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By design, $75 million 'Legacy' fund hard to access

Wednesday, October 24, 2012 - 7:50 am

Al Gore famously declared that, if elected president, he would put entitlements in a “lockbox” – and city officials might like to put Fort Wayne's $75 million “Legacy” trust fund in one, too.

Mayor Tom Henry and City Council each could veto the other's plans for the fund – created from the lease and sale of the old City Light utility – under a set of guidelines meant to protect the money at all costs from hasty spending.

Council members and officials with Henry's office debated a proposed ordinance Tuesday that would set ground rules for the money ahead of next week's informal “fifth Tuesday” meeting, where the mayor will present council with his Legacy plans.

Council tabled the ordinance for two weeks but settled on several key points. For example, any spending from the trust – which is split into two separate funds – would require approval from both the mayor and a 6-3 “supermajority” of council.

“We have no problem setting a high standard for both funds,” Deputy Mayor Mark Becker told council members.

The ordinance, which was written by Henry's staff, originally required supermajority approval to spend from the $30 million trust fund comprised of lease payments from Indiana Michigan Power to the city. But it called for only a simple 5-4 majority for the smaller $17 million fund.

The smaller fund is expected to grow by nearly $30 million through 2025 as I&M continues to make annual payments to the city under the terms of a recent settlement for the City Light utility's remaining assets.

Council also approved an amendment by Council President Tom Smith, R-1st, that would allow both the mayor and council members to bring forward proposals for the money. As originally written, the bill appeared to give the only the mayor power to initiate action on the funds, leaving council to simply say yes or no to his ideas.

Councilman John Crawford, R-at large, wanted to delete a provision in the bill that outlines a set of “guiding principles” for the money, but his amendment failed. He argued that the guidelines – which call for the money to go toward only bold “transformational” projects – would needlessly tie council's hands.

Tim Haffner, the mayor's chief legal counsel, said the principles were meant to serve as general guidelines and provided city officials with wide latitude to use their best judgment.

“Any time you want to set a long-term strategy, you ought to be guided by something,” Haffner said.

Council endorses 2013 budget

Also Tuesday, council unanimously endorsed a 2013 city budget of about $174 million -- including a little under $140 million supported by property taxes.

Mayor Henry's spending plan originally included a 5.7 percent property tax increase to make up for a budget gap of about $6 million, but council combined more than $1 million in spending cuts with money from the city's cash reserves and interest from the Legacy fund to close the gap without raising taxes.