Muncie Watch

What a delightful gift I got the other day, a decorative yard ornament of sorts, which surprised me as I pulled toward my driveway. A conscientious citizen no doubt devoted to efficiency in government, as well as deeply interested in local public policy issues, had inserted a yellow sign into my property along the road, which, by the way, lies outside city limits. I admit, I had to laugh out loud.

“We support our Muncie firefighters,” reads the black lettering. Don’t all property tax payers? Of which I’m not one.

That’s part of the problem, I guess, and one has to wonder about what all’s behind this latest campaign, clearly aimed at winning over hearts and minds (as well as wallets) of, primarily, the city’s residents. If see lots of the signs well outside the city. An ardent PR campaign would not hesitate to go there. You’re trying to convince people that you have lots of support all over the place.

Yeah, yeah, I know my grass needs cut. Back to topic, though, I wonder if something more may be on the mind of Muncie firefighters that would include residents outside the city. Might the campaign be a prelude to another campaign, one that seeks to increase the Local Option Income Tax anywhere from half a percent up to 2.5 percent?

If firefighters can convince citizens that they — meaning the citizens, I think — can’t live with the property tax reductions, then the next step is to find more money from non-property tax sources, and the No. 1 source could be citizens’ incomes. That solution goes beyond the city’s borders, in part. Muncie leaders can’t raise the income taxes just of city residents. Local Option Income Taxes are levied on a countywide basis, so everyone in the county pays the same rate. But Muncie’s City Council alone can make the call. That’s because the majority of the county’s population resides inside Muncie city limits, which gives the City Council the majority vote on the Local Option Income Tax Council.

The LOIT Council is a “virtual” entity. It has 100 votes apportioned on a pro-rata population basis to the fiscal bodies of each city and town in Delaware County, plus the fiscal body of the county. So whatever the Muncie City Council decides represents more than 50 percent, and thus a majority of the members of that body make the final decision.

Is anybody thinking of hiking the LOIT? The latest property tax reform bill changed LOIT law. Used to be three options, and you had to take them in order: first, to offset and lower property taxes; second, to offset increased spending, and third, to pay increased public safety costs. Now, you can go for the first and third options or the second and third options. Or, you still have the option of taking all three. The least increase that could bail out the fire department would add one-half percent to income taxes. For the city, that could also help the police. The county’s share could pay for EMS, the sheriff or the costs of jail. Not sure, but prosecution costs might be eligible, too.

The maximum increase in LOIT would be a full 1 percent for the first option, another 1 percent for the second, and .25 percent for public safety. Since we’re already paying a LOIT of 1.05 percent, the maximum could take us up to a 3.3 percent local income tax. The state itself takes only 3.4 percent.

One might consider any new taxes as suicidal for a sitting officeholder. But this City Council, where some members run unopposed, is in just the second year of a four-year term. Members could easily think that voters won’t remember by 2011.

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Mayor Sharon McShurley hates forking over $300,000 a year from her Economic Development Income Tax funds to pay off debt of the Horizon Convention Center, itself largely funded by the county’s food-and-beverage tax (1 percent added to the bill for all meals and drinks at local restaurants). She’s contractually obligated to do so, though, via the bonds issued to build the center, which is in and added onto Muncie’s original downtown U.S. Post Office structure on High Street.

She doesn’t think she’s getting enough direct economic development for the money. In fact, she’s not particularly happy with local economic development efforts period, which are handled by the city’s private, nonprofit Chamber of Commerce and a spin-off, the Delaware Advancement Corporation, another private nonprofit.

But economic development officials might point to one major success that will likely lead to another, and will free up for the mayor a different $300,000 in committed funds years earlier than planned.

The Muncie Redevelopment Commission learned this week that the bonds for the Muncie Mall TIF project will be paid off by February, one year earlier than anticipated, and four years earlier than originally planned in 1996. That’s when MRC and Muncie City Council created a TIF district around the Muncie Mall (see below right). The area roughly was bounded on the east, south and west by Broadway, McGalliard and Madison Street (just west of Linda Layne), excluding existing at the southwest corner. The north boundary was the extent of Simon Property Group land north of the Mall. TIF, or Tax Increment Financing, uses increased property tax revenues in a specified geographical area that result from targeted public improvements within that area, and the public improvements are paid for from the increased property tax revenues.

