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October 12, 2007
Dear Friends,
This week I released my proposal for the use of the City Light Lease Fund, sometimes referred to as the “Community Trust Fund.” The fund was established in 1974 when the City-owned electric utility was leased to Indiana Michigan Power. Payments of $270,000 per year have been made into the fund since its establishment. The fund matures in 2009, with an estimated value of nearly $40 million, and the restrictions on the use of the funds will expire upon maturity.
I am calling on Fort Wayne to follow the wise example of city leaders of 35 years ago. As Mayor I will push for the reinvestment of the principal balance of the fund in a segregated account, where it may continue to grow to benefit Fort Wayne in the future and, under restricted terms, be available in a time of financial or other crisis.
I think it is short-sighted to take a ‘let’s spend it now’ attitude to this fund. It wouldn’t exist at all if that had been the attitude of Mayor Lebamoff and the City Council in 1974. I don’t view this fund as a ‘windfall’—as my opponent referred to it when announcing his plans for a two-year series of meetings to decide how to spend it—but as the product of the vision, good planning and self-sacrifice of a prior generation.
I propose reinvesting the lease money; allocating 50% of the annual interest that would be earned to city purposes; and reinvesting the remaining 50% of the annual interest in the fund, so that it will continue to grow by an ever-increasing amount. I estimate that even in the very early years of this proposal, the fund should yield a minimum of $2.5 million per year in interest, and that the amount will quickly grow. As Mayor I will urge City Council to restrict the funds for a period of ten years or more, allowing the principal to be spent only on specified emergencies and only with a super-majority vote of Council.
My proposal will accomplish the following:
- Annually increase money available for neighborhood and economic development and other city purposes by more than $1 million, with the increase growing in every subsequent year.
- Continue the growth of the Trust Fund through the reinvestment of interest and dividends.
- Maintain a strategic reserve against financial or natural disaster for the city.
- Provide insurance in a “worst case” situation against default on the city’s unfunded pension obligation.
Given the local economic climate and the city’s pending obligations, I oppose spending the money to fund more City-driven projects.
If our debts were paid, our real wages increasing, our taxes declining, our housing in high demand and our existing retail and industrial space filled to capacity, then perhaps I could join in the call of my opponent for consultants, committees, and a year or two of meetings to draw up wish lists. But that is not our reality. The prudent thing to do is to be good stewards of this inheritance from our predecessors; with gratitude invest a portion in the city today, and with the rest invest in the future of the city tomorrow.
I acknowledge that during the spring I expressed interest in using a portion of the fund to defray college loan costs for those locating to Fort Wayne. However, upon further examination I cannot justify making such a program a priority.
It’s not the absence of loan support programs that hurts us in attracting college graduates; it’s the absence of jobs. We can only truly turn that around by getting our fiscal house in order, lowering the tax burden and promoting private sector growth.
Sincerely,
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