In an 8-1 vote Tuesday, the Fort Wayne City Council approved the creation of a study committee to examine the health and viability of the city's Legacy Fund.
The Legacy Fund consists of money generated by the lease and sale of the city's old power utility. The fund currently contains $33.9 million, city spokesman John Perlich said in an email late Tuesday.
A vote on a $500,000 request from Science Central for a new planetarium was put on hold while Councilman Paul Ensley and others sought answers to whether a $10 million commitment for the Electric Works development would be dispersed from the Legacy Fund this year.
“As we certainly saw with the Science Central discussion, we had a project that made it through the Legacy process as it is now and got to this table, but got stuck largely on not a question of the merits of the project, but on a policy question with regards to council's policy for Legacy,” said Ensley, R-1st.
Ensley and Councilman Michael Barranda, R-at large, sponsored the resolution.
“There are some of us I think that don't want to spend (the fund's balance) below $30 million, and there are some of us that are more comfortable with that,” Ensley said. “But the collective intentions of this group has not been clearly communicated to the Legacy Joint Funding Committee, and that's been an issue for at least a year now.”
The committee, which consists of the three City Council members appointed to the Legacy Joint Funding Committee, seeks to answer five key questions:
1. Should the City Council approve a grant or loan that takes the balance of the Legacy Fund below $30 million? Are there situations in which this is acceptable?
2. What should the role of the Legacy Joint Funding Committee be moving forward? It currently acts in a granting capacity. Should the committee have an advisory role, be a decision-making body, take on a fiduciary role or act in some other way?
3. Who should be on the committee? Is the current membership structure the correct makeup for the committee moving forward?
4. What is the proper role of the administration and staff in bringing projects before the committee? Are there different processes for loans versus grants? How should that determination be made?
5. Are the guidelines, as approved previously, still relevant and appropriate? Should the Legacy Joint Funding Committee further define “catalytic” or “transformational”? Have these definitions changed as the community has changed?
The three City Council members assigned to the Legacy Joint Funding Committee are Ensley, Barranda and Councilman Geoff Paddock, D-5th.
The group will make recommendations early next year, which Ensley said the council can use to produce guidance for the Legacy Joint Funding Committee moving forward.
Councilman Tom Didier, R-3rd, who previously sat on the Legacy Joint Funding Committee, said he noticed during his time on the board that the committee spent a lot of time worrying about what was in the fund itself.
“It was kind of frustrating,” Didier said.
Barranda said he's not sure that the study committee would make recommendations regarding what constitutes a transformational project. He said it would rather provide clarity about “what we ultimately want to see in the presentation before us” of potential projects to be funded.
“We're really looking for the substance of how something's brought before the committee, what their role is in analyzing it and how that comes before us,” Barranda said. “My goal is to certainly not weigh in on what projects X, Y, or Z should or shouldn't be.”
Speaking to the council, Stacey Smith, chairwoman of the Legacy Joint Funding Committee, said the study committee needs to address what constitutes the corpus, or base of funds that must remain in the Legacy Fund at all times.
“We need some more direction,” Smith said. “You guys need some more consistency to give us. How do we look at corpus; how is that defined, how is that decided?”
When the Electric Works money is withdrawn from the Legacy Fund, the remaining balance is projected to be at $23.5 million, Perlich said. Through additional payments from Indiana Michigan Power and interest earnings, the Legacy Fund is projected to rise above $30 million in 2021 and reach $52.3 million in 2025, assuming no additional projects are funded, he said.
“We've been good stewards of the fund and the public can be assured that Legacy is an asset that is here now and will continue to be in the future,” Perlich said. “By working together with residents, City Council and the Legacy Joint Funding Committee, we're committed to meet current needs, make sound investment decisions and maintain flexibility to be prepared to support future projects.”
Councilman Glynn Hines, D-6th, was the only council member to vote against the resolution.