Legal ad publication snafu to hold city taxes at 2013 levels

By ERIC BERNSEE

Editor

Unless state officials reverse their hard-line stand, Greencastle residents apparently will see no increase in their 2014 city taxes.

And while initially that may seem like a good thing from a homeowner's standpoint, taken from the be-careful-what-you-wish-for vantage point, it takes on a whole different meaning.

The city is expected to see less tax revenue next year due to an error in the publication of its legal notice for the 2014 budget, City Clerk-Treasurer Lynda Dunbar told the City Council at its November meeting Tuesday night.

"Over the last six years we have faced other financial challenges," Mayor Sue Murray noted, "and with the cooperation of my department heads, we will work diligently to manage this one too. It's unfortunate to have to rise to the challenge once again."

The current situation stems from the Indiana Department of Local Government and Finance (DLGF) ruling that due to an error in published dates, Greencastle's 2014 budget will be held at its 2013 tax levies and rates.

That 2013 final rate was reported by DLGF as 0.9394, which generated a levy of $3,120,699 (initially, the Council had passed, via Ordinance 2012-13, a higher tax rate of 1.3584).

At issue is the legal ad publication for the city's 2014 budget, which appeared in the Banner Graphic on Aug. 17 and Aug. 23 in advance of a public hearing on Aug. 29.

While the period Aug. 17-23 encompasses seven days, the legal ad needed to be published twice -- seven days apart --- according to state statutes.

The city has appealed the DLGF ruling in regard to non-compliance with state filing statutes, Mayor Murray said. However, the DLGF position has remained unchanged, Dunbar said.

That is substantiated by correspondence from Michael E. Duffy, an attorney for the DLGF, who stressed that Indiana code specifies that "notice shall be published two times, at least one week apart, with the second publication made at least three days before the event."

"Thus," Duffy writes, "the seven-day window between ads is explicit.

"In Greencastle's situation," he added, "the issue at hand is improper timing of the publications, rather than an error in the content of the notice itself."

Clerk-Treasurer Dunbar tried in vain to use proof of online publication to substantiate that the budget deadline had been met.

She received verification from the Banner Graphic that the legal notice was published in its online editions on Aug. 16 and Aug. 24, dates which would fulfill the seven-days-apart requirement.

However, Duffy, in email communication with City Attorney Laurie Hardwick, indicated legal publication must be done in a newspaper and not via the Internet.

"Posting an ad on a website -- even one owned by a newspaper -- is not the same as publishing the ad in a newspaper published and circulated in the political subdivision," Duffy said.

"I have had some informal discussions with DLGF," Dunbar said, "and have asked for certain questions to be documented in writing, but as of this time I have not received them."

Mayor Murray said those questions that still to be answered include:

· The city's 2013 report was predicated on an assessed valuation of $332,201,327. The city's 2014 budget looked at a 15 percent drop in assessed valuation to $282,201,327, as was suggested by DLGF. What effect will that will have as they look at the city's Budget Estimate and the proposed tax rate?

· City officials have been preliminarily told they can request additional appropriations from Council as it moves into 2014 for TIF and EDIT funds already in-house. That will be essential in moving forward on some anticipated infrastructure and Stellar projects.

"Will that be the final interpretation from DLGF?" Mayor Murray asked. "I certainly hope so."

How much of a shotfall will Greencastle see from the publication mistake? City officials are unsure at present.

"Until we get clarification from DLGF about rates and which AV will be used, it's hard to know," Mayor Murray told the Banner Graphic.

Dunbar noted that funds that DLGF does not certify -- like EDIT (Economic Development Income Tax) and TIF (Tax Increment Financing) -- will need to be readvertised and a public hearing held to adopt those budgets.

"I can tell you that we are looking only at the funds DLGF certifies," she added, "and out of the 11 funds they certified, the only ones affected will be our General Fund, MVH (Motor Vehicle Highway), Park, Cemetery, CCD (Cumulative Capital Development), and not all in a negative way."

The clerk-treasurer advised the Council that by its December meeting she should have "a complete report on the effect this will have on the entire budget and a plan of action."

"At this time," she added, "we are still going through the budget line item by line item to see how each department will be affected.

"For the city at large," Dunbar added, "we will not be reducing any of our services, and the taxes that our citizens pay to the city will be the same as last year, so there will be no increase."

Dunbar also suggested action that might help such a mistake from happening again in the future.

"When a major error is made," she said, "I think it is very important to adopt a new plan of action to prevent this ever occurring again."

She suggested forming a Budget Committee with two members of the City Council appointed to sit on the panel with the mayor and clerk-treasurer and go through future budgets in detail before the budget is presented to the full Council each August.

The Council agreed with that idea, and Councilmen Mark Hammer and Adam Cohen volunteered to fill the two seats.