Court Opinion

ID: 2786357
Source: CourtListenerOpinion
Date Created: 2015-03-16 15:03:19.875667+00
Date Added: 2024-06-11T11:28:39.593737
License: Public Domain

Mar 16 2015, 9:54 am

      ATTORNEY FOR APPELLANT                                     ATTORNEY FOR APPELLEE
      Eugene M. Feingold                                         Gregory Zoeller
      Steven P. Kennedy                                          Attorney General of Indiana
      Law Offices of Eugene M. Feingold
                                                                 Kathy Bradley
      Munster, IN
                                                                 Deputy Attorney General
                                                                 Indianapolis, IN

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Redevelopment Commission of                                March 16, 2015
      the Town of Munster, Indiana,                              Court of Appeals Case No.
                                                                 45A04-1408-PL-404
      Appellant-Petitioner,
                                                                 Appeal from the Lake Circiuit Court
              v.                                                 The Honorable Thomas W. Webber,
                                                                 Sr., Judge Pro Tempore
      Indiana State Board of Accounts                            Cause No. 45D04-1310-PL-92
      and Paul D. Joyce, State
      Examiner of State Board of
      Accounts,
      Appellee-Respondent

      Mathias, Judge.

[1]   The Munster Redevelopment Commission (“the Commission”) appeals the

      Lake Circuit Court’s order entering summary judgment in favor of the Indiana

      Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015                   Page 1 of 14
      State Board of Accounts1 (“the Board”) in which the trial court determined that

      Indiana Code section 36-7-14-28 does not permit the Commission to use tax

      incremental financing funds to pay for the ongoing maintenance of redeveloped

      properties.

[2]   We affirm.

                                Facts and Procedural History
[3]   In February 2006, the Commission initiated a project to redevelop a designated

      area in Munster, which included the Munster Centennial Park and the Munster

      Community Park. The Commission financed the parks’ improvements, in part,

      using funds acquired through tax allocation financing, also known as tax

      increment financing2 (“TIF”). After the redevelopment of the parks was

      completed, ownership of the parks was transferred from the Commission to the

      1
       The Indiana State Board of Accounts supervises the financing and accounting practices of Indiana’s
      municipal corporations.
      2
          The Indiana Supreme Court has explained the tax allocation scheme in Indiana:
               Under the tax allocation statutes, an impetus towards redevelopment of blighted urban areas is
               achieved by the reallocation of local tax money in such a fashion that overlapping taxing
               jurisdictions which benefit from improvements in the renewal areas also share in their cost. The
               overlapping taxing bodies are all beneficiaries of any post-development revenue increases due to
               increased assessed values in the development area. Prior to the legislative amendments
               authorizing tax allocation procedures, the [Commission] alone bore the costs of land
               acquisition, clearance, and improvements associated with any redevelopment and the
               overlapping taxing bodies did not share in the public costs of the redevelopment. The tax
               allocation legislation requires a sharing of those costs by all public bodies benefiting from the
               redevelopment by requiring all post-development tax revenues attributable to increased assessed
               values to be paid to the [Commission] until all costs of public improvements associated with the
               redevelopment have been paid. The taxing bodies remain entitled to all property tax revenues
               not attributable to the development within the Allocation Area. When the redevelopment costs
               have been paid, the tax allocation is discontinued and all public bodies share in tax revenues as
               they did prior to the redevelopment and enjoy the benefits of increased property tax values and
               revenues.
               S. Bend Pub. Transp. Corp. v. City of S. Bend, 428 N.E.2d 217, 219 (Ind. 1981).

      Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015                            Page 2 of 14
      Munster Municipal Center Corporation and Parks Department (“the town”).

      The town allocated in its annual budget a portion of TIF funds to pay for the

      ongoing maintenance of the parks.

[4]   At some point, the town learned that the Board did not consider maintenance

      of redeveloped properties to be proper use of TIF funds. The town consulted its

      legal counsel as to whether it was permissible for the town to use TIF funds to

      maintain the two parks. On May 16, 2013, the town’s counsel wrote: “It is our

      view that the statutes authorize activities of this nature when those activities are

      in conjunction with the overall redevelopment purposes of the Town.”

      Appellant’s App. p. 38. Counsel’s memo also stated:

              [I]f the Redevelopment Commission is utilizing the tax levy for general
              expenses to fulfill [its duty to use the land in the manner that best
              serves the town] and has concluded that it ought to promote this use of
              parks and cooperate with the Town, its decision fits squarely within
              the statutory framework and intent and is certainly incident to its
              statutory powers and duties.

