Withdraw of money will prevent tax hike but is only a stopgap solution
COATESVILLE – The City Council reversed itself and voted in favor of borrowing $1.4 million from a trust fund in order to cover various city expenses for the rest of the year at its meeting, Monday night.
City Council voted against borrowing the money earlier in the month, but the absence of two members and the remaining members being split left the decision at 3-2. Council voted again this week with council voting 4-3 to borrow the money. Per regulation, the issue needed this four-vote majority in order to become finalized.
After much discussion at both meetings, Council was still split, with some members seeing the withdrawl of the money as necessary, while others wanted to look for alternate ways to cover city costs and use the trust fund money on commercial projects that could bring more income to Coatesville.
“It was understood way back when that at some point in time, money would be asked for,” City Manager Kirby Hudson said, referring to the December meeting in which they voted on the city’s budget.
City Council President David Collins said that they understood that while drafting the 2013 budget, they understood that the city would not be able to pay for the year’s expenses and borrowing from the trust fund was their contingency plan all along.
Council Member Jarrell Brazzle voiced his concern that they were heading down a slippery slope of borrowing trust fund money until none is left.
“What’s going to happen is, every year, we’re going to ask for more money,” he commented. “Where do we stop? Where do we say ‘no more’?”
Council members also discussed the possibility of raising taxes to cover city costs but some members were opposed to doing so without residents seeing any immediate benefits.
President Collins said that in order to prevent further borrowing or raising taxes, the city will have to find ways to generate revenue.
“There have got to be more than just two alternatives out there. So that’s left up for the administration to come up with that,” he stated. “I don’t want to put the administration in a box by throwing out an idea.”
Hudson clarified that the expenses in question were costs of running the city.
“This has nothing to do with frivolous expenses by the administration,” he said. “Every year, tar, salt, street light costs go up.”
In another contested decision, council members voted 3-3 on whether or not to defer payments to a $7 million loan given to the city’s Redevelopment Authority from the city.
The Redevelopment Authority, responsible for various projects around the city, such as renovating the train station and the potential velodrome was adversely affected by the economic downturn and therefore cannot afford to repay the city for the money borrowed.
If the city decides not to allow deferment, they could claim the Authority’s property and sell it, but that runs the risk of not gaining back the full amount of the loan. Also, because the RDA is not technically run by the city, it is able to develop projects that the city would not be able to work on.
Residential and light commercial development on former heavy industry land in Coatesville is made possible by a zoning overlay. The land is still zoned for heavy industry and the zoning overlay makes it possible to build a velodrome, restaurant, office building or condominium. The RDA can make a plan for a development site such as the “Flats” or former Carlson Steel Company property and make sure that developers follow that plan. The city is required by law to sell it’s property to the highest bidder. Back in 2007 when Harry Wslker and Andrew Lehr were negotiating with Florida Power and Light at the Whip Tavern to build a gas fired electric power plant on the “Flats” the RDA owned the property as they do now. If the city owned the Flats in 2007 we would have a gas fired electric power plant in the center of Coatesville.
The reason developers were at all interested in Coatesville was the opening of industrial land that once decided Coatesville in half to residental and commercial development.
If the City and not the RDA owned the Flats the power plant would have been constructed. And I am certain that Don Pulver would have given up on the Coatesville Martiott Courtyard and office buildings that he intends to build between the hotel and Lincoln Highway. The possibility of the redevelopment in Coatesville would have disappeared. And for decades the primary business in Coatesville would be supplying illegal drugs to Chester County.