Feds Raid Township Trustee Office

The reason the Indiana Chamber continues to push for local government reform is the opportunity to provide more effective services with more efficient use of taxpayer money.

The fact that some township trustees continue to draw the scrutiny and action of authorities only adds to the logic of modernizing Indiana’s local government system. A portion of the latest from Lake County (the Northwest Indiana Times has the full story):

FBI and IRS agents raided the Calumet Township Trustee’s office and removed boxes full of documents and at least one computer shortly after noon Thursday as part of a federal investigation of the office.

Bob Ramsey, the supervisory agent for the FBI office in Merrillville, said his office, the Internal Revenue Service in Merrillville and state police are taking part in a joint operation.

Calumet Township Trustee Mary Elgin, who operates one of the largest township government units in the state, couldn’t be reached for comment. She has been under official scrutiny for her office’s spending on assistance to Gary’s low income residents and the use of take-home cars.

The state has been threatening to take over the finances of her office if she doesn’t reduce administrative costs. Elgin is suing Gov. Mike Pence to stop enforcement of a 2013 law that would significantly reduce her control over more than $5 million in annual spending.

The law requires Elgin to reduce the property tax rate supporting her township assistance program to less than 12 times the average of the state’s 1,008 townships. Calumet Township’s tax rate has been as much as 22.6 times the state average. Elgin said her tax rate is much lower when the impact of state-mandated property tax cuts are calculated.

A Times investigation found her office spent almost as much on employees’ salaries and benefits and business vendors, as it did on direct assistance for  emergency shelter, utilities, health care and food. Elgin puts her administrative costs at 37 percent of her budget.

 

 

 

Check Out the Chamber’s Issue Pages

Do you have a topic you're passionate about, and would like to know what the Indiana Chamber is working on in that area? We've developed some web pages highlighting key issues that will show you what we're focused on and offer some background on our public policies. See the pages below, and more information will be added weekly to these as the session progresses.

http://www.indianachamber.com/education
http://www.indianachamber.com/tax
http://www.indianachamber.com/healthcare
http://www.indianachamber.com/econdev
http://www.indianachamber.com/labor
http://www.indianachamber.com/environment
http://www.indianachamber.com/localgov
http://www.indianachamber.com/federal

Our 2013 Top Legislative Priorities and Legislative Business Issues documents are also available to view.

Why Consolidation is Right for Muncie/Delaware County

James Gooden, a Muncie native and consultant for GEA Architects, penned a thoughtful column for the The Star Press contending the time has come for Muncie and Delaware County to merge into a single unit of local government. The Indiana Chamber has been working to reduce government duplication statewide for years now, and we’re happy to see this getting more press.

Why should we merge Muncie and Delaware County into a single unit of local government?

It should be done because the current form is archaic and it is not in sync with present or future lifestyles and employment trends. Along with having high value for education, quality health and wellness facilities, and lifestyle opportunities, communities with effective and creative government are attractive as places to work and live: All are appealing traits to potential investors.

It bears recognizing that effort to bring new investment to ECI in no way diminishes the importance of the significant roll that current manufacturing, agriculture, retail and service sectors play in our economy. All are poised for growth. While, now, only about 1 percent of the county’s workforce is engaged in farming the land, the diverse business of agriculture stands out because it has been a mainstay since the pioneer days of the 19th century, but the industry has changed with the times — local government has not.

Town and country are today a homogenized community. Yet, we still operate local government in a horse-and-buggy fashion and that prompts a couple of pertinent examples. Recently, the rebuilt West Jackson Street bridge, opened to traffic after a long closure. In a related Star Press article, County commissioner Todd Donati pointed out that all bridges (except those carrying state highways) are constructed and maintained by the county. Conversely, the streets (except those carrying state highways) leading to and away from the bridges in Muncie are constructed and maintained by the city. How absurd is that (?)

Short Session Long on Achievement

The following is a message from Indiana Chamber President Kevin Brinegar:

It was the tale of two sessions in 2012. Act one centered on making Indiana the 23rd right-to-work state, giving current and future Hoosier workers the right to choose whether or not to join a labor union. Act two set the stage for such vital public policies as a statewide smoking ban, protection of our water rights and the inheritance tax elimination to become reality.

The passage of right-to-work (HB 1001) was truly monumental. Now, Indiana has further distinguished itself from neighboring states and given companies another big reason to bring their business and jobs here – and not there. In the short time since it passed, there has already been documented interest from several companies now putting Indiana at the top of the list for their business relocation or expansion. And it’s only just beginning!

