, however, the Seventh Street TIF District is the only one among them that has demonstrated any real success. Its reward for building a significant fund balance, Phelps has argued, is to be treated as a piggy-bank for other areas of the city, rather than to reinvest the dollars in the district that generated the revenue.

The city can legally funnel dollars from the Seventh Street TIF into an adjacent TIF district that may lack funds. Thenceforth, the funds can be moved into another adjacent TIF district, and so on, until the dollars land where they are needed.

Finance Director Andres Sammul explained, “The Element could be funded from the downtown group of TIF districts, which 10 adjoin each other, so you can designate it as Seventh Street, but in reality, they all join together, and we finance their activities according to who has financing available to fund expenditures.

“As we noticed in the last few years, some TIFs have been successful,” Sammul added. “Other ones have had difficulties, whether it’s the revenue generation that’s been estimated has not materialized, or projects have proved more difficult than anticipated. And so, just as in the city family, we move funds between funds, you can also move funds between adjacent TIFs. And at the end of the day, we do have to pay the bills that have been incurred in TIFs. And if adjacent TIFs have funding that can help that, then that’s certainly the thing we need to do, just as we did last year, and we will do this year, and will do in future years.”

Despite the suggestion that The Element’s allocation comes from several TIF districts, which the mayor and staff could not specifically cite during the meeting, Phelps maintains the entire allotment for the downtown group came at the expense of Midtown.

“Once again, the Seventh Street TIF is the resource for non-necessary amenities and special projects that have absolutely no gross return on investment returning to the Midtown District,” Phelps responded, arguing the vote was a far cry from the fiscal conservatism aldermen should be exercising during poor economic conditions. “It is truly a sad day for democracy when our city and city council continues to undermine the generations-long commitment to Midtown’s development at the expense of appeasing a small section of Rockford’s creative class with this farce of bread and circuses for the people.”

At least one alderman also questioned the merits of raiding one TIF district for the benefit of another.

“If monies come out of one TIF to go to another, I mean, is that just obvious that that particular TIF is going to be short that for doing projects in that area?” Ald. Frank Beach (R-10) wondered. “Philosophically, I have a very difficult time just moving money from one TIF to another TIF. I thought they were supposed to stand on their own two feet.”

Asked to explain to the council the intended purpose of TIF dollars, Community Development Director Reid Montgomery responded, “TIF districts are basically to improve blighted properties.”

Others, including aldermen Linda McNeely (D-13) and Ann Thompson-Kelly (D-7), noted the information presented to aldermen specifically stated the funds would come from the Seventh Street TIF District.

“After negotiations with the committee and Ald. [Karen] Elyea [D-11, whose ward includes the Seventh Street TIF], [she] had no objections to the dollars coming out of the TIF,” Thompson-Kelly reported. “In the past, it did come out of two different TIFs, and the discussion was that, this year, it was going to come out of the TIF in the Seventh Street area. …That was the agreement at the committee level.”

Mayor Larry Morrissey (I), however, restated assertions from staff that the funding comes from multiple, “cross-collateralized” TIFs.

“When we’ve made commitments and various obligations…especially when they’re cross-collateralized, we’ve done what we’ve needed to do to keep our commitments,” the mayor said.

Sosnowski’s amendment was ultimately approved in an 8-6 vote. Aldermen Venita Hervey (D-5), Thompson-Kelly, Bill Timm (R-9), Beach, Elyea and McNeely voted against the $10,000 funding reduction. The amended motion prevailed by a similar roll call, but with Elyea voting “aye” to approve the $50,000 for The Element.

The matter still faces final approval as an ordinance.

Aldermen to vote whether to give Valdez additional duties without a raise

Ald. Carl Wasco (D-4) has asked that a vote be taken during the Aug. 16 meeting that would approve the appointment of Deputy City Administrator Julia Valdez to also oversee the Human Resources Department, but without a salary increase for the additional responsibilities, unless specifically approved by aldermen, at least until the 2011 budget has been passed.

The $124,000 HR director position has been open since the departure of Jessica Jones last month. Mayor Larry Morrissey (I) has proposed that Valdez, whose present position pays $80,000 annually, take on the additional duties for an additional $34,000 per year.

Resolution

• Agreeing to work cooperatively with other area municipalities to develop a sustainability plan in an effort to strengthen the region’s chances of obtaining federal grants.

Committee reports

• Awarding a $977,023.98 contract to H&H Electric, of Franklin Park, for 87 lighting units along Kishwaukee Street, between Harrison and First avenues.

• Authorizing the fire chief to bid up to $250,000 for a used pumper truck.

• Awarding a $9,268 bid to N-Trak for the demolition of 414 Oakley Ave. Northern Illinois Service was awarded $13,997 and $11,863 for demolitions of 509-511 Palm St. and 966 N. Court St., respectively.

• Awarding a $36,872.34 sole-source contract, payable through federal grant funds, to Mid-City Office Products, of Loves Park, for furnishings and related labor for the Human Resources Department.

• Approving a development agreement with JMZ Properties for TIF assistance of up to $47,290 from the East Side TIF District. JMZ is rehabilitating a building at 110 N. First St. The measure still faces approval in the form of an ordinance.

Public comments

Jerry Dalsanto supported the possibility of the city implementing a utility tax in the name of sparing cuts to public safety.

Dr. Robert Pfluger provided a history of how the banking and Federal Reserve systems began, to be continued during presentations in the weeks to come.

Garry Kohley spoke in support of the media’s efforts to bring information to the public regarding the city’s budget woes, specifically with regard to police and fire personnel.

Prophet Yusef encouraged parents, students, teachers and public officials to work together to reduce the dropout rate of African-American males.

Proclamations

Aug. 14 was proclaimed Honoring the Mounds Day and Paint-a-thon Day. The week of Aug. 9 was proclaimed Paint-a-thon Week.