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Redevelopment Comm'n v. Indiana State Board of Accounts

Court of Appeals of Indiana

March 16, 2015

Redevelopment Commission of the Town of Munster, Indiana, Appellant-Petitioner,
Indiana State Board of Accounts and Paul D. Joyce, State Examiner of State Board of Accounts, Appellee-Respondent

Page 273

Appeal from the Lake Circiuit Court. The Honorable Thomas W. Webber, Sr., Judge Pro Tempore. Cause No. 45D04-1310-PL-92.

ATTORNEY FOR APPELLANT: Eugene M. Feingold, Steven P. Kennedy, Law Offices of Eugene M. Feingold, Munster, IN.

ATTORNEY FOR APPELLEE: Gregory Zoeller, Attorney General of Indiana; Kathy Bradley, Deputy Attorney General, Indianapolis, IN.

Mathias, Judge. Najam, J., and Bradford, J., concur.


Page 274

Mathias, Judge.

[¶ 1] The Munster Redevelopment Commission (" the Commission" ) appeals the Lake Circuit Court's order entering summary judgment in favor of the Indiana State Board of Accounts[1] (" the Board" ) in which the trial court determined that Indiana Code section 36-7-14-28 does not permit the Commission to use tax incremental financing funds to pay for the ongoing maintenance of redeveloped properties.

[¶ 2] We affirm.

Facts and Procedural History

[¶ 3] In February 2006, the Commission initiated a project to redevelop a designated area in Munster, which included the Munster Centennial Park and the Munster Community Park. The Commission financed the parks' improvements, in part, using funds acquired through tax allocation financing, also known as tax increment financing[2] (" TIF" ). After the redevelopment

Page 275

of the parks was completed, ownership of the parks was transferred from the Commission to the Munster Municipal Center Corporation and Parks Department (" the town" ). The town allocated in its annual budget a portion of TIF funds to pay for the ongoing maintenance of the parks.

[¶ 4] At some point, the town learned that the Board did not consider maintenance of redeveloped properties to be proper use of TIF funds. The town consulted its legal counsel as to whether it was permissible for the town to use TIF funds to maintain the two parks. On May 16, 2013, the town's counsel wrote: " It is our view that the statutes authorize activities of this nature when those activities are in conjunction with the overall redevelopment purposes of the Town." Appellant's App. p. 38. Counsel's memo also stated:

[I]f the Redevelopment Commission is utilizing the tax levy for general expenses to fulfill [its duty to use the land in the manner that best serves the town] and has concluded that it ought to promote this use of parks and cooperate with the Town, its decision fits squarely within the statutory framework and intent and is certainly incident to its statutory powers and duties.


[¶ 5] The town also sought the opinion of the Board. On August 22, 2013, the town received a letter from the Board, which provided:

The legislature has provided that the expenditure of redevelopment funds for maintenance is to occur only to maintain buildings in the situation where the redevelopment commission has determined that demolition of those buildings is not considered necessary to carry out the redevelopment plan. Such funds cannot be used to maintain park land. This should not be construed as a legal opinion but represents the position we would take in an audit of the Town's records.

Appellant's App. p. 37.

[¶ 6] On October 7, 2013, the Commission filed a complaint against the Board seeking declaratory relief. Specifically, the Commission alleged that " [d]isallowing the use of TIF funds for maintenance of a TIF financed redevelopment project . . . will create a substantial additional tax expense to its property owners" and that " [f]ailure to comply with the notification of the State Board of Accounts would place the Town of Munster and its Redevelopment Commission at risk of fines, penalties, and other punitive actions . . . taken by . . . the State Board of Accounts." Appellant's App. p. 3.

[¶ 7] On June 2, 2014, the Commission filed a motion for summary judgment. The trial court denied the Commission's motion on August 1, 2014, and granted summary judgment in favor of the Board, finding that that the language in the relevant statutes shows that " the legislature [did not intend] to allow TIF funds to be used for the continued maintenance of properties acquired and improved through the use of TIF funds." Appellant's App. p. 8. The court also noted that the parks in question were now owned by the town, not by the Commission, and that " this is not a matter that falls within I.C. § ...

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