To jump start improvements, MRC issued two bonds totaling $5.4 million and built the wide-curving extension of Barr and Princeton streets that swept around the Mall to the west and north, complete with curbs and gutters and several drainage retention ponds. Then Simon Property Group built the separate strip mall north of the Muncie Mall, where Kohl’s and OfficeMax anchored the ends and a half-dozen other retailers opened up in between. OfficeMax later closed, but MC Sporting Goods opened up in its place. Still later, Target constructed its new store west of the Mall and the Mall itself expanded the space now occupied by Macy’s. Throw in the recently added Kerasotes ShowPlace 12 and Qdoba’s Mexican restaurant, and the additional property taxes generated by millions worth of new properties in the TIF have allowed the bonds to be paid off years earlier than the August 2012 initial repayment date.

By a lot of standards, one would have to conclude the Mall TIF redevelopment project is a success. I don’t know how many new jobs were added, though they were mostly retail and those won’t be terribly well paying positions. And, of course, the new Target replaced an older Target that closed (though I believe the building is occupied by a new tenant).

But the story goes on.

In 2006, Muncie attracted Sallie Mae to what’s called a “spec building” in the Air Park Industrial Park on Riggin Road. A spec building is a structure with walls, roof and floor and all utility hookups and parking. MRC was speculating that the investment would attract a business. Terry Murphy, lead economic development official with both the Chamber and DAC, and local government officials managed to land Sallie Mae, and MRC completed the building’s interior to office space as required for a company that provides loans to college students.

To pay for the building and interior improvements, in 2006 MRC expanded the Mall TIF district north and west across Walnut and included the whole park south of the Muncie airport, and floated another bond, this one for $5.5 million at 7.5 percent interest rate over 10 years (see image to left, and click on it to see a larger version). City and county officials agreed to chip in equally from each government’s Economic Development Income Tax funds to pay the note. This year’s payments will be $728,000, but next year, and all subsequent years, payments would be just under $600,000, or $300,000 apiece for city and county.

The deal was for the mayor and county commissioners to pay from EDIT until the earlier Mall TIF improvement debts were retired, at which point the spec building/Sallie Mae costs will be picked up by those TIF property tax revenues. Current projections would continue payments until 2017, when a balloon payment from Sallie Mae of $3.2 million will turn ownership of the building from MRC over to the private firm. If any more development occurs around the Mall, or anywhere in the Air Park for that matter, TIF payments could accelerate, though Sallie Mae won’t likely complete purchasing the structure before 2017.

Meanwhile, the mayor (and county commissioners, too) next year will have $300,000 each of disposable EDIT money they didn’t expect.  TIF districts have been controversial in the past — after all, they do remove property tax revenues from the General Funds of local governments.  But the increased tax revenue wouldn’t have existed without the improvements, and local government would have been hard pressed to find other revenues for the improvements.  Unless I’m missing something, this is a sterling example of how TIFs should work.

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A speedy trial for the accused murderers of Teresa French, shot to death at her Cromer Street home in 1993, looked less and less likely yesterday as both defendants told the judge in the case that they agree with their attorneys’ requests for continuance.  After 15 years, what’s a few more months?

Tony French, going through a better divorce with Teresa in 1993, and Jess Woods, the accused triggerman, appeared at a hearing for a trial still scheduled for August 18, less than six weeks away.  French’s attorney, Steve Smith of Anderson, moved to roll back the date to late November or early December.

Woods’ attorney, Zaki Ali, also of Anderson, had no objection and had to welcome the extra time.  His client had just been extradicted from California late last month and was arraigned only days ago.  Neither defense counsel has even received crucial information about all evidence from the state that prosecutors are reqired to provide, though Smith has some.  Chief deputy prosecutor Jeff Arnold told the court all the information, legally called “discovery,” was now available and the delay in turning over the documents was due to their quantity: three large boxes of paperwork.  The judge wasn’t happy as he asked defense attorneys about motions, witnesses and depositions, and they had to keep replying that they couldn’t answer until they examine the government’s evidence.

