Calumet Township data reveals it as big spender among townships

2013-01-08T00:00:00Z 2013-05-07T17:25:04Z Calumet Township data reveals it as big spender among townshipsBill Dolan bill.dolan@nwi.com, (219) 662-5328 nwitimes.com
January 08, 2013 12:00 am  • 

GARY | The multimillion-dollar budget for the Calumet Township trustee has been a fat target for critics from Griffith Town Hall to the statehouse in Indianapolis.

Trustee Mary Elgin wants to knock that bulls eye off her back. She argues critics have used skewed statistics when analyzing her township's spending habits.

"The figures that the state and the town of Griffith have been using were all wrong," she said. "It's unfair, and I would like to get that settled, once and for all."

Elgin was referring to state-generated annual reports indicating the trustee's office spent a total of at least $360 million since 2003, including a $57.2 million glut of disbursements in 2008 alone.

The Calumet Township trustee's office was cited in the General Assembly last year for spending about $100 per resident -- many times larger than the state average -- according to the Indiana Department of Local Government Finance.

That has given ammunition to Griffith Town Councilman Rick Ryfa, who said his community is tired of having to bear the high tax burden of supporting the trustee's large payroll and liberal administration of assistance.

"Calumet Township is nowhere near on par with the rest of the state," Ryfa said. "Our spending rates are the highest, and we are by far the highest taxed township in the state."

How it compares

Critics have complained the overhead of township trustees' administrative costs in general are many times that of private charities that provide similar poor relief.

Joanne Reisser, vice president of development for non-profit rating firm, Charity Navigator, said the private sector tends to handle poor relief more effectively than local government.

"We feel the private sector does a better job of effectively spending money," Reisser said. "The best charities are going to spend 75 percent on programs and only 25 percent on administration and fundraising."

Elgin estimated Calumet's administrative costs at 43 cents for every dollar of assistance given, or about 43 percent of the spending.

Calumet Township records analyzed by The Times indicate that between 2001 and 2009, the township spent $42 million on its employees' salaries and benefits, $65 million on assistance for the indigent and $23 million in payments to business vendors for services.

Still, Elgin said she believes her critics have used "reports they don't understand" and used them as "an opportunity to be negative."

Larger-than-life bottom line?

Elgin said the figures that the State Board of Accounts requires her office to report end up counting the same money multiple times when it is moved among the township's several bank accounts, just as if it is being spent again and again in the form of salary, vendor payments or township assistance to the indigent.

She said the state's "cash and investments" protocols are designed to create a paper trail to make money transfers easier for auditors to track.

But she said the process also makes for an apparently larger-than-life bottom line.

"It's easy to use those numbers to prove a point, but it is not reality. And they know better," Elgin said.

The Times obtained records Elgin's office maintains for audit reviews that show $134 million of spending by Calumet Township between 2001 and 2010 -- less than half the state figures.

Elgin said even after removing the "noise" of fund transfers, her present budget is more like a fun-house mirror than a true reflection of her office's spending.

"I'm not sure we actually spent $11 million in our budget because we may only have gotten $5 million because of low tax collections and the tax caps. But we have to publish and approve an $11 million budget just to get that $5 million to operate," Elgin said.

Dwarfing all others

Even that $5 million in expenses dwarfs all but eight of the 1,007 other township trustees in the state, according to Gateway, the Indiana Department of Local Government Finance's database.

The only comparable budget in the region is Lake County's North Township, which plans to spend $6.8 million, or $41.75 per resident, on services in East Chicago, Hammond, Highland, Munster and Whiting. North's population is 36 percent larger than Calumet's.

However, the Indiana Department of Local Government Finance reports that Calumet Township is now spending $98.08 per resident.

Curtis Whittaker, Calumet Township's financial consultant, said the township's per capita numbers are similarly skewed by the state's accounting procedures.

"They first said we spent $165 per capita," he said. "That's crazy."

Skewed counts?

Whittaker said the problem arises from State Board of Accounts rules requiring the township to keep its tax revenues in several earmarked funds.

"When one of our funds became low, we would borrow from another of our funds," he said. "But we have to show that as if it was new revenue and an expense. That artificially inflates the numbers we have. I talked with (former Gov. Mitch Daniels) about this problem. He sent me to (State Examiner) Bruce Hartman, who said we had to live with it because those are the rules of the game."

Whittaker said when the acuity of Calumet Township's poverty level is figured in, "We are right in line with everybody else in the rest of the state."

He said legislative fiscal experts privately agreed with Calumet.

But Griffith Councilman Ryfa isn't buying it.

"The reason the township is so out of whack is because their math isn't very good," he said.

Forcing its hand

Elgin said it is difficult to spend less money because Gary's large and intensively poor population generates tens of thousands of emergency relief claims annually that her staff has no choice but to investigate.

So it becomes a balancing act between need and expenditures, she said.

Township records show annual spending has fallen from an annual high of $14.3 million in 2006, but much of the reduction was forced on the unit of government by state-mandated limits on the township's primary source of revenues: property taxes.

"Tax caps came into play and zapped more than half of our tax dollars," Whittaker said.

Within the past decade, the township has reduced its payroll from a high of 212 employees in 2003 to 82 current employees, according to township data analyzed by The Times. The township also closed three of six buildings.

But it still maintains a fleet of township owned vehicles, eight of which are take-home cars for employees.

"Some employees do have cars. It may be down to eight," Elgin said. "They are not luxury vehicles. They are older. We no longer pay for the gas or expense. There were 46 such vehicles when we came into office."

The tax caps, the upper limit on how much in tax dollars government can extract from a single property, have had the same effect on other trustees.

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