PORTER COUNTY PLAN COMMISSION

Special Meeting
May 16, 2007

M I N U T E S

    A special meeting of the Porter County Plan Commission was held at 5:30 p.m. in the Porter County Administration Center, 155 Indiana Avenue, Valparaiso, Indiana.

    Those members present were Richard Burns, Tim Cole, Robert Detert, Commissioner Robert Harper, Todd Hutson, Elizabeth Marshall, Herb Read, Rita Stevenson and Kevin Breitzke.

    Staff members present were Attorney Scott McClure, Robert W. Thompson Jr. and Toni Byers.

    Mr. Breitzke stated that the minutes for the May 9, 2007 Plan Commission meeting are in front of each member and will be considered for disposition at a later date.

The following case was discussed by the Commission:

    Issues regarding Falling Waters subdivision.

    Tony Floramo, Mike Cap and Attorney David Hollenbeck stated that they are the principals in this matter.

    Mr. Breitzke stated that there were some unanswered questions from the board and he would like to ask the commission members if they have any questions first.

    Commissioner Harper asked if everyone got one of these handouts from Building Commissioner Mike Haller.  He got an email today from Dr. Gutierrez, and he made a copy for everyone.  

    Dr. Peter E. Gutierrez stated that I have more copies here, but since I sent you this note this afternoon, my meeting was canceled; I did not expect to be here.  What I am going to read is different from what he has because I normally don’t read a speech, but I’m doing it because I want word for word in the record with no question. Unfortunately, neither my friend and neighbor across the lake, Portage Superintendent of Schools Mr. Berta could not be here tonight.  Mr. Berta has a school board meeting.  The Bertas in Wheatfield, this bond issue, and the manner in which money has been spent constitutes a definite conflict of interest, possibly bordering on being illegal.  To say the least, it is highly unethical and immoral to subject the residents of Falling Waters to such a debt without their input, consent and right to express their opinions before such a monstrous debt was placed on the property owners.  All of us were led to believe that the wastewater treatment plant and American Water service were part of our purchase price when we bought our lots or purchased a home.  Mr. Floramo was quick to point out that we all signed a consent



form, however, this was not a true informed consent.   We were never informed that a bond issue would be floated for $9.99 million.  As a physician I am required by law to give an informed consent and can lose my license if I fail to comply with the law.  Our consent to this bond issue is like a physician saying:  There may be complications; and that is all.  We are required to give an informed consent, including all the possible complications and problems.  This bond issue has to be looked at closely.  What plans were purchased by the conservancy district at an extremely high price from the developer.  The president of Floramo Partners, which is the organization that profited from the sale, is also the boss of the conservancy district.  His exact title is really unimportant.  The other person on the conservancy district board who voted for this sale also benefited from the transaction.  His name is Mike Cap.  Somewhere in the mass of papers that Commissioner Harper received from Mr. Hollenbeck are some appraisals and estimates based on a comparable comparison with Coffee Creek. Everybody is familiar with Coffee Creek and the fact that at least two people were sentenced to jail for activity involving Coffee Creek.  Coffee Creek and Falling Waters are not comparable.  When you are purchasing an appraisal, you generally can get whatever you are willing to pay for.  I have not had time to go through all the papers to find out what the wastewater treatment plant cost and what we are going to have to pay for. The water lines are usually put in and turned over to the American Water company, not leased to them, as indicated in the paperwork.  Why is Falling Waters the only conservancy district raising money to pay for their drinking water system?  Let us look at this monstrous debt that Mr. Floramo proposed as just, fair, moral and ethical. These figures will only pay off the municipal bond issue and not provide or include any service to the residents of Falling Waters.  These figures are based on 407 lots being sold and homes being constructed on them, with occupants living in them. At the slow rate of sales of homes up to now, this may take several years.  Here are some interesting figures, based on 470 homes (sic):  Mr. Floramo owns….lots…does little, because the conservancy district levy is based on assessed valuation.  There is an annual debt service of $836,328 that breaks down to $2,054.86 annually per household, on average; $9,990,000 was borrowed at 7 percent for a municipal bond.  This is a very high interest, possibly indicating the market does not consider this a triple A municipal bond.  Each lot will average $24,545.45 total in principal and $38,463.37 in interest until the bonds are retired. This is based on all 407 lots having houses with occupants.  This is a total of $63,008.82 total per household over the lifespan of a municipal bond.  Had my wife and I known this amount of debt could be placed on our shoulders without our consent, we would have run away, not just walked away.  There is documentation by Mr. Hollenbeck in this letter of May 9, 2007 to Commissioner Harper, with the Plan Commission urged Mr. Floramo to pursue the creation of a conservancy district for Falling Waters.  If Mr. Hollenbeck documents this, then it must be accurate and true.  Surely the Plan Commission then has an obligation and duty to see that their advice is followed in a manner that is fair to the residents of Falling Waters, who are all citizens of Porter County. My wife and I



both doubt that any of you Plan Commission members would say that this is fair and just.  In addition, we feel that you would be very unhappy if you were in our shoes now.  We and the Bertas have sought legal counsel with the intent to pursue this matter legally.  The Bertas and we welcome any and all Falling Waters residents to join us.  We request that Mr. Floramo and anybody selling property in Falling Waters be required to provide full disclosure of the tremendous indebtedness of the Falling Waters Conservancy District.  I realize that such disclosure will make it very difficult to sell our home, but we could not be so morally deficient to not make full disclosure ourselves. For the Board’s benefit, I have scanned or had my secretary scan the papers that Commissioner Harper was kind enough to have done in the Commissioner’s office, and I will send it to his office within the next two or three days so it’s available in PDF form for anybody.

    Commissioner Harper stated that when I looked at these documents – and I didn’t go over every page – in there someplace I read some reading that the developer is required to file an affidavit as to expenditure made on the work done in there.  Did I read that correctly?

    Mr. Hollenbeck stated, I’m not sure I understand the question.

    Commissioner Harper stated that I thought I read in one of these documents that, in addition to the appraisals, there’s a requirement under the law, or at least there was a requirement in this plan, that the developer file an affidavit as to expenditures made on the infrastructure, and I didn’t see that affidavit in here.