Under the state’s new smoking ban law (HB 1149), Indiana will now protect 95% of people while at work and also allow citizens to eat at any restaurant in the state without having to encounter cigarette or cigar smoke. That will make a huge difference in all parts of the state. Many Hoosier towns are not part of a metro area and did not have a non-smoking ordinance previously in place. This new state law will protect residents in those locations.

Also now covered are companies that wanted to make their workplaces smoke-free but couldn’t due to existing labor agreements. Meanwhile, local governments still can enact stricter ordinances and the ones already passed remain in place. Sure, an even more comprehensive ban would have been preferred. What passed, however, was the strongest possible that could be done at this time and nothing short of a major accomplishment.

You can also count the inheritance tax elimination (SB 293) as a big victory. This tax only amounts to 1% of the total state revenue but made things unnecessarily difficult for so many Hoosiers. For a small family-owned company, the inheritance tax was often a tremendous hindrance to even staying in business after the death of the owner.

Effective at the end of the year, the more favorably-treated Class A category of inheritors expands (to include stepchildren and children’s spouses) and the amount excluded from the tax increases from $100,000 to $250,000. Beginning next year, the inheritance tax will be phased out equally over nine years – going away completely in 2022.

One bill that didn’t get a lot of press, but was among the most important to pass involves the state’s water supply (SB 132). Now water utilities are required to report usage to the Indiana Utility Regulatory Commission; only 15% of utilities previously did so. It also clarifies the water usage laws to confirm that private property owners, not municipalities, have control of the underground wells on their property. Both are needed steps toward a statewide plan for the protection and effective regulation of Indiana’s water resources.

In the local government arena, a multi-year effort to eliminate nepotism and conflict of interest for local government office holders and employees (HB 1005) finally made it across the finish line. There are too many examples where taxpayers pay for excessive costs because an employee also serves on the legislative body that approves that local government unit’s budget.

The grandfathering in of current employees is too generous, but nonetheless was a positive step that new local government employees will have to abide by.

We thank House and Senate leaders, along with Gov. Daniels, who took on several high-profile, emotional issues this session and guided them to passage. It was a fitting conclusion for Daniels’ final legislative session, with accomplishments that will leave a lasting positive impact on Hoosiers for generations to come.

See the full 2012 Legislative Report and Scorecard.

Reactions to Local Government Reform Progress Mixed

It’s no secret the Indiana Chamber is a strong proponent of local government reform, and we’re directly involved with MySmartGov. Although we’re encouraged that legislation curbing nepotism in local government passed this year, to this point the going has been rather slow in getting Indiana legislators to eliminate duplication at the township level. The Indiana Economic Digest has an interesting article on the topic, relaying how the gentlemen who created the Kernan-Shepard Report — the document that initially stated the case for reform — don’t see the progress thus far as being entirely negative.

Getting property tax bills out on time may not seem like a headline-grabber, but for supporters of a sweeping government reform effort, it’s big news.

Four years ago, not a single county in Indiana hit the deadline for sending out tax bills that generate revenues needed to keep the gears of local government moving. The following year, only two did.

Last year, 90 of Indiana’s 92 counties made the deadline.

The difference has saved cities and schools millions in interest payments on tax anticipation loans while waiting for their counties to collect and hand over tax dollars.

State finance officials credit the dollars saved to a recommendation made in December 2007 by the Indiana Commission on Local Government Reform.

The bipartisan commission spent months coming up with a road map to streamline local government. In a report that called for sweeping changes, it issued 27 recommendations — including the one that led to the consolidation of township assessors under the county and a shift to more professional assessment standards.

But only about one-third of those 27 recommendations have come to fruition since.

That’s not enough for Gov. Mitch Daniels, who created the commission. Talking to reporters Monday — just two days after the Indiana General Assembly closed Daniels’ last legislative session — the governor bemoaned the fact that much of the bipartisan commission’s recommendations have met a bipartisan wall in the Legislature.

“I continue to be disappointed that we didn’t get more than one-third done,” Daniels said.

That’s not how one of the men who headed the commission’s work sees it, though.

Retiring Indiana Supreme Court Chief Justice Randall Shepard is the Republican who co-chaired what became known as the “Kernan-Shepard commission” with former Gov. Joe Kernan, a Democrat.

