No decision made on sharing costs

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March 29, 2010

County hopes to resolve legal-bill issue by May

By KEN de la BASTIDE The Kokomo Tribune Mon Mar 29, 2010, 09:58 PM EDT

For 90 minutes, Howard County officials presented their case concerning why legal costs should be shared among the governmental entities involved in the Delphi and Chrysler property tax negotiations.

Since 2005 Howard County has spent approximately $534,000 with law firm Barnes & Thornburg – a result of the bankruptcy filings of the county’s two largest employers. The county reached an agreement to recover $37 million in personal and property taxes from the two companies over the next six years.

Representatives from Kokomo, Kokomo-Center and Northwestern schools, Kokomo/Howard County Public Library, Center and Howard townships and the recycling district met Monday with county officials to discuss sharing costs.

The county wants the other taxing entities to share the cost based on the proportion of taxes each would receive.

County officials offered two options, according to Council President Dick Miller, R-4th. Option 1 is to pay the share of the legal costs immediately and be reimbursed, as $633,000 in interest on taxes is paid or, Option 2, allow the county to retain the interest in the future to cover the costs.

No decision was made by any of the taxing entities, according to Miller.

Miller said each taxing entity will take the two options to their respective council or board for a decision. He said the county hopes to resolve the issue by May.

“We presented what we believe to be the issues,” said Miller, who was designated as the spokesman. “We discussed the approach the county took and the assumption of the working group.”

Kokomo Mayor Greg Goodnight said it was a productive meeting and that he is not leaning toward any of the options at this point.

“We’ll take a look at it,” he said. “It never hurts to ask for the money, but we have an obligation to city taxpayers. I understand why they’re asking, these are tough economic times for everyone.”

Goodnight said he hopes the city makes a decision by the end of the week.

The county had several options when it came to the two bankruptcy filings, he said. Do nothing, wait and see what the courts would award and be aggressive.

“We took the aggressive approach to the limit of whoever we selected as legal counsel,” Miller said. “I have every confidence that we were directed to the right law firm.”

Miller said the second option of the county retaining the interest earned on the tax collections was acceptable to some of the taxing entities.

“I hope we never have to go through this again,” he said. “I wouldn’t do it again without a prior consensus of cooperation with regard to the legal fees. We made an assumption that everyone agreed to share the costs.”

Whichever option is accepted by the local taxing entities, Miller said a Memorandum of Understanding or Inter-local Agreement would have to be signed with the county.

Miller said he would not be surprised if most of the other taxing units decided to allow the county to retain the interest earned.

“I would be pleased if some agreed to pay their share right now,” he said. “If not, the county would not have collected the legal fees over 10 years from when this started.”

• Ken de la Bastide is the Kokomo Tribune enterprise editor. He can be reached at 765-454-8580 or via e-mail at ken.delabastide@kokomotribune.com

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