By Jim Sack

PILOT is an acronym for “payment in lieu of taxes.” The premise is that City Utilities is a business and should contribute taxes to the polity as does I&M and NIPSCO, you or I. The business assets of City Utilities are assessed as your home is assessed and payment is made to city government. As the valuation and commensurate assessment of the assets increase through improvements or inflation payments also rise.

So, last night Kumar Menon, the director of City Utilities, smart and nattily attired, came to council to get his rate hike, some 40 percent over two years starting in 2013, but he never quite got past the second slide in his Powerpoint. Welcome to the new city council.

Peremptorily, council president Smith wisely chose to give we hoi polloi first crack at the issue in an informal public hearing. A short, very short line of citizens essentially said they saw the need, but felt the increase was steep. No one argued against the increase, just the size and the pace.

And, many of the citizens who spoke were already aware that Mr. Menon had come to council last night holding forth an olive branch – he announced the administration had found a way to stretch the increase over three years, rather than in two phases, 2013-2014, as previously outlined to council. The gesture was very well received by all members of council, as well as the citizen-speakers. Council had, in fact, asked for just that last week when the issue was first laid before them, a night when Mr. Menon was able to get all the way through a somewhat tedious Powerpoint, and a night when, to his chagrin, the issue was ultimately tabled. It was tabled again last night after a slew of questions and observations from nearly every council member and due to a procedural flaw.

The rub, the reason it was tabled… the time frame modification was not accompanied by the verbose legal language of the sort that would be found in an ordinance; so no language to vote. Tabled again to Mr. Menon’s growing frustration in the face of looming state deadlines and 50 costly main breaks a week.

But, before the matter was tossed back to the administration, Mr. Harper used the rather collegial discussion to raise one of his pet bugaboos. Mr. Harper’s reading of the city budget shows some $7 million in PILOT is paid by CU to the city each year which then goes into the general fund and used to pay for curbs and sidewalks and elevator maintenance. He feels it is an additional tax on the citizens of Fort Wayne and wants both to limit it and to have a bit more control over it expenditure.

In essence, Mr. Harper’s proposal, which will be heard next week in act three of The Tastiest Water in America, is that a cap be placed on how much of PILOT tumbles into the black hole of the great belly of the general fund to be churned with many other sources of funds and digested into concrete; and, further, to use any sum above some set amount, say the $7 million, to pay only for infrastructure repairs and maintenance. Given Mr. Harper is in the super majority on council and that his idea elicited little more than chin-scratching from the potential opposition the proposal is likely to be passed next week, or the week after. Last night council agreed to linked Mr. Harper’s bugaboo to the rate increase which the administration dearly wants, so administration leaders are unlikely to filibuster his proposal, his compromise, as it were. The administration wants the increase, but gave much on the terms of the deal, now Mr. Harper wants formulaic change and the administration has little option but to negotiate that point. And, in turn, Mr. Harper tossed the administration a bit of an olive branch of his own: he is not proposing cutting the current PILOT level, but rather capping it and using the surplus to reinvest in CU from whence it came. Hard to fight that.

Again, to be clear, no one denied the need to replace piping that was little more than high-grade junk when it was laid in the 40s and 50s. The increase is a foregone conclusion.

Next week, Mr. Menon, probably without his trusty PP, will be back, perhaps backed by the city attorney, the controller and an engineer or two to argue their points. The shift will be from the rate increase to the encroachment by council on PILOT. The arcane will become the esoteric.

A dozen other matters came up last night. Mr. Smith brought up the firing of Homeland Security director Bernie Beier. He wants the mayor to send someone down from on high to explain the rationale behind the withdrawal from the city-county agreement which results in Mr. Beier being adding to the ranks of the unemployed. The greater questions of city-county relations and of the future of the troubled Public Service Academy on the south side will really be the focus of that discussion.

Councilman John Shoaff used the rotting pipe discussion to rail against the sort of willy-nilly urban sprawl from the urban core that was subsidized then by sub-standard water pipes and other cuts of the corner. In short, he said, we are now paying dearly now through this rate hike for the quick profits and lackadaisical oversight of a previous generation. His admonition is now to look at every development proposal, each new sewer extension and each new road widening as potential detriments to our quality of life. We eventually pay, as was his point, for ill-considered growth, and growth is not synonymous with an improved in the quality of life.

Councilman Dr. John Crawford also noted that the redrawing of the district lines was moving along rather smoothly, without much political haggling and should be on paper and before council soon.

It should be added that the discussion last night was to the point and thoughtful, but not angry or personal in any way. The new members, Councilmen Russ Jehl, Dr. Crawford and Geoff Paddock, each succinctly added their two-cents, and, along with the veterans, managed a complicated discussion with restraint. Last night was a lesson in urban management at a post-graduate level rather then the third-grade spitefulness that hampered the previous council.

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This entry was posted on Wednesday, February 15th, 2012 at 10:19 am and is filed under City & County Government, Fort Wayne. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.