    Mr. Hollenbeck stated that I’m not sure that is true.  I believe that the two appraisals that were done for the constructed infrastructure at least were partially based on costs of construction that had been secured from Mr. Floramo.

    Commissioner Harper stated that I didn’t see any of those documents in here.

    Mr. Hollenbeck stated that I would not have had those. Mr. Floramo may be able to provide those to you, but it would have been provided to the appraisers.

    Commissioner Harper stated, let me look at that appraiser’s document, because I believe I saw that in there.   I’ll look for that.  I thought I saw in the appraiser’s report that they required an affidavit as to value from the builder. Maybe Mr. Floramo remembers if he had to do that or not.

    Mr. Floramo stated that we had to produce contractors’ sworn statements to the title company during the disbursement of funds for this infrastructure.  Whether or not those documents were required by the court with a (inaudible) of the approval for the funding, I don’t recall.

    


Commissioner Harper stated that I think I asked about that last time, did I not?  And you said you’d get those records.  Have you done that?

Mr. Floramo stated, no.

Commissioner Harper asked, will you do that?

Mr. Floramo stated, yes.

Commissioner Harper asked, can you give me…

Mr. Floramo stated, if you can give me your fax number I certainly can fax that.  It’s basically three pages.

Commissioner Harper stated, here’s what I’m looking at:  a letter – part of this package dated April 15, 2005 – to David Hollenbeck from one of these consulting engineers – “We have examined the following documents:  A. an exhibit entitled “Owners’ Actual Cost of Improvement” prepared by Michael Cap, which summarizes the actual cost extended for these improvements. I understand this exhibit was prepared from the developer’s sworn statement to his bank and title company that tracked these expenditures for the disbursement of funds and, so, apparently there’s two documents. There were documents prepared by the developer’s sworn statements to his bank and title company on these disbursements, and there was also an affidavit by Michael Cap, and I’m asking if we can get to see those documents.

Mr. Cap stated, to answer that, we didn’t produce an affidavit – we produced the document that you’re referring to is a summary based on the actual costs, which were the sworn statement, and that was produced as an appendix in the district plan, so that document is already included in one of the appendices of that very thick final distribution.

Commissioner Harper asked, can you tell me where it’s at then?

Mr. Cap stated, sure.

Commissioner Harper stated, I don’t see it in here.

Mr. Cap stated that I could also fax it to you.  It was a legal-sized document that was included as an appendix to the approved district plan.

Commissioner Harper asked, is the approved district plan in there?

Mr. Hollenbeck stated that the court order approving the district plan is in there. The district plan is like that thick.




Commissioner Harper stated that I’d like to see this document, this exhibit. We made copies of these and some people picked them up.  I’ve got two extras tonight and if more people want it they’re going to have to contact our office and we’re going to have to ask our print shop to copy them.

Ms. Marshall asked, since the conservancy district now owns the sewer plant, have the following tests been done:  the mandrel, the air test and the sewer video test, has that been done on this project?

Mr. Cap stated that those tests were done with the approval of the construction work way back when.  I know we did the mandrel test, which is the same as the deflection test, and then the videotapes, we did the deep sections, so, whatever was required with our IDEM permit, we did.

Ms. Marshall stated that since the sewer plant is in violation of the IDEM reports, as I indicated at the last meeting, and since the sewer lines were used as storage for the sewage because the plant was not functioning at one time, I think that the conservancy, once they take over this matter – you can’t do the tests until the project is complete – it’s based on jet pressure and all that kind of stuff, so I don’t think that those tests have been done.

Mr. Cap stated that those tests are intended to, let’s say, verify or guarantee the integrity of the pipe and those were done after the work was completed.  That’s a separate issue – that’s testing the construction of the sewer.  The matter of the IDEM violation I can tell you, we send these reports out monthly.

Ms. Marshall stated that I do have a copy here of the IDEM, because I called and I had the NPDS permit and your submittals to them, and the whole time of January 2006 until now there’s been three submittals, with the violation, so, you know, I’m concerned about the quality of the water that you put into the roadside ditch which you claim is a tributary of Deep River and that is my concern.  I know, if it comes to that, that you’re still hauling sewage out of the sewer plant with trucks.

Mr. Cap stated, no.  I’d be curious with whom you were speaking at IDEM, because I can assure you that we file our reports monthly and have since April of 2006.

Ms. Marshall stated that I do have a copy of our submittal.

Mr. Cap stated that we talked with another lady from IDEM weekly for the last three weeks over matters like this.  I’ll readily acknowledge that IDEM had the authority…

Ms. Marshal stated that I  will tell you exactly who I talked to, Lee Boss, permit manager.




Mr. Cap stated that we’ve been speaking with a lady by the name of Pam Grahams, with the enforcement compliance section, and she pointed out, well, two things:  She pointed out that one permit form that she had supposedly sent to Attorney Hollenbeck hasn’t been completed for last year, and the second thing is that I am not authorized to sign the permits, and when I tell you that we have sent these out monthly, I can say that because I personally signed the permits and personally mailed them. And this person acknowledged that she had received all of our permits, what they call the monthly operating reports, but we were lacking this other DMR or something, and that’s on a form – we can’t pull it off of their web site.  They have to physically mail it out and she’s been claiming that she sent it to Attorney Hollenbeck’s office, and he hadn’t seen it.  Just to also explain, with that particular form, there is an annual permit fee for the NPDS permit.  Attorney Hollenbeck receives that annual fee and has been paying it, but has not received these other forms.

Ms. Marshall stated, in front of me, I do have printouts of NPDS – do you file them in June, July and September of last year?  Those are the three months and also the backup material.  I am kind of concerned that it’s always brought up that the Plan Commission suggested a conservancy district.  I cannot believe that a conservancy district was formed with the people that were involved.  I don’t have a complete list of the people that were involved.  Were there any residents in Falling Waters that were on the board of the conservancy district?

Mr. Floramo stated, yes.

Ms. Marshall asked, and who was that?

