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PORTER COUNTY COUNCIL Special Meeting March 19, 2007 The Porter County Council met on Monday, March 19, 2007 at 5:00 p.m. in the County Administration Center, 155 Indiana-Suite 205, Valparaiso, Indiana. Members present were Michael Bucko, Jim Burge, William Carmichael, Matthew Murphy, Bob Poparad, Rita Stevenson, and Vice President William Carmichael. Also present was Attorney David Hollenbeck, Auditor Jim Kopp and Jan Noll. Mr. Carmichael called the meeting to order with the Pledge of Allegiance. ATTORNEY REPORT Tax Anticipation Warrants Mr. Carmichael, Our first order of business; Dave, did you have a report for us? Mr. Hollenbeck, Yes, thank you, Bill. To update you on the tax anticipation warrant issue that you authorized last time, in consultation with our auditor, and with the concern about the timing of both the December settlement, and the issuance of the 2007 tax bills, and to make sure that we had adequate cash for cash flow purposes, you had authorized me to seek tax anticipation warrants in an amount not to exceed $20,000,000. When I went out to do that, what I discovered was that 20-million bucks, even on a draw basis, is a little heavy for the area banks in terms of being able to cover. Plus, under the banking law, if we issue more than $10,000,000 they can’t give us the tax-free rate on that. We’d have to pay the market rate, which is right now probably in excess of 6% So in consultation with Jim and the banks, what I’m going to propose tonight, and hopefully, get your approval on, is to drop that figure down to $10,000,000. We’ll go ahead and issue the $10,000,000. I can tell you, the interest rate will be 3.94%, which is actually a little less than it was last year. We’ll hope we get the December settlement done, we get the tax bills out, and that will be enough. If that isn’t enough, then we’ll have to go back into the market, and sustain that higher interest rate, and get some other banks to participate. So I guess what I’m looking for is your acquiescence and a modification of your original instruction to me, dropping the issuance of the tax warrants down to $10,000,000 instead of 20, and going forward in junction with the auditor to expedite it. Again, because the December settlement still remains out there, there’s even greater urgency, like paying our bills. I’m going to try to get this done yet this week. Mr. Carmichael, Okay, what’s the Council’s pleasure? Mr. Poparad moved to approve the issuance of tax anticipation warrants in the amount of $10,000,000. Mrs. Stevenson seconded, motion carried unanimously. Mr. Hollenbeck, And we’re signing the paperwork down here, so we’ll keep going if you don’t mind. Mr. Carmichael, Okay. PROVISIONAL TAX BILL DISCUSSION Mr. Carmichael, Who does the Council want to hear from first? Who do you want to here from first? The auditor? The assessor? Mr. Bob Poparad, Murphy. Mr. Carmichael, Murph, you’re in the batter’s box. Mr. Bob Poparad, You’re up. Jim Murphy, I copied out, I was at treasurer’s conference a week, ten days ago, and Melissa Henson of the DLGF was there, and gave me some paperwork regarding provisional billing, which I made available to Jan, and I think you guys all have copies of that. It has changed a little since the last time. When they enacted the legislation back in 2003, the legislation that we used then to do provisional billing, they have inserted themselves in a lot of places in the process now. That would be the DLGF and the Auditor of the State, the State Board of Accounts and so on. They have inserted themselves in the process quite heavily, heavy-handedly I was going to say, but maybe it’s not. But anyway, if you have those copies, you can read them at your leisure. The Power-Point presentation, that has several elements to it, one of which, I believe on the second page of that, Ms. Henson indicated that zero counties have been issued budget orders and tax rates for ’06 pay ’07. So no one is going to get their bills out or if they get them out, it’ll be just by a whisker to make a May 10th deadline. Then she goes on in her presentation--which I have copied off for you--and goes through all of the steps and all of the choices that we will have to make if we decide that there is no alternative but to do provisional and reconciling bills this year. You guys would be involved in it as far as a resolution or something that I have to have you folks sign if you’re in favor of the idea too. The auditor and I, we’ve been meeting daily, and meeting with others weekly, working out all the schedule details just to make sure that, you know, we’re not leaving anything unturned here, to try to figure out ways to accelerate the process, and try to avoid the aftermath of this provisional and reconciling bill process, which once it starts it will take a long time to get it cleaned up, but I can go into those details later. Your question is probably, can we execute a provisional billing, and have it come due on May 10th, and I think sitting here today, with your cooperation and the DLGF’s acquiescence to the choices that we make with regard to how many billings we want to have, and what percentage do we want to collect on what dates. If anyone is all in agreement on that, then I would say sitting here today that, yes, I suspect that we could get a bill out by April 25th, which would then make the bill come due on May 11th, excuse me, May 10th, because you have to give them 15 days on a provisional billing, just like on a regular billing. I also anticipate that, I mean we’re certainly be able to do a reconciling billing, and have it come due on November 10th, but if we do that, then that’s a whole separate billing, and that must be, that would require us a 30-day notice to the taxpayers--to anybody who’s going to pay that. So we would have to have everything squared away so that we could put all of the bills, have them all postmarked no later than October 10th. That’s probably doable too. Now, I say that, you know, but we still have some blanks in the predictions of dates from the state and other agencies that, you know, we don’t know how long the state is going to hold up tax rates and budget orders once Mr. Kopp gets the assessed values certified to them. We don’t know how long that’s going to be. We don’t know, to the best of my knowledge we may have, Sharon Lippens was going to have contact with some folks in Tippecanoe County to see if they, you know, what was their timetable. We don’t have that information yet. We’re going to meet again, and discuss all these things. Then, of course, complicating this, the auditor is still finishing the last details on the settlement that was scheduled to be finished at the first of the year. That hasn’t been done, but I guess he’s closing in on that one. He’s trying to develop a date for when and what, I won’t speak for you Jim if you want to come up and speak for yourself. But, you know, he’s narrowing in on all the things that he has to do to get all of these things done. None of these things, he hasn’t supervised any of these tasks, but we have been working together since I have some experience in some of these things. The IT Department, Sharon Lippens and her folks have kept a pretty good record of timelines that we have experienced in the past three or four tax cycles. Given the aggravation, before I get into the aggravation part of it that we are going to experience here in the county, let me also say that, the billing that we would be able to execute and have come due on May 10th this year would only be 45% of real estate. There would be no, excuse me, 45% of real estate that was billed last year. Only 45%. So that if you had to schedule two provisional bills in one year you wouldn’t go more than 90%. So 45% is the limit, and we can’t do personal property because we will likely be over billing everyone since the inventory comes off personal property, so I would suspect that we would really be netting a 45% of what was billed last year, but something in the 30’s. The high 30’s, maybe 35%. So that’s one drawback to that. Once we choose to go down the path of doing provisional bills then a lot of activity has to stop. As you probably are aware, we have to reconcile with the people to whom we have sent the provisional bills. So therefore, we can’t really, we can’t transfer, the auditor can’t transfer ownership on any of these parcels from one to the other until the reconciling bills, until we are prepared to send the reconciling bills. That will cause a backlog in there. The biggest heartache that we are going to experience is on behalf of all of the taxpayers in the county who have an escrow arrangement with their bank or mortgage company is, it has been experience in the years that I have been working with the mortgage companies--13 or 14 years now--it will be difficult to make the mortgage companies and the service companies that they hire to do this business with me, it will be very difficult for them to understand that this bill is not really the bill for the whole year. This is only a portion of last year’s amount. What they will do as soon as they find out what the tax is, a lot of them, some of them will be able to follow along. The local banks who know what we’re doing, they do a very nice job of it. But some of the service companies who have a lot volume, what they will do then is automatically recalculate the escrow account, and that will affect the house payment that the folks send in because they are not allowed to hold more. I don’t know, I mean I forgot all the rules on that, but they can’t have more money in an escrow account than a certain amount of what the payment is. They are not allowed to do that. That’s holding onto the taxpayers assets for too long. So that’s going to get messed up when we come out with a reconciling billing, which may be higher, may be lower. In parenthesis, in my discussion here, I also gave you a handout that was presented to us by Professor Larry DeBoer from the Purdue University bunch, and he indicates on the first page there that he and the Legislative Services Agencies predict that homesteads, taxes on residential property this year is going to go up 14.6%. So yes, the taxes are going to go up when we get around to calculating them. So we will have those complications to deal with, with regard to the mortgage companies. That caused a lot of trouble the last time we did provisional billings, and I would guess that that went on for a year and a half. I bet we had answered thousands of phone calls, wrote numerous letters and emails, and had phone conversations with mortgage companies explaining, no, you needn’t raise their house payment; leave it alone because it’s going to even itself out here real soon. We had a lot of difficulty with that. All of the corrections, you know, every time you send out a bill except for the provisional bill you afford the taxpayer an opportunity for a 45-day, that’s starts a 45-day clock during which time they can appeal their assessed value to the assessor. Well then that starts a whole other set of questions and concerns that the taxpayers do have because they really, if they don’t understand the entire process they’ll get kind of lost in the rush, and they’ll appeal it, and the assessors will have to go through all of this workload, you know, probably from half of this into half of next year. So all of these are going to complicate the situation. But in answer to your question, you know, I mean when will cash flow run out, are the taxing units, are they prepared to have a tax deadline that’s somewhere in the vicinity of July or August. I mean I haven’t seen any, I haven’t heard any door slam yet that would preclude us having the tax deadline in late July or early August. I mean that’s my feeling now. As I said earlier, there’s some holes in the schedule. I mean we need some more information about forecasts from the state on how long they anticipate they are going to be fooling around with the rates once Jim sends them certified AV’s. We don’t know that yet, and they would be guessing too since they don’t have much of that done. But based on what I have seen now, I would like to hold off making that decision finally for another two weeks, ten days. I think we would probably have a chance to gather more information, and maybe be able to come up with a better answer at that time, because it would really, I mean I would rather, the auditor has been working hard--you know, there’s smoke coming out the windows when they’re down there working. They have a lot of things that all have to happen concurrently, and he’s ganging up on it and getting it done. He’s consulting with the assessors and with me and with anybody else that can give him a hand. If his office can continue to apply that kind of hard work getting the assessed values certified to the state and getting the regular tax billing out, I think we would much, all of us in this business and the taxpayers, I think would be, you know, aside from the amount of interest that the taxing units would have to pay to borrow money to keep the lights on, I think that would be a better situation. It would also help us with the cooperation of the assessing community. It would also help us to get closer, getting back on this schedule to where we get assessed values in the late summer and we get them certified to the DLGF in September when they’re supposed to go down there, barring anything the legislature is going to do, so we at least have a chance of getting our tax rates on the date that they are really required to be here which is February 15th, so we can get a bill out in late March or April, and get back on schedule. Having a May 10th and November 10th, make our lives a little bit more predictable and stable. I think we’ve all been looking forward to that. Questions? Mr. Carmichael, Jim, what’s the additional cost if we have to mail out a provisional? What’s the additional cost for the year in mailing the reconciled bill? Mr. J. Murphy, Probably right around 25 or $30,000 at the most. Mr. Carmichael, That’s what it was before, about 30,000. Mr. J. Murphy, I don’t see it being any different than that. Mr. Carmichael, Of course, the obvious is the taxing units that don’t get their money under the other scenario--that have to borrow more money--will be spending a lot more than $30,000 on a tax anticipation warrant. Mr. J. Murphy, That’s correct. Mr. Bob Poparad, Where are we at in the process right now, in terms of sending out real tax bills? Mr. J. Murphy, The assessors are making every effort to transmit to the auditor, assessed values. The auditor has... Mr. Bob Poparad, Jim, come on up here, because you’re in the middle of this anyway. Mr. J. Murphy, The auditor has a lot of interesting and complex things he’s going to have to do with those numbers whether he likes it or not. Mr. Bob Poparad, You haven’t rolled yet? Mr. Kopp, We’ve been trying since last Thursday. Mr. J. Murphy, But once they do that, once he has the assessed values he has a whole litany of things that he has to do before, in addition to. All of those things can go on concurrently, you understand. I mean the advertising of the proposed rates and so on, the distributing the assessed values for all the taxing units, all of these things that they need for budgeting and so on. Mr. Bucko, I guess my question might, and it’s probably a very similar one where Bob was coming from. At the last meeting we had 16 points that made up the process. Remember that? The 16 points, and we had to have number one done before we got, we’re able to step from 2 to 16. In that 2 to 16 range then certain procedures within that range can be done simultaneously. Do we have an idea where we are in any completion levels of those yet or are we somewhere in, you know, where do we stand in completing any portions of the rest. Jim, I’m just trying to get a handle. That’s the only tool I’ve got to determine where we might be. Mr. Kopp, Let me tell you where I think we’re at. The settlement is a very complicated system that is done by taxing district and everything else, and everybody gets their little piece of the pie. Our values do not balance, and they don’t balance for several reasons. We’ve had to go back and, we get something to the state, we get it back and they said it’s not right, this doesn’t balance. Currently, we are working on the 17-T’s that don’t balance, and that has to do with the assessed value, refunds and how much we have to give back to the state, posted credits and refunds, and penalties. It’s just a very complicated thing that we’re having to go back and redo. We don’t even know if we can get the computer system to run it or if we’re going to have to run it by hand. But I had somebody work most of the weekend trying to figure out where we are at with it. We found out Thursday this is the next problem, so to speak. We have to get the settlement done before anything can happen. I thought the end of February, then I thought the end of March. The state’s working with us, but we have lags or days where we have to get information, they have to get information, and we talk back and forth. I don’t even know if we can get settlement done by the end of April. Then when we go to address the provisional tax bills, I can’t do provisional tax bills and work on tax bills, I don’t have the manpower, I don’t have the intelligent, what do they call it, the people capable of doing it. It’s not something you just hire somebody to do. So we have to make a choice to work on tax bills or provisional tax bills, at least I think we do. I’m with Jim, I think we should work on the tax bills. We’ve got problems with the Manatron program which is just a disaster. It’s not being supported, which I think everybody is aware of. I need probably three weeks after it rolls so I can submit information to the state to start the beginning of sending the tax bills. But before that I’ve got to get settlement done. Then after that we can start plugging in the values. We’ve got the TIF settled, and those numbers are ready to go in this computer. It’s where we direct our effort, I guess. I don’t necessarily agree with Jim that we get the bills out in July, but I think in August or September. I’m a little more pessimistic because we don’t have control of the dates. I think too, some of this stuff, that we’re being real optimistic if we say July. But, you know, that’s my two-cents worth, and he’s got more experience, but the way it’s gone the last three months. Mr. J. Murphy, A lot of these low-numbered items, the exemptions and the deductions, that’s probably done already. A lot of these others, you know, the neutralization of the TIF and all that business, it just needs to have the new AV’s plugged into that, then that’s ready for presentation. So a lot of those, a lot of the preliminary work on some of these tasks that can be done concurrently has already been done by him, his folks in the real estate department. So, you know, he’s farther ahead than he thinks. Mr. Bucko, And the projection is that you can only, you’re only going to end with a provisional bill, it’s only going to handle about 45% of the taxes, none of it being real estate. Mr. J. Murphy, All of it is… Mr. Bucko, Or personal property, excuse me. Which means roughly somewhere between 30 and 35% net. Mr. J. Murphy, I haven’t done the math on it, but that’s roughing it out. There’s a lot of, Burns Harbor, up in Westchester they have a lot of, Mittal Steel has a lot of very expensive personal property in machinery, so that’s quite a big number. Mr. Bucko, Then I hear you saying then you’ve got to go through the process of truing up and doing whatever you have to do with the provisional bill. Then that sets you back based on trying to get things squared away for February of next year, so you can get things on possibly on some cycle, depending on if the state is on the right cycle, and dadada dada. I don’t know about this Council, but I learned, if I’ve learned anything over the years in just pure life, when you’re in a hole up to your head you throw away the shovel. Mr. J. Murphy, Quit digging. Mr. Bucko, That’s that first thing you’ve got to do. You know, it may cost this county more, but I think I tend to lean toward waiting and trying to get the bill out in October, myself. It may cost us a little more, and all the other taxing units, but it may be more manageable in the long run. Mr. J. Murphy, I promise that if I see everything going to hell in hand basket, I’ll come back and ask you for that resolution and get going on provisional bills. You know, I will do that. But I haven’t seen, you know, enough things happen finally to make it extend out much past the way it has been over the past several years, so. Mr. Bob Poparad, Let’s say we decided, and you decided, and we all decided to send provisionals, could they go out April 15th payable May 10th? Mr. J. Murphy, April 25, pay May 10. Probably, yes. Mr. Bob Poparad, Okay. Mr. J. Murphy, Or, you know, we could get them extended two weeks. Mr. Bob Poparad, Okay. I’ve got to be honest, I don’t see what the downside is. Not so much from our side but for everybody sitting out here. At least we get something. They get something. I mean it may not make our lives any easier, but I don’t know if our goal is here to make our lives easier or to get the taxes to all these bodies sitting out in the audience, which is sort of what our job is. I mean the money issue alone if it just boiled down to dollars and cents, they’d all stand up and say, send out provisionals, because they’re all going to spend interest and lots of it, which means everybody in this county spends. So either we, you know, it’s like, I mean if it’s just a matter of spitting out the tax bills, I know it’s not that simple, but I mean, I guess my argument to everything you said is, if we send out provisionals, that doesn’t stop the process that we’re working on now. We still have got to get all this stuff done whether we send out provisionals or not. Mr. Kopp, We can only work on one at a time. Mr. Bob Poparad, I agree. Mr. J. Murphy, Once we send provisional bills out, Bob, yes, we have money coming in. Mr. Bob Poparad, Right. Mr. J. Murphy, We have to distribute it manually. Mr. Bob Poparad, Okay. Mr. J. Murphy, Because we have to use all of the line items that were in last year’s budget, because we don’t… Mr. Bob Poparad, Okay, I agree. Right. But does everything else, if we send out provisionals, that does not stop the process we are working on right now. Mr. J. Murphy, No. I mean… Mr. Kopp, It’s going to delay it considerably, and it could go to such a point that instead of trying to get assessed values in July or August to start for next year, we might be in worse shape next year, because we’ve got to get this done first, and get it balanced, and get a settlement with the state. I think Jim and I have talked about that--and I hope I’m not putting words in his mouth--we’re just prolonging the agony for another year, and it’s going to get worse and worse. It’s like a snowball that keeps going. We’ve got to stop and get this thing corrected. Along those same lines, I think you’ve all got a letter that both of us have signed, asking for software that would let us balance everyday, and make this thing work. Mr. Bob Poparad, Okay, what’s going on with that? I got the letter, what’s going on with that? Mr. Kopp, Well, nothing. It’s… Mr. Bob Poparad, You don’t want to buy it? Mr. Kopp, We do want to buy it. Mr. J. Murphy, We do want to buy it. There was a demonstration was done here from a company with a good reputation, not quite nationwide, but they’re active in a lot of states. Sharon Lippens can give you all the chapter and verse on that. But from my experience in the auditor’s office, it does everything that the auditor would want it to do, and more. From the treasurer’s perspective, it’s even better. I mean it’s balances every day. Mr. Bob Poparad, What about the assessors? Mr. J. Murphy, Well, if we can get the assessors to take another look at that too. I mean some of the township folks seem to be happy with it, so. We haven’t heard anything from the county assessor. Mr. Bob Poparad, Okay. Mr. J. Murphy, But Jim and I are convinced… Mr. Bob Poparad, We’ve got a lot of thumbs up back there. Mr. J. Murphy, I was hoping they would like it too, because it looked very comprehensive. This system would be, because some places in Texas require a settlement to be done every day. This software would allow that. So when you get the last check in the bank, you’re ready for settlement immediately. Mr. Bob Poparad, Okay, why haven’t we bought this yet? Mr. J. Murphy, We just took a look at it last month. Now, it’s not certified, so we really can’t… Mr. Bob Poparad, Nobody’s certified. Mr. J. Murphy, Right, but it has all the bells and whistles than I thought were out there. It looks like a very nicely put together piece of software. Mrs. Stevenson, And it’s in compliance with the state? Mr. J. Murphy, It will be. They have every confidence… Mr. Kopp, The state has pushed back their certification deadline until sometime in late fall, because they are changing their specs again. Mr. Bob Poparad, Do we have somebody from the county assessor’s office? Susan Villarruel, I’d like to speak on behalf of the assessor’s office. John Scott is not here, he’s ill. We have a list that was provided to the Board of Commissioners to Bob Harper of all these software vendors. I know we’re not here to discuss software vendors. Mr. Bob Poparad, Well maybe we need to discuss software vendors. Ms. Villarruel, Well you let me know. I mean I’m just, I’m here for, we’ve had several demonstrations on software vendors, and we are continuing to have software vendors. We have three more lined up yet to see. Based on that list that was provided to the commissioners from the list that was at some conference in January sometime, and that’s the list that I’m going from. I talked with Sharon Lippens from ITS, and we’re going, based on that list, bring in all the software vendors, as many as possible. On the assessor’s standpoint, we do not want to make a decision until we actually see all the software vendors that are available first before we make a decision. Because as we speak now, there has been a delay in the certification because the disk that was provided to all the software vendors was incorrect, so now they are stating that the disk will probably be not available to the software vendors until late December of this year, so that they can make the changes that are going to be modified again, that the state is asking for. So that’s why John Scott does not want to make a decision as of today until he actually sees all the vendors, and until the state comes up with the guidelines, that… Mr. Bob Poparad, So we’re not going to buy anything until December? Ms. Villarruel, As far as the assessor’s standpoint, we’re not going to buy anything until we actually see all the vendors that are out there available first. Mr. Bob Poparad, You didn’t answer my question. When are we going to buy some software that works for everybody sitting in this room? Inside this building. Ms. Villarruel, Okay, I cannot make that call as far as John Scott, because he is not here. Mr. Bob Poparad, Right. Ms. Villarruel, I cannot speak for him. But I can just… Mr. Bob Poparad, Well, what, in a month, two months? Ms. Villarruel, John would like to look at more software vendors that are available out there still before any kind of a decision is made, and whether they are certified or not certified. Mr. Bob Poparad, Nobody is certified. Ms. Villarruel, Right, and Manatron is working with us right now… Mr. Bob Poparad, Let’s talk about Manatron, the same ones that bought Plexis and dropped us in the grease, right? Ms. Villarruel, Correct, right. Mr. Bob Poparad, I just want to make sure we’re talking about the same company. Ms. Villarruel, Sorry. Manatron has provided us with a letter on Friday stating that they are going to continue to provide us with the information, the software, and anything that we need. We have something in writing that says they will not cut us off any service. So they are working with us until… Mr. Bob Poparad, All of a sudden after Hamer came up, they decided to work with us? Ms. Villarruel, Well no, because we’ve been working with them from day one. It’s been a very difficult situation trying to deal with it, but they are trying to work with us. They sent us four options; from those four options, Gwenn, the county attorney and Sharon Lippens, they drew up a letter stating that they wanted clarification on two of those options. We sent that letter to Manatron. Manatron is in worse shape of trying to work up something because they have five other counties just like us that are in the same boat, and they say they do not want to cater just to Porter County; they want to cater to the five counties that are in our same position. That would be more cost benefit to Manatron as a company. But they are working with us right now, so our software data continues to work. I’ve been working with Sharon Lippens for the last several weeks, and she’s been working with me trying to get the personal property and the real estate, and right now we’re in the process of trying to get information. We’re trying to balance. She has worked on the 2006 data, and there are just a couple little quirks that we are trying to get to where we can balance and roll those figures to the auditor’s department. As far as personal property, that data is ready to go, but Sharon also again has to run a report in order to get all this data so that all the figures balance before we can roll to the auditor’s office. Hopefully, as soon as we roll the real estate, then Sharon can work with the auditor’s office again to get all those, whatever reports, or whatever needs to get done so that our figures balance, so we can also roll the personal property. So it’s not like, you know, we are trying to move forward so that all this stuff gets done at one time. Do you guys have any other questions? Mr. Bob Poparad, I guess it appears that the treasurer, the auditor and a bunch of township assessors like Hamer. But John Scott is going to make the decision in spite of what all these people say, and I’ll address this to John Scott since he’s not here. I don’t want to put you on the spot. If he doesn’t like Hamer, he doesn’t buy Hamer. Is that… Ms. Villarruel, No, that’s not what he’s saying. What he’s saying is he still wants to look at, like tomorrow we have, actually, Manatron/Provell coming in and giving us a software demo. In two more weeks we have two more vendors coming in. Mr. Bob Poparad, Not to cut you off. This is all the more reason I think we should send out provisionals, because we’re going to play hide-and-seek with software people for probably what, another three months? Four months? Ms. Villarruel, No, probably… Mr. Bob Poparad, So we’ll buy it by? Ms. Villarruel, I can’t make that decision. Mr. Bob Poparad, That’s my point. We’re still interviewing vendors. Mr. Kopp, Bob, we can buy our stuff without the assessor’s. Ms. Villarruel, What we’re trying to do… Mr. Kopp, Then we could do the tax bill next year on the new program. Mr. Bob Poparad, Well okay, but in the meantime we can still send out provisionals and get some pennies in their pockets. Mrs. Stevenson, Wait a minute, Bob. Whatever you, if you guys buy this program, if you guys buy this and you two are in sync, then whatever they purchase, will it be in sync with yours? Mr. J. Murphy, Yes, that’s one of the certification requirements that it all has to be connected. You have to be able to integrate all of the programs, all of it has to have some direct link, a hard link, one to another. Mrs. Stevenson, Okay. Ms. Villarruel, It might not be the same company, but they have to be… Mr. Kopp, Be in the order. Ms. Villarruel, Right, and what we’re trying to do is, what I was trying to do is line up vendors that will actually give us all three programs before we actually settle down with getting, because there are companies out there that offer just the treasurer’s and the auditor’s currently, and do not offer the assessor’s. We’re still going to look at those options because they say not until December of this year will they have the assessor’s package ready. But we’re still opening up our doors for these vendors to come in so that we can see what their program offers. Mrs. Stevenson, So it wouldn’t hurt us if we went ahead and purchased what you two need in the meantime? Mr. J. Murphy, It would not hurt. Mr. Kopp, It would make our life wonderful. Mr. J. Murphy, It would streamline the auditor’s responsibility. Even if the treasurer wasn’t in on it, if he could get a hold of that, that would make his life a lot easier. At this time, Mr. Hollenbeck left the meeting. Mr. Kopp, He and I could balance every day or any period of time we want. It will give us numbers to put in the state reports, which we don’t have now. They are manually generated by x minus plus and whatever else. Mr. Burge, The software issues aside, I agree with Mike’s original assessment that doing a provisional bill offers a quick short-term band aid, but it seems to still exasperate the overall problem. Mr. Bob Poparad, Absolutely. You’re totally correct. But I guess, our obligation to everyone sitting out in this audience is to get some money in their pocket. Is that our first obligation or is it to try and work and plod our way through the problem. Mr. Bucko, I understand your struggle. I understand the struggle. Mr. Bob Poparad, If we send out provisionals, that does not stop the process, our plodding through the mud. But it puts some pennies in their pockets, and it saves them people a little interest. Mr. Burge, Does it cause us a bigger problem though next year because it keeps… Mr. Bob Poparad, No, maybe not, but this problem, we’ve had this problem, this problem is a year old. I mean this thing didn’t jump up and bite us in the ass yesterday. Mr. Burge, Right. Mr. Bob Poparad, We were talking about this nine, ten months ago. So it’s not like the wheel got reinvented and they fixed everything, we’re still plodding along, and it’s ten months later. The AV’s haven’t rolled, the assessors with all this crap. I mean we might as well send out provisionals because there is absolutely no guarantee, and nothing against you guys or anybody in this room, but there isn’t a guarantee we’ll send out a tax bill August 1st , is there? Mr. J. Murphy, No. Mr. Bob Poparad, Then why in the hell don’t we just send out one tax bill in November and say to hell with it. Everybody just go borrow the money, and we’ll send one out in November. Mr. J. Murphy, I can’t predict… Mr. Bob Poparad, Well that’s my point. Mr. J. Murphy, I can’t predict today. Mr. Bob Poparad, And it’s not you, we’ve got the state involved, and I understand all that, but, we don’t have a date. So every time we have a meeting it’s going to be October? So why don’t we just have one tax bill on November 10th. We did one year, didn’t we? Mr. Bucko, There is that issue. Mr. Bob Poparad, Well that’s my point. So why don’t we send out something now to help alleviate their borrowing base or their borrowing cost. Mrs. Stevenson, Why don’t we get the input from the assessors. Why don’t we get the input from other people out in the audience, and find out where they stand with this, and how bad it’s going to hurt if we do provisionals. We know where we stand as far as the financing. We know that. Mr. Bob Poparad, Where are the school people? Mr. Berta, how much are you going to spend? Michael Berta, For what? Mr. Bob Poparad, Interest. Mr. Berta, Through October, approximately $225,000. Mr. Bob Poparad, That’s Portage. Valpo will probably spend the same. Duneland, probably the same. Mr. Bucko, Duneland’s up here. John Marshall, Duneland is about 375. Mr. Bob Poparad, So almost a million between the school districts. I mean we could put something in their pockets, that’s all I’m saying, and not stop the process that they are doing now. That’s all I’m saying. Mr. Carmichael, Alright, let’s hear from somebody in the audience that wants to speak to this, their input as to what their thoughts are on this issue. If you raise your hand I’ll recognize you. Mr. Poparad. Mr. Bob Poparad, Hey, cousin. Bernie Poparad, I thought I heard Mr. Kopp say that the TIF settlement is all done. Is that in his mind or is that with everybody that’s in on the TIF shortchange? Mr. Kopp, We’ve had everybody in except Burns Harbor who declined to come in. We got an agreement with everybody that’s come in, and really the only problem is Chesterton, and they had TIF areas that they said were TIF that are outside their survey area, and most of that is, they’ve got to give us new a survey and get it in, but we’ve agreed on what it will be, more or less. Mr. Carmichael, Porter. Bill Sexton, Jim, the Town of Porter hasn’t come to an agreement with your figures yet. We haven’t provided you any information on that. Mr. Kopp, Maybe it’s Porter that has not been in, I guess. Mr. Sexton, No, we’ve been in. Our man was in and he got numbers from you, and brought it back to the council. The council has been reviewing it; it has not been agreed that those numbers are right. Mr. Kopp, Well we think they are right, and we are in the process in certifying with the state, because we gave you guys a month to get in here and get it resolved. We can’t go on and on like this. We’re also going to go back and refund or pay you what was wrong in 2004 pay 2005 over a couple years. We’ve got that worked out with the state. So you’re going to get basically the numbers we have on our sheets that you have for 2006 and whatever you need to make up 2005 over two years. Mr. Sexton, So in your mind it’s settled, but not in ours. Mr. Kopp, Well that’s, I can’t keep going on like this. We’ve been going on for two months now. Mr. Carmichael, Mr. Poparad. Mr. Bernie Poparad, I know as a council that’s been with our attorney, he has been trying to get in contact with Mr. Kopp and set up something. We’ve not heard anything from Burns Harbor, so we’re, you know, we can’t, it’s not that we declined to come in, we want to come in, no problem. Mr. Kopp, Does Karl Cender work for you guys? Mr. Bernie Poparad, No, he works for Porter. Mr. Kopp, Okay, Karl Cender has been in for Porter then, and Portage and Valpo. And I contacted Bob Welsh and Chuck Lukmann who represents the other two communities, Chesterton. I also contacted the clerk treasurer of Porter two or three weeks ago saying time is running out, we’ve got to get this resolved, and I have still not heard anything. Mr. Sexton, You say you contacted the clerk treasurer in the Town of Porter? Mr. Kopp, Yes, and she contacted the attorney, Bob Welsh. I’m not sure, I’ve talked to so many people I don’t know who I’ve talked to. Mr. Carmichael, Isn’t Lyp the attorney? Who’s your attorney, Bill? Mr. Sexton, Hollenbeck. Mr. Carmichael, Hollenbeck, okay. I think Patrick Lyp is somebody’s. Mr. Bernie Poparad, Okay, so basically, what I understand, does he have it settled in his mind? Not so much as the rest of the towns and everything else, he figures it’s settled. Mr. Carmichael, You have to ask him that. Mr. Kopp, I think that everyone that’s been in has been happy where we ended up. I know that Chesterton is getting more money than they thought for this year, and less for last year. Based on our numbers, their attorney was happy. Mr. Sexton, The problem with that, Jim, is you have to convince the rest of the council. Mr. Kopp, Pardon? Mr. Sexton, We have to convince our councils to be satisfied with that number. The attorney can’t make that decision. Mr. Kopp, Alright, I don’t disagree but this is holding up the tax bills, so how long do you want to play? Mr. Sexton, It’s been an ongoing problem. We’re just trying to find out when we’re going to get the payment from the last part of last year. We still don’t really have an answer to that. Mr. Kopp, That’s because settlement is not done. Mr. Sexton, Do we have an answer when that might be done? When are we going to see those numbers? When are we going to see that money? Mr. Kopp, Probably not before the end of April at the earliest. Mr. Carmichael, Okay? Ed. Ed Gottschling, I heard you saying that we only could get 45% out of a provisional bill. Why is that? What can’t we have a provisional bill that bills the taxes from the year before? Mr. Carmichael, Jim, can you answer that? Mr. J. Murphy, I’d be happy to. Ed, IC 6-11-22.5 says that that’s all we can do. The best we can give out in provisional bills is if you use two provisional years, bills in one year, no more than 90%. So if we go with one provisional and one reconciling, the provisional must be 45% of real estate. It’s the state statute. Mr. Gottschling, Well if we can’t get any money, how about the County paying the percentage of the warrants that we have to issue? How about them paying the interest on the warrants that we have to issue, because it’s your fault that we’re not getting the money. It’s not our fault. Mr. J. Murphy, Ed, we will, the auditor will be giving you interest from December 31st on any interest that the County has earned on your portion of the money, which we have not distributed to you since January 1st. You will get that in a separate check out of unappropriated general fund. Mr. Gottschling, When will we get that? Mr. J. Murphy, As soon as we know we can make the distribution. Mr. Carmichael, Did you hear him, Ed? Mr. Gottschling, I heard that, but when is that? Mr. Bucko, We don’t know. Mr. J. Murphy, You won’t be the first to know, but you’ll probably be the second to know, Ed. Mr. Carmichael, Alright, anyone else? Yes, Phil. Phil Baugher, I have a question about the TIF resolution. Mr. Carmichael, Who do you represent? Mr. Baugher, I’m a bookie from the north end. I’m with Westchester Public Library. I just have a question about the TIF resolution. If we are, if the County is going to contribute more to the units that were shorted in TIF last year, is that money coming from what we would’ve otherwise received, the other taxing units that don’t have TIF districts? Mr. Kopp, It’s coming from the taxing units that have TIF districts. It’s not overall, just the TIF districts themselves. Mr. Baugher, So nothing would be reduced from our collections or say the school. Mr. Kopp, The school collections will be reduced by something from the TIF district. Mr. Baugher, Then we would be too I would imagine. Mr. Kopp, Alright, Jim says yes and yes. Mr. J. Murphy, And so would the County. So everybody in that taxing unit would have to pay back, pay the redevelopment commission for that which was omitted previously, so. That’s just the way it works. Mr. Carmichael, Jan. Jan Meyers, I just want to clarify one thing, when Mr. Murphy says he’s waiting for the assessment, just so we get it straight, our stuff is in, it’s just a matter of ITS getting all the data. I mean it’s been extracted from ours. No? Okay. Alright, which kind of puts us in another situation that we have Form 11’s that we’re trying to run. We can’t get into the system, so I mean we’re trying to get those out, the 45 days, even if we do have the Form II’s out, we can’t access the system to fix anything. That’s about all I can comment on that one. We have a couple of software vendors that are coming up that Suzie was talking about. Nikish, the one that came out today, it appears is a company from India, and they seem to develop software, but I don’t know, they didn’t have anything on their website that was in use. They utilize data, but, it doesn’t even, I can’t get a concept as to whether they can even merge the three offices. That was one thing Hamer had above everybody else. Tyler, I believe April 2nd, and they’re also a data integration system, and they have payment and search properties, and they have e-pay and e-courts and e-treasurer, whatever, but I can’t find an assessment system. There’s not anything where we can enter data to come up with a number to use in that software. So far Hamer has been light years ahead of anything that we have ever seen around here. Plus, the biggest benefit is that we can work up to two years ahead, although they don’t recommend it. They only recommend one year. If we have a house that’s sitting at 85% and all we have to do is put it in as complete, and the def on, and we happen to be there this year, and it’s not going to go on until 2008, we can be working in 2007, shut that one down, open up 2008, finish the job, never have to touch it again next year. It’s done. There is, I took three pages of notes from Hamer. I did give copies to the commissioners. If the Council would like them I’d be more than happy to make copies. We haven’t seen it all in use. I mean that would be nice to see, but what they have presented, how they can integrate the auditor’s information, and we can do a correction, it’ll pull information of tax rates from Mr. Murphy’s database, and show us how much those people will get as a refund or if they still own instantaneously. The auditor’s office, when they make a transfer, it is going to immediately be reflected into our system. We will not have to do that work again. So when you’re looking at how tax bills are going to come down the road, if we have a system, and can get this in place, and right now, nobody is certified in Indiana, but at least we’d have an option, and who cares if we save 80,000, it’s the man hours. We can’t realize the savings yet, they promise that, of course, we’ve had promises before that weren’t kept, but they promised that they did not foresee a problem with even letting us into see the deed, which I believe is called Laredo. Is that Laredo what you guys use in the auditor’s and the recorder’s office? And we could, instead of having to go up if we have a problem, we can just get right into Laredo or whatever it is, and pull up a deed. We don’t have to travel up here to look up information. So I think when we’re all looking at how we are getting our money down the road, I’m also a township trustee, so I’m waiting for my tax money too, just as other people are. I personally think until Mr. Kopp gets this, we’ve got to get this previous mess straightened out. Otherwise, we’re just going to keep rolling over bad apples, and we’ve got to get caught up. So whatever the township can do to get him moving whether it’s training people or something, we have to look at that. Mr. Burge, I have a question for Jim Murphy. You had mentioned the problems that could be caused with homeowners that have their taxes in escrow. Any idea, a feel for percentage of how many across the county, how many homeowners are in escrow, a percentage of the ball? Mr. J. Murphy, About 45%. Mr. Burge, About 45%, so almost half of everybody out there would be negatively impacted by provisional bills. Mr. J. Murphy, Maybe not 100% of that 45% would have a problem. Some of the lenders will understand what we will be doing, and will be able to deal with it, and accommodate it. But some will not. Those are the folks that will call. Mr. Bob Poparad, The escrow people can move that fast to adjust the mortgage between May and November? They’ll move that fast? I always thought they did it on a yearly basis. Mr. J. Murphy, They’re used to pulling one dollar amount in the spring that covers the entire year. Well the dollar amount that they pull off of our records will be 45% of everything that was collected last year. Then we’ll send them a refund in their escrow money. Ms. Meyer, I have a question for Mr. Murphy. Mr. J. Murphy, Yes. Ms. Meyer, If you do the provisional bills, and this year the homestead credit is 10,000 more than what it was last year, will that 45%, can that be reflected in the first provisional bill or does that have to be adjusted for the second bill? Mr. J. Murphy, That will be adjusted in the reconciling bill. Ms. Meyers, So there’s another glitch that is going to create an extra step because the previous homestead credit is 35,000, currently for 2006 pay 2007, is 45,000. Mr. J. Murphy, Yes, 45,000. Ms. Meyers, A one-time deal. So that means even after you do it, and you get that extra step in there, you’ve got to take it back out because they’re going to take it back away from us. Mr. Carmichael, That will be in the reconciled bill? Mr. J. Murphy, Yes, sir. Mr. Carmichael, Okay. Mr. Bucko, I need to ask a question of the school corporations, if I may. In reference to these interest payments here, in comparison to last year and the year before that and past years, what’s the normal TAW interest rate paid by school corporations on a yearly basis as a matter of fact of doing business? Mr. Berta, Interest? Mr. Bucko, Yes, interest paid on, you know, on an average yearly basis. Mr. Berta, It’s 3.68%. Mr. Bucko, That was maybe last year or something to that effect. No, no, I’m asking you… Mr. Berta, I think that’s a pretty good average. Mr. Bucko, So how much, if you’re doing about 225,000 this year, how much did you have in interest payments last year? Mr. Marshall, This year in 2007, we’re paying currently 3.47% on the money that we borrowed in January, which is going to come out to about $212,000 in interest. Now we have borrow more money in June in order to make it through the next six months of the year. We will have to borrow, well, our holding maximum is 3,500, 3,500,000 that we could borrow, but we’re not going to get an interest rate of 3.47 in June. It would be double that. So we can figure, we’re going to pay at least $212,000 or $221,000 more interest, which is going to double our interest payment. The other thing that I think we have to keep in perspective here is that we’ve also dropped our cash balance to about 3% now because of the money we did not get at the end of 2006. So that’s also putting us a little bit in harm’s way. I guess I’m sitting here a little bit frustrated because we’ve heard from the county council as schools since December, we want you to come to this meeting and share your concerns. We’ve been saying every meeting since December that provisional tax bills is a possibility to help us out with our money. Now we’re getting to a point where we need to make, where we’re going to need the benefit from provisional tax bills, and now we’re hearing that we don’t want to do that. Mr. Bucko, No, I don’t think that’s everybody’s decision here. I’m just trying to find out, and I asked, and it didn’t come the last time. I was trying to find out what the real expense was and compare it to what TAW’s were or are. You know, a normal means of doing business on a yearly basis, so we had a real handle on what everybody’s expenses out there would be. Now our overall expenses are, to the County, to do provisional bills is 30 or $40,000. Well, there is a big split there, and I understand that. But I’m also looking at, at what point in time do we get you out of that quagmire on a regular basis. I don’t, it’s probably been since the late 90’s since that’s been close to being correct. Mr. Marshall, Well in our case it will be double. Mr. Bucko, Okay. Mr. Carmichael, Pauline. Pauline Poparad, Pauline Poparad, Burns Harbor, just a general taxpayer. I understand there is a legacy that people inherited of past problems, and what I was wondering, I have not heard anybody say, is there a consultant company that you could pay to come in, straighten up this mess once and for all. Are there outside people that can do that? Has anybody checked that out? Sometimes another idea, I mean everyone is probably working to the very best of their ability, but there might be fresh ideas out there, and I just wondered had anybody researched that aspect. Mr. Kopp, I have two companies in trying to get our books balanced, and get our funds balanced, and get the computer system to properly post. We’re probably 90% of the way there. Mr. Carmichael, Did you have any further questions, Pauline? Ms. Poparad, Well, I meant, like a total solution, integrating all the departments. Is there a company… Mr. Bucko, That starts from the state and comes all the way down to here. Ms. Poparad, Okay. Mr. Bucko, The state has, you know, we’re not even starting right at the state level. Ms. Poparad, There’s your problem. Okay. Mr. Bucko, There lies the problem. That’s been a problem through the 90’s and nothing has changed, has it? Ms. Meyers, Just like trying to get software. They won’t even certify anything, but they won’t let us buy new software. Mr. Kopp, If we could’ve done a simple, issue the tax bill last year, do it real simple, it would be no sweat. They’ve made it so complicated, and injected so much stuff in between that it’s going to be a nightmare to get corrected to get all the values to balance, because it’s all going to be hand-done, and it’s going to be a nightmare. Mr. Carmichael, Matt, did you have something to say? Mr. M. Murphy, No. Mr. Carmichael, I’m of the opinion that we should do the provisionals, and get it over with. I know you hate that. It’s a lot of extra work. Mr. Bob Poparad, It would buy us some time though. Mr. J. Murphy, Can I ask you for another week? You guys will be back here next week, Tuesday. Mrs. Stevenson, Do you think anything can change within a week? Mr. J. Murphy, I can find out. I can find out how long the state anticipates fooling around with our assessed values before we get budget orders. Mrs. Stevenson, Will you get a true answer from the state? Mr. J. Murphy, Their best guess. Mr. Bob Poparad, Nothing against the state, we love them all dearly, but that’s the problem. Mrs. Stevenson, No we don’t. Mr. Bob Poparad, Well I’m trying to be nice. But they won’t give you an answer. They’ll say, you know, we think. Meanwhile, everybody sits here and pays this interest. If we just say we’re sending out provisionals, and we’ll deal with the state when we deal with them. At least we’re doing something. I’m about done with my last tax meeting sitting up here. I’m going to make a motion we instruct everybody to send out provisional tax bills. Mr. Carmichael, You made a motion to? Mr. Bob Poparad, To send out provisional tax bills as soon as possible, April 25th, whatever date they can do it. Mr. M. Murphy, Who’s decision is it? Mr. Bob Poparad, Well who knows. But let’s make it... Mr. M. Murphy, I was just curious. Who’s ultimately, who’s got the… Mr. J. Murphy, That would be the county treasurer. Mr. Bob Poparad, Okay, it’s your decision. Mr. J. Murphy, Give me a week before I tell you one way or the other. You’ll be here next Monday, Tuesday, I mean. Mr. Bucko, What are we looking for, for an answer that’s going to say, yes it is okay, or it isn’t. That the state swears, and cuts their finger, and we touch blood, you know, and all that stuff to get an honest whatever. Mr. J. Murphy, Not with those guys I wouldn’t. Mr. Bucko, Well I know. I mean I’m sitting here trying to reason things out, and you know, it’s… Mr. J. Murphy, It only became appropriate for us to contemplate provisional billings on March 16th, and it became obvious that the auditor was not going to deliver the abstract of taxes for this year. So, you know, we’re right at the point in time where we can decide. I mean, I guess… Mr. Carmichael, What I’ve discovered here is that this matter will be on the agenda for the 27th. Mr. J. Murphy, It won’t take me long. Mr. Carmichael, At that time we’ll make a decision one way or the other. Mr. J. Murphy, Well if I make the decision that we do it, then I can start then. But you folks don’t have to do anything until I come and ask you for a resolution in favor of the notion. Mr. Carmichael, Okay, you need a resolution, ask Dave for that resolution. Mr. J. Murphy, I shall, yes, sir. Mr. Carmichael, So that we meet the requirements of the law. Mr. J. Murphy, There’s even a copy of the language in here that’s required, so. Mr. Bucko, Can we, you could find out in three days, right? Of course it isn’t going to matter. I don’t know, I’m trying to get some kind of value out of this last meeting, and I don’t know whether we are going to do that or not. Mr. J. Murphy, This isn’t rocket science, it’s worse, I guess, that’s my two-cents. Mr. Bucko, It’s not my lack of confidence in anybody in this room. My lack of confidence is in the State of Indiana, and it’s been there ever since the 90’s. Mr. Carmichael, Okay, does anybody have anything they want to say at this time? Anyone? Watch the papers. Motion dies for the lack of a second. We’ll take it up the 27th. There being no further discussion, meeting adjourned at 7:05 p.m. PORTER COUNTY COUNCIL PORTER COUNTY, INDIANA Michael Bucko Jim Burge William Carmichael Matthew Murphy Robert Poparad Rita Stevenson Dan Whitten Attest: James Kopp, Auditor |
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March 19, 2007