On Dec. 6, 2010, I attended a city council meeting in which Resolution 2010-35 was discussed. The purpose of the resolution was to amend the lease agreement between the city of Logansport and the Logansport Municipal Building Corporation (LMBC) to allow the expansion of the Ivy Tech infrastructure project to extend work on 18th Street to Broadway instead of the original Main Street limit. The Resolution was approved 6-1.
During the comments from citizens, I proposed the $1.1 million, which was allegedly surplus from the project, to be applied to the balance of the debt. I quote the minutes: “Bob Bishop questioned the wisdom of spending the money and not applying it to the balance. It was explained that those who buy bonds expect a return on their investment, explained by Bond Attorney Sue Beesley. Ms. Beesley advised the council to commit the money to avoid potential financial penalties.”
At the same meeting, former LEDF director stated the following in the minutes: “Economic Development Director Skip Kuker wants to tap into the portion of the $4 million not used in the Ivy Tech project, which came in under budget by $1.1 million. He said the remaining bond money could be turned into about $5 million through state and federal funding that requires a 20 percent match.”
The minutes do not reflect the fact that I asked Ms. Beesley, while sitting in the back of council chambers, if there was any way the money could be paid back and she said yes it could. When Mayor Fincher asked for any further comments, I again stood and asked to allow Ms. Beesley to finish her statement about paying the money back. When Ms. Beesley was recalled, she was cut off before she was allowed to give the council the option of returning the surplus bond money. Council decided to meet on how to spend the money at a later date.
Throughout the 2012 city elections, in which I ran for city councilman, I challenged the wisdom and legality of spending surplus money that had been borrowed instead of paying it back to the tax payers.
During my research into the matter, I discovered that according to IC 5-1-13-2 “Use of surplus proceeds” there are only two options if the bond is paid back with property taxes. Both options require the surplus money to be paid back and not spent! In my opinion, and the opinion of several attorneys I have consulted with, it would be illegal to spend the money, unless we are willing to stretch the truth, and I am not willing to do that.
After I was elected and took office on Jan. 1, 2012, Mayor Franklin asked me to become a member of the LMBC to oversee the bond. I agreed and was elected to be President of the Board. Since I have been President of LMBC I have talked with several attorneys to confirm my opinion, including Ms. Beesley. I recommended, along with Mayor Franklin’s approval, to the LMBC board a vote to pay back the surplus. On June 7, 2013, the LMBC board voted unanimously to send on to the Common Council for their approval. The City Council Finance Committee met on July 17, 2013, and agreed to send on to the Common Council Aug. 5, 2013. On Aug. 5, 2013, the Common Council voted 7-0 to transfer the $570,000 to the sinking fund. Yes, the actual figure is $570,000 and not $1.1 million. I do not know where that figure came from in 2010.
In effect, that transfer will take the Logansport tax payer off the hook for $570,000. Even though it took over 2.5 years to finally get this money returned to the tax payer, I am extremely pleased that it is finally where it belongs. I would like to thank Mayor Ted Franklin, Clerk Treasurer Carol Sue Hayworth, Superintendent Paul Hartman, Community Development Director Chris Armstrong, Attorney Senator Randy Head and the City Council for assisting me in finally resolving this important issue for the taxpayers of Logansport.
Bob Bishop is president of the Logansport Building Corp. and Logansport City Councilman representing Ward One.