The
City of Eau Claire has a long history of operating under a Council - Manager
form of government. Council - Manager government
combines the strong political leadership of elected officials with the strong
managerial experience of an appointed manager. All power and authority to set
policy rests with an elected city council. The city council in turn hires a
nonpartisan manager who has very broad authority to run the organization.
The elected council members
represent the community and develop long-range vision for its future. They establish
policies that affect the overall operation of the community and are responsive
to residents’ needs and wishes. To
ensure that these policies are carried out and that the entire community is
equitably served, the governing body appoints a highly trained professional manager on the basis of his/her
education, experience, skills, and abilities (and not their political
allegiances).
Residents calling for an ordinance
to require a referendum for capital projects may think that large capital
projects are too important of an issue to be left in the hands of their elected
officials. The United States, State of
Wisconsin, and City of Eau Claire were each created as a representative
democracy. As such, council members are
elected to represent the community and be responsive to residents’ needs and
wishes.
Large capital projects and the
operations of the City are complicated issues that take time and knowledge to make
informed decisions. For elected
officials, time and knowledge mean working through an issue or budget by gathering
background information, participating in public presentations and discussions, and
conducting their own research. This
process is open and transparent and often takes time. So much time, that government is often
criticized for taking too long to reach a decision. To help put this in perspective, the total
City Budget is almost $132 million. Of
that, $60 million is for the day-to-day operations. The City prepares a five-year
capital improvement plan that totals over $136 million. For 2014, the budget appropriates over $22
million for capital projects.
When reviewing the Confluence
Project, it is important to understand that the total cost will be around $80
million and that it will consist of three separate elements; a community arts
center, a mixed-use building, and a public plaza. It is important to remember that
approximately 50% of the community arts center will be funded through the State
of Wisconsin. It is equally important to
realize that the value of the mixed- use building will generate property taxes that
will be used to cover the pledge made by the City. Since I started with the City just over one
year ago, I have spent countless hours researching, discussing, and presenting
the facts surrounding the Confluence Project.
As with any project of this size, there are many issue that need to be
considered and addressed. In fact, there
are still some elements that will be changed.
I view the Confluence Project as
an economic redevelopment project. One may
ask, why and how does the City gets involved in economic development
projects. The City tries to promote the
expansion of our tax base and works to protect values for the investment made
by all property owners. Not only will
the Confluence Project increase the property tax value of the City, it will
generate economic vitality in the downtown area by creating a sense of place
and a destination. It will also add jobs
and provide a selling point in attracting business and creative, talented people. In
that light, the Confluence Project can be viewed as an investment just like the
Phoenix Park area.
If one were to measure the return
on investment in the Phoenix Park area, you would find that the City’s return
on investment was 177.2%. I would think that most people would accept that
return over a 10-year basis. That return
on investment was calculated on the fact that the City provided and paid for
$17 million worth of improvements and experienced an increase in the tax base of
$30 million from 2002 to 2012.
This tax base investment was NOT made by the general
taxpayer--taxes were not raised to pay for the investment. The City used “tax increment financing” to allow
for the tax base expansion. Through tax
increment financing, the City creates a special and specific district, and then
creates a baseline of the value for the entire district. The taxes generated on the baseline value are
distributed to all taxing jurisdictions as if there were no increase in
value. The taxes collected for the
incremental value (the difference between current market value and the baseline
value) are retained by the City and placed in a separated fund to off-set the
cost of the improvements. In the case of
the Confluence Project, the taxes generated by the incremental value of the new
mixed-use building will be used to honor the pledge by the City. The bottom line is that the City cannot raise property taxes to pay for its commitment to the Confluence
Project due to levy limits imposed by the State of Wisconsin.
As I stated earlier, the elected
officials are to represent the citizens and respond to their needs and
wishes. One way they can perform that
function is to receive input into the process.
The entire community has an excellent reputation for encouraging and
promoting civic engagement. It was
actually through a civic engagement process that the concept for the Confluence
Project was initiated. This commitment
for civic engagement continues with an online public comment forum called the
“Electronic Eau Claire Conversation”. Currently,
this forum allows people to voice their opinion on the Confluence Project. The elected officials can then use this input
to assist with future decisions regarding the Confluence Project. If fact, one could make an argument that this
input is more thorough than a yes or no
vote made by a binding referendum.
In closing, I would like to get
back to the original question as to the need for a referendum. I recently read an article in a professional
blog that suggested that there are three common denominators shared by those
who insist local governments should conduct public referenda:
- They oppose any measure in which they receive no personal gain
-
They
don’t want to see any increase in their local property taxes
- They see no value in improving the community or local programs to make life better for others. They survived under the prevailing conditions, so why shouldn’t others