St. John Indiana - Founded 1837
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November 1, 2012 Town Council Minutes

Michael Forbes, PresidentAttorney David Austgen
Mark Barenie, Vice-PresidentSherry Sury, Clerk-Treasurer
Larry BustamanteSteve Kil, Town Manager
Gregory Volk 
Ken Gembala 

CALL TO ORDER:
Mr. Forbes called to order the Town Council's special meeting of November 1, 2012, at 7:00 p.m. (The Pledge of Allegiance was said.)

ROLL CALL:
Ms. Sherry Sury, Clerk-Treasurer, took roll call with the following members present: Michael Forbes, Mark Barenie, Gregory Volk, Ken Gembala, and Larry Bustamante. Attorney David Austgen was present. Staff members present, Steve Kil. Police Chief, Fred Frego and Fire Chief, Fred Willman were present. Chip Sobek, Parks Superintendent, was absent. Town Council Recording Secretary, Susan E. Wright was also present.

NEW BUSINESS:
A. CONSIDER REQUEST FROM LAKE CENTRAL SCHOOL CORPORATION TO RECONSIDER THE WAIVER OF BUILDING PERMIT FEES FOR CURRENT CONSTRUCTION PROJECTS

Mr. Forbes noted that the Council has been asked to consider a request from Lake Central School Corporation to reconsider the waiver of building permit fees for current construction projects. He asked a representative of Lake Central to address this issue.

Larry Veracco, Superintendent, Lake Central School Corporation, appeared before the Council seeking an additional reduction of building permit fees for the current construction projects. He respectfully requested an additional reduction in the fees.

Mr. Bustamante remarked that all of the fees were introduced into the referendum; he asked Petitioner if they were aware of the costs of the project at that time. Mr. Veracco stated that Petitioner estimated the permit fees to be much lower than they actually heard from the Council.

Mr. Forbes stated he would like to address Mr. Veracco's statement. Mr. Forbes stated that the Council had a meeting with the school corporation. Mr. Forbes stated that representatives of both the Town and the school corporation were present at the meeting. At this meeting, Mr. Forbes stated he was present, Mr. Barenie was present, Mr. Kil was present, and possibly Attorney David Austgen was present.

Mr. Forbes stated that the Town representatives were informed at that time that the permit fees presented during the referendum were based on estimates from school projects in Decatur, Indiana and Plainfield, Indiana. Mr. Forbes stated that the costs of building permit fees in these communities were $200,000.

Mr. Forbes stated his understanding is at no time prior to the referendum was the Town of St. John contacted about the costs of permit fees. He stated he believed the engineering company made the estimates for purposes of budgeting. Mr. Veracco explained that the engineering company shared some of their past projects with the school corporation. Mr. Veracco stated that the school corporation's Director of Construction prepared an estimate for them.

Mr. Forbes asked again if the building permit fee estimates were based on the two school projects in the aforementioned Indiana towns. Mr. Veracco responded “Numerous projects.”

Mr. Bustamante asked where the extra funds would go if the Council were to lower the permit fees. Mr. Veracco stated that the funds would go into “school facilities, buildings and such for students ‐ to benefit students.” Mr. Bustamante asked if the extra funds would directly benefit the students.

Mr. Veracco stated that the vocational wing of the building has equipment needs. He stated that while they intend to seek support from major car manufacturers they don't know how much money they will receive from them. Mr. Veracco stated that the money will go into school facilities to benefit kids.

Mr. Veracco stated that it is School Corporation's belief that this is what the taxpayers voted “yes” for, for the dollars to be spent on school facilities for kids in the community. Mr. Bustamante stated that his concern was that this money not be spent on items like furniture, but spent for the benefit of students. Mr. Veracco stated that every dollar from a reduction in building permit fees would go into enhancing the facility to make Lake Central High School an excellent place to be for students, and to enhance their quality of life in Dyer, Schererville and St. John.

Mr. Forbes remarked that the Petitioner could not specifically say that this money would be used to buy books or computers. Mr. Veracco stated that the money could not be spent to buy books as that is a separate funding mechanism. He stated it could be used for equipment for the school.

Mr. Barenie asked if the money could be used to build things like chemistry laboratories. Mr. Veracco stated that the funds could absolutely be used for this purpose.

Mr. Bustamante stated he understands that the school corporation cannot say exactly where the money would go. He stated, if the Council does lower the building permit fees, it would be nice to know that the money was going towards things like a bigger laboratory. Mr. Veracco assured the Council that the money will be spent on the students and would not be transferred to any funding for salary or the like. He stated the money would be contained in the facility fund for Lake Central High School.

