City officials confident about stand in rainy day fund dispute

Elkhart Mayor Dick Moore¿s administration is standing by its interpretation of a local ordinance that has been called into dispute by some Republican city council members.
Posted on Jan. 21, 2013 at 12:00 a.m.

ELKHART — Mayor Dick Moore’s administration is standing by its interpretation of a local ordinance that has been called into dispute by some Republican city council members.

And instead of waiting on an opinion from the Indiana Attorney General’s office, a spokesman for Moore said he would like to see council appropriate funds that would officially negate the need for furloughs.

Two Republicans contend that leftover funds from 2012 should have been moved to the city’s rainy day fund despite the fact the administration has chosen for years to move the money to the general fund for future use.

The issue arose this month after city department heads turned over enough money leftover from 2012 to pay city employees their full 2013 salary and forgo the need to carry out planned furloughs for all city workers.

The administration asked council last week to approve funding of city salaries.

Nobody has spoke against fully funding city employees.

But Mary Olson and David Henke both objected to the process, saying the money should have been deposited into the rainy day fund and argue that a local 2004 ordinance that established the rainy day fund outlines the procedure. They also announced last Monday during a city council meeting that they expressed their concerns to state officials and are seeking an opinion.

At the time, Moore told the council that he believed the ordinance was being misinterpreted, but had little else to say about the matter.

The mayor’s assistant, Arvis Dawson, afterward, said the administration had anticipated Republicans would make the argument and that the administration had researched and discussed the issue prior to the meeting.

He expressed confidence that the policy is proper.

In the meantime, the ordinance needed to fully fund city worker salaries was sent to the council’s finance committee, which will discuss the issue Feb. 4.

Republicans said they would like to see action on the ordinance delayed until they see a ruling from the attorney general.

The administration, though, feels confident about their position, which was outlined in a letter from city controller Stephen Malone to Moore on Jan. 8.

The letter opens by remarking that Henke may not have read the statue “very closely.”

Malone agrees that the statue specifies that money raised by the property tax levy that is unused must be sent to the rainy day fund.

Elkhart’s tax levy totaled $27 million, but because of circuit breaker, only about $19 million was collected.

“Since the city spent $32,578,412 out of the General Fund, obviously no part of the property tax levy remains unspent and since no part of the property tax levy is unspent at the end of the year, there is no money from the property tax levy in the General Fund to transfer to the Rainy Day Fund,” Malone’s letter read.

Dawson said the administration would also like to see the finance committee take action on the ordinance Feb. 4 rather than wait on the Attorney General.

Henke disagrees, saying the city should seek and abide by an opinion from the state.

Henke said he’s been looking into the issue for months.

Henke told a representative of the state Department of Local Government Finance that the city has failed to move money totalling about $16 million over to the rainy day fund during Moore’s entire five years in office.

Henke said moving leftover monies directly to the general fund could hurt the city’s position when preparing for the following year’s tax levy.

“Why can’t we ask a higher opinion and be right?” Henke said.

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