News From Terre Haute, Indiana

Breaking News

Local & Bistate

June 23, 2014

TIF use: Spending vs. lending

SBA considering if city can use TIF funds to pay immediate expenses

TERRE HAUTE — A State Board of Accounts official said Monday that his agency is not likely to present its findings on a complaint over control of Terre Haute’s redevelopment funds until an ongoing routine audit is complete.

But that same official, Todd Austin, SBA director of special districts, said that generally state law permits the lending from one city account to another city account. That, he said, would include redevelopment dollars — called tax increment finance (TIF) dollars.

And state law also clearly limits how TIF money may be used, he said. Also, TIF money loaned to another area of the city would have to be fully repaid within the budget year.  

“It’s kind of a complicated issue, it really is,” Austin said in a telephone interview Monday afternoon. “It’s still being discussed.”

Cliff Lambert, executive director of the Terre Haute Department of Redevelopment, said he believes that the administration of Mayor Duke Bennett has used Redevelopment Commission TIF dollars to pay immediate city expenses, such as payroll. Lambert contends that’s not allowed under Indiana law.

In early June, the Tribune-Star contacted the SBA’s office supervisor, Charlie Pride, to ask whether Indiana cities may legally use TIF money to meet immediate expenses if TIF accounts are later replenished. That question remained unanswered as of Friday.

On Monday, however, Austin said the basic answer to that question is “no” — that state law limits how TIF money is allowed to be spent. Just saying “no,” however, “would not be telling the whole story,” he said.

The SBA has taken the view that “virtually any local government fund can loan money to virtually any other fund. The statute isn’t crystal clear, … but we’ve taken the view that any fund can loan to another fund” as long as the loan is repaid by the end of the year, he said. That includes TIF funds, he said.

“Think of it this way,” Austin said. “You can spend money and you can loan money.” The law limits how you can spend TIF money, but “there’s another statute that would allow money not to be spent but to be loaned.”

Lambert, reached late Monday, said borrowing money implies an agreement to lend, something the administration did not receive from the Redevelopment Commission, the five-person body that oversees TIF funds.

“They (the city administration) didn’t request to borrow the money,” Lambert said. “They arbitrarily took it.”

Lambert believes Leslie Ellis, city controller, has transferred about $4.9 million from Redevelopment Commission bank accounts since April. A public records request last week showed that on May 15, $600,000 was transferred from one TIF account to a city payroll account.

Messages were left for Mayor Bennett Monday evening. Controller Ellis referred a request for comment to Bennett.

In early June, Lambert filed a formal complaint with the State Board of Accounts. That complaint will be handled like any other received by the SBA during an audit, Austin said. The SBA will not discuss the ongoing Terre Haute audit with the media, but local officials may publicly discuss matters as they are resolved and clarified, he said.

“If we, through the course of the audit have discussions with officials and clear up matters, you may be able to glean some information by talking with them. But, from us directly, I think we’re going to have to let our audit do the talking.”

Austin would not say when that audit would be complete.

Reporter Arthur Foulkes can be reached at 812-231-4232 or arthur.foulkes@tribstar.com.

1
Text Only | Photo Reprints
Local & Bistate
Latest News
TribStar.com Poll
AP Video
Courts Conflicted Over Healthcare Law Raw: Truck, Train Crash Leads to Fireball US Airlines Cancel Israel Flights Diplomatic Push Intensifies to End War in Gaza Raw: Lawmakers Scuffle in Ukraine's Parliament Michigan Plant's Goal: Flower and Die Raw: MH17 Passenger Remains in Kharkiv, Ukraine New Orleans Plans to Recycle Cigarette Butts Raw: Israel Hits Gaza Targets, Destroys Mosques Obama Signs Workforce Training Law Cat Fans Lap Up Feline Film Festival Crash Victims' Remains Reach Ukraine-held City Raw: Israel Bombs Multiple Targets in Gaza Obama Offers Condolences at Dutch Embassy Foxx Cites Washington 'Circus Mirror' Holder Urges Bipartisanship on Immigration Raw: Cargo Craft Undocks From Space Station Raw: Texas Gov. Rick Perry Visits Iowa The Rock Finds His Inner 'Hercules' Police Probing Brooklyn Bridge Flag Switch
NDN Video
Justin Bieber In Calvin Klein Underwear Shoot Samsung Pre-Trolls The IPhone 6 With New Ad Jimmy Kimmel Introduces His Baby Girl Swim Daily, Nina Agdal in the Cook Islands Guilty Dog Apologizes to Baby for Stealing Her Toy Prince George Turns 1 and is Already a Trendsetter Train Collides With Semi Truck Carrying Lighter Fluid Kanye West Tells-All on Wedding in "GQ" Interview Tony Dungy Weighs in on Michael Sam Scarlett Johansson Set To Marry In August New Star Wars Episode XII X-Wing Revealed Obama: Putin must push separatists to aid MH17 probe Michigan inmates no longer allowed to wear orange due to 'OITNB' Adam Levine Ties the Knot Sebastian The Ibis Walks Beautiful Bride Down The Aisle | ACC Must See Moment NASA Ceremony Honors Moon Walker Neil Armstrong Faces of Souls Lost in Malaysian Plane Crash 105-year-old woman throws first pitch Man Creates Spreadsheet of Wife's Reasons for Turning Down Sex 'Weird Al' Is Wowed by Album's Success
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
  • -

     

    March 12, 2010

activity