Circuit Court 3 Judge Robert Barnet didn’t hide his irritation that the prosecutor’s office has taken so long.  One might wonder whether another factor was at work in the delay: the exhaustive digging started one month ago by Circuit Court 2 Judge Richard Dailey into the prosecutor Mark McKinney’s past drug forfeiture practices.  Over the past month Dailey has held multiple and lengthy hearings, called at the court’s own motion, into long past seizures by the joint city-county Drug Task Force.  That’s repeatedly tied up both McKinney and deputy Eric Hoffman, who have filed their own motions along the way, including one to the Indiana Supreme Court asking for an emergency halt to Dailey’s persistent inquiry.  While Arnold will co-try the French murder case, Hoffman seems to be the lead prosecutor.  Both McKinney and Hoffman are away this week at a state prosecuting attorneys conference.

Some information about the state’s case came out of Thursday’s pre-trial hearing.  Arnold confirmed that the state had audio recordings from a confidential informant tying the murder to Tony French and Woods (left and right in photo to right).  Arnold also said the current witness list for the prosecution numbered 71 people.  The state also will be filing for what’s called a “404″ hearing expected to take half a day.  That’s a procedure where attorneys for both sides will argue whether other criminal (and possibly noncriminal) actions by the defendants, but unrelated to the current murder charges, can be brought up during trial.  Tony French repeated battered his wife (see left) and threatened repeatedly to kill her.

The trial itself may take up to a week.  Smith has filed an alibi defense for his client, who was seen by many co-workers at Borg-Warner, his employer, at the time of the shooting.  Smith also wants to separate the defendants into two trials, something the state will oppose.  Barnet said he would rule on moving the trial back by early next week.  Hard to imagine he won’t push the date to some extent, given that one defense attorney hasn’t seen anything of the state’s case and the other not all.  Still, I hear the judge, who ends his career on the bench Dec. 31, doesn’t want to retire without presiding over this case.  This case won’t drag on.

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MITS is starting the process of cutting back service in response to property tax reforms rolling in this year, one of the first local government units to do so.  All the others — townships, county, library, most of all the city of Muncie — will follow eventually.

The bus company looks to pull the plug on the free Downtown Trolley service that shuffles people (many of whom should be walking) mostly from free parking spots at Central High School’s Fieldhouse to the County Building and other locales further south in downtown.

MITS runs the service with replicas of early 20th Century trolleys, and the company says the street cars “have proven immensely popular with riders of all ages.”  Lots of county employees use the service daily, but evidently MITS just does not draw enough of those riders of all ages to keep running.

In addition to ending the trolleys, MITS proposes ending Route #18, which serves Wilson Middle School.  The route goes from downtown, south on Hoyt Avenue to Memorial, then west to Tillotson and south to the school.

Two more proposed changes: to cut back late morning to mid-afternoon runs on two routes: #7, from the downtown terminal out East Jackson to Country Club Road and back through Mayfield addition and #10, the Heekin Park route which goes from downtown to South Side High School and back on Hackley and Madison Streets.  Service would cease from 9 a.m. to 3 p.m.

Depending on what proposed cuts are made, MITS hopes to save between $250,000 and $400,000, and could reduce staffing by 3-4 people, all by attrition, with no layoffs.  MITS employs about 90 staff on an anual budget of $7.9 million.  Much of the funding is from federal and state sources, but MITS raises about $3.5 million from property taxes annually.

Already, the company has left several vacancies open in anticipation of the move.  MITS management looked glum this week as they pondered what cuts to propose.

The Downtown Trolley has the second lowest passenger counts of 16 routes run by MITS.  The run out to Wilson is lowest.  Then comes the East Jackson route, though both it and the Heekin run have much higher numbers during early morning and late afternoon hours.