Mr. Gembala commented that he realized that there was talk that past Councils had waived fees in varying amounts for schools and churches. He stated that the big difference now is that, because of the frozen levy, the Town's budgets are frozen and there are no extra dollars anymore to cover anything extra.

Mr. Gembala stated that even though the Council would like to help a school or help a church they have to watch their dollars and make sure the money goes where it is supposed to go. He stated that the Council is first responsible to the taxpayers and the budget. Mr. Gembala stated that he wanted everyone to be aware that it is not an easy thing to deal with and the Town's budgets are frozen.

Mr. Veracco responded that the school corporation understood the Council's position. He stated that the school corporation has said from the start that they did not want the Town to get hurt or to pay any costs associated with this facility. He stated that is why the school corporation offered a cost plus a percentage, to protect the Town. Mr. Gembala stated that he did not think that any one of the Council would agree to take one dollar out of the Town's budget to waive any type of fees for anyone who comes in with such a request. He stated that the money has to be used where it belongs versus what previous Councils had the luxury of doing.

Mr. Volk remarked, to his recall, fees were waived mainly for schools and churches. He stated that building permit fees were waived but the Council has never waived utility system development fees to his knowledge. He noted that Lake Central does not have any system development fees because they are already on the system. He asked if this was correct. Mr. Kil stated that there is a minor dollar amount being spent for water meters, but not much.

(General discussion ensued.)

Mr. Volk stated that although some permit fees were waived for schools and churches no system fees were ever waived for these developments. He reiterated that the Town would not be receiving a system fee development from the Lake Central School Corporation project. Mr. Volk stated in the past during better financial times they may have waived some building permit fees but the Town still received a good chunk of money from system development fees which do not apply to this project.

(General discussion ensued.)

Mr. Volk remarked that he has heard comments that the Town cannot charge beyond the administrative fees on permit costs. He noted that the Town's fees are extraordinarily high. He stated that he has seen a lot of discrepancy from engineering estimates from school districts elsewhere in the state and what the Town charges. He asked how the fees are established.

Attorney Austgen explained that the building permit fee is established by formulas within the Town's ordinance. He stated that it is based upon a construction cost and an applicable cost factor added to the estimated construction costs.

Attorney Austgen stated that the Town's numbers are Uniform Building Code driven. He stated it is not something that was invented. He stated the number is arrived at by a universal and objective formula criteria for establishment. Attorney Austgen stated, in his opinion, the law is valid and it exists for a reason. He said the purpose of the law is so the Council has a non-arbitrary, non-discriminatory, uniform use of an applied formula for what it costs for building a structure and improvement in the Town of St. John, and everyone is treated the same.

Attorney Austgen stated that one thing is that there is always a question of costs, whether they are exceeded, or excessively exceeded or not treated correctly or what it takes to administer the processing of a permit. He stated that common law steps in so that a municipality cannot charge more than cost.

Attorney Austgen stated that when you have a project of this size, with a significant degree of complexity, size, area, fixtures and improvements, this is accounted for by the Uniform Building Code. He stated this size project is a once in a lifetime project.

Mr. Volk commented that he wanted to know how the Town arrived at the fee structure. He stated that the main point he wanted to bring out is that the fee is justified or it would not be in the ordinance. Attorney Austgen concurred. He stated that the Town has a valid fee schedule in the Building Ordinance that the staff uses uniformly, objectively, non-discriminatorily and un-arbitrarily on each and every building permit that is presented for review, approval and issuance.

Mr. Volk stated that the only other project in Town of this size and scope was the Strack & Van Til project; he asked about those costs. Mr. Kil stated he did not recall the exact construction fees. Mr. Kil noted that although Strack & Van Til was a large project it was not near the size and scope of the Lake Central project. Mr. Kil stated the bulk of the fees from Strack & Van Til were utility related and not building driven. Mr. Kil explained that the estimated construction costs is what drives the fee structure for Lake Central School Corporation. He stated that the permit fees would probably be double what they are if this were a new school because there would be hundreds of thousands of dollars in utility fees.

Mr. Kil reiterated that this permit is 100% building permit driven because of the size of the school and the estimated construction cost. He explained how building fees calculated. He stated that is based on an estimated square foot cost.

(General discussion ensued.)

