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June 20, 2014

City awaits decision on TIF funds

State officials continue week’s discussion on City’s TIF use

TERRE HAUTE — State auditors may decide as early as Monday whether Terre Haute officials have been properly or improperly using tax increment finance (TIF) cash.

State Board of Accounts officials have been discussing the matter over the past week, said Charlie Pride, office supervisor for the SBA, which oversees local government finances. A decision is expected early next week, perhaps as early as late Monday, he said.

Meanwhile, Cliff Lambert, executive director of the Terre Haute Department of Redevelopment, confirmed Friday he filed a formal complaint earlier this month with the SBA about the possible misuse of TIF money by the administration of Mayor Duke Bennett. Lambert said he believes the administration is using TIF money to meet day-to-day city expenses, including payroll, which he contends is a violation of state law.

Mayor Bennett and Leslie Ellis, city controller, maintain it is perfectly legal to place Redevelopment Commission cash into a common pool with other city money and then use pooled cash to meet day-to-day expenses.

Such “pooling” has been done for years, they argue. However, making TIF money part of the cash pool is a new development – something that started after TIF bank accounts were handed over to Ellis in April.

This disagreement is now the question before the state board.

“We still haven’t got anything resolved yet,” the SBA’s Pride said in a Friday afternoon telephone interview. “We’ve been discussing it all week, but nothing is finalized.”

The specific questions under discussion are whether, under state law, TIF money can be used to cover immediate city expenses and whether it is appropriate to pool TIF money with other city cash, he said. “Those are the two items that we’re trying to get resolved,” Pride said.

Lambert, in a telephone interview Friday, said his formal complaint was received by the SBA on June 3 and includes a sworn affidavit.

“As executive director of the Department of Redevelopment, I have an obligation to protect the Redevelopment Commission and the department staff from any culpability or concern that [they] are complicit in any criminal felony violation of the Indiana code as it relates to the use of the TIF funds by the city administration,” he said.

Ellis, reached later Friday evening, said the administration was unaware of Lambert’s formal complaint.

“We have no knowledge of the complaint, but we have been in continual contact with the State Board of Accounts throughout this process,” she said.

Lambert said he sent his formal complaint to Paul Joyce, a member of the three-person State Board of Accounts, which is appointed by the governor. Lambert said he also called the SBA offices on June 3 to express his willingness to travel to Indianapolis and give a sworn deposition. That was his last contact with the Indianapolis oversight agency, he said.

Lambert, while a city employee, works directly for the Redevelopment Commission, which is made up of five voting members including three appointed by the mayor and two by the city council. There is also a non-voting member appointed by the school board.

The three current members of the SBA are Joyce, state examiner, Mike Bozymski and Tammy White, both deputy state examiners. All three are CPAs.

The SBA, part of the state government’s executive branch, audits all government units within the state, including cities, towns, schools and counties. It also does investigations to reveal fraud or noncompliance with local, state or federal statutes, according to the SBA website.

TIF money is raised from property taxes collected in designated geographic areas known as TIF districts. Terre Haute has four TIF districts including the downtown area, the area around the east-side Wal-Mart store, the Fort Harrison Industrial Park and property around Jadcore on Fruitridge Avenue.

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

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