MITS will hold hearings on the proposed service cutbacks on Wednesday, Aug. 6 at 5:30 p.m. and the next morning at 8:30 a.m. at its office on Seymour Street (with bus service to the hearings available).

Seems odd that in a time of skyrocketing gasoline prices that might finally drive people to hop on the bus for a 50-cent ride more often, MITS looks to cut back, but, then, those sky-high costs of oil barrels his the buses just as hard.  As well, in general economic downturns, MITS experiences ridership drops.

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As Circuit Court 2 Judge Robert Dailey continues hearings on how the Delaware County prosecutor has handled drug forfeiture cases — investigating  possibility of fraud upon his court — he’s also determined to make forfeiture process adhere to state law, something seemingly not done in the past.

A day after yet another hearing this week, he convened some of the cast of involved characters in a jury room to hear State Board of Accounts district director Bill Vinson tell them what the law requires in forfeiture cases.  Vinson is supervisor of a field examiner who testified last week in court that Muncie violates state law in handling cash seized in drug raids as well as violating law in spending some proceeds.

In forfeiture actions filed by a deputy prosecutor, court orders prepared by the prosecutor direct forfeited cash to be placed in a city-controlled Drug Task Force account outside the municipality’s “General Fund.”  But state law requires such forfeitures be put in that General Fund to reimburse the city for the law enforcement costs incurred by city police in investigating the case leading to the seizure.  It’s a technicality, but one might say that all laws are technicalities.

Muncie’s DTF fund was managed by two officers who headed up DTF, one a county sheriff’s sergeant, the other a city police sergeant.  DTf is a joint city-county squad with, for the past decade, about six city police, three county officers, and one Ball State officer assigned to their ranks.  In that time, about half a million dollars of seized assets were forfeited by various drug dealers, and DTF spent most on equipment and supply needs.  Some money, though, was donated to charities, which doesn’t accord with state law, and large amounts were spent equipping a state-of-the-art exercise room for police in the basement of City Hall.  That rankled some taxpayers.

Never did any money find its way into the coffers of the state’s Common School Fund, which state law says should happen with any forfeited money left after law enforcement costs are reimbursed.  The Common School Fund is a trust fund from which school systems meeting certain requirements (such as low per capita income resources) can borrow for capital costs at interest rates better than market.

SBA’s Vinson distributed a flow chart he created to show the steps in the drug forfeiture process to attendees, which included the Muncie city controller, attorneys for the city and county, several deputy prosecutors, the city’s police chief and county sheriff.  Also on hand was a representative from the state’s Criminal Justice Institute, which administers some state and federal funds used in law enforcement.

The procedure outlined by Vinson would eliminate any special account for forfeited money.  Seized assets would be placed in a police evidence room to await criminal prosecution.  If a suspect is found not guilty, the defendant’s assets are returned.  If convicted, then a civil forfeiture action may be filed by either a deputy prosecutor as part of his or her official duties, or by an attorney appointed by the prosecutor.  If the action is won, the cash would be placed in a trust under control of the county clerk.  The court also would determine how much law enforcement expenses the city and county racked up in investigating the case, and the county clerk would disburse those amounts to those units of government, to be placed in their General Funds respectively.  The court also would determine how much the private attorney, if used, would be paid and the prosecutor’s office would pay that expense. One or more deputy prosecutors in the past have got a whopping 25 percent of the value of forfeitures.  The current prosecutor, while chief deputy from about 1996 through 2005, earned nearly $100,000 through forfeitures, and Judge Dailey has questioned the practice.

In addition, as the law permits, law enforcement could continue to use non-cash assets forfeited for three years, at which time the sheriff would auction the assets and funds distributed accordingly.

Whatever’s left over would be sent to the state’s Common School Fund.

Group members, or some subset thereof, will convene again in a couple weeks to refine procedures.

The upshot of the revisions will, I guess, finally follow Indiana law, but one could rightfully have concerns about what we might lose.  If anything is even more amok than DTF forfeitures around the state, it’s school capital construction, and we well could end up reducing what we have to spend fighting narcotics crimes to increase the fund from which schools can borrow to build more . . . grand entrances to high schools?

