In 2009, Elkhart, Ind., the recreational vehicle capital of the world, became the poster child for a recession that still lingers in several sectors of the national economy.
The downturn hit the city early and hard. Almost simultaneously, a state enacted budget bill caused shortfalls in municipal funding that complicated the economic situation.
The rising number of out-of-work individuals meant a drop in local income taxes, and many of the same residents also fell behind on their property taxes payments.
Mayor Dick Moore responded by tightening the city’s financial belt. Department heads were suddenly no longer permitted to spend their entire budgets, and all expenditures over $500 required the mayor’s approval. More importantly, Moore turned to alternative funding sources to keep the city in the black.
“Since the funding for our general municipal budget was down, we used other funding mechanisms from our cumulative funds,” he said. “We were able to shore up our funding shortfalls using these funds. And that’s what we will continue to do until such time as the economic downturn ceases and our property and local income taxes become more stable.”
Remarkably, no layoffs of city employees took place during the recession. The city maintained a high level of public services, and kept its fund balances at a respectable A+ credit rating as determined by Standard and Poor’s Ratings Services.
During 2010 and 2011, Elkhart’s administration committed a significant amount of time to working with a federal lobbyist to assess what stimulus funds were available to the community.
Moore put together a stimulus committee that reviewed and applied for assistance opportunities. Through those efforts, the city received directly and indirectly $40 million dollars in stimulus funds.
“We worked tirelessly with the Economic Development Corporation to retain and create new jobs,” he noted. “During that same time period, we were able to start our combined sewer overflow and long-term control plans with only minor rate increases, thanks in
part to funding we received from Indiana Financing Authority.”
Among the projects that were realized with outside funding were the demolition of two blighted downtown properties and improvement to the city’s airport.
Most notable to the casual observer, though, might have been the remodeling and expansion of a stately downtown landmark. The 86-year-old theater had fallen into disrepair. Several attempts to restore it failed. But in 2010, federal funding shook hands with a particularly committed effort to kick off the $18 million dollar project.
In an example of alternative financing, when funding fell short to complete the longawaited project, Mayor Moore borrowed funding from Indiana’s Major Moves, an
aggressive 10-year transportation plan to improve and expand Indiana’s highway
infrastructure. Those funds were repaid at a higher interest rate than what the money had
been earning. Elkhart also recouped, through stimulus funding 45 percent of the interest
that occurred, during the project. Individuals and businesses also came forward to support
the revitalization project.
In June 2011, the grand Lerner Theatre reopened. It quickly became the public face
of a resilient midwestern city.
Elkhart plans to continue developing its combined sewer overflow infrastructure and long-term control plan for local waterways. Maintaining a high quality of services and
keeping all city employees working are also on its list of priorities. While Elkhart is still struggling to balance its 2012 budget in light of continuing tax losses, in his State of the City address in March Moore vocalized his commitment to addressing this newest challenge.
“As I have said before, we must never turn our back on the RV industry. It’s part of the fabric of our community,” he stated. “It has always rebounded, it is rebounding now, and I predict that the RV and manufactured housing industry will exceed the so-called expert’s growth expectations.” Remaining mindful of exactly where the city is in the recovery process will also be a prudent component of setting the city on a financially stable path, he added.