He thinks progress on local government reform has been impressive, given the resistance to change a system put largely in place before Indiana became a state.

Shepard recalls a conversation with commission members just as they were getting ready to release the 2007 report that called for virtually eliminating township government while consolidating hundreds of school and library districts and imposing new rules for financial accountability.

One member said it would be a “miracle” if everything in the report got done. Shepard said the response from another commission member was: “‘It’ll be a miracle if anything gets done.’”

So in Shepard’s estimation, getting one-third done “is a pretty good outcome.”

In the session that just ended, lawmakers passed a bill with roots in the Kernan-Shepard recommendations: Aimed at eliminating conflicts of interest and reducing nepotism in local government, it bars a local government employee from taking office as an elected official of the government he or she works for. It also bans a local government employee from supervising a relative in a local government job.

Similar legislation failed in past sessions.
 

Nepotism at the Township Level: Monroe County Edition

More evidence Indiana needs HB 1005 to pass to start cracking down on township government abuse. RTV6 has the story:

The State Board of Accounts is demanding a former Monroe County township trustee repay more than $95,000 after an audit revealed questionable expenditures involving family members.

Benton Township Trustee Heather Cohee stepped down last week amid criticism that she hired her husband and daughter to perform tens of thousands of dollars of work for the township without proper documentation.

The Attorney General’s Office told RTV6 on Monday that it will likely file a civil lawsuit against Cohee to recover the public funds, as well as a preliminary injunction and temporary restraining order to freeze her financial assets.

According to the audit, Cohee hired her husband, Todd, also a Monroe County Sheriff’s deputy, to perform jobs such as cemetery mowing, parking lot paving, snow removal and landscaping.

Auditors said she also hired her daughter, Brittany, to do regular cleanings for the township, but the trustee had little documentation to support where the money actually went.

Todd Cohee served as the Township Clerk and Brittany Cohee served as the Township Assistance Clerk.

Auditors said Heather Cohee repeatedly did not file a conflict of interest statement for her husband or her daughter, which is a Class D felony.

Heather Cohee was unavailable Monday to discuss her resignation or the audit with RTV6.

Daniele Coe is handing the books for now, while the township board figures out the next steps.

"I don’t have a comment on what has gone on, but I know the board is doing everything it can to make sure business goes on as usual," Coe said.

Board member Lynn Stevens told RTV6 that the board would do everything possible to get the taxpayers’ money back, and said they scheduled an emergency meeting Monday night to discuss options.

Web Site Sheds Further Light on Local Government Spending

Keeping track of townships and local government spending is a complicated, but necessary measure. That should now be a little easier thanks to some efforts of the Indiana Dept. of Local Government Finance and their new web site. The Tribune (Seymour) has the story via Indiana Economic Digest:

Hoosiers now have an opportunity to take a deeper look at how local governing units collect and spend their money thanks to a new website recently unveiled by the state.

And Jackson County seems to be faring better that (sic) a lot of Indiana counties, a local official says.

“We look really good,” county Councilman Brian Thompson told his fellow council members during their recent meeting at the courthouse annex.

Thompson was basing that assessment on information located on the web at https://gateway.ifionline.org/

The Indiana Department of Local Government Finance unveiled the website developed in cooperation with the Indiana Business Research Center at Indiana University’s Kelley School of Business in mid-November.

According to a press release from the DLGF, the website is the second phase of a new online data collection system and public access website that “substantially increases the transparency and accessibility of local government finance” for Hoosiers.

The first phase of the system, known as the Indiana Gateway for Government Units or Gateway for short, allowed local officials to submit 2012 budget forms electronically from July 1 to Nov. 3.

As part of the second phase, those budget figures are now incorporated into the interactive research website. Visitors to the site can compare against other units and analyze per capita revenues and spending.

The public site allows taxpayers to access relevant data by property address, view up-to-the-minute budget summary information and download customizable reports.

“Once Gateway is fully implemented, with a few mouse clicks, citizens can obtain local government budgets, property tax information, debt tallies, and spending reports,” Department Commissioner Brian Bailey said.

Local officials also will use Gateway to submit annual reports to the state Board of Accounts, allowing users to tie budget information to expenditure information easily for the first time.

They also will report debt information through Gateway, providing taxpayers with information about borrowing costs and overall indebtedness. This data, which local officials must submit by March 1, will be made available through the public access website this spring.

