FISHER, J.
On November 7, 2008, the Department of Local Government Finance (DLGF) issued a final determination approving the City of Hammond's (City) budget and tax levy for the 2008 tax year. Dale J. Scopelite and James T. Sheehan (hereinafter, the Petitioners) challenge that final determination. While the Petitioners present ten issues for the Court's review (see Petrs' Br. at 1-2), the Court consolidates and restates those issues as:
In September of 2007, the City, through its authorized officers and after several public hearings, adopted its budget and correlating property tax levy for 2008. (See Petrs' V. Pet. for Judicial Review (hereinafter, "Pet.") Ex. 1 at 4 ¶ 1; Ex. 2 at 35.) On May 3, 2008, the Auditor of Lake County, Indiana (Auditor) posted notice advising City taxpayers of the rates to be charged in order to generate the approved property tax levy. (See Pet. Ex. 4.)
On May 9, 2008, a group of taxpayers (which included the Petitioners) initiated an appeal by filing an objection statement with the Auditor. In their statement, the taxpayers explained that over the course of several years, the City had "recklessly" spent money it did not have, forcing taxpayers to make up the shortfall through higher property taxes. (See Pet. Ex. 2 at
On October 30, 2008, the DLGF conducted a hearing on the taxpayers' objections. On November 7, 2008, the DLGF issued a final determination in the matter in which it denied the taxpayers' petition and approved the City's 2008 budget. In so doing, the DLGF did not address each of the taxpayers' objections individually; rather, it construed them collectively as representing four objections to the City's budget, tax levy, and tax rates: (1) the City's expenditures were "reckless"; (2) the City's budget estimates were inaccurate; (3) the City exceeded its 2% constitutional debt limit; and (4) the City was inefficiently administered. (Cf. Pet. Ex. 1 at 1, 4 ¶ 3 with Ct. Ex. A.)
On December 18, 2008, the Petitioners initiated an original tax appeal. The Court conducted oral argument on September 4, 2009. Additional facts will be supplied as necessary.
Each year, local government units pay their operating costs and expenditures, in part, through the collection of property taxes. Consequently, each unit is required, annually, to formulate an estimated budget, proposed tax levy,
Once the unit has completed its formulations, it is required to provide taxpayers within the taxing district notice of, and an opportunity to be heard on, "(1) the estimated budget; (2) the estimated maximum permissible levy; (3) the current and proposed tax levies of each fund; and (4) the amounts of excessive levy appeals to be requested." A.I.C. § 6-1.1-17-3(a). After the public hearing but before November 2, the unit is to "fix" (adopt) its budget, tax levy, and tax rates.
On appeal, the Petitioners explain that the DLGF did not conduct its hearing on the taxpayers' objection petition until October 30, 2008, well after the mandatory February 15 deadline. (Petrs' Br. at 17.) As a result, the Petitioners claim that the DLGF denied them due process
First, the February 15 deadline set forth in Indiana Code § 6-1.1-17-16(h) is not a mandatory one. Admittedly, to say that the DLGF "is expressly directed" to do something connotes a mandatory import. See, e.g., Huntington County Cmty. Sch. Corp. v. Indiana State Bd. of Tax Comm'rs, 757 N.E.2d 235, 240 (Ind. Tax Ct.2001) (explaining, for example, that the terms "must" and "shall" connote mandatory import). Nevertheless, phrases and terms that appear mandatory may, at times, be construed as directory in order "`to prevent the defeat of the legislative intent.'" In re Middlefork Watershed Conservancy Dist., 508 N.E.2d 574, 578 (Ind.Ct.App.1987) (citation omitted). More specifically, such phrases and terms will be construed as directory when the
Here, Indiana Code § 6-1.1-17-16 does not specify any adverse consequences in the event the DLGF fails to complete its duties by February 15. Such silence leads the Court to conclude that the legislature's purpose behind the specified date is simply to keep the budget process "moving along" and, ultimately, to ensure that the DLGF has final review on both budgets and taxpayer objections thereto. See, e.g., Whetzel v. Dep't of Local Gov't Fin., 761 N.E.2d 904, 908 (Ind. Tax Ct.2002) (explaining that when construing statutes, it is equally as important to recognize what they do not say as it is to recognize what they do say) (citation omitted). This legislative purpose would be thwarted if the February 15 date was construed as a mandatory deadline: when the DLGF received the taxpayers' objection statement in May of 2008, it would have been precluded from reviewing it, along with the City's budget. Cf. with Bd. of Comm'rs of Marion County v. W. Elec. Co., 198 Ind. 417, 153 N.E. 177, 178 (1926) (explaining that when statutory provisions are for the benefit and protection of taxpayers, they are construed as mandatory; when statutory provisions are designed to merely secure order, system, and dispatch in proceedings, they are construed as directory) (citation omitted).
