County commissioners rebuff mayor’s proposal on convention center governance, focus turns to next week’s $6M appropriation

cropped 11-26-2019 commissionersIMG_0939
From left: County commissioners Julie Thomas, Penny Githens, and Lee Jones at Tuesday night’s county council work session as they read aloud a prepared statement rejecting Bloomington mayor John Hamilton’s proposed governance for the convention center expansion. (Dave Askins/Beacon)

The Monroe County council was not expected to discuss the convention center expansion at its Tuesday night work session. A draft resolution on the topic, floated at the council’s meeting two weeks ago, had been pulled from Tuesday’s agenda.

But an appearance at the council’s Tuesday’s work session by all three county commissioners led to a half hour of discussion of the convention center expansion.

The three commissioners took turns reading aloud a statement that concluded with a rejection of a proposal in the previous day’s memo sent by Bloomington’s mayor, John Hamilton, for the governance of the expansion project.

An even governance split?

Hamilton proposed a numerically even split for appointments between the city and the county, when added up for two governing bodies—a future seven-member CIB (or possibly a 501(c)(3)) and the existing five-member convention and visitor’s commission (CVC).

Hamilton’s memo came after last Thursday’s meeting of the “Group of 20” city and county officials in city council chambers. In the first hour of that meeting, oral assurances were given by city councilmembers that they favored equal numbers of appointments made by the county and city on a convention center governance body. Those assurances were key to convincing the county commissioners that the meeting could proceed to its published agenda.

The commissioners gave as one reason for their rejection of Hamilton’s proposal the fact that the state statute on CVCs gives the authority to make appointments to the county council and the county commissioners. The existing CVC has worked fine for a number of years based on the statutory appointment authority, they said.

Some members of the county council reacted more favorably than the commissioners to Hamilton’s proposal. Trent Deckard said he was optimistic because he continued to hear in the memo talk of equal representation. President of the county council, Eric Spoonmore, said he thought the mayor’s proposal was made in good faith. And Geoff McKim called Hamilton’s message a “fair proposal.”

City council or mayor?

In their statement, county commissioners made explicit what already seemed apparent from last week’s “Group of 20” meeting: They are interested in pursuing a conversation with the city council, but not the mayor.

Commissioner Julie Thomas, seated two spots away from Hamilton at the table, concluded the Nov. 21 meeting by saying, “We’ll be in touch with the city council.”  As of Wednesday morning, commissioners had not yet scheduled a post-Thanksgiving meeting with city councilmembers.

In their statement on Tuesday, the commissioners said:

The General Assembly could have referenced or allowed for a role to be played by the executive branch of City government; however, there is notably no mention of the executive branch of City government when it comes to the Food and Beverage tax dollars. As we mentioned at the conclusion of our last meeting, it is our intent to reach out to the City Council next week. Please know this is not an attempt to alienate Mayor Hamilton. Rather, it is our intent to follow the statutory procedures and work with the branches of government given authority on these issues by the General Assembly.

In fact, the city executive is mentioned in the statute as a member of the food and beverage tax advisory commission.

It’s the role of the advisory commission that is now the focus of a question by the county’s legal counsel about the statutory procedures for expending food and beverage tax revenues.

The $6-million question: What is the requesting procedure?

In her remarks at Tuesday’s county council work session, county attorney Margie Rice raised the question of whether the city council’s upcoming action on a $6-million appropriation ordinance has followed the procedure outlined in the statute. The statutory question, according to Rice, is whether the city council has, through an official action, requested the advisory commission’s recommendation for the expenditure of food and beverage tax money.

The appropriation ordinance for $6 million of food and beverage tax money appears on the city council’s Dec. 4 agenda for a first reading. That means it won’t be subjected to debate or discussion, just read aloud. It needs a second reading and a vote by the council at a subsequent meeting to be enacted.

The money is to pay for the architect’s fee for design of the project. Convergence Design has already been contracted for the design work, the same firm that did the preliminary work on basic site plan choice.

At its Jan. 22, 2019 meeting, the food and beverage tax advisory commission already approved a not-to-exceed amount of $4 million for architectural design fees. That figure was based on general guideline of 5–10 percent of construction costs, which were at the time estimated to be between $30 million and $40 million. The exhibit hall piece of the project is now estimated to cost around $45 million.

Another $15 million for a parking garage brings the estimated total construction cost to $60 million, which corresponds to $6 million (10 percent) for architectural fees.

The city council’s Dec. 4 agenda item assumes that the food and beverage tax advisory commission will make the required recommendation under the statute at its Dec. 3 meeting.