      Id.

[5]   The town also sought the opinion of the Board. On August 22, 2013, the town

      received a letter from the Board, which provided:

              The legislature has provided that the expenditure of redevelopment
              funds for maintenance is to occur only to maintain buildings in the
              situation where the redevelopment commission has determined that
              demolition of those buildings is not considered necessary to carry out
              the redevelopment plan. Such funds cannot be used to maintain park
              land. This should not be construed as a legal opinion but represents
              the position we would take in an audit of the Town’s records.

      Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015         Page 3 of 14
      Appellant’s App. p. 37.

[6]   On October 7, 2013, the Commission filed a complaint against the Board

      seeking declaratory relief. Specifically, the Commission alleged that

      “[d]isallowing the use of TIF funds for maintenance of a TIF financed

      redevelopment project . . . will create a substantial additional tax expense to its

      property owners” and that “[f]ailure to comply with the notification of the State

      Board of Accounts would place the Town of Munster and its Redevelopment

      Commission at risk of fines, penalties, and other punitive actions . . . taken

      by . . . the State Board of Accounts.” Appellant’s App. p. 3.

[7]   On June 2, 2014, the Commission filed a motion for summary judgment. The

      trial court denied the Commission’s motion on August 1, 2014, and granted

      summary judgment in favor of the Board, finding that that the language in the

      relevant statutes shows that “the legislature [did not intend] to allow TIF funds

      to be used for the continued maintenance of properties acquired and improved

      through the use of TIF funds.” Appellant’s App. p. 8. The court also noted

      that the parks in question were now owned by the town, not by the

      Commission, and that “this is not a matter that falls within I.C. § 36-7-14-22.5

      where maintenance of real property owned by the commission can be

      maintained by [the] commission with TIF funds.” Id.

[8]   The Commission now appeals. The Board cross-appeals.

      Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015   Page 4 of 14
                             I. The Commission’s Standing
[9]    In its cross-appeal, the Board argues that the Commission did not have standing

       to bring an action for declaratory judgment because “there is no real or actual

       controversy.” Appellee’s Br. at 7. Specifically, the Board contends that the

       Commission has “shown no injury based on the [Board’s] letter stating that the

       position of the [Board] is that TIF funds may not be used for park

       maintenance.” Id. at 8. The Board argues that the Commission’s claims that

       prohibiting the use of TIF funds for the maintenance of the parks will increase

       property owners’ tax obligations and place the Commission at risk of punitive

       actions are “purely speculative.” Id.

[10]   Standing is defined as having a “sufficient stake in an otherwise justiciable

       controversy.” Ind. Civil Rights Comm’n v. Indianapolis Newspapers, Inc., 716
N.E.2d 943, 945 (Ind. 1999). The point of the standing requirement is to ensure

       that the party before the court has a substantive right to enforce the claim that is

       being made in the litigation. Pence v. State, 652 N.E.2d 486, 487 (Ind. 1995).

       Standing is “a significant restraint on the ability of Indiana courts to act, as it

       denies the courts any jurisdiction absent an actual injured party participating in

       the case.” Id. at 488.

[11]   The standing requirement obligates courts to act only in real cases and shun

       action when called upon to engage only in abstract speculation. Id. An actual

       dispute involving those harmed is what confers jurisdiction upon the judiciary:

       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015    Page 5 of 14
               For the disposition of cases and controversies, the Court requires
               adverse parties before it. Standing focuses generally upon the question
               whether the complaining party is the proper person to invoke the
               Court’s power. However, more fundamentally, standing is a restraint
               upon this Court’s exercise of its jurisdiction in that we cannot proceed
               where there is no demonstrable injury to the complainant before us.

       Id. (quotation omitted). Put simply, in order to have standing, the challenging

       party must show adequate injury or the immediate danger of sustaining some

       injury. Ind. Civil Rights Comm’n, 716 N.E.2d at 945.

[12]   In its complaint, the Commission sought declaratory relief allowing it to use

       TIF funds to maintain the redeveloped parks. Indiana Code section 34-14-1-2

       defines a person who may obtain declaratory judgment:

               Any person interested under a deed, will, written contract, or other
               writings constituting a contract, or whose rights, status, or other legal
               relations are affected by a statute, municipal ordinance, contract, or
               franchise, may have determined any question of construction or
               validity arising under the instrument, statute, ordinance, contract, or
               franchise and obtain a declaration of rights, status, or other legal
               relations thereunder.