Mr. Volk stated that if the Council were to lower the permit costs more than they have already been lowered it could cut into the cost of hiring an outside inspector, if needed. He stated that the Town will have to have enough money to cover this cost should something happen. Mr. Volk stated that his understanding is that Tom Redar will be performing the inspections at Lake Central High School. Mr. Kil stated that he has talked at length with Tom Redar and Mr. Redar has indicated that he is willing to do the inspections at the high school. Mr. Kil stated that, obviously, the Town's engineers will be involved at times. He stated that if the Town gets in a spot, they will be using the services of Don Moffitt, from Schererville, (per the interlocal agreement) like they normally do.

(General discussion ensued.)

Mr. Barenie remarked that the Council had looked at some rough numbers months ago. More recently, Mr. Barenie stated that Mr. Kil has recently provided the Council with more accurate numbers. Mr. Barenie stated that the Council looks at things from a global position for the Town. Mr. Barenie noted that the school corporation's fees are currently approximately $830,000.00. He noted that the school corporation has been given a twenty percent (20%) waiver. Mr. Barenie remarked that the Town has struggled for the last four or five years. He stated that the Town is in a good position at the present time, but not a great position. Mr. Barenie stated he would love to make a recommendation to grant a 100% waiver, but at this point in time given the entire finances of the Town and all the hard work that has been done he proposed a fifty percent (50%) waiver.

Mr. Barenie made a motion, based on new information presented within the last couple of months, to waive fifty percent (50%) of the building permit fees in lieu of the twenty percent (20%) previously granted.

Mr. Volk noted that fifty percent (50%) would bring the Town down to the bare minimum and the Town would have no choice but to do their own inspections. Mr. Barenie disagreed. He stated that this would include some funds in the event something happened to the Town's inspectors, per his discussion with Mr. Kil.

Mr. Volk noted that this is a three year project and a number of things could happen with the inspector. Mr. Kil stated that with the estimate of the Town's expenses and with the motion on the table of a fifty percent (50%) waiver, the Town would probably not be comfortable in hiring an independent inspector on top of everything else. He noted that they would be able to request help of Schererville's inspector under the interlocal agreement. He reiterated that the Town would not be able to hire a full-time, independent inspector, which, he said, is not being contemplated.

Mr. Forbes stated, from previous discussions, his understanding is that if the Council grants the fifty percent (50%) waiver, they will not be hiring an independent inspector. Mr. Kil concurred.

(General discussion ensued.)

Mr. Forbes stated that the Town would not hire a full time or part time inspector if the Councils grants the fifty percent (50%) waiver. He stated that the Town would do the inspection work along with possible back-up help from Schererville. He stated if something happened to Tom Redar the Town would have to absorb the costs themselves.

(General discussion ensued.)

Mr. Barenie stated he understood that there are not enough funds to hire a three year, full time, inspector at $80,00 per year. Mr. Kil noted that the normal business is covered, but there is not enough money to hire a full time, independent inspector along with everything else that has to be covered.

Mr. Forbes noted that the original discussion centered on hiring an outside inspector to deal with the high school so that the Town's business was not disrupted. He stated that now it will be one inspector.

(General discussion ensued.)

Mr. Gembala noted that Mr. Kil did have conversation with Mr. Redar. Mr. Kil stated that Mr. Redar indicated he would have no problem with performing inspections at the high school. He stated that Mr. Redar has presented him with estimates of “average hours per day” he expected to be at the high school performing inspections. Mr. Kil stated that Mr. Redar will still be able to perform other inspections in Town.

Mr. Forbes noted Mr. Barenie's motion on the table to waive fifty percent (50%) of the permit fees. He stated that the motion would have to be amended to add another thirty percent (30%), or retract Council's original motion for waiving twenty percent (20%) of the permit fees.

Attorney Austgen recommended that the Council make two motions. The first motion would be to reconsider the Council's previous action. The second motion would be to make a make a new motion.

Mr. Forbes stated he was asked by members of the audience to give them an opportunity to speak on this matter. He stated he would combine Any & All on the agenda with New Business to allow the audience members an opportunity to speak. Mr. Forbes noted he would open the floor for public comment before a motion was made. Mr. Forbes asked the audience members to keep their comments brief and on point. He stated the Council was gathered to discuss the fee waiver and impact of its passage or not.

PUBLIC COMMENT

Mr. Joe Hero, 11723 S. Oak Ridge Drive
Mr. Hero remonstrated against any resolution to waive any fees for Lake Central School Corporation. He asked the Board to reverse their previous approval of the twenty percent (20%) fee waiver. He stated that the taxpayers of St. John deserve a Town Council that administers taxation in an equal fashion.

Mr. Hero stated that a resident of Hanover Township, not even a part of the school system, are paying for the corporate costs of the Town. He stated that when the Town Council waives the fees and the Town incurs extra costs these costs are imposed upon Hanover Township residents in the form of double taxation or additional taxation.

