News From Terre Haute, Indiana

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December 27, 2012

2012 in Review: Disputes over zoning were hot issues on local governments’ agendas

First of five parts

Zoning issues took center stage in Vigo County in 2012, with Terre Haute residents blocking a senior living complex near Deming Park and Vigo County neighborhoods temporarily halting construction of a southside apartment complex, while gaining a brick privacy wall.

Some other issues of 2012 include a county smoking ordinance amended to match a Terre Haute city ordinance, higher rates for the city’s sanitary sewer district, oil drilling throughout Vigo County and concerns about funding for Terre Haute.

Health care complex

The first zoning issue arose at the start of the year when Magnolia Health Systems, which operates about 30 nursing homes in Indiana, sought to rezone 46 acres on the north side of Ohio Boulevard west of Deming Park.

The company had planned a three-stage, $20 million complex with a 96-unit nursing home, 52-unit assisted living facility and 17 duplex patio homes. The proposed project stated it would serve about 180 people and employ about 150 people if built between Brown and Fruitridge avenues.

Neighborhood residents organized against the measure, and about 120 people attended a Feb. 1 Vigo County Area Plan Commission meeting.

Opponents said the development would damage the beauty and historic significance of Ohio Boulevard and expressed concern about traffic, noise, air quality, lighting, water drainage, danger to school children and neighborhood property values, stating the development would better fit into other areas of the city.

In addition, an attorney who represented a Clay County family stated a $140,000 judgment in 2010 remained unpaid from a nursing home formerly owned by the company’s president.

Company officials had requested the Plan Commission table a decision until March to allow more time to meet with neighborhood residents. However, just a day after the Plan Commission meeting, the company announced on Feb. 2 it would withdraw its rezoning request.

“It is abundantly clear that the facility which we intended to enhance services available in this community is not welcome,” Vince McGowen, director of business development for Magnolia, wrote in an email to the Tribune-Star.

Residents cheered in a Terre Haute City Council meeting later that evening when the company’s attorney stated he had been instructed to withdraw the zoning request.

Cobblestone Crossing

From May through November, a zoning issue involving Cobblestone Crossing at U.S. 41 brought residents from Woodgate and Viscaya Point to several meetings with county commissioners and the Plan Commission.

At issue were two-story apartment buildings under construction which residents said were too close to existing single-family homes. Residents claimed an original development plan called for upscale residential homes to be built near Woodgate East and South, with apartments closer to U.S. 41.

Residents claimed changes to a Planned Unit Development zoning approved in 2008 allowed for only minor changes in that development plan, not expanding where apartments were built. Also, residents said the county was lax in its notification efforts to impacted property owners of the proposed zoning change.

The concern was the northwestern portion of the development. Cobblestone in May received building permits to construct seven buildings on 18.03 acres. In August, county commissioners halted all new building permits at the development, but construction on the 18 acres continued.

In September, residents citing a possible conflict of interest, sought a stop-work order. On Sept. 13, a stop-work order took effect following an alleged conflict of interest from Norm Froderman, a member of the Plan Commission who admitted to a likely direct or indirect financial interest in Cobblestone.

Residents and Cobblestone officials worked to reach agreements such as construction of a brick wall between the apartments and neighboring homes. By November, the Plan Commission approved new plans for development and set conditions that buildings not be more than 35 feet tall and attached several space and building conditions.

Smoking Ordinance

Vigo County’s countywide clean indoor air ordinance was amended in 2012 on the heels of a July enactment of a stricter ordinance in the city limits of Terre Haute.

Vigo County Commissioners in May unanimously voted to publish an amendment to the county’s clear indoor air ordinance that matches a 2011 Terre Haute city ordinance that bans smoking in most places, including taverns and bars, effective July 1.

“Our ordinance would be amended to bring in some of the areas that were originally exempted such as civic organizations, service clubs, patriotic organizations or similar private club organizations,” County Attorney Michael Wright said in May.

“The city’s ordinance prohibits smoking in those areas. I tried to make the two entirely consistent so there is no competitive advantage between city establishments and county establishments,” Wright said.

Veteran groups opposed the changes, citing that a new state smoking law did not include veteran organizations. However, local government can make local laws that are stricter than a state law.

The action may have cost Vigo County Commissioner Paul Mason re-election. Mason, a veteran of the Vietnam War, supported the amendment, stating that all residents of the county should have the ability to work in a smokefree environment. Mason was defeated by Republican Brad Anderson, who acknowledged he did receive support from veterans groups over the issue.

Higher sewer rates

The city of Terre Haute in November voted to increase sanitary sewer rates by more than 50 percent over the next three years.

The action was made to enable the city to meet federally mandated improvements to the city’s combined rainwater and sewer system. The first 15-percent rate increases takes effect in July, 2013, followed by two additional increases of 15 percent over the following two years.