[13]   “In order to obtain declaratory relief, the person bringing the action must have

       a substantial present interest in the relief sought.” Hibler v. Conseco, Inc., 744
N.E.2d 1012, 1023 (Ind. Ct. App. 2001). “The basis of jurisdiction under the

       Declaratory Judgment Act is a justiciable controversy or question, which is

       clearly defined and affects the legal right, the legal status, or the legal

       relationship of parties having adverse interests.” Little Beverage Co., Inc. v.

       DePrez, 777 N.E.2d 74, 83 (Ind. Ct. App. 2002).

       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015            Page 6 of 14
[14]   In the instant case, the Commission asked the trial court to enter a declaratory

       judgment to determine its authority to use TIF funds to pay for the maintenance

       of the parks it redeveloped. Because the Commission had already budgeted and

       utilized TIF funds to pay the maintenance expenses of the parks, and in light of

       the position the Board took in its letter to the Commission, the Commission has

       shown that it had a substantial interest in determining whether its use of the

       TIF funds was proper as well as the immediate danger of injury. See Ad Craft,

       Inc. v. Area Plan Comm’n of Evansville & Vanderburgh Cnty., 716 N.E.2d 6 (Ind. Ct.

       App. 1999) (uncertain zoning status of a vacated right-of-way upon which a

       billboard had been built was a controversy which an area plan commission

       could seek to resolve via a declaratory judgment action, particularly considering

       the intricacies of the various zoning and permit issues involved and the legal

       and economic necessity of a prompt resolution thereof); Lutheran Hosp. of Ft.

       Wayne, Inc. v. Dep’t of Pub. Welfare of Allen Cnty., 397 N.E.2d 638 (Ind. Ct. App.

       1979) (hospitals had standing to bring action for declaratory judgment whether

       they were entitled to reimbursement from county department of public welfare

       for emergency medical treatment rendered to indigents in light of fact that the

       expenditures incurred by hospitals in treating the indigents approximated

       $450,000). We therefore conclude that the Commission had standing to bring

       its claim for declaratory relief.

       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015   Page 7 of 14
                                      II. Use of TIF Funds
[15]   The Commission argues that the trial court erred when it granted the Board’s

       motion for summary judgment. Our standard of review of summary judgment

       appeals is well established:

               When reviewing a grant of summary judgment, our standard of review
               is the same as that of the trial court. Considering only those facts that
               the parties designated to the trial court, we must determine whether
               there is a “genuine issue as to any material fact” and whether “the
               moving party is entitled to a judgment as a matter of law.” In
               answering these questions, the reviewing court construes all factual
               inferences in the non-moving party’s favor and resolves all doubts as to
               the existence of a material issue against the moving party. The moving
               party bears the burden of making a prima facie showing that there are
               no genuine issues of material fact and that the movant is entitled to
               judgment as a matter of law; and once the movant satisfies the burden,
               the burden then shifts to the non-moving party to designate and
               produce evidence of facts showing the existence of a genuine issue of
               material fact.

       Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269-70 (Ind. 2009)

       (citations omitted).

[16]   The party appealing a summary judgment decision has the burden of

       persuading this court that the grant or denial of summary judgment was

       erroneous. Knoebel v. Clark County Superior Court No. 1, 901 N.E.2d 529, 531-32

       (Ind. Ct. App. 2009). Where the facts are undisputed and the issue presented is

       a pure question of law, we review the matter de novo. Crum v. City of Terre

       Haute ex rel. Dep’t of Redev., 812 N.E.2d 164, 166 (Ind. Ct. App. 2004).

       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015       Page 8 of 14
[17]   Our resolution of the issue presented in this appeal hinges on our application of

       several interrelated sections of Indiana Code title 36-7. We initially observe

       that statutory interpretation is a question of law reserved for the court and is

       reviewed de novo. Ind. Pesticide Rev. Bd. v. Black Diamond Pest & Termite Control

       Inc., 916 N.E.2d 168, 181 (Ind. Ct. App. 2009) (quotation omitted), trans.

       denied. De novo review allows us to decide an issue without affording any

       deference to the trial court’s decision. Id. Our goal in statutory construction is

       to determine, give effect to, and implement the intent of the legislature. Id.

