On Dec 5, the Council voted 5-2 to approve an urban renewal plan that gives the Louisville Revitalization Commission unprecedented control over the expenditure of up to $77 million. Council members Muckle and Yarnell voted no.

The Council’s vote puts into motion a series of events that will lead to the collection by the LRC of an estimated $42.1 million in incremental property tax revenue. Although prior to approval of the urban renewal plan, LRC officials played down their intent to obtain an additional $35.4 in incremental sales tax revenue, LRC documents tell another story: the LRC fully intends to secure for itself the $35.4 million. The City itself appears to believe the LRC will be requesting—and will receive—that revenue, which explains why the City obtained a fiscal analysis that assumes the LRC will be diverting both incremental property and sales tax revenues.

The lack of financial accountability. The LRC’s accountability over the $77 million is still an open question. Those Council members supporting the plan said there are adequate checks on the LRC’s expenditures because the Council would approve the LRC’s annual budget under the so-called Cooperation Agreement, also passed on Dec 5.

But review of the budget is hardly a substitute for control over expenditures of tax dollars by elected officials. After all, there’s a big difference between approving a budget (what the Council will do) and making the multi-million budget and spending the tens of millions of tax dollars (what the unelected LRC will do). For some perspective: our elected Council prepares the City’s $13 million operating budget, and at every Council meeting approves every dime the City spends; in contrast, the unelected LRC could have a budget comparable to or significantly greater than the City’s, and the City Council after approving the LRC’s budget has no ability to control its expenditures. This is why unelected bodies like the LRC can lose $1.5 million in 4 years and put elected bodies in the position of picking up the pieces.

The unelected LRC’s extraordinary powers. Additionally, with or without the agreement, the LRC retains extraordinary powers, powers equivalent to a second City Council in Louisville: to enter into non-monetary contracts with any private or public entity; borrow money; issue and redeem bonds; “set up, establish, and maintain such general, separate, or special funds and bank accounts or other accounts as it deems necessary”; “invest any of its funds”; encumber revenues and property; set up the framework for negotiating and conducting the negotiation of agreements with developers. None of these powers is subject to review by the Council. (The quotations are from Colo. Rev. Stats. § 31-25-104, which lists the powers of an urban renewal authority.)

The LRC’s lack of ethics accountability. Unlike any of the members of the City’s other 13 boards and commissions—who have a budget of $0 to spend—the LRC’s members are not subject to any part of the City’s stringent ethics codes, which have helped ensure that city officials act for the benefit of citizens and not against them. 

The LRC model is one foreign to Louisville. We have never put that much money and powers in the hands of an unelected body. The Council never explained why we should now.