AGO 2010-3.
| Case Date | August 03, 2010 |
| Court | Indiana |
Indiana Attorney General Opinions
2010.
AGO 2010-3.
August 3, 2010OFFICIAL OPINION 2010-3Mr. Bruce A. Hartman, CPA State
Examiner State Board of Accounts 302 West Washington
Street, Room E418 Indianapolis, Indiana 46204-2769RE: Requirements for a legislative body
to approve certain transactions undertaken by a redevelopment commission or a
redevelopment authority.Dear State Examiner Hartman:
Your letter requesting an advisory opinion posed the following
three questions:
1. Must the legislative body of a city approve an
economic development loan in the amount of $6.5 million obtained by city's
redevelopment commission or redevelopment authority?
2. Under what circumstances must the legislative body of
a city approve a loan, the issuance of bonds or notes, or any other borrowing
undertaken by the city's redevelopment commission or redevelopment
authority?
3. Must the legislative body of a city approve a lease
rental agreement with a term in excess of 20 years in the amount of
approximately $174 million between the city's redevelopment authority, as
lessor, and the city's redevelopment commission, as lessee?
Your letter included materials related to a specific project;
however, the questions in your letter were stated in more general terms. For
that reason, this opinion analyzes the basic issue raised by your questions
which we restate as follows:
To what extent is a city redevelopment commission or
redevelopment authority authorized to incur financial obligations without the
approval of the city common council?
SHORT ANSWER
As a general rule, redevelopment commissions and redevelopment
authorities have statutory authority to incur financial obligations related to
local redevelopment projects without the approval of the city common council.
Approval of the common council is required only for those transactions
enumerated in the statutes as requiring such approval.
ANALYSIS
The planning and development statutes in Title 36, Article 7, of
the Indiana Code provide a framework for units of government to undertake
redevelopment projects and promote economic development. Indiana Code section
36-7-14-3 authorizes a local unit of government to establish a department of
redevelopment which is controlled by a redevelopment commission. A unit of
government may also create a redevelopment authority under IC 36-7-14.5-7. The
issues you raise concern the interrelation of the redevelopment commission, the
redevelopment authority and the legislative body of a unit in which the
commission and authority are established; specifically, whether approval of the
legislative body is required for certain transactions undertaken by the
commission or the authority. The common council is the legislative body and
fiscal body for a city other than a consolidated city. Ind. Code §§
36-1-2-6, -9.
In 2003 the Indiana Attorney General issued Official
Opinion No. 2003-8 (fn1) addressing the question of whether a
redevelopment commission is able to acquire and dispose of property and
appropriate non-property tax revenues for purposes of redevelopment or economic
development without the approval of the governmental unit's legislative body.
That opinion noted that approval of the fiscal or legislative body of the unit
is required for some transactions of a redevelopment commission but that other
transactions of the commission do not require such approval. With respect to
acquiring and disposing of property, the opinion concluded that approval of the
legislative body was not required.
Your questions are similar to those presented in the
above-referenced opinion and call for a similar analysis; however, some
amendments have been made to the relevant statutes since that opinion was
issued.
Redevelopment commissions have been granted broad powers which
are set forth in Ind. Code § 36-7-14-12.2. Among other powers, a
redevelopment commission may:
(1)...
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