Second, with respect to the Petitioners' allegation that the City implemented its budget prior to the DLGF's hearing on October 30, 2008, there is no evidence in the record to substantiate that allegation. In fact, both parties acknowledge that tax anticipation warrants were issued in order to fund the City's operation while the budget approval process was being completed. (See Oral Argument Tr. at 16, 29.) See also BLACK'S LAW DICTIONARY 1724 (9th ed.2009) (defining tax anticipation warrants as short-term loans made to local governmental units that are to be payable out of tax receipts when collected).
The Petitioners have not shown that they were denied due process when the DLGF conducted its hearing on the taxpayers' objection statement on October 30, 2008. Accordingly, the Petitioners' claim as to this issue is denied.
Next, the Petitioners take issue with the manner by which the DLGF, in its final determination, addressed the taxpayers' objections. Specifically, the Petitioners argue that pursuant to Indiana Code § 6-1.1-17-13, the DLGF was required to provide written determinations and statements on each of the fifty-nine objections.
Indiana Code § 6-1.1-17-13 provides that after the DLGF conducts its hearing on an objection statement, it shall "consider the testimony and evidence submitted at the hearing" and then "mail [its] ... written determination [] and ... written statement of findings[.]" A.I.C. § 6-1.1-17-13(b)(3). This statute does not require that the DLGF's final determination/statement of findings be in a particular format and the Court will not read into it such a requirement. See Kohl's Dep't Stores, Inc. v. Indiana Dep't of State Revenue, 822 N.E.2d 297, 300 (Ind. Tax Ct.2005) (explaining that the Court will not expand or contract the meaning of a statute by reading into it language that is not there). Accordingly, the Petitioners' claim as to this issue is also denied.
Indiana's Constitution provides that
IND. CONST. art. 13, § 1. This constitutional provision is codified at Indiana Code § 36-1-15-6:
IND.CODE ANN. § 36-1-15-6 (West 2007).
On appeal, the Petitioners claim that the DLGF's final determination must be reversed because the DLGF not only erred in calculating the amount of debt to which the City was allowed, but erred in determining that the City had not exceeded that debt limitation. The Court will address each of the Petitioners' claims in turn.
In its final determination, the DLGF explained that "[t]he latest adjusted value of taxable property in [the City] is $820,036,594. Therefore, the maximum that [the City] can be indebted is $16,400,731." (Pet. Ex. 1 at 5 ¶ 11.)
First, in challenging the propriety of the DLGF's final determination, the Petitioners bear the burden of demonstrating its invalidity. See, e.g., Clark-Pleasant Cmty. Sch. Corp. v. Dep't of Local Gov't Fin., 899 N.E.2d 762 (Ind. Tax Ct.2008). Thus, the Petitioners must show the Court that there is evidence in the administrative record that does not support the DLGF's finding that the City's latest adjusted value was $820,036,594. The Petitioners have not, however, provided the Court with any explanation as to why they believe that the City's latest net assessed value is $758,532,923, nor have they provided any citations to evidence contained in the administrative record that would support that belief. (See Petrs' Br. at 21-30; Petrs' Reply Br. at 11-18.) (See also Oral Argument Tr. at 23-26, 36-38.) This Court does not bear the burden of searching the administrative record to find support for the Petitioners' argument and, thus, deems the Petitioners' argument waived. See, e.g., Clark v. Dep't of Local Gov't Fin., 779 N.E.2d 1277, 1282 n. 4 (Ind. Tax Ct.2002) (explaining that taxpayers must walk the Court through every element of their analysis; it is not enough for taxpayers to merely claim they made a prima facie case without explanation or to cite to "large swathes" of the record as though the evidence speaks for itself). See also Shepherd v. Truex, 819 N.E.2d 457, 463 (Ind.Ct.App.2004) (explaining that pro se litigants are held to the same standard as legal counsel; poorly developed, non-cogent arguments are waived).
