New UEZ Concern: Administrative Costs

A resolution to add new revenues to the 2013 budget brought out more controversy over Urban Enterprise Zone funds when one council member questioned their inclusion and another objected to use of $92,000 to run the program.

Plainfield's Urban Enterprise Zone program began in 1985 and did well when the city had large revenue-producing businesses such as Macy's. Income from sales tax dropped after Macy's closed and the program never reached the desired level of involvement by smaller retail businesses. It was shut down after a state report revealed it was only producing eight cents in new revenue for every dollar needed to operate the state program. Participating municipalities received the balance of funds for local administration.

At the July 8 City Council meeting, Councilman Adrian Mapp, a chief financial officer in another city, said the UEZ funds should not have been lumped in with various grants to be added to the budget. Treasurer Diane Sherry-Buono said the state had advised cities to include the funds, but Mapp disagreed and a resolution up for approval Monday does not include the UEZ money.

Councilman Cory Storch had another concern, saying the funds are now finite and will no longer be replenished.

"Once we spend it down, it's gone," Storch said. "We should spend it very wisely."

Storch noted a long list of projects still to be covered by UEZ funds and called the $92,000 in local administrative costs "very short-sighted." The amount pays for two employees in City Hall to run the program.

Public Works Director Eric Jackson, who was filling in for City Administrator Eric Berry and Finance Director Al Restaino on July 8, said if the salaries were removed from UEZ funds, the cost would have to be taken directly out of the municipal budget. He said he wanted the council to be aware of that outcome. But Storch insisted that the cost be removed from the UEZ funds.

"So the resolution will come back without the $92,000 and you will tell us how you will adjust (the funding)," Councilman Reid said to Jackson.

The city began taking an amount for local program administration out of the UEZ money more than 10 years ago. But since the fund balance was turned back to the city in 2011, council members' questions about use of the money and status of projects went unanswered until a couple of months ago when the program director offered a spreadsheet. It still did not spell out the status of each project.

Formerly, approval for any project had to come from the state Urban Enterprise Zone Authority, but now it would have to come from the council. In December 2011, the council rejected the use of $32,600 for an "ecological park." No new proposals have been made. Mapp unsuccessfully pressed for a full accounting of each project in May 2012.

The 2011 state report showed that only 14 percent of eligible retailers in Plainfield were enrolled in the program when the state shut it down. One of the perennial sticking points was a requirement for an employer to add jobs, which most local "mom and pop" retailers were unable to do. Before the decline of major retailers, UEZ funds were used for such things as street cleaners, trash baskets, benches and extra police in the zone.

--Bernice