Mr. Floramo stated, Mr. Alex Kazmurchak, Lot 167.  He was a resident and a builder at the time it started. The conservancy district started back in 2000, as Mr. Hollenbeck presented in his letter, and took over five years to literally give approval – various courts, various components of appeals, various sagas within the subdivision as to where this was going – all of my literature and disclosures that the Plan Commission has stated last meeting that they were late in informing individuals  were always there from Day One.  They started out with our literature.  Once the district plan information became more available to everybody and how much what all this stuff was, the courts were involved, made their ruling and we received Mr. Jim Shanahan of Ice Miller down in Indianapolis, who is the expert on the bond issue and the conservancy district, I submitted to Mr. Harper last meeting for the Plan Commission’s review the waiver of remonstration that we did tell everybody – we sent this letter to everybody – that a $10 million bond issue was going to be issued and individuals who agreed with it executed that – I have the originals and copies – individuals who did not agree with it, specifically Dr. Gutierrez, because Dr. Gutierrez and one of his attorneys met with Mr. Hollenbeck and I about a year ago relative to his concerns with the conservancy district, but, and I don’t want to speak for Mr. Shanahan,



but my understanding on the number of waivers that were required relative to the issuance to the judge was met, so some people were okay with it; a handful weren’t.   That’s how the process went forward.

Ms. Marshall stated that I find it interesting that Mr. Hollenbeck, who is such an authority on conservancy districts, and you entered into something that…I mean…it just doesn’t sound – and I know what your response is going to be, it’s legal…but it sounds kind of shady, as far as I’m concerned.

Mr. Floramo stated that I understand that my credibility is probably zero with the board – I take that personal, relative to the handful of residents who are here – when I came to Northwest Indiana, in front of 500 to possibly a thousand individuals who sat in this room – it was wall to wall people were outside and we were trying to figure out the preliminary plat approval of our subdivision, I had no idea that one of the requirements of the Plan Commission was to form a conservancy district.  I develop in a lot of places.  I didn’t have the first clue what a conservancy district was.  I didn’t understand it.  My first question was taxes:  How is this – because it’s my understanding that it’s a taxing municipality – how is this going to affect my marketing?  If all of a sudden my marketing goes because all of a sudden my lots and houses are going to be zapped with some exorbitant dollar amount, how is this going to be?  The understanding that I had that we were in unincorporated Porter County, the Plan Commission – I don’t want to say frowned upon, because it never got to that level – but neighboring cities asked us to annex in, specifically Winfield, which was Lake County, and now we didn’t want another piece of property which was 100 percent in Porter County, with a Lake County city – no, let’s do more research with the conservancy district. Mr. Hollenbeck explained to me what it was and how it was, and since we were not a municipality, meaning we did not have a mayor, we did not have a village manager or whatever it’s called in that area, we did not have other administrations, you wouldn’t have that fee that would be on the real estate tax bill – so this conservancy district, with the amenities and the infrastructures that would be provided, would be less.  My whole thing was I had to make sure that the tax bill was here, was less than my neighboring communities.  We have met, Mr. Hollenbeck and Mr. Carlson, who’s our financial consultant, and we went through this showing my concerns.  It’s my understanding – and correct me if I’m wrong --  that the analysis that was done was that the tax bill in Falling Waters, with the current tax rates, on an assessed valuation, comparable to somebody in Doubletree or somebody in wherever, our taxes will be lower and that included the conservancy district input. During these meetings – which, I think, the concerns are valid, because they’re valid to me, too – which I tried to express in the homeowners’ association meetings, that the venue is not the Planning Commission; the venue is the Porter County tax assessor – because the tax bill right now – it’s my understanding that the taxes – we are being…Falling Waters now, on an assessed valuation, there is a multiplier effect in our tax bill of 150 percent



because we are considered by Porter County’s assessor’s office as a premier subdivision, and, in my conversations with the assessor’s office, that might be all well and good when we’re all done, but we’re in a toddler stage right now.  If your taxing individuals at one time 5 percent, their assessed valuation, it takes the state of this district, it takes the state of a lot of things into account because it affects individuals’ pocketbooks.  So, I’ve asked individuals – and I don’t want to be specific as to who they were – as to please take the energy that’s presented here today to individuals who can help the financial end, meaning the tax assessor.  If the tax rate was instead of 1.67 on assessed valuations per hundred, if there was a multiplier effect by the assessor’s office of .6 or .7, because we are in the development stage and growing and whatnot, we wouldn’t be sitting here today relative to concerns of a financial matter for the residents, and myself in trying to sell the lots because, once again, I have to pay on the vacant lots that I own, based on assessed valuation, as Dr. Gutierrez pointed out, my share of this conservancy district.

Ms. Marshall stated that my comment back to you is, and these are my opinions, a conservancy district is formed because of failed government.  A conservancy district addresses the problems – and you need to identify them when you set up a conservancy district – drainage problems, but it has to be very specific.  It seems like you turned this around – it’s like going to the – it just doesn’t seem like it flows the way it’s supposed to..

Mr. Floramo stated that we did not, with my non-knowledge of what a conservancy district was – I did not have the knowledge to recreate the wheel relative to  this conservancy district. Mr. Hollenbeck, we paralleled off of existing conservancy districts, and the method that they did relative to improving, acquiring assets and what not, and that’s what we did.  We submitted it to multiple judges and they ruled on us.  This wasn’t a new thing that my team came up with, and say, oh, this is great, let’s come up and make some money.  This is something that we followed an existing guideline of an existing district within Porter County, I believe, and that’s what we did.

Ms. Marshall stated that I think it was the day before yesterday that I received a communication from the Plan Commission.  I called yesterday to have it refaxed because I didn’t get all of the pages.  I did not get it, and I want to know exactly what this Plan commission and our attorney – I can’t read these pages – it’s bad print – but, did we come up with some kind of a document called Welcome to Falling Waters that we are going to…are we, the Plan Commission, working to come up with something that you’re going to hand out when you sell lots there?