Second, the Petitioners' argument that Indiana Code § 36-1-15-2(2) created a $15.2 million bond limit for the City is incorrect. That statute states:
IND.CODE ANN. § 36-1-15-2 (West 2007). In other words, the statute provides that, in certain instances (i.e., when there is a
The Petitioners have not shown that the DLGF erred in calculating the amount of debt to which the City was allowed. Accordingly, the DLGF's determination that the City's debt limitation was $16,400,731 stands.
Next, the Petitioners contend that the DLGF erred when it determined that the City had not exceeded its debt limitation. To support their claim, the Petitioners state that pursuant to the City's "CTAR-2" Report, the City has debt of $95,957,294—well over the $16,400,731 limit. (See Petrs' Br. at 24, 26.) (But see also Petrs' Br. at 29; Oral Argument Tr. at 23-24 (where Petitioners allege that because a tax anticipation warrant, a judgment against the City, and a loan were not accounted for in the "CTAR-2" Report, the City's debt is closer to $117 million).)
The "CTAR-2" Report states that as of December 31, 2007, the City had outstanding redevelopment revenue bonds in the amount of $45,290,000; general obligation bonds in the amount of $21,445,000; leases in the amount of $3,095,442; and loans in the amount of $12,120,452. (Cert. Admin. R. at 99.) The "CTAR-2" also indicates that the City paid $2,484,950 in interest during 2007 on its long-term indebtedness and that it had short-term liabilities during 2007 in the amount of $11,521,448. (Cert. Admin. R. at 99-101.)
The CTAR-2 Report, however, does not establish that the City exceeded its debt limitation. Indeed, not all of the liabilities listed on that Report count towards the City's debt limitation under Article 13, § 1 of the Indiana Constitution. See, e.g., IND. CODE ANN. §§ 36-7-14-3(b), -25.1(i) (West 2007) (explaining that the $45,290,000 in bonds issued by the City's Redevelopment Commission would not constitute City debt because they are the debt of a special taxing district and payable from the collection of a special benefits tax); IND.CODE ANN. §§ 36-10-3-19, -24(d) (West 2007) (explaining that $18.2 million in general obligation bonds issued by the City's park district would not constitute City debt for the same reason). See also City of Valparaiso v. Gardner, 97 Ind. 1, 6 (Ind.1884) (explaining that "[w]hen the current revenues are sufficient to fully pay the current expenses ... [of] corporate life, there can not be said to be any debt"); Kees v. Smith, 235 Ind. 687, 137 N.E.2d 541, 542-43 (1956) (explaining that for purposes of Article 13, § 1 of Indiana's Constitution, a city's lease for property does not give rise to an indebtedness for the aggregate of all the rentals for the entire term.) Thus, the Petitioners have not demonstrated that the DLGF erred in concluding that the City had not exceeded its debt limitation.
The Petitioners have neither shown that the DLGF erred in calculating the City's debt limitation, nor have they shown that the City did indeed exceed its debt limitation. Accordingly, the Petitioners' request for relief as to this issue is denied.
Finally, the Petitioners explain that during the taxpayers' objection hearing, they told the DLGF that: 1) there were mathematical errors in the tax levy's computation; 2) the budget did not include the self insurance fund; 3) the budget reported inaccurate revenue and expenditure amounts; 4) City officers failed to use the proper forms when they presented their budget estimates to the City Council; 5) the City's water department, sanitary district, and port authority were not paying
When this Court reviews a DLGF final determination, it gives it great deference as long as it is supported by substantial evidence. See, e.g., Clark-Pleasant, 899 N.E.2d at 765; Perry v. Indiana Dep't of Local Gov't Fin., 892 N.E.2d 1281, 1282-83 (Ind. Tax Ct.2008). The Court will find that a DLGF's final determination is supported by substantial evidence "if a reasonable person could view the record in its entirety and find enough relevant evidence to support the... determination." Amax Inc. v. State Bd. of Tax Comm'rs, 552 N.E.2d 850, 852 (Ind. Tax Ct.1990).
In reviewing the transcript from, and the evidence presented at, the DLGF hearing, the Court finds that the budget issues of which the Petitioners complain are, like most of the taxpayers' other objections, nothing more than unsupported allegations and conclusions, open-ended questions, or opinions as to how money would be better spent. (See generally DLGF Hr'g Tr.; Cert. Admin. R.; Supp'l Cert. Admin. R.; Pet. Ex. 2 at 5-16.) Accordingly, the Court cannot say that the DLGF erred when it "failed to rectify" the alleged problems: unsupported allegations, conclusory statements, open-ended questions, and opinions do not constitute the probative evidence necessary to demonstrate to the DLGF that the City's budget, tax levy, or tax rate violated the law. See, e.g., Knox County Prop. Tax Assessment Bd. of Appeals v. Grandview Care, Inc., 826 N.E.2d 177, 184-85 (Ind. Tax Ct.2005).
