News From Terre Haute, Indiana

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October 7, 2012

Experts: Boards often face conflicts of interest

Problem surfaced on Vigo County Area Plan Commission in August

TERRE HAUTE — The unearthing in August of an apparent conflict of interest involving a member of the Vigo County Area Plan Commission — the body that advises local elected officials on rezoning requests — points to a danger facing all zoning boards, according to planning experts.

Plan commissioners are often real estate professionals or others with an interest in property development, said William Klein, director of research at the non-profit American Planning Association in Chicago. So it’s not surprising commissioners often have business interests that overlap with things that come before their boards.

“You really can’t avoid it,” Klein said in a Tribune-Star interview Friday. However, whenever a conflict — or even a perceived conflict — arises, plan commissioners should avoid voting or discussing the conflicted matter with other board members. In fact, a conflicted commissioner should leave the meeting room, Klein said. Just his or her presence in the room can exert “an invisible influence” on other commissioners, he said.

In August, Norm Froderman, a longtime member of the Vigo County Area Plan Commission, acknowledged that he owned a share of Cobblestone Crossings, a south-side property development that has frequently come before the commission for zoning and other approvals. When asked whether he owned shares while taking part in votes, Froderman answered: “Probably.”

In light of the acknowledgment, county officials declared that all of the rezoning that took place at Cobblestone while Froderman served was now cast “in doubt.” As a result, the Vigo County Area Planning Department is requiring that Cobblestone come back before the commission to resubmit its rezoning requests. A court has not ordered such action, noted Jeremy Weir, director of the planning department; however, “we are trying to be proactive in regard to getting the developer aware of where we believe the legal standing of the action would lead.”

If and when Cobblestone returns to the Area Plan Commission, anyone with an ownership stake in development will not take part in any new zoning votes, county officials have stated. Weir expects the development to be back on the Area Plan Commission agenda at its Nov. 7 meeting in the Vigo County Annex.

Backing into conflicts

Plan commissioners are often the sort of people who are quite active in a community and who care strongly about what’s going on, said Eric Kelly, an attorney and professor of planning ethics and law at Ball State University. Those are the kinds of people you often want on such boards, he said.

However, this means commissioners can sometimes “back into” conflicts unintentionally, Kelly said, especially in smaller communities, such as Terre Haute or Muncie.

Nevertheless, plan commissioners should “bend over backwards” to avoid even appearances of conflict, Kelly said. In fact, he would like to see laws governing planning organizations be broadened to cover a wider range of potential conflicts.

“It can look just awful,” if board members have even an indirect connection to the matters that come before them, Kelly said.

In an interview with the Tribune-Star in September, Froderman said his ownership share of Cobblestone is “indirect at best.” He also said it amounted to less than one-half of 1 percent of Southern Indiana Investments and emerged from an investment he made back in the 1980s.

“It just kind of worked its way into this,” said Froderman, who did not wish to comment for this article.

But the size or relative importance of a commissioner’s financial stake is not mentioned in Vigo County’s Unified Zoning Ordinance, which states that a member of the Area Plan Commission is prohibited from taking part “in a hearing or decision of the Board concerning a matter in which he has a direct or indirect financial interest.” The Area Plan Commission’s bylaws echo that ordinance as does the Vigo County employee handbook.

State law goes a little further. It bars not only participation by commissioners with a financial interest in a matter, but also states that a commissioner may not take part in a hearing on a subject in which he or she is “biased or prejudiced or otherwise unable to be impartial.”

Noting the state law, Weir reminded plan commissioners at Wednesday night’s meeting in the Vigo County Annex that they need to recuse themselves from taking part in any votes on matters in which they have a financial stake. He also informed them they are to avoid voting on matters in which they may be biased or influenced by someone or something else.

“If you are in a situation where you feel like you’ve been biased in some fashion or influenced toward something, you should not feel guilty about stating that,” Weir said. “Go ahead and bring that up prior to it being heard and the board, as a body, can decide whether or not you have to go forward with voting on something of that nature.”

But that doesn’t go far enough, said Charlie Williams, president of the homeowners association involved in legal arm wrestling with Cobblestone Crossings and the person whose questioning at an Area Plan Commission meeting in August uncovered Froderman’s apparent conflict of interest. Williams would like to see stronger action to avoid potential conflicts in the future.

“Norm [Froderman] was honest, to his credit” when he admitted his investment in Cobblestone, Williams said, adding he believes there needs to be something more than voluntary policing” by commission members in the future.

Williams suggests that members of the Area Plan Commission review their agendas prior to their monthly meetings and then answer a roll-call that specifically asks whether they have a conflict facing the commission on that night. “That would be the sort of [due diligence] that would let commissioners know they are going to be held accountable,” he said.

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

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