Mr. Floramo stated that my understanding, from last Plan Commission meeting, was that through Mr. Hollenbeck, myself, Mr. McClure, we would come up with language, at the suggestion of the Plan Commission, that was twofold:  some type of marketing literature for





additional disclosure of what this district was, and, supplementally, adding to my real estate contract, further explanation of what this conservancy district means financially and what it is so everybody doesn’t have…that the questions on this district are minimized and further explained.  I received word today that an additional sentence from what I had drafted on my real estate contract, if it was able to be added, we could add it – that is at the end of the purchase agreement.  The purchaser agrees to notify any subsequent purchasers about the conservancy district, meaning that if anybody purchases a lot from me and then sells it to another party, they have to make sure that that individual is aware of all the disclosures and information that I have provided to that individual on what this means.  I have copies for the Commission.  This is my new contract, with that language in it, as we presented to Mr. McClure and I believe was passed out.

Ms. Marshall stated that I didn’t get my copy, and I think you are setting a dangerous precedent here at the Plan commission if we have the Plan Commission attorney write these glowing “Welcome to Falling Waters”.  I don’t know why we are doing that.  I do not have a two-page copy of the 13 items that you have here because I couldn’t get them to send it to me.

Mr. Floramo stated that this is the last sentence that I just spoke of.

Mr. McClure stated, I did not write Welcome to Falling Waters Estates.

Ms. Marshall stated, okay, well, I don’t know where it came from.

Mr. McClure stated that it came from Mr. Hollenbeck, which was faxed to me, then I faxed it to the staff here at the planning department to distribute to the Plan Commission members.

Ms. Marshall asked, did you participate in writing this?

Mr. McClure stated, no.

Ms. Marshall asked, so this is from Mr. Floramo?

Mr. McClure stated, Mr. Hollenbeck or Mr. Floramo.

Mr. Floramo stated that the contract that I just handed out is from my internal legal staff and myself.

Ms. Marshall stated that since I’ve not had time to read it, does this indicate that everybody that buys a lot in Falling Waters is going to be subjected to paying these high costs as part of the conservancy district?




Mr. Floramo stated, yes, on Page 2, if you look at Item 12, it starts off with disclosing – we have independent disclosure sheets that we provided to the Plan Commission last week, which is a two-page document, which explains what a conservancy district is, what its uses are.  Number 12 says:  “You’ve received this two-page disclosure.”  Further down it says, a little bit more of what you are asking, I think.

Ms. Marshall stated that we have Schedule A and Schedule B here.

Mr. Floramo stated that Schedule A and Schedule B are not conservancy district issues.  Schedule A and Schedule B are what Mr. Cap and myself have worked out with Mr. Haller, with the Building Department, that we do need additional review covenant-wise for the homeowner’s association that the size of the house, the placement of the house, the site plan of the house are in compliance with the documents, so, Schedule A, Mr. Cap or myself reviews and signs and then an individual has to take that Schedule A to the Building Department, and, if it’s not executed, they cannot get a building permit, so, it’s gone through the initial check of our review.  However, a problem that has happened here, is that some individuals have constructed homes after they submitted their Schedule A, which we reviewed and approved, built something different than Schedule A, and now there’s problems – elevation changes, a basement that’s a walkout, as opposed to a non-walkout, so, in speaking with the Building Department, how can Falling Waters help?  So we established a Schedule B.  Schedule B is, before an occupancy permit is issued on the residence, we go back in and re-review what they submitted, make sure that what they gave us in Schedule A is being built, make sure that the landscaping and other items are identified.  If not, they have to put in a landscape escrow with monies drafted to the Falling Waters homeowners’ association for sod or trees or whatever and then that’s reviewed.  Mr. Cap then signs off, or myself, on the Schedule B, and then that is presented to the Building Department for an occupancy permit.  It’s another check and balance on our end, in cooperation with Porter County, and it seems to work, because now everybody knows that you’re trying to get somebody to move into their house or financing or whatever.  Those two schedules, which I can also fax, or give to you, I think, the Building Department has them, but we’d be more than happy to produce them.  It has nothing to do with the conservancy district.  It has to do with the construction of the house.

Ms. Marshall stated that I understand the occupancy permit. Do you have what is called an architectural review committee?

Mr. Floramo stated, I do.

Ms. Marshall asked, and who is it?

Mr. Floramo stated, myself and Mr. Cap.




Ms. Marshall asked, if I came in there and was going to build a house, I have to give you the plans for the house?

Mr. Floramo stated, that is correct.

Ms. Marshall stated, and you’re going to look at them and think, well, does this fit into Falling Waters, is this what we really want, is this a style or, you know…

Mr. Floramo stated that I’m very limited on that, because, in my covenants and in my documents, the covenants say restrictions as to size.  A ranch is 2,200 square feet and a two-story is 2,600 square feet. Masonry has to be in the front elevation of the street, and other minor things.  I cannot…if you want a green roof and I don’t personally like a green roof, I personally cannot enforce a green roof, because it is not stated in my bylaws and covenants that green roofs are prohibited, so, I’m limited to this architectural review, other than size, placement of the house relative to the site plan and drainage and whatnot, and that’s pretty much the rule – you either meet the size and the front elevation with the grading, and that’s all we really review.  It has nothing to do with personal styles of the houses.  The lots are upper-end…

Mr. Breitzke stated that we’ve been through this same question for the previous couple meetings on the same issue. These are the same answers that we heard before. Do you have some new questions or issues?

Ms. Marshall stated that I don’t find that we’ve been through these. I find that we haven’t had completed answers before, so, reviewing this at this time, I don’t think is out of line.  

Mr. Read stated that one of the issues we discussed last time was the full disclosure of the costs and we agreed to come back and to review the information that was given out to potential buyers. Mr. Thompson delivered to me this Welcome to Falling Waters Estates, this real estate sales contract attached to it. My first question is, when somebody drives by and they say this looks like a nice-looking development and they go to the gatehouse, I assume you give them something like this Welcome to Falling Waters Estates, am I correct?

Mr. Floramo stated that it’s more than that.  We have a folder with a bunch of literature, yes.

Mr. Read asked, do you also give this?

Mr. Floramo asked, the real estate contract?  The real estate contract, on the initial, is not given in our marketing data.