       When a statute has not previously been construed, our interpretation is

       controlled by the express language of the statute and the rules of statutory

       construction. Id. We review the statute as a whole and presume the legislature

       intended logical application of the language used in the statute, so as to avoid

       unjust or absurd results. See Curley v. Lake Cnty. Bd. of Elections & Registration,

       896 N.E.2d 24, 34 (Ind. Ct. App. 2008) (quotation omitted), trans. denied.

[18]   To determine the intent of the legislature, we examine the statute as a whole

       and also read sections of an act together so that no part is rendered meaningless

       if it can be harmonized with the remainder of the statute. Id. (citing City of N.

       Vernon v. Jennings Nw. Reg’l Utils., 829 N.E.2d 1, 4 (Ind. 2005)). The best

       evidence of legislative intent is the language of the statute itself. U.S. Steel Corp.

       v. N. Ind. Pub. Serv. Co., 951 N.E.2d 542, 552 (Ind. Ct. App. 2011). Thus, we

       must give all words their plain and ordinary meaning unless otherwise indicated

       by statute. Id. When the language in a statute is ambiguous or uncertain, we

       may look not only to the language, but also to the nature and subject matter of

       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015     Page 9 of 14
       the act and the object to be accomplished thereby in ascertaining the legislative

       intent. Johnson v. Morgan, 871 N.E.2d 1050, 1053 (Ind. Ct. App. 2007). If,

       however, the statutory language is clear and unambiguous on its face, we will

       give such a statute its apparent and obvious meaning. U.S. Steel, 951 N.E.2d at

       552.

[19]   Indiana Code section 36-7-14-39(b)(2)(J) provides specifically that TIF funds

       may be used to “[p]ay expenses incurred by the redevelopment commission for

       local public improvements that are in the allocation area or serving the

       allocation area. Public improvements include buildings, parking facilities, and

       other items described in section 25.1(a) of this chapter.”

[20]   Indiana Code section 36-7-14-11 provides that the Commission shall, in

       relevant part:

               (6) select and acquire the areas needing redevelopment to be
               redeveloped under this chapter; and
               (7) replan and dispose of the areas needing redevelopment in the
               manner that best serves the social and economic interests of the unit
               and its inhabitants.

[21]   Indiana Code section 36-7-1-18 defines “redevelopment” as:

               (1) Acquiring real property in areas needing redevelopment.
               (2) Replatting and determining the proper use of real property
               acquired.
               (3) Opening, closing, relocating, widening, and improving public
               ways.
               (4) Relocating, constructing, and improving sewers, utility services,
               offstreet parking facilities, and levees.

       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015        Page 10 of 14
               (5) Laying out and constructing necessary public improvements,
               including parks, playgrounds, and other recreational facilities.
               (6) Restricting the use of real property acquired according to law.
               (7) Repairing and maintaining buildings acquired, if demolition of
               those buildings is not considered necessary to carry out the
               redevelopment plan.
               (8) Rehabilitating real or personal property to carry out the
               redevelopment or urban renewal plan, regardless of whether the real or
               personal property is acquired by the unit.
               (9) Investigating and remediating environmental contamination on
               real property to carry out the redevelopment or urban renewal plan,
               regardless of whether the real property is acquired by the unit.
               (10) Disposing of property acquired on the terms and conditions and
               for the uses and purposes that best serve the interests of the units
               served by the redevelopment commission.
               (11) Making payments required or authorized by IC 8-23-17.
               (12) Performing all acts incident to the statutory powers and duties of a
               redevelopment commission.

[22]   The Commission argues that the “statutory powers granted the [Commission]

       are broad and include the use of TIF funds for maintenance of redevelopment

       projects.” Appellant’s Br. at 6. According to the Commission, Indiana Code

       section 36-7-1-18’s grant of “specific power to develop parks and recreational

       facilities” also includes “the power to perform all actions incidental to its

       assigned powers, expending funds for the maintenance of a project initially

       financed with redevelopment commission funds[.]” Id. at 9 (emphasis added).

