MUNSTER | 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.”
A flurry of discussion followed the presentation of that letter by Shafer.
“I’m not ready to take a CPA’s opinion of a statute,” said John Reed, a commission member and an attorney in private practice.
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.