Mr. Hero stated that the Town Council should consider that the school corporation is a separate taxing unit with taxes that go to Dyer, Schererville, St. John and St. John Township, unincorporated. He stated taxes are levied on these areas by the school corporation. He stated if money is given up here, Dyer, Schererville and St. Township, unincorporated, is not contributing and this is a system of uneven taxation.

Mr. Hero stated he heard the Town Council's attorney say the Town's ordinances are correct and follow the law. He stated the Council should follow the ordinance. He stated that once the Council starts waiving fees they are discriminating against some of the taxpayers, and it is discriminatory, arbitrary and capricious.

Mr. Hero asked the Town Council to review the Town's ordinance to see if they have the ability to waive these fees. He said if the fees are improperly waived he thinks each member should be personally liable for restitution of the fees to the community. He reiterated this would unfair taxation and does not make sense.

Mr. Hero stated that Lake Central School Corporation made a mistake and they want the taxpayers to pay for it. He stated that the Town cannot “chintz” on the inspections. He stated that the facility houses many students, and for this reason, the inspections are the most important part of the project. He advised the Council not to put the Town in a bind to “chintz” on inspections. He stated that Town should use professionals if they must. Mr. Hero stated that the Town should not put the burden of the inspections on one person who may not be competent in all things. He stated this could be a liability for the Town.

For the record, Mr. Forbes stated that the Council never said that the Mr. Redar was incompetent or unable to complete the task. Mr. Forbes stated that Mr. Redar is more than capable of handling this project.

John Corbit,11551 97th Lane
Mr. Corbit stated his concern is that six months ago the school corporation wanted a twenty percent (20%) reduction. He asked what would happen if they come back in six month and ask for another reduction.

Mr. Barenie explained that the school corporation did not ask for a twenty percent (20%) waiver. He stated based on the information available to the Council at that meeting that amount was all that could be offered. He stated since that time the Council has a complete new set of financial statements.

Mr. Corbit asked why the Council gave the school corporation a twenty percent (20%) fee waiver.

Mr. Barenie stated that the decision was made based upon the information available to the Council at that particular moment. Mr. Barenie stated a fifty percent (50%) permit fee waiver was hinted at many times.

Mr. Corbit told the Council “Do what you want.”

Steve Hastings, 8740 Patterson
Mr. Hastings stated there is another way to deal with this problem. He stated that the school corporation could always put out another referendum to St. John, Dyer, Schererville, and St. John Township to share the costs between these communities. Mr. Hastings stated as the school corporation made the mistake of miscalculating the fees or not including them, and did not talk to the Town about the fees this would be a fair solution, another referendum.

Mr. Hastings stated that he does not like to see the Town being used as a piggy bank. He stated this is not fair. He stated he is fine with the twenty percent (20%) waiver originally granted by the Council, but to waive fifty percent (50%) is not the way to go. He suggested waiving the entire amount and letting the school corporation put out another referendum.

Brenda Bahgerport, 8347 Heron Lake Road
Ms. Bahgerport asked the Council not to give the school corporation too much leeway. She stated she lives right behind the school. She said she has seen the Town's Water Department over at the school numerous times. She stated this takes time away from the Town's projects.

Ms. Bahgerport stated that they are having problems finding the infrastructure and this is going to cause an overrun on what the Council is giving the school corporation a break on. She stated that a natural gas line has been damaged on the project. She stated that this is just the beginning of the project. She stated she does not want the Town of St. John to pay over what they collect from the school corporation.

Mr. Forbes called for additional public comment. There was no further public comment. He closed the floor to public comment and brought the matter back before the Council. He asked the Council members for any additional comments.

Mr. Volk stated that Mr. Hastings made a good point about all of the towns sharing costs. He stated that St. John has always been burdened with the costs of services including policing, fire, ambulance and whatever else goes along with having a big institution. Mr. Volk stated he has always believed that costs should be shared by all of the communities.

Mr. Volk noted that St. John probably has the least amount of students in the high school. He wanted to know why Schererville, Dyer, and St. John Township do not participate equally in the costs of the high school.

(General discussion ensued.)

Mr. Forbes noted that as of October 23, 2012 there have been 90 incidents at the school attended to by the Police Department; in 2011, there were 128 incidents including traffic.

(General discussion ensued.)

