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Mayor concerned with city boards’, school district’s relationship

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Franklin’s mayor asked for a time-out as two city boards couldn’t agree on whether to spend tax dollars on a school projects.

He wanted the elected city council and the appointed members of the redevelopment commission, to reach a consensus on whether $500,000 should be given to Franklin schools.

School officials had been given an invitation to propose other projects they needed help with and thought a program to give laptops to every student would better prepare students to work at local businesses or for college.

The redevelopment commission members didn’t want to postpone a decision and voted 4-1 this week to spend the tax-increment financing, or TIF, district money on the laptops. The night before, the city council had voted 5-2 to take a stance against the purchase.

The decision was up to the redevelopment commission, though.

The issue of who has say over tax money collected in a TIF district and how the money can or should be spent is surfacing across the county and throughout the state. Cities collect new property tax revenue and divert it for special projects, while other governments, such as schools and libraries, try to make up for lost revenue.

As a parent of two students in Franklin schools, Mayor Joe McGuinness said he was in favor of the laptop program. But as mayor, he said, he opposed spending the $500,000 because of the disagreement between the council and redevelopment commission members. He wants the city and the schools to be working toward the same goal of making the city better.

“Certainly issues, whether it’s building roads, fixing potholes, whatever it may be, they’re going to divide a community. But it is disheartening to hear the level it has gotten to. This is a lose-lose,” McGuinness said.

A majority of city council members opposed using the TIF funds for the laptops. Some council members questioned whether the purchase is legal, whether it was an appropriate use of money that typically is used for infrastructure or development, or whether the school could potentially pay back half the amount.

Attorneys for the redevelopment commission and city council agreed the city could legally use TIF funds to buy the laptops.

Redevelopment commission members considered the city council’s opinion before approving the purchase Tuesday. The school district’s superintendent, financial officer and technology director made a detailed and convincing presentation of how the laptops would benefit students, commission member Jay Goad said.

He said commission members were being micromanaged on a decision that was their responsibility.

Commission chairman Bob Heuchan said the board members did the appropriate amount of research in order to make an informed decision, which was theirs to make.

“I don’t feel it’s our responsibility to ask for permission from other government bodies,” Heuchan said. “We’ve been granted the authority to make these decisions.”

The school district loses about $3.4 million in tax funds each year due to property tax caps, which has caused the district to slash spending on technology, buses and new equipment purchases in order to make debt payments, school officials said.

Franklin’s TIF districts generate about $3 million in tax revenue each year, taking away about $1.46 million from Franklin Community School Corp., schools executive director of finance Jeff Mercer said.

The money being spent by the city on the laptops is only one-third of what the school normally would collect if the city didn’t have the TIF districts, Goad said.

“With the TIF district, you put the city at an advantage. If we can’t give the schools a little money when they need it when they’re paying $1.4 million, then maybe we should just split up the TIF and let everyone fend for themselves,” Goad said.

‘Endgame was literacy’

The money will purchase Google Chromebook laptops for the high school’s 1,700 students. The laptops will be given to students at the start of the next school year with the goal to help improve student writing, familiarize them with technology, and allow students to do online research and collaborate with classmates on projects, school officials said.

Purchasing Chromebooks for every high school student was an idea that came out of school officials’ planning on ways to improve literacy, Superintendent David Clendening said. Students need to write more and access information, including class notes or online research. Putting a laptop in every student’s hands was the best way to accomplish that, he said.

“The endgame wasn’t Chromebooks. The endgame was literacy,” Clendening said. “If kids can read and write well, they can do well.”

After the redevelopment commission gave $100,000 to Franklin schools to make security upgrades to entrances at several schools, city officials offered to help with future projects, Clendening said.

The school district needs the money to get the first order of laptops and launch the program. The district will replace those laptops every three or four years with school funds and book rental fees paid by families of students. Officials want to expand the laptop program to the elementary schools and plan to invest $1.9 million in the program by 2020.

Franklin schools has a large amount of debt from building a new high school in 2007 and renovating the former high school to serve as the middle school. At the time, enrollment had increased 49 percent from 1993 to 2007, requiring more space. After the recession hit in 2008, enrollment flatlined and unemployment spiked. In addition, the state implemented property tax caps, which caused the school district to lose millions in taxes each year, Clendening said.

School officials want to continue trying to improve education for students, he said.

“We have awesome facilities. And we’re not going to apologize for our facilities,” Clendening said.

City council members said they support the schools and improving learning for students but had concerns about using TIF money for laptops. Those funds should primarily be used for infrastructure such as roads, sidewalks or drainage, or for helping a new business develop land for a factory or offering an incentive for a company to expand, council members said.

Council members Joe Ault and Steve Hougland questioned whether the city could legally use the funds that way, while others including Joe Abban and Ken Austin questioned whether there was a better use than buying laptops with a short lifespan.

Compromise proposed

The mayor proposed slowing down and forming a committee consisting of Abban, who opposed the idea, and Rob Henderson, who is a member of both the city council and redevelopment commission and supported it. He suggested they meet with school officials and try to find common ground on the project, whether it be funding the project as a loan, funding half of the amount or maybe not spending anything at all.

Henderson, who was in favor of buying the laptops, stated he thought a study committee would only delay or kill the project without reaching any consensus. The council then approved 5-2 a resolution by Abban stating they opposed the spending.

McGuinness again made a plea for redevelopment commission members to seek a compromise on the issue. At Tuesday’s redevelopment commission meeting, Henderson suggested a compromise option, proposing the city fund the full $500,000 but the schools pay back $250,000 over a five-year period.

But commission members said they felt such a compromise was unnecessary because of the benefit to students and amount of tax dollars the city’s TIF districts funnel away from the schools. The board approved the laptop purchase, with member B.J. Deppe opposing it because he doesn’t think the purchase is legal or the right use for those tax dollars.

The commission’s attorney, Rob Schafstall, told board members that a section of state law allows redevelopment commissions to work with schools to promote education programs, which in his opinion made it legal to buy the laptops. Also, the money is being spent from a fund established when Best Buy returned tax dollars that were in savings when the company closed its Franklin distribution plant. That money has fewer restrictions on how it can be used compared with tax dollars collected directly from current businesses, Schafstall said.

“I don’t think we’ve had a better business plan than these folks. I really question the need for more homework,” Goad said.

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