Mr. Read stated, so, in other words, they don’t get the information about the costs of the conservancy  district when they go to the guy at the gate and you give them your sales pitch.  I want to go through the sales pitch. The first paragraph is quite


understandable.  You want to sell the property.  You want to sell the subdivision, and, so, you’re allowed to puff it up as much as you want.  You say in this first paragraph, “building sites range in price from $65,00 to $140,000.  Now, and I haven’t checked this out, if what we were just given that the conservancy district bond retirement, including the principal and the interest amounts to $63,000 over the lifespan of this.  Now that means, then, that your building sites range in price not from $65,000, but $128,000 to $203,000 per lot because this Welcome to Falling Waters implies that the cost of the infrastructure is included in the lot.  You were instructed, as I recall from our last meeting, to come up with a document that clearly states that, in addition to this $65,000 and $140,000 that there are extra costs.  We all recognize, that, say, the property owners’ association fees can change – you don’t know how much development they want to do, whether they want to have a country club or a golf course or a picnic table, but, the open space, the lakes, the sewer, the water, almost everybody I know, including myself, thinks that that is included in the purchase price of the lot, and it isn’t, and you don’t tell them that in Welcome to Falling Waters Estates.  $128,000 and $203,000 might be chump change to Donald Trump, but I don’t think there are many Donald Trumps around here and I can understand why you don’t want to publicize that – it raises the price.  My point is, and it’s not a question, this does not truly represent what you have, and it relates to Ms. Marshall’s same questions, she asked the question, do they know about the retirement of these bonds, and you don’t give them this, and, even if you did give them this, it’s in fine print, but you don’t give it to them anyway, so you’re not following through with what I understand you agreed to do  last time.

Mr. Floramo stated that we haven’t been giving any information to anybody for the last two months because we cannot sell a lot with a building permit moratorium.  Therefore, my understanding of last week’s request is for me, through Mr. Hollenbeck and Mr. McClure, was to come up with some language for further disclosure.  I have nothing to hide.  If it is the recommendation on my folder, which includes lots, price lists, schools, Porter County information, the whole gamut, by me placing a blank copy of my real estate form and, sir, it’s not in fine print in Page 2 – I boldly embossed Falling Waters Conservancy District and seller further discloses that these are the issues, this is the amount of the bond, this is what it is, in lieu of a septic system, I almost purchased the old bankrupt Kingsley Manor, which is now Liberty Lakes.  I was within an inch of buying that and doing something. In my research with Liberty Lakes – Kingsley Manor, at that point – their terrain is very similar to a lot of the terrain in Falling Waters, meaning that a standard septic and well system, you cannot get a standard well and septic system – the elevations are too high, so, for an individual to build a house in Falling Waters, if they were doing a non-Lake Michigan water, non-public sewer, if they put in their own septic field, if they put in  their own well, it would be in far excess of the $25,000 that whoever that is.  So, in my disclosure, we had the opportunity to bring in Lake Michigan water.  I brought it in over two miles. We built this award-winning plant that is discharging very good.  We are very happy.  I have a fear that


individuals have a satellite in the sky pointing down at my discharge and they’re shooting pictures every four seconds – that’s how seriously I take this, that I’m constantly being watched, so I take this seriously, but, back to the question:  If it is the request of this Board to have this contract disclosure, I don’t have a problem with that.  I want to give people the information, because the worst thing that can happen is that at the time of closing, or execution of the contract, it comes up and now I’ve lost the sale.  I’d rather have somebody not be interested because of financial reasons or whatever before we get a lot of people involved.

Mr. Cole stated that I have a comment and a question and the question is not related to the conservancy district, but the comment is, and that is, that this board has long ignored conservancy districts in Porter County. There have been several.  There have been some in municipalities. There is one in Graham Woods that has been in existence for a long, long time.  They are expensive.  Most people who contract for them or who build them or bond for them and know they’re expensive, it’s, I guess it floors me that we are questioning some of this.  However, that does not mean that nearly $10 million for a conservancy district should go unnoticed.  That’s only the comment.  I have no further question, but I think this board needs to educate itself about the conservancy districts because it is going to be more and more in place in Porter County. This has to do with an onsite investigation, inspection, whatever that I conducted a week ago Monday.  I noticed in your cleanup, the concrete culverts that have been dug up in the South end of the development were on a truck and were being taken to the NIPSCO right-of-way and, while I was over there, there was a backhoe pushing debris into the NIPSCO right-of-way – I guess NIPSCO was okay with that, this clean fill, according to some people.

Mr. Floramo stated, yes, there’s two inches there. The pipes that were relocated, my second batch of the Jersey barriers closing off some of the cul-de-sacs – I’m two to three weeks out, so, what we did, we took the concrete culverts, placed them in series with the barriers so people wouldn’t jump around trees and go there.  The pushing of material is more of a grouping of the organic material that NIPSCO destroyed to try to work out maybe if the fire department wanted to do a practice – because we had fire hydrants – I have not spoken to the fire department about that.  I don’t know what their position may or may not be – but we got it to an unsightly position.

Mr. Cole stated that in raising the issue of the fire department, has the fire department been provided with adequate information to service your…

Mr. Floramo stated that I would like to turn it over to Mr. Plumb, who is here today.

Don Plumb, 74 Cirque Drive, stated that I did distribute smaller versions of these maps to the board, and this is for the fire chief –


I’ll drop it off at the fire department.  It’s just a street map – it shows addresses and has all the fire hydrants shown.

Mr. Floramo asked, the information that allowed you to produce that came from where?

Mr. Plumb stated that it came from Mike Cap.  He sent me the drawings and he sent me a very in-depth drawing that had multiple layers that had the original water lines, the design locations, so, we were able to pull up the fire hydrants and glue them on this machine, so it was a big help to have that.

Ms. Stevenson asked if the gates are wide open now and not locked.

Mr. Floramo stated that the rear gates have been tied in a permanent open position.

Ms. Stevenson asked, so, if the fire department had to come in, they could go in either way.

Mr. Floramo stated, yes.

Ms. Stevenson stated, also, you had given us a list last week of what you were working on. I understand some of the stuff still isn’t in yet, but can you tell me what more you have done?

