Council approves abatement compliance
La PORTE – Tax Abatements were once again the hot topic for La Porte City Council, which had votes on two local businesses’ annual compliance reports at its Monday meeting.
The Tax Abatement Compliance Forms, were presented by La Porte City Planner, Beth Shrader.
The Compliance Forms J&L Dimensional Services stated that for the final year in the five-year abatement of personal property approved in 2012 (R-4-2012), they have exceeded employment creation goals, exceeded salary goals and exceeded investment goals for manufacturing equipment. The forms were approved by the council, unanimously.
However, the Annual Compliance Forms for Tax Abatement Recipient Plastic Package Inc. dba Revere Packaging was met with some confusion by the council. Due to a filing error, it seemed as though the company had missed the mark for their salary goals (SV-1), considerably.
“I should be able to report that they have exceeded all of their goals, however, their salary goals [portion contains] an error,” Shrader explained. “We revisit this every single year and see the erroneously entered salary goal. I got some information from the [current] CFO, and he believes that the CFO prior to him entered the company-wide payroll instead of just the La Porte, Indiana payroll and that is what caused the very high salary goal.”
The amount listed in the abatement would have represented more than the approximate 19 employees in the La Porte location. This resulted in the salary goals being much more than what the company typically pays its employees.
“Essentially it makes it pretty impossible to meet that goal because the La Porte location is about a third of the total company.” said Shrader.
At-Large Councilman Joe Mrozinske replied, “from my understanding, when the resolution was passed, and when we agree to a resolution or abatement, we are looking at the total package. So, if we are looking at substantial progress [over] years, we are going to gauge it [based] on what they say they are going to do. There has been no change in the resolution. Those figures are what we should gauge [compliance] on, not what it’s ‘supposed to be’.”
Mrozinske further explained, “if we send everyone down to the county offices and ask everyone to put what they ‘feel it should have been’ because of an error, we’re going to be in trouble.”
He went on, “this should have been corrected last year. If what they state is what we are going to base it on, then I don’t know why we are spending any time looking over these abatements.”
Nick Otis, the City Attorney argued, “I think it is unrealistic that the average salary would be about $100,000 for these types of jobs. Is that fair to say?”
Shrader agreed with Otis.
Without going into detail, Shrader confirmed that the abatement not being approved would become an issue before the next council meeting.
“May I remind the council that there have been more abatements that have been approved, just last meeting, where there was an issue with SV -1 and clarification was provided?” Shrader asked, rhetorically.
Mrozinske remained hesitant to accept the compliance forms with the error in place.
“I would think that if we were to approve this, that I would want clarification as to what type of paying jobs that we are bringing in with this abatement,” he said. “It’s only fair for the other businesses in this town who are paying taxes.”
At-Large Councilman Timothy Stabosz made a motion to accept the compliance forms.
“The reason for the motion is that they exceeded their investment goals,” Stabosz said. “The estimated investment goal was $1 million and they actually invested $1.7 million, and to some, where the rubber meets the road is the tax payers collect on the value of the investment.”
Mrozinske addressed the public and the council.
“I just want to stress the importance of filling out the right paperwork when you bring it before the council. That’s going to be my argument,” Mrozinske said. “We are in the day and age where abatements can be used as economic development tools, and I agree with that, but the information has to be correct.”
The motion passed six to one in acceptance of the annual compliance forms for tax abatement recipient Plastic Package Inc. dba Revere Packaging.