The Court AFFIRMS the DLGF's final determination in its entirety.
COURT'S TAXPAYERS'
CATEGORIZATION OBJECTION
NO.
1 THE CITY'S PROPOSED TAX RATES/LEVIES 1
EXCEED STATUTORY LIMITS SET FORTH
IN IC 6-1.1-18
2 THE CITY'S DEBT EXCEEDS LIMITS SET 2
FORTH IN ARTICLE 13, § 1 OF INDIANA
CONSTITUTION AND IC 36-1-15
3 THE CITY'S BUDGET FAILS TO INCLUDE:
*The Self-Insurance Fund 3
*City contracts 5
*Revenue and expenditure estimates for 25 13 departments *Revenue and expenditures associated with the 14 Hammond Festival of Lakes *Debt service for all departments 28 *Admissions Tax revenue 38 *State property tax replacement credit revenue 39 *State homestead credit revenue 40 *Property taxes collected from Water 52-53 Department and Sanitary District *Funding for City Redevelopment 55 *Funding for Planning and Development 56 department *Revenue of, and expenditures for, Lost Marsh 59 golf course 4 THE FOLLOWING EXPENSES SHOULD BE ELIMINATED FROM THE CITY'S BUDGET: *Salary for Mayor's photographer 4 *Salaries for six City employees who held "dual 6 positions" *Funding for the City golf course clubhouse 11 *Raises for City employees 15 *Salaries for six of the twelve positions within 16 Controller's office *Salary for one of the two staff accountants 17 within Clerk's office *Salaries for three of the fourteen clerks within 18 Clerk's office *Promotion pay 19 *Salary for one of the two clerks for Common 20 Council *Salaries for all non-essential City consultants 21 *Salary for street light engineer within 26 Engineering/City Hall Maintenance Department *Salaries for the two housing coordinators within 27 the Human Relations Department *All residency bonuses budgeted for police 29 officers *All costs associated with non-essential take 44 home vehicles *All costs associated with one of City's two legal 45 aid clinics *All costs associated with United Neighborhoods, 47 Inc. *Costs for crossing guards 48 *Reduce Mayor's salary from 95k to 50k because 49 he works at Purdue every Friday *Salary for one of Mayor's two secretaries 50 *Costs associated with production of Mayor's 51 television show 5 INFORMATIONAL REQUESTS OF DLGF: *When City Council passes resolution regarding 7 financial matters, how many votes are required? Is an ordinance required?
*What can Wagering/Admissions Tax revenue be 8,9 used for? Property tax relief? *With respect to the Board of Works budget, 22-25 what is included in "insurance," "utilities," and "election" expenses? *What are "payments in lieu of taxes?" Are all 30 entities paying the proper amount of taxes? *Did Motor Vehicle Highway Department's 31 budget request to hire new employee actually list the correct number of employees? *Under Gaming Revenue, what are "debt 34-35 services-administration" and "services and charges-administration?" *What are "penalties," "fuel costs," and 41-43 "automobile expenditures" and their appropriate itemizations? *Why is budget's revenue $82 million less than 46 what is reported in State Board of Accounts' financial statement? *Is the property of the Port Authority properly 57 assessed? Is the Port Authority paying its fair share of taxes? *Can Port Authority lease city golf course 58-59 legally? Is that golf course properly assessed? 6 OTHER RECOMMENDATIONS FOR/ REQUESTS OF DLGF: *Suspend collection of City fees until City 10 calculates them pursuant to state statutes *Compel department heads to provide the detail 12 for their budget estimates on "Budget Form 1" *Determine the proper amount of gaming 32 revenue that should be listed in budget *Change budget so that "gaming revenue" reads 33 "admissions tax and wagering tax" *Reduce Gaming Revenue's "debt service" and 36 "services/charges" to zero and use those amounts for property tax relief *Reconcile gaming revenue and expenditures 37
Respondent, Indiana Department of State Revenue, by counsel, files its Motion for Publication of Memorandum Decision. The Court, being duly advised in the premises, now finds the motion should be GRANTED.
IT IS THEREFORE ORDERED as follows:
