MERRILLVILLE — The Town Court will be back in session.

A preliminary injunction granted Thursday by Lake Superior Court Judge Bruce Parent requires the Town Council to immediately reinstate the court operations and reopen the online portal for litigants to pay fines and court costs.

The order directs the council to make any necessary budget adjustments so the court can function. That includes paying court staff who lost their jobs when the court was closed almost a month ago.

The preliminary injunction stems from litigation Merrillville Town Court Judge Eugene Velazco filed against the Town Council in response to the panel’s decision to shutter the court as of Dec. 31, 2020.

The council in 2019 cited financial issues when making the choice to close the court.

Bond payments stolen by a former court employee contributed to a deficit in the court’s budget.

In his order, Parent said the council’s decision to shutter the court as an approach to resolve the financial issues “was short-sighted and impractical but was not malicious.”

The total amount of missing bond money hasn’t been determined, but it’s speculated it could range from $175,000 to $425,000, according to court documents. Merrillville received a $50,000 insurance settlement to help address the bond deficit, but no other action has been taken so far.

Because the bond fund hasn’t been replenished, bonds posted by new criminal defendants are regularly used to return bond proceeds to defendants from older cases, according to court documents.

In his order, Parent said that’s “setting up what can only be described as a pyramid scheme” to handle bonds.

Thursday’s order indicates the council must hire a certified public accountant to thoroughly examine the cash bond account. The panel also is required to determine a method “for the ultimate funding of the cash bond account as soon as practical.”

Town Council President Rick Bella said in an email the town is reviewing options for bond fund accounting. He didn’t immediately respond to a separate request for comment about the preliminary injunction.

After the court closed this month, many people with active cases there have been confused about the status of their cases and how they would be handled.

Parent found the temporary injunction “was in the best interest of the public generally.”

Attorney Jewell Harris Jr., who is representing Velazco, said he and his client are “very pleased with the court’s decision.”

Harris believes Parent understands the seriousness of issues associated with the Town Court’s recent closure and that Merrillville’s court provides value to litigants.

Although the preliminary injunction was granted, more hearings are needed before permanent legal decisions are made about the case. Those hearings could be scheduled in coming days.

When the council in 2019 adopted the ordinance to close the Town Court, it created a plan to transfer active court cases to the county.

During a Wednesday hearing about the matter, Attorney Lizabeth Hopkins, who is representing the Merrillville council, said correspondence was sent to Velazco indicating the town wanted to move forward with that process. She said he didn’t comply but responded that he believed the town’s ordinance wasn’t valid.

Transferring court cases to the county won’t completely happen until Merrillville administration resolves the lingering issue involving the missing bond payments.

Although the Town Court is reopening, it’s required to no longer accept new cases and start winding down its operations where feasible. That could include transferring some cases to Lake Superior Court if cash bonds can be found for specific cases.

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