FORT WAYNE – Fort Wayne will use the remaining cash it received from the states multimillion-dollar accounting error to help pay for the backbone of a new emergency radio system.
The City Council on Tuesday unanimously approved using $4.2 million in income tax revenue to pay for half of a new radio system for emergency responders. Allen County will pay for the other half, while each government will purchase its own physical radios to be used with the system.
The council also formally approved a plan to finance $5.6 million for 1,604 new emergency radios over seven years after giving the proposal a preliminary OK last week. The annual costs will be included in the citys annual general fund operating budget.
Valerie Ahr, deputy city controller, said the use of economic development income tax money for the radio system essentially drains all the money the city received from a state error. State officials in April said a programming error cost local governments $206 million in local option income tax revenue in 2011 and early 2012, meaning $15.6 million in unexpected revenue will flow to governments within Allen County this year. Of that, $8.5 million will go to Fort Wayne.
The council previously approved $3.5 million in county option income taxes for road work and $1.5 million in county economic development income taxes for ash trees from the error pool. Ahr said cash reserves will cover the remaining costs of the radio system.
The city will have about $1.1 million in CEDIT cash at the end of this year, she said, after projecting to have $1.4 million in the budget.
Mayor Tom Henry previously said he was wary of using all of the money while the state audits its books. He also said he would like to use $420,000 of the error money for gateway improvements.
Future errors could be discovered that might cost the city money, said City Councilman Mitch Harper, R-4th. He questioned how such a situation would be handled.
Ahr said any money owed to the state would likely be paid over the course of several years through reduced payments made from the state to cities and counties.
She said there was no concern the state would require any payments be made immediately.
That would break just about every city, she said.
The radio project will cost both local city and county governments $17 million combined to update the system that is used to respond to 911 emergency calls. The radios are to be delivered by the end of the year.