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Board of Commissioners of Clark County v. Indiana Dept. of Local Government Finance

Tax Court of Indiana

April 24, 2015

BOARD OF COMMISSIONERS OF CLARK COUNTY, Petitioner,
v.
INDIANA DEPARTMENT OF LOCAL GOVERNMENT FINANCE, Respondent

ON APPEAL FROM A FINAL DETERMINATION OF THE DEPARTMENT OF LOCAL GOVERNMENT FINANCE.

ATTORNEY FOR PETITIONER: C. GREGORY FIFER, APPLEGATE FIFER PULLIAM LLC, Jeffersonville, IN.

ATTORNEYS FOR RESPONDENT: GREGORY F. ZOELLER, ATTORNEY GENERAL OF INDIANA; JESSICA E. REAGAN, DEPUTY ATTORNEY GENERAL, Indianapolis, IN.

OPINION

Page 553

WENTWORTH, J.

This case concerns whether the Indiana Department of Local Government Finance (DLGF) erred in denying the Clark County Board of Commissioners' (Board) request to increase Clark County's Cumulative Capital Development Fund (CCDF) tax rate for the 2012 budget year. The Court finds no error.

BACKGROUND

Prior to July 11, 2011, the Board contracted with H.J. Umbaugh & Associates for the preparation of a Comprehensive Financial Plan (Umbaugh Plan) to assist its commissioners in fulfilling " their role as [the] managers of [Clark] County." (See Cert. Admin. R. at 186-87.) The Umbaugh Plan recommended that the Board increase the CCDF tax rate to the maximum allowed by statute. (See Cert. Admin. R. at 190.) The Umbaugh Plan indicated that the rate increase would generate about $613,800 in additional property tax revenues that, once transferred to the County's Rainy Day Fund, could be used to pay certain operating expenses. (See Cert. Admin. R. at 190.)

On July 21, 2011, the Board introduced Ordinance No. 18-2011 for approval and adoption at its regularly scheduled monthly meeting. (See Cert. Admin. R. at 5-6, 135-36.) Ordinance No. 18-2011 provided in part

WHEREAS, Ind. Code § 36-9-14.5, et seq., and Ind. Code § 6-1.1-41, et seq., authorize this Board to establish a cumulative capital development fund for any purpose for which property taxes may be imposed within the county under the authority of the series of statutes referenced in Ind. Code § 36-9-14.5-2; and,
WHEREAS, this Board has previously established the [CCDF] by ordinance, and such fund has been in continuous existence for more than one (1) year; and,
WHEREAS, the [CCDF] is presently funded by a tax rate of $0.0180 per $100 of assessed valuation pursuant to the 2011 budget approved by the [Council] and in accordance with the provisions of Ind. Code § 36-9-14.5-6(a); and,
WHEREAS, Ind. Code § 36-9-14.5-6(b) authorizes the tax rate of a cumulative capital development fund that has been in existence for a period of one (1) or

Page 554

more years to be established at a rate of up to $0.0333 per $100 of assessed valuation; and,
WHEREAS, Ind. Code § 36-1-8-5(b)(1) permits funds held in the [CCDF] to [be] transferred to the Clark County Rainy Day Fund to the extent not expended during any budget year; and,
WHEREAS, this Board now finds that an increase of the tax rate funding the [CCDF] is an appropriate action given the budget crisis that Clark County government presently faces in that it will create a mechanism by which the County's reserve funds might be replenished once the essential functions of County government are again fully funded[.]

( Cert. Admin. R. at 10-11.) During the meeting, however, the Board failed to adopt Ordinance No. 18-2011 with a unanimous vote as required under Indiana Code § 36-2-4-7(b); consequently, the Board scheduled a special meeting for the following week. (See Cert. Admin. R. at 5-6.) On July 27, 2011, at that special meeting, the Board unanimously adopted Ordinance No. 18-2011.[1] (See Cert. Admin. R. at 6-7.)

On July 28, 2011, the Board petitioned the DLGF for approval of its proposed tax rate increase, but shortly thereafter, over 100 taxpayers filed an objection petition with the Clark County Auditor. (See Cert. Admin. R. at 1, 20-29). On September 26, 2011, the DLGF held a hearing during which some of those taxpayers advocated against the tax rate increase stating that they believed certain county officials were fiscally irresponsible and had previously spent CCDF monies improperly. (See, e.g., Cert. Admin. R. at 168-69; Cert. Supp'l Admin. R. at 7-12, 15-29, 36-38.) To support their position, the taxpayers presented, among other things, excerpts from the State Board of Accounts' 2008 and 2009 Audit Reports, which indicated that ...


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