[23]   The Commission also argues that Indiana Code section 36-7-14-39 should be

       interpreted broadly to allow for the use of TIF funds to maintain the parks

       because “[t]he maintenance expenses to which the redevelopment commission

       applies TIF funds are expenses incurred because of the development.”
       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015       Page 11 of 14
       Appellant’s Br. at 11. It acknowledges that the statute does not specifically

       permit use of TIF funds to maintain redeveloped parks but points to Indiana

       Code section 36-7-14-39(b)(2)(G), which allows the Commission to use TIF

       funds to reimburse the town for expenditures for improvements made in the

       allocation area; section 36-7-14-39(b)(2)(H), which allows the Commission to

       use TIF funds to reimburse the town for expenses related to “rentals paid by it

       for a building or parking facility that is physically located in or physically

       connected to that allocation area”; and section 36-7-14-39(b)(2)(J), which

       allows the Commission to “[p]ay expenses incurred by the redevelopment

       commission for local public improvements that are in the allocation area or

       serving the allocation area. Public improvements include buildings, parking

       facilities, and other items described in . . . this chapter.”

[24]   However, the plain language of the statutes leads us to conclude that the trial

       court’s grant of summary judgment in favor of the Board was proper. “It is

       clearly established that boards of county commissioners possess only such

       powers as have been granted expressly by statute and those which must be

       necessarily implied to execute some expressed power.” S. Bend Pub. Transp.

       Corp. v. City of S. Bend, 428 N.E.2d 217, 225 (Ind. 1981). Our review of the

       relevant statutes fails to lead us to any provision that expressly permits the

       Commission to use TIF funds for ongoing maintenance of properties that have

       already been redeveloped.

[25]   Indiana Code section 36-7-14-39(b)(2) provides that TIF funds “may be used by

       the redevelopment district only to do one or more of the following,” then lists

       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015   Page 12 of 14
       the allowable uses. Notably absent from the list of permissible uses is general

       and ongoing maintenance of redeveloped properties. Instead, the language of

       the statute indicates that TIF funds are to be spent on the construction and

       installation of improvements, rather than continuing maintenance. The sole

       provision in the statute specifically authorizing the use of TIF funds for

       maintenance is section 36-7-1-18(7), which allows TIF funds to be used for the

       maintenance of buildings on property acquired before redevelopment is

       complete. Also, Indiana Code section 36-7-14-39 states that “[t]he allocation

       fund may not be used for operating expenses of the commission” (emphasis

       added).

[26]   Our supreme court has observed about the former version of the tax allocation

       statute:

               When the redevelopment costs have been paid, the tax allocation is
               discontinued and all public bodies share in tax revenues as they did
               prior to the redevelopment and enjoy the benefits of increased property
               tax values and revenues. The legislature passed the tax allocation
               financing statutes at this time to provide redevelopment commissions
               with a necessary means to promote development when local
               governments are facing massive cutbacks in federal assistance and
               increasingly tight fiscal constraints attributable to the property tax
               freeze.

       S. Bend Pub. Transp. Corp., 428 N.E.2d at 219. This language, along with

       statutory language instructing the Commission to dispose of the redeveloped

       properties once redevelopment is complete, see Indiana Code section 36-7-14-

       11(7), is indicative of the General Assembly’s intention that TIF funds no

       longer be used once redevelopment is complete.

       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015     Page 13 of 14
[27]   The Commission also argues that section 36-7-1-18(12), which gives the

       Commission the right to perform “all acts incident to the statutory powers and

       duties of a redevelopment commission” in the statutory definition of

       “redevelopment” necessarily includes the right to use TIF funds to fund the

       parks’ maintenance. We disagree. The powers granted by this provision are

       limited to the express statutory powers, or powers incidental to the expressed

       powers, of the Commission. See S. Ry. Co. v. Harpe, 223 Ind. 124, 131, 58
N.E.2d 346, 349 (1944). As we have determined, the Commission’s use of TIF

       funds for the ongoing maintenance of a redeveloped property is not expressly or

       impliedly permitted in the relevant statutes.3

                                                Conclusion
[28]   For all of these reasons, we conclude that the Commission had standing to

       bring its declaratory judgment. We further conclude that the trial court did not

       err in determining that Indiana statute does not permit the use of TIF funds for

       the continued maintenance of completed redevelopment projects.

[29]   Affirmed.

       Najam, J., and Bradford, J., concur.

       3
         The Commission also argues that the trial court erred in concluding that the Commission could not use TIF
       funds to maintain the parks because the parks are no longer owned by the Commission. We find no error
       here. The transfer of ownership of the parks from the Commission to the town is simply additional evidence
       that the redevelopment of the parks is complete and the use of TIF funds to maintain the parks is not
       permitted under the relevant statutes.

       Court of Appeals of Indiana | Opinion 45A04-1408-PL-404 | March 16, 2015                      Page 14 of 14