The Town of Porter
intends to prolong its Tax Increment Financing district past 2025 with both
the Redevelopment Commission and Town Council passing resolutions Tuesday
issuing tax increment revenue bonds with a maturity date no later than 2040.
The bonds would
give the TIF an extra 15 years of life as a state law decrees that all TIF
districts created prior to 1995 -- legacy TIFs -- will expire in 2025,
unless they are paying debt on bonds issued prior to June 30, 2015, the RDC
was told in March by Eric Walsh, principal with H.J. Umbaugh and Associates.
The Town’s TIF area
was created in 1990 by the RDC when there was no required expiration date by
In its most recent
year, the RDC took in $872,000 which helps keep roads, sidewalks and
infrastructure inside the TIF area in repair without the Town having to
raise taxes, RDC member and Council President Greg Stinson said. Not having
the TIF for an extra 15 years or so means the Town will miss out on $10
million to $11 million in revenues, he said.
“The TIF is good
for the town. It’s good for the residents. It’s good for everybody,” said
capture tax revenue from new construction that would otherwise go to other
taxing units and the town’s general fund. The extra revenue generated causes
tax rates in the other units -- schools, county, township, library -- to
drift up as tax rates are set annually to capture the levy to which each is
entitled under state law.
The RDC held a
special meeting prior to the Council’s meeting Tuesday so it could expedite
the process of selling bonds given the time crunch. A 27-page resolution was
drawn up explaining the terms, payments and redemptions.
It does not say how
long the bonds will last. That is left up to the purchasers.
Scott Peck, who was
hired as counsel for the bond, said the 22-year bond was more marketable
than a 25-year bond. The interest rate for a 20-year bond would be roughly 4
percent, while a 25-year bond would have about a 4.5 percent rate.
The bonds’ interest
rate is not to exceed 5.5 percent per annum, according to the resolutions.
Stinson said he
would be comfortable with 22 years which would still give the town some
flexibility. “We need more money for roads,” he said.
The bonds to be
sold are to not exceed $4 million. From that, various road improvements
would be made in the allocation area and a new public works building could
The new bonds will
not have any effect on the rate of taxes businesses in the TIF area pay,
Stinson said after the meeting. The RDC collects revenues each year and
divides a portion to pay debts. Currently, it is paying a 15-year bond sale
made in 2010 to upgrade the Town’s sanitary sewer system.
Revenue received in
each bond year is estimated to be at least 150 percent of the principle and
interest requirements of all debt obligations from the bonds, the RDC’s
Before the RDC
voted 5-0 in approval of the resolution, a public hearing was held. Resident
Jennifer Klug spoke in favor saying the town benefits from having the TIF to
pay for roads.
“This is something
we need for our town. This is a good thing,” she said.
No one from the
floor spoke in opposition.
Later on Tuesday,
the Town Council also voted 5-0 to sign off on a 2-page resolution approving
the issuance for the bond.
Council’s brief meeting, Parks Director Brian Bugajski was absent but left
word that the Memorial Day ceremony will be Monday, May 25 at 1 p.m. at the
Community Center in Hawthorne Park.
The event, open to
the public, will be put on by the Chesterton American Legion Post 170.
In another matter,
the Council gave Fire Chief Lewis Craig permission to go to the Westchester
Township Board to request $1,188 for the yearly renewal of the emergency
fire reporting system.
Police Chief James
Spanier reported that two new police vehicles have been ordered, while other
department heads had nothing to report.
Council member Rob
Pomeroy offered congratulations to Clerk-Treasurer Carol Pomeroy on her win
last week in the Town’s primary elections.
Carol Pomeroy in
turn thanked her supporters saying she “couldn’t do it without them.”