The Indiana State
Board of Accounts and the Munster Redevelopment Commission seem to be in tiff
about the use of TIF funds.
Commission members
last week approved filing a lawsuit asking a judge to give a legal opinion on
the matter.
From the point of view
of the State Board of Accounts, the problem is the use of tax increment
financing allocations for landscape maintenance at Centennial Park.
The park is in a TIF
district, and the Redevelopment Commission has authorized the use of those
funds to maintain the park’s extensive landscaping.
However, during its
examination for 2011 and audit for 2012, the state board “commented, among
other things, that TIF allocations cannot be used to pay for landscape
maintenance, as had been done at Centennial Park,” Clerk-Treasurer David Shafer
said in a report to the Redevelopment Commission on Aug. 26.
The commission, which
includes the five Town Council members and a School Town of Munster
representative, controls the use of funds generated by the town’s TIF district.
Those funds only come from property taxes paid by businesses in the district,
not residential property taxes.
Shafer said in a memo
that the town’s official response “respectfully took exception to the comment
and promised to seek an official audit position from the SBOA after obtaining
its own legal opinion.”
On June 24, the
Munster Redevelopment Commission accepted a legal opinion submitted by the law
firm of Ice Miller that the maintenance was an acceptable use of redevelopment
dollars as indicated in state law, Shafer said.
That opinion was
forwarded to state board member Bruce Hartman, a certified public accountant,
in Indianapolis.
Hartman’s response
dated Aug. 22 reiterated the state board’s position that “such funds cannot be
used to maintain park land.”
...
Reed made a motion to
file a lawsuit for “a declaratory judgment" asking a judge to interpret
state law governing the use of TIF funds. A second part to the motion stated
that the town will follow the dictates of the state board while awaiting a
decision.
Redevelopment
Commission members voted unanimously to instruct Town Attorney Eugene Feingold
to file the lawsuit as soon as possible.
A judgment is
important because the Munster TIF district will be active for the next 17 years
and the money involved in the park's maintenance will be a large sum during
that 17-year period, said Joe Simonetto, chairman of the Redevelopment
Commission.
"We need to
follow the letter of the law while challenging the law," he said.