“By linking local government finance to the other data hosted on Stats Indiana, policy makers and businesses will have information at their fingertips to help them make fiscal decisions in the context of their overall community, or communities they may consider joining,” IBRC Deputy Director and Chief Information Officer Carol Rogers said.

Governor to Support Overdue Government Reforms

The Indiana Chamber and MySmartGov have been champions of sensible government reform in Indiana, and have supported suggestions from the Kernan-Shepard Report that would eliminate townships, among other excesses. The Evansville Courier & Press now reports Governor Mitch Daniels will firmly put his weight behind these measures in the 2012 session:

Gov. Mitch Daniels will make one last push for local government reforms – this time, a select and scaled-back set of them – during the final legislative session of his administration, he announced Friday.

Daniels unveiled his legislative agenda for the Indiana General Assembly’s 10-week 2012 session, which starts Jan. 4, during a speech at the Kiwanis Club of Indianapolis.

He said he will lobby for structural changes at both the township and county levels, as well a crackdown on conflicts of interest among municipal workers who also sit on the elected bodies that set the budgets for their employers.

It’s another try at implementing more of the recommendations offered in 2007 by a blue-ribbon panel chaired by former Gov. Joe Kernan and Indiana Chief Justice Randall Shepard.

This year, as freshman Rep. Kevin Mahan, R-Hartford City takes over the chairmanship of the House Government and Regulatory Reform Committee, Daniels said he believes the conditions are right for more progress than he has made in the past.

“We’re going to try to approach it in a little simpler way,” Daniels said.

He said he hopes four local government changes that have stalled out in previous sessions can gain more traction this year. Those four are:

- Allowing counties to switch their executive structure from three-member groups of commissioners to a single county commissioner.

- Abolishing three-member township advisory boards that oversee township trustees’ budgets and bumping their fiscal oversight duties up to county councils.

- Eliminating nepotism – that is, the ability for local elected officials to hire their relatives to do the area’s work.

- Restricting “conflicts of interest,” or situations where those who are paid by local government, such as police, firefighters, park employees and more, also serve on the councils that set their budgets.

“I think if we could get action on two, three, four fronts like those, this would be good. Those are some important reforms. I’ve always believed that we wouldn’t do this in one or two big gulps; it would have to be an incremental process, and this would get the process moving forward,” he said.

Township Trustee Paid $332,000 for….. Nothing?

This story is unfortunate, and I genuinely feel bad for the trustee who lost this money – and was subsequently ambushed at her home by a news crew. But a mistake was made — and it was a big one. It just simply points to yet another instance of township government in Indiana not using taxpayer resources very effectively.

A township trustee who paid up front for a fire truck that never showed up is now facing scrutiny from the State Board of Accounts and the Indiana Attorney General’s Office.

Pamela Crum, the trustee of Sheffield Township in Tippecanoe County, wrote a check for $332,970 to Elite Fire Apparatus of Wisconsin, but the company went bankrupt shortly after, according to an audit by the State Board of Accounts.

"The result was, they were just out the money and they were going to get no fire truck, and, according to the bankruptcy court, there were no assets to distribute," said Paul Joyce, deputy state examiner for the State Board of Accounts.

Indiana code states that public officials should not pay for goods or services up front, unless it’s a recurring expense, such as rent, 6News’ Kara Kenney reported.

"You’re not supposed to pay for anything in advance," Joyce said. "That’s because you might not get the goods and services you purchased."

Joyce called Sheffield Township’s $332,970 check the worst case the agency had ever seen of a public official paying for something that didn’t show up.

In an effort to recoup the money on behalf of taxpayers, the attorney general’s office sent out letters to Crum, the former board members who approved the expenditure, as well as Ohio Farmers Insurance and National Fire & Casualty.

National Fire & Casualty has a $500,000 policy on the township, and Ohio Farmers Insurance has a $15,000 surety bond on the township trustee, according to the attorney general’s office.

If they don’t pay within 30 days, the attorney general’s office may file a lawsuit to recover the public funds.

"I’m not happy, not happy," said Linda Gregory, a longtime Sheffield Township taxpayer. "For a small town like this, it’s surprising."

Session in Review: Frustrating at Times, but Satisfying

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Indiana Chamber President Kevin Brinegar wraps up the 2011 Legislative Session. While frustrations included the House Democratic exodus and lack of township reforms, he labels the session "overwhelmingly satisfying" due to positive education reforms, tax cuts and immigration reform that was not as punitive to businesses as it could have been.