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Due to alleged financial misappropriation, the Carmel Board of Parks is suing the City Board of Public Works

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Carmel, Indiana – The Carmel Board of Public Works and Safety is being sued by the Carmel/Clay Board of Parks and Recreation.

The disagreement is on a purported financial theft. A complaint, submitted on December 5, claims that money meant for the Board of Parks was wrongfully transferred into accounts under the control of the Carmel Board of Public Works.

According to the complaint, the Board of Parks is a “municipal corporation and political subdivision and is a distinct legal entity.” The Board of Parks contends that its distinct legal standing grants it the right to sue the Board of Public Works.

According to court records, the Board of Parks was established in August 1991 by Clay Township and the City of Carmel.

According to the complaint, “the City and the Township shall administer their authority to create a parks department and administer parks and recreation programs exclusively through the department as governed by the joint board” as stated in an interlocal agreement between Carmel and Clay Township.

The Impact Fee Fund provides the Board of Parks with a portion of its funding. The money that Clay Township and the City of Carmel are supposed to deposit from “impact fees” goes into the Impact Fee Fund.

“Impact fees” are the result of legislation passed by the Indiana General Assembly in 1991. In part, the legislation allows local governments to impose “impact fees” on developers to help offset the costs of the infrastructure required to support developers’ projects.

Any “monetary charge imposed on new development by a unit to defray or mitigate the capital costs of infrastructure that is required by, necessitated by, or needed to serve the new development” is what the Act defines as an “impact fee.”

Governmental organizations are required by law to enter into “credit agreements” with developers. Developers’ expenses may be partially compensated by said credit agreements through “impact fees.” According to the lawsuit, “credit agreements” are usually formed when developers provide the city goods, services, or property, or they assist in setting up the infrastructure needed to support new building projects.

The board of parks was designated as the “sole agency” under a 1996 ordinance, according to the complaint, in charge of deciding which infrastructure upgrades would enable developers to be eligible for “credit agreements.”

Additionally, the Board of Parks asserts that the code requires “any fees collected” to be given to the Board of Parks unless that money is utilized to cover administrative costs associated with keeping the “impact fee” scheme in place or to cover specific refunds as stipulated by the ordinance.

Later, the ordinance was changed to provide the Board of Public Works the authority to negotiate and carry out “credit agreements.” The amendment prohibited the City of Carmel from transferring funds obtained from “impact fees” to accounts that are not part of the Impact Fee Fund, as per the lawsuit.

According to the Board of Parks, the City of Carmel has allegedly transferred funds from the Impact Fee budget to a different city budget at least sixteen times since 2018. “No less than $6.6 million in ‘impact fees’ from the Impact Fee Fund and the park board to other city funds and agencies,” according to the Board of Parks, was misappropriated by the city.

The Parks Board asked for a temporary injunction to prevent the City of Carmel from using funds from impact fees for other purposes. The Indiana Business Journal reports that the interim injunction request was turned down. The Park Board will keep pursuing a permanent injunction to halt the fund transfers, according to an IBJ article.

The board of parks is also asking the courts to force the City of Carmel to provide an accounting of the improperly diverted funds. The park board is also asking for improperly diverted funds to be restored to the Impact Fee Fund.

 

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