And forfeiture monies can’t be planned and budgeted in advance.  You never know what you’re going to seize.  So the reimbursements to the city and county General Funds will be unappropriated balances.  At some point, the police department, could, say, approach City Council and ask for additional appropriations from these balances to spend on equipment and supplies, but nine council members might eye tens of thousands of unappropriated *extra* money and have their own wish list to fund.

At a time of dwindling resources (Muncie still doesn’t know how much money it will lose yet this year due to property tax reform, nor next year, nor in 2010, when the loss will be maximum), the DTF paid many of its own expenses.  I think, in fact, all costs for DTF except salaries and benefits (health care, life insurance, retirement) were paid from drug forfeitures.  Absent that money, the police chief, despite pending reductions, will have to now put tens of thousands more into her proposed department budget if she wants to continue a Drug Task Force.  So will the sheriff if he continues to participate in DTF.

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Nearly five years after the study was first proposed, a consultant has come up with a proposal for diverting railroad trains running past the stretch of Norfolk and Southern tracks between the Muncie Mall and downtown Muncie. The tracks would be relocated east of the Muncie Bypass and swing from the point just about where the railroad goes underneath the Bypass up to Royerton, at CR 500 N.

The relocation would be marvelous in eliminating the miserable traffic jams and delays at Granville/McGalliard roads, plus every grade-level crossing south of that point (Streeter, Centennial, Highland, a dozen others) and eliminate the crossing downtown on Wysor south of the old Broadway (now MLK) bridge.

One can’t have driven much in Muncie and not have been stopped sooner, later, or frequently at one of these crossings — unless, of course, you saw the sluggish locomotive in time and rerouted yourself to McCullough Boulevard, slipped under the railroad bridge through the park.

Because of the number of street crossings, the trains usually travel at a crawl.  In addition, the trains need to make a 90 degree turn crossing the White River heading into downtown and to continue southbound, a nearly 180 degree turn along Gavin Street, the scene (adjacent to a nursing home) of multiple mishaps where trains have jumped the tracks.  The map to the right (from the consultant’s draft) shows these two acute turns and again, tight turns make trains slow way down.  NS railroad actually reports adhering to a 10 mph speed limit through Muncie.

Delays are costly, and the consultants came up with a staggering $1.9 million annual cost to motorists of waiting on the trains along this stretch.  The worst crossing, of course, is on McGalliard, where 25,000 cars daily traverse the tracks.  From 2001 to 2005, eight car-train collisions occurred along the entire stretch, and you might recall two weeks ago, a motorist, probably talking on a cell phone, driving into a train at the McGalliard crossing.  (Am I correct in thinking that the motorist is *always* at fault in a car-train collision?)

The relocation of the rail line, which would equal about four miles of new track, would decrease traffic delays for thousands of automobiles, improve air quality, allow trains to travel faster (time=money for the railroad, too), reduce noise pollution of locomotive air horns, save drivers millions of dollars, decrease likelihood of hazardous materials spills, possibly even free up four miles of track to add to Cardinal Greenway with no adverse effect on wetlands, the environment, wildlife species, archeological sources or historic sites.

And the cost, were the project to start today: $20 million for construction and land acquisition.  That’s well less than the savings over an estimated 30 year life span (a time period that must be conservative: that stretch of railroad from the Mall for downtown is well more than 30 years old).

So the cost is well worth the money.  Yet . . . where does the money come from?  Even with federal funds paying 80 percent, Muncie and Delaware County doesn’t have $4 million for a local match.  It’s not like we can assess each motorist a quarter each time they drive over a former railroad crossing.

Our best hope is that the railroad, indeed, sees the shortcut as a huge money-saver and coughs up a big part of the local expense.  This would be too much: that the railroad sees the location as perfect for a railroad yard, and constructs additional tracks for sorting and storing cars, maybe even loading and unloading freight, all requiring 250 local employees.  Of course, this is close to Desoto, who’s motto is “BANANAS”: Building Absolutely Nothing Anywhere Near Anyone.”

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