Mr. Floramo stated that the cleanup is ongoing.  It’s not as bad as it was.  We have concentrated on maintenance items. The guardhouse is painted now. The front fence is painted.  The gates are no longer.  We had had the homeowners’ association meeting and the lake was treated.  All the efforts that I conveyed were there.  We still have a full-time individual working for me out there.  He had one of my company trucks.  He’s a great individual. He takes his work serious and he doesn’t get offended picking up debris.  The signs, which were an issue last week, next Tuesday, I have 32 stop signs coming out.  The signs I received today for the street signs that were missing, Friday we will get these two missing street signs physically up.  the list that I was just presented by Mr. Haller, some of the storm sewers, we tried, and I need to get my ironworker back out there to cut the welds that we welded down with that mishap.  

Mr. Burns asked, why do you have to have it recut?  Most of what I’ve seen today…

Mr. Floramo stated that there’s a fabric in between the sewer grate and the top that’s collecting this…

Mr. Cap stated that people steal the grates.

Ms. Stevenson stated that we’re all hesitant to lift this for the simple reason that you’re not going to keep the person out there.  As soon as we lift this, everything goes back to the way it was, and we sure don’t want this.  We’ve come a long ways.  This is how we feel


and this is probably how the people feel that live there, so, you can’t blame us for feeling this way.   Can you guarantee us…

Mr. Floramo stated, yes.  We’ll take it a step further, because, once again, I take credibility very seriously.  The issue is, last meeting, a Plan Commission member suggested that a committee or visits by Plan Commission members, or somebody going through Falling Waters to kind of look and make sure that I’m doing what I’m doing. I sure don’t want to come back to the Plan Commission with – in my mind, zero credibility and then being less than zero – if this thing is not happening, because, then what.  I’m no longer swimming upstream.  It’s a different thing.  I’m trying to get support from the homeowners relative to different things, wishes and thoughts. Your suggestion on communication, we are doing monthly meetings.  I have with me a copy of the packet going out to all the homeowners, which are the minutes of the last meeting, directories, and all that type of stuff, for the communication.  It will be mailed tomorrow afternoon, based upon the outcome tonight.  To answer your question, yes.  I guarantee that I don’t want come in front of the board and the Planning Commissioners with egg on my face on residents that have serious concerns, relative to the stuff that is not being performed.  It’s not in my best interests.

Mr. Breitzke asked, are you going to keep a full-time person out there?

Mr. Floramo stated, absolutely.

Mr. Hutson stated that your conservancy district board that you have currently, who’s the members of the board again?

Mr. Floramo stated, myself, Mr. Cap and Mr. Alex Kazmurchak.

Mr. Hutson asked if Mr. Kazmurchak is no longer living out there.

Mr. Floramo stated that he is. He stated that it’s my understanding that the election for additional members is October 2007.

Mr. Hollenbeck stated that the three members that are on there now were appointed by the Board of County Commissioners, under Indiana law, to be the initial board of directors.  There are subsequent elections that occur among the freeholders – people who own land out there – and under the conservancy district statute, that election occurs at the annual meeting, in this case, it will be the annual meeting in ’08, which I think is in January or February.  During October of this year, under the statute, is where we put out notices for anyone who would like to serve on the board, and then November is when they submit their nominating petitions.

Mr. Hutson asked, so any homeowners, builders who own lots, they would all have an opportunity…




Mr. Hollenbeck stated, yes.  

Mr. Hutson asked, each person gets one vote – it’s not determined by lots or anything?

Mr. Hollenbeck stated, yes.  He stated that under  the conservancy district statute, the initial board of directors of the conservancy district is appointed by the Board of County Commissioners and we came to the Board of County Commissioners, and they appointed the three people who are currently on the board. The election process for a conservancy district starts when notices are published in the paper in October of ’07 soliciting nominating petitions that are deliverable during the month of November. Those nominating petitions can nominate anyone who’s a freeholder within the conservancy district, and you have to have it signed by five people who are freeholders within the district.  The deadline for that is December 1st.  If you have but one candidate, then you don’t have an election, obviously.  If you have more than one candidate, then, at the annual meeting, and I can get you this, the circuit court says when that annual meeting is.  I can’t remember whether it’s in February or early March. If you don’t have two candidates, then that new board member is sworn is as a member of the board and (inaudible) for a four-year term.  If you do have more than one candidate, then you have an election where every freeholder is entitled to vote. The way it’s set up now, this is very customary for conservancy districts, because, at the beginning, you have such few freeholders.  Each of the directorship positions are at-large – they serve the entire conservancy district.  Normally what will happen as the number of freeholders grow, the size of the board will be enlarged – you can go up to nine – it has to be an odd number.  As board freeholders come on, you increase it to five or seven or even nine. In this case, nine would probably be too many, given that there is only going to be the potential for 400. You can also, if you are inclined to do it, start designating geographical areas.  The best example of this is, this is exactly, verbatim, what happened at Aberdeen.  We created the district. The conservancy district bought the infrastructure. As Aberdeen grew – it started out with three board members, and they were the developers because there was nobody out there who was a freeholder. As Aberdeen grew, the conservancy district board grew to seven and we’ve now divided them into geographical areas, because there are pretty designatable, in Aberdeen, geographical areas of neighborhoods, in terms of that whole process, and that’s how I would envision, like every other conservancy district, I would envision that’s how this one would grow.

Mr. Hutson asked, so the homeowners and so forth would have an opportunity, maybe, potentially, if they run, to be on the board?

Mr. Hollenbeck stated, absolutely, and it’s critical that they do, because this is their infrastructure.




Mr. Hutson asked, if I’m going to buy a house out there, if I was to go pick up one of your fliers, the only things I see on here is the home price and so forth and a picture of the home.  But, as far as the homeowner association, the $600 annual amount, does that go for just annual maintenance and so forth?

Mr. Floramo stated, snow removal, electric, etc.

Mr. Hutson asked, this annual debt per household – is that stated anywhere in the initial flyer or anything – can that be placed on here?  He stated that that’s probably a better thing for a homeowner to grasp.