An average household monthly sewer bill will increase from $32 to $49 per month by the end of the three-year rate cycle.

The increases are needed to pay for an approximately $150 million upgrade of the city’s wastewater treatment facility and improvements designed to keep the city’s raw sewage from entering the Wabash River.

In October, prior to the rate increase, the city’s Board of Sanitary Commissioners awarded Plocher Construction Co. of Highland, Ill., at $115.43 million contract to construct a new wastewater treatment plant for the city.

That cost is to be paid from a $150 million bond issue to be paid from the higher sewer rates. When completed, the new treatment plant is expected to last 50 years.

Oil Drilling

Interest in oil drilling began in 2011 with a big discovery from CountryMark near Terre Haute International Airport-Hulman Field. Requests to change zoning for oil and gas exploration continued in 2012, but not every request hit black gold.

In April, residents of Hawthorn Woods and other eastside neighborhoods began meeting over concern of a proposed oil well north of Hawthorn Park. Hunter Von Leer, a Hollywood actor and native of Vigo County, sought to place the well on a 94-acre lot he has owned for nearly 30 years.

The oil well would require approval of a zoning change for a mining overlay. The proposed drilling site was considered in an urban area and more than 130 people voiced opposition to the county’s Plan Commission on the proposed drilling.

The Plan Commission failed to make a recommendation, pushing the final decision to the Vigo County Board of Commissioners, which denied the mining overlay request. Von Leer could still establish a well on the west side of his property, which is not in an urban area, however that requires a more costly slant drilled well.

A mining overlay was approved in April to develop four new wells on 13 acres for Hulman & Co.. That overlay covers property on the west side of Hunt Street, about 3,000 feet north of the intersection of Indiana 42 and Hunt Street. It is near an area that CountryMark made a big oil discovery in 2011.

CountryMark also received a mining overlay for oil and gas exploration in far southern Vigo County, less than a mile from the Sullivan County line in Pierson Township.

Earlier in 2013, the Board of Trustees at Indiana State University approved an oil and gas lease with Pioneer Oil Co. The lease, approved in February, would allow the Lawrenceville, Ill.-based company to develop any oil and gas resources on university property.

In August, ISU requested and was granted permission from the Terre Haute Board of Zoning Appeals for oil exploration and possible drilling on the eastern edge of ISU’s campus. Because the property was already zoning for heavy manufacturing, it did not go before the Plan Commission or the Terre Haute City Council.

In December, county commissioners approved five mining overlays for potential oil and gas developments along Dallas Drive, Singhurst Street and Cottom Drive in the county for Riverside Exploration LLC of Traverse City, Mich. The county did require development standards on vapor and odor control, visual impacts and security.

City Finances

This year has brought some debate among city council members over resources and finances of the city.

In May, the city borrowed $5.02 million to cover day-to-day expenses prior to a twice-a-year disbursement from property tax revenue. In September, Terre Haute City Councilmen Neil Garrison, D-5th, and John Mullican, D-6th, voiced concern the loan was an early sign of financial problems.

Such loans are not uncommon. H.J. Umbaugh & Associates, an Indianapolis accounting firm, showed where 27 cites, towns, school districts and other taxing units had taken out temporary tax anticipation loans.

Mayor Duke Bennett said the need for the loan stemmed from diminishing cash balances, or reserves, at the end of each year. The mayor said that is a result of state property tax caps, which have hit the city hard.

Bennett proposed new revenue sources such as solid waste fee for city residents. A 20-year trash contract, signed in 2007 by former Mayor Kevin Burke, is the third highest expense after employee salaries and benefits, the mayor said.

In September, the mayor said the city’s proposed 2013 budget was not “balanced” but is “very close to fundable.” Reaching a balanced budget will require a few more years, with the city in 2013 again requiring a short-term loan of about $5 million.

In October, the Terre Haute City Council passed a 2013 budget, which set the stage for city officials to find about $2.5 million in new revenue or new budget cuts or a mixture of each to make a “balanced” budget.

Garrison proposed moving $20,000 from city controller’s line item to the City Council to allow the legislative body to hire its own financial consultant. The measure was shelved in October, but could arise again early in 2013.

In December, Vigo County officials learned the county’s assessed value dropped about 7.5 percent, with the largest drop hitting the city of Terre Haute. The drop could result in the city having between $2 million and $3 million less in revenue in 2013.

The City Council, in December, approved a transfer of $3.5 million from the city’s Rainy Day fund into the city’s general fund. It also approved a measure for the Terre Haute Sanitary District to pay $2.1 million into the general fund as a payment in lieu of taxes to support services such as police and fire protection. The council, however, rejected transferring $2 million into the city’s general fund from the city’s portion of a County Economic Development Income Tax.

Friday: The year in local business.

Reporter Howard Greninger can be reached at 812-231-4204 or howard.greninger@tribstar.com.

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