News From Terre Haute, Indiana

Local & Bistate

May 28, 2014

Mayor refuses to return TIF money

Duke Bennett says city on ‘solid ground’ pooling Redevelopment money with other funds

TERRE HAUTE — Mayor Duke Bennett made it clear Wednesday he has no intention of returning cash to Redevelopment Commission bank accounts.

Last Wednesday, the Redevelopment Commission passed a resolution asking Leslie Ellis, the city controller, to return about $3.4 million withdrawn from Redevelopment Department bank accounts within 48 hours.

In a written statement issued late Wednesday afternoon and addressed to Redevelopment commissioners, Bennett said that would be unnecessary.

“Moving dollars from one account back into another account at the same bank simply because someone does not like the changes in the law is not a valid reason to take that action,” Bennett said in his 21⁄2-page statement sent by email to members of the Redevelopment Commission.

The “someone” the mayor was likely referring to is Cliff Lambert, executive director of the Department of Redevelopment, who has stated he believes the Bennett administration may have violated the law in its handling of Redevelopment money. It is illegal to spend tax increment finance (TIF) money on non-TIF expenses, according to the Indiana State Board of Accounts, and Lambert believes that is exactly what it happening.

The five-member Redevelopment Commission, an appointed body, oversees the city’s TIF districts.

The “law” Bennett is referring to is Senate Enrolled Act 118, which the state legislature passed this year. The law makes the city controller the “treasurer” of the Redevelopment Commission and gives the “treasurer” authority over the administration, investment and disbursement of “all funds and accounts” of the commission in line with “laws that apply to other funds and accounts administered” by the treasurer.

That, Bennett said, gives Ellis the authority to “pool” Redevelopment cash with other city funds to meet expenses. As long as Redevelopment funds are properly settled at the end of the year and no charges are made against them that are not allowed, they can be managed like any other city funds, he said.

“We know we’re on solid ground,” Bennett said in a telephone interview later Wednesday. Other city departments have bond obligations, and they are managed the same way, he said. “This isn’t anything unique.”

Lambert, interviewed later in the evening, disagreed. Redevelopment money is different by law, he said. It is a class-C felony to use TIF money for anything other than TIF-related expenses, he said. The new state law “didn’t change that,” he said.

Lambert said he will appeal to the State Board of Accounts in Indianapolis and, perhaps, the Indiana Department of Local Government Finance, for a ruling on the matter.

In his statement, Bennett also questioned the fairness of the Redevelopment Commission meeting of last week, calling it a “well-planned attempt to discredit the administration.” The controller, Ellis, who attended the meeting, was not warned in advance about the questions she would be facing, he said. “It was an ambush,” the mayor said in his later interview. The four-page statement read by Lambert at the start of the meeting strongly questioning the city’s use of the TIF accounts was not even on the meeting’s public agenda, he noted.

Lambert called the allegation of an ambush “absurd.” His office repeatedly sought information from the controller’s office about the TIF accounts in the first half of May, he said, something supported by emails obtained by the Tribune-Star through a public records request.

By all accounts, Lambert and Bennett, although both work in City Hall, have not communicated much in recent days or even weeks. Based on documents obtained through a public records request, Bennett sent Lambert an email on April 21 outlining four things that need to happen in light of the new state law involving the transfer of budgeting authority to the City Controller. In a reply email, Lambert responded stating he sees “no real problem with any of these requirements.” Later, however, in his statement to the Redevelopment Commission, Lambert called the tone of Bennett’s email “bullying” and “a little desperate.”

Bennett said he and Lambert have not communicated much or at all since.

“I agree 100 percent,” Bennett said when asked whether the two should improve their communication. “I’ll talk to anybody, any time,” he said.

Lambert, asked the same question, said it would be pointless to talk because the Bennett administration does not communicate well with the City Council or other parties about the city’s fiscal health. “It would not help anything,” he said.

The Tribune-Star provided Lambert a copy of the mayor’s statement so he could respond for this article. He was not included on the original email from the mayor’s office.

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