Mr. Floramo stated that I think the comment that came back, which I am receptive to that statement, is the purchaser then agrees to notify subsequent purchasers – Floramo Partners, as an entity to date, has not constructed a house.  We have not engaged a real estate company to sell houses, because we don’t have any houses.  We have engaged a real estate company to market our lots. The literature, what we’ve found in Falling Waters, is a lot of individuals who like to see the houses.  They like to walk in and do whatever.  Being a licensed Indiana broker, we can place in the remarks section, we can enforce this – I don’t know how to enforce it – it goes back to the purchaser and, subsequently, conveying or telling individuals about this district.  To put in the remarks that there is a conservancy district.  We are further, to make sure that this is a non-issue, is to also have this description identified stronger on the title commitment, so, if somebody goes and pulls a title they have a better description of what this district is, the amounts and responsibilities and so forth.

Mr. Hollenbeck stated that one of the things that would make a lot of sense, but we don’t have it yet, because we haven’t imposed the property tax, and we don’t have tax rates yet, once we get a tax rate, it would be very appropriate to put last year’s tax rate was so many cents per hundred dollars of assessed valuation.  That hasn’t been possible because we haven’t had a tax rate certified at this point.  In response to what Mr. Read said, the analogy that I would draw would be, if you were selling your house, and you listed it for $150,000.  The person that buys it, unless they have cash, is going to go get a mortgage and there’s going to be an interest rate, and it’s going to go over 20 years and they’re going to pay a lot more than $150,000 on that house, but that’s not part of the disclosure process when you sell that house, and, to me, that’s the analogy we’re looking at here.

Mr. Detert stated that I was the one he referred to that suggested that we set up a Plan Commission committee, and I suggested two names, Tim Cole and Mr. Burns, to make at least one trip a week, and possibly to go through and make sure that everything’s being cleaned up and handled properly, and I still think that’s a good suggestion.   Bob Thompson is limited in the number of people that he has to do that, and if we’re interested on this Commission, then we ought to take it up.   I feel very strongly about that.  I think that if we see everything being cleaned up, my suggestion was to lift the


embargo, because, if he’s going to keep the place clean, he has to have some money coming in.  The conservancy district, I don’t think we’re legal experts.  We all assume, on the Plan Commission, when we see one that they’re set up properly.  I don’t know what the financial constraints are on those.  As far as the sewer is concerned, Mr. Floramo wanted to have many lots, as many as he could, and the only way to do that is to have it on sewers.   The other alternative that was open was septic, and with the situation we had out there, he didn’t have any other choice but to make a conservancy district. The only other Porter County sewer system was Twin Lakes and they said no.  In Winfield there was a lot of growing going on and the sewer system there was questionable, as I recall, and I just read in the paper where they are floating a great, big bond over there just to get their sewer system up to the capacity they need for what is now going on, so I don’t know how they could have tied into a system like that that was still in flux.  The tax situation across County was another consideration, but, if he wanted sewers, there was only one left, and that was a conservancy district.  The other opportunity was septic, it could have been put on septic.

Mr. Burns stated that I’m still concerned about the roadway and curbs.  Did we get that report from the engineering firm, Armstrong?

Mr. Breitzke stated, at this point, no, we haven’t. Have they contracted the borings yet?

Mr. Thompson stated, no, they were working with a company that would come in and do the borings.  I was hoping to get an answer today, as far as schedule. Originally I contacted Mr. Floramo about the possibility of being there Friday.  I don’t know that that’s going to happen, but it will happen here shortly and I expect it to happen next week.   They had to go to another company to do the borings and the whole idea was for Armstrong to just go in there and do it on a one-day visit, do everything, so that way they don’t have to make two or three trips in there.

Mr. Floramo stated that I’m planning for Friday, so the notice that I requested before, I don’t really need that notice because I have it penciled in for Friday.

Mr. Burns stated that the other issue was the summary from the building inspector.  He stated that Mike was out there sometime this morning, I think.  How does it look?

Mike Haller, Porter County Building Commissioner, stated that I assume everybody got a copy of the report.  Jack Clem, code enforcement office and I were out there today and we did a drive-through.  We pretty well have a mental list of what the issues were in the subdivision.  It looks a lot better than it did; I didn’t think it looked particularly bad to begin with.  My particular concern was the erosion control issues because we deal with those on a daily basis in other places. Far as I’m concerned, they still had some issues out there, which are relatively important at this point in time:  no soil


stabilization; open grates that are – basically, our erosion control ordinance states that anything in the road is fair game, and that’s where it all collected after the big rain we had.  

Mr. Burns asked, how about the silt fences?  Are the contractors installing silt fences.

Mr. Haller stated, for the most part, there’s not a lot of activity out there, not so much because of the moratorium, but the housing market in general – we’re down 50 percent, so there’s two or three homes under construction there and they do have adequate silt fence.  There’s two places where it breaches, but it’s probably a couple of bankrupt ones.  The only way we’re going to fix that is if this guy goes and fixes it.

Mr. Burns asked, can you do that?

Mr. Floramo stated, not a problem.

Mr. Haller stated that all they really need is a schedule.   Part of the erosion control ordinance for the County requires a plan, so, we need a written plan of what’s going to be done and when it’s going to be done.

Commissioner Harper asked, who votes when they have a vote in that conservancy district?

Mr. Hollenbeck stated that anyone who satisfies the definition of a freeholder.

Commissioner Harper asked, will Mr. Floramo be able to vote one vote for each lot he owns?

Mr. Hollenbeck stated, no.

Commissioner Harper asked, so, it’s just one person, if you have 21 lots you just have one vote?

Mr. Hollenbeck stated that if you are a freeholder, the statute says one vote per freeholder.

Commissioner Harper asked, no matter how many lots?  That conservancy district’s been formed since 2004, correct?  Have you sent out notices to these people?

Mr. Hollenbeck stated that we’ve satisfied the notice requirements.  

Commissioner Harper asked, notice to the other residents for an election of this conservancy district since 2004?

Mr. Hollenbeck stated that there is no statutory obligation to mail notices to freeholders, so, the answer is no.

Commissioner Harper stated, then tell me how you complied with the notice requirement.