Mr. Volk stated that the taxpayers of St. John are being double taxed. Mr. Volk asked Mr. Veracco if there has ever been any thought given to approaching the other towns about cost sharing. Mr. Veracco stated that there was a meeting scheduled for earlier in September but the meeting was cancelled. Mr. Forbes pointed out that this meeting was related to the Resource Officer and the not the permit fees.

(General discussion ensued.)

Mr. Gembala stated he concurred with what Mr. Volk is saying in that the Town needs help with the school. Mr. Volk stated that the school corporation should approach the other communities about sharing costs related to the school, specifically the building permit fees. He suggested that the school corporation approach the other communities and recoup a portion of the building permit fees rather than have the Town of St. John take the hit on the fees.

Mr. Forbes opined that the Resource Officer is an entirely different matter. Mr. Volk suggested that the school corporation begin a dialogue with the other communities about contributing to the fees. Mr. Volk stated that the Town is justified in charging the fees.

(General discussion ensued.)

Attorney Austgen stated that this might be a discussion piece that the Town Council or the School Corporation might want to have with other communities or governmental bodies. He stated the reason the school officials are here is because the Town of St. John has exclusive jurisdiction over this institution from the standpoint of police power, public health and safety, ordinances and regulations all due to its being within its municipal boundaries. He stated these powers are vested in the Town Council by state law and enabling ordinances.

Mr. Kil stated that this money will be receipted into the General Fund as miscellaneous revenue.

(General discussion ensued.)

Mr. Forbes noted that previous administrations have participated in the waiving of building permit fees and he has previously participated in the process. However, Mr. Forbes stated, at the time those permit fees were waived, the Town was issuing 300-400 building permit fees per year. He stated when that amount of revenue was coming into the Town the Town was able to absorb the hit from waiving whatever amount of fees were waived. Mr. Forbes noted that the economy is not the same today, and the Town does not enjoy the luxury of waiving fees like this anymore.

Mr. Barenie stated that the Clark fees were waived in the midst of the recession, and not in the Town's heyday. Mr. Forbes stated he cannot agree with a 100% waiver.

(General discussion ensued.)

Mr. Forbes stated he would entertain a motion to rescind the previous twenty percent (20%) waiver granted to Lake Central on the building permit fees. Mr. Barenie made a motion to rescind the twenty percent (20%) waiver on building permit fees previously granted to Lake Central. Mr. Bustamante seconded the motion. Mr. Forbes requested a roll call vote. Ms. Sury took the roll call vote as follows: Greg Volk ‐ yes. Ken Gembala ‐yes. Larry Bustamante ‐ yes. Mark Barenie ‐ yes. Mike Forbes ‐ yes. The motion was unanimously carried by roll call vote (5/0).

Mr. Forbes noted that the twenty percent waiver on building permit fees was rescinded.

Mr. Forbes stated he would entertain a motion on a new waiver amount. Mr. Barenie made a motion to waive fifty percent (50%) of the building permit fees for Lake Central School Corporation. Mr. Bustamante seconded the motion.

Mr. Gemabala noted that the numbers he was provided cover all of the costs and any little cushion that would be needed, and would not take anything out of the budget for the inspection.

Mr. Forbes noted, as a reminder, that the numbers provided to the Council were an estimate and not a hard and fast number. He stated that this is a three year project. Mr. Forbes stated that the permit fee is accurate but the costs to the Town are projected and not rock solid, but pro forma numbers. Mr. Forbes stated that if anyone maintains these are rock solid numbers they are mistaken. He stated this is a three to four year project and the exact dollar amount it will cost the Town cannot possibly be guessed.

Mr. Forbes noted there was a motion and a second on the floor. Mr. Forbes requested a roll call vote. Ms. Sury took the roll call vote as follows: Gregory Volk - no. Ken Gembala ‐ yes. Larry Bustamante ‐ yes. Mark Barenie ‐ yes. Michael Forbes ‐ no. The motion was carried by roll call vote (3/2).

The Town Council authorized a fifty percent (50%) reduction in building permit fees for Lake Central School Corporation which brings the total amount to Four Hundred Fifteen Thousand Three Hundred Fifty-Six Dollars and fifty-cents ($415,356.50). Building total: ($411,529.50); Water meters: (3,827.00).

ANY & ALL:
Mr. Forbes indicated that he included public comment in the previous discussion.

ADJOURNMENT:
Mr. Forbes called for a motion to adjourn. Mr. Gembala made a motion to adjourn the meeting; Mr. Volk seconded the motion. The motion to adjourn was unanimously passed by voice vote (5/0). (The meeting was adjourned at 8:47 p.m.)

A TRUE COPY

_______________________________________________Susan E. Wright
Recording Secretary St. John Town Council