It’s the step before the advisory commission’s recommendation that Rice points to as potentially problematic. The city council is required to request the advisory commission’s recommendation:

IC 6-9-41-16
Advisory commission

(b) The county and city legislative bodies must request the advisory commission’s recommendations concerning the expenditure of any food and beverage tax funds collected under this chapter. The county or city legislative body may not adopt any ordinance or resolution requiring the expenditure of food and beverage tax collected under this chapter without the approval, in writing, of a majority of the members of the advisory commission.

Based on the material in the city council’s information packet, it looks like the city is relying on an “ongoing request” of the advisory commission made as a part of a previous appropriation ordinance, approved on May 15 of this year, which allowed the architect and bond counsel to be paid for their preliminary work. That $550,000 appropriation ordinance included the following:

SECTION 2. By this ordinance, the Common Council as legislative body of the City, requests the advisory commission’s ongoing recommendations concerning the expenditure of any food and beverage tax funds collected under this chapter as the need for those expenditures arises in the future and in a manner consistent with Indiana Code §6–9-41-16(b)

A “whereas” clause in the city council’s upcoming appropriation ordinance for the $6 million refers to the May 15 ordinance language as a “standing request” of the food and beverage tax advisory commission.

After the county council’s work session, Rice told The Beacon she did not think that this kind of “standing request” meets the statutory requirement.

How was previous request made?

The same question has arisen before: Does the city council need to make a formal request of the food and beverage tax advisory commission each time an expenditure is contemplated?  At their Jan. 16, 2018 meeting, councilmembers were asked to approve a motion for a request to the food and beverage tax advisory commission for the expenditure of funds to pay the architect for preliminary work. From the meeting minutes:

[Councilmember Steve] Volan asked if the Council would need to make such a motion anytime it wanted to spend funds. [Council attorney/administrator Dan] Sherman said he did not think so.

Based on the CATS video of the exchange, Sherman was relying on the general nature of the motion for his conclusion that no further requests of the food and beverage tax commission would be needed from the city council. Sherman’s verbatim remarks on the topic were:

And that’s why you’ll see that this motion is very general. It’s not time limited. It doesn’t say for expenditures in 2019. It doesn’t talk about funds received by a certain date, so I don’t do not anticipate that you’ll have to do this every time you anticipate a request to expend funds…”

Rice told The Beacon she doesn’t agree with Sherman’s interpretation: “I have advised my clients differently, and explained that it appears the law anticipates ongoing dialogue and conversation, so that the Commission may ‘coordinate and assist efforts of the county and city fiscal bodies regarding the utilization of food and beverage tax receipts.'”

In the meeting minutes from Jan. 16, 2019 the motion is described as “Motion to Request Recommendations for Funding from the Food and Beverage Tax Advisory Commission.”  The motion is not listed out in the agenda posted to the city’s public website, nor is it mentioned in the information packet for the meeting posted to the city’s public website.

Following the city council’s approval of that motion, the city council’s request was conveyed to the advisory commission by the city’s deputy mayor, Mick Renneisen, in a Jan. 17, 2019 letter. In the letter, Renneisen states, “To be clear, we are asking not for approval of an amount, but approval of the use of tax proceeds to pay the architect.”

Later in the Jan. 17 letter, Renneisen appears to draw a distinction between an approval for the use of funds for a purpose and an approval of an amount to be expended for a purpose:

The additional funding requests mentioned above may be considered and approved by the advisory commission at this time, if you deem them to be appropriate uses of the fund, or at future meetings. Since your approval is related to the use [emphasis in original] of the food and beverage tax proceeds, and not any specific amount requested, we would urge you to consider and approve all the requests now so that future steps in the project can be initiated without delay.

The requests made of the food and beverage tax advisory commission at the Jan. 22 meeting included consulting/design services, project management support, and construction inspections.

Northward or eastward expansion?

In their statement on Tuesday at the county council work session, county commissioners opposed the timing of the upcoming appropriation ordinance, saying: “This is premature as a site has not been selected nor has a governance body been created to instruct and guide the design efforts.”

On the topic of site, county commissioners favor an eastward expansion. The recommendation of a nine-member steering committee  in late May was for a northward expansion.

The commissioners favor a capital improvement board as the governance structure. The city sees a 501(c)(3) as possibly a better approach.

The questions about the way the city council is required under the statute to make requests of the food and beverage tax advisory commission will likely be aired out at the advisory commission’s next meeting, scheduled for Tuesday, Dec. 3 at 4 p.m 3 p.m. in the Nat U. Hill meeting room of the county courthouse.

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