Mr. Hollenbeck stated that you put a legal notice in the paper and solicit nominating petitions.

Commissioner Harper stated, okay, so that’s why these people didn’t know about it.

Mr. Breitzke asked, what is the term of  the office?

Mr. Hollenbeck stated that the initial appointments that were made by the Board of County Commissioners pursuant to the statute are staggered, but once you start having elections they are for four year terms.

Mr. Detert asked, at the back gate, there is no street sign there.  When did you say you were going to get the street signs?

Mr. Floramo stated that all the street signs I received today I’m going to have my individual this weekend…

Mr. Detert stated that I was going to suggest if they weren’t in that you put a handmade sign or something out there, because somebody coming in from that gate wouldn’t know what they were looking at.

Commissioner Harper stated that if I have an advertisement saying, welcome to my house for sale.  It has icebox, refrigerator, stove, two nice sofas, but the terms of the sale are, and the cost is $150,000 and you sign on the line, and I have in there a little innocuous somewhere, but the furniture doesn’t go with it, somehow that doesn’t seem right.  What Herb was pointing out is that this Welcome to Falling Waters says welcome to Falling Waters.  We are a gated community that has sewer and water and this and that and the other and I think what we asked for is some specificity showing how much they are actually paying for it. I think the board needs to decide what amount we are going to require that people be told.  Is it the $63,000 with the interest or what is it, and where is it to be put?

Ms. Marshall stated that at the April 11th meeting a member of the Plan Commission abstained from voting on this.  Is there any obligation on the part of any Plan Commission member that’s involved with you financially?

Mr. Floramo stated, no.

Ms. Marshall stated that I just see that abstaining here means that you have a financial obligation to somebody.

Mr. Floramo stated that there is nobody on the Plan Commission, County Commissioners that has shown an interest in Falling Waters that has anything to do with any of my entities at all.




Mr. Read stated that I am very concerned about this full disclosure situation.  You can’t do anything about what I consider to be abuses of the past, but I want to see this resolved for anything in the future, and, personally, I could not vote for removing the moratorium until I see how it’s worded.  It’s not up to us to make the wording.  It’s up to you, but I want to see wording in this Welcome to Falling Waters handout that satisfies my concern for full disclosure.

Mr. Floramo stated that in that last paragraph that I placed in my contract, is that language adequate in the Welcome to Falling Waters marketing material?

Mr. Read stated, if you are referring to this thing here, my answer is no.  I want to see – I understand that you might not be able to pin it down to exact dollars and cents – but I want to see something that says, in addition to the price of the lot, there are certain additional costs that every homeowner is expected to pay, and list them.

Mr. Hollenbeck stated that I am the author of the Welcome to…and, what I was told in dealing with Scott, is I was to prepare a marketing type document, and we were also  to amend the purchasing agreement, which Tony did.  That’s what I did. I sent it to Scott on Monday. He reviewed it.  He sent it out.  I called about it at least three times to see if there was any changes I needed to make to it.  I actually called Mr. Harper, as well, to see if I could make any changes, because we wanted to bring closure to this, because Tony wants to satisfy you and disclose whatever you want.  I didn’t get one thing back.  I take that back – I got one comment, I think, through Mr. Floramo that Mr. Harper wanted changed about subsequent purchasers and…

Mr. Read stated that the first time I saw this was yesterday. That’s why you didn’t get a comment back – because you had a meeting tonight.  This is my comment.

Mr. Hollenbeck stated that the author of it, when you read that, you go on to read it it says that the conservancy district purchased the infrastructure, there are going to be costs associated with it.

Mr. Read stated that it doesn’t say that in here. It says it in the real estate sales contract, but he doesn’t give that out at the gate.

Mr. Breitzke asked, what’s the pleasure of the board as far as a moratorium?

Mr. Detert stated that I don’t know what we intend to do there.  I don’t want to make a motion that’s not in sync with what this board wants to do.  At  the meeting before last, I believe, we talked about looking into security and I think you (Mr. Harper) were going to talk to the sheriff?

Commissioner Harper stated that I did talk to the sheriff and asked him to make more trips out there and so forth.

Mr. Detert stated that there’s definitely criminal action going on and I think I’ve been a victim of it.

Mr. Breitzke stated  that if we lift the moratorium, we can put another moratorium on this at any time.

Mr. Burns moved to lift the restriction in mind that we always can put it back on.

Discussion:

Mr. Burns stated that we have seen some improvement.  It’s not where I like to see it.  I’m concerned about several issues, but, right now, I think it’s probably best if we lift it and keep a close eye on this development.  

Mr. Detert asked, would you like to include in that motion that we do what I suggested and have you and Tim Cole go through there?

Mr. Breitzke asked, is Mr. Cole okay with that?

Mr. Cole stated, yes, I am.

Mr. Burns moved to lift the restriction in mind that we always can put it back on; with Mr. Burns and Mr. Cole to visit the subdivision at least once a week to verify that all the requirements are being adhered to.  Mr. Detert seconded the motion.

Discussion:

Mr. Read stated that I want to know whether or not the maker of the motion and the seconder of  the motion would include in that motion that at our next board meeting that the developer comes back with a proposed rewording of his Welcome to Falling Waters Estates, with a full disclosure and, if he doesn’t, then we can decide then what to do.



















Mr. Detert stated, Herb, I think you need to talk to him and maybe you need to help write it.

Mr. Read stated, I’m not going to write it for him.

Mr. Burns moved to lift the restriction in mind that we always can put it back on; with Mr. Burns and Mr. Cole to visit the subdivision at least once a week to verify that all the requirements are being adhered to.  Mr. Detert seconded the motion, which carried on the following roll call vote:

Burns  -   Yes Cole  -   Yes  Detert  - Yes  Harper  -   Yes
Hutson -   Yes Marshall –No   Read  -   No  Stevenson -  Yes
Breitzke – Yes

There being no further business, the meeting was adjourned at 7:00 p.m.


PORTER COUNTY
PLAN COMMISSION

S\ Kevin Breitzke, President

Attest: Robert W. Thompson Jr., AICP, Executive Director/County Planner