Attorneys Findings In Response to Petition

VALPARAISO LAKES AREA CONSERVANCY DISTRICT
2026 BUDGET – FINDINGS IN RESPONSE TO PETITION TO APPEAL TAX LEVY
On August 20, 2025, the Board of Directors of the Valparaiso Lakes Area Conservancy District (“VLACD”) held a public hearing on the matter of the adoption of a budget for fiscal year 2026. Two freeholders appeared at the meeting and provided comments. One freeholder submitted written materials. Thereafter, on August 27, 2025, a group of
freeholders within the VLACD (“Remonstrators”) filed a Petition to Appeal Property Tax Levy (“Petition”) containing objections to the budget with the Indiana Department of Local Government Finance (“DLGF”). Being duly advised, the Board of Directors of the VLACD now adopts the following Findings in accordance with Indiana Code 6-1.1-17-5(c).
I. NOTICE OF THE PUBLIC HEARING ON THE BUDGET WAS PROVIDED IN ACCORDANCE WITH INDIANA LAW.
At the public hearing, one remonstrator questioned how notice of the public hearing on the budget was provided. The VLACD staff stated that publication of the notice of the public hearing is provided by the Indiana Department of Local Government Finance (“DLGF”) as provided by statute. In addition, copies of the notice of public hearing were
posted in two prominent places at the principal office of the VLACD.
First, it is axiomatic that remonstrators who appear at a public hearing cannot contest a lack of notice. Dittmer v. Indianapolis, 143 Ind. App. 621, 627 (Ind. Ct. App. 1968). In advance of a public hearing on a proposed budget, an Indiana conservancy district is required to follow the same procedures as municipalities. Ind. Code 14-33-9-1(a)(2). That process includes submitting information to the DLGF through its Gateway portal. The DLGF then provides this information to taxpayers through its Gateway system at least ten days prior to the public hearing according to Ind. Code 6-1.1-17-3. The meeting itself complied with the Indiana Open Door Law as notice of the meeting was posted at both the principal office location of the VLACD and at the place of the meeting.
II. FINDINGS ON SUBSTANTIVE REMONSTRANCES
The Petition states as follows:
“We object to the large contingency appropriations in the budget and to the Board’s unwillingness to use existing fund balances to reduce or eliminate the need for a property tax levy. We believe the levy is excessive, unnecessary, and will place an undue burden on taxpayers. We submit that it was not prepared in accordance with
Indiana Code.” The substance of the objection is explained in written materials that were submitted at the public hearing and have been included with the Petition. Those specific substantive objections are addressed as follows:
ITEM NO. 1: Inflated Budgets Hide the Truth. The Remonstrators contend that the proposed Budget contains $200,000 in “vague ‘other contractual services’” with no specific proposed project identified by the Board. The Petition (Item 1) characterizes this as a “contingency appropriation” and requests that it be reduced to not more than ten percent (10%) of the budget.
RESPONSE: The Remonstrators mischaracterize the “other contractual services” as a “contingency,” which it is not. For that reason, the limitation imposed by Ind. Code 14-33-8-2(b) does not apply. The line item in the budget is for stormwater projects approved by the board as part of a five-year plan. These stormwater project expenses were approved
based upon 2023 estimates, even though pricing has increased since that time.
At the public hearing, a remonstrator also questioned the increase in the amount budgeted for legal services, from $17,000 in 2025 to $25,000 in 2026. These numbers are lower than the $40,000 budgeted for 2024. The amount budgeted in 2025 ($17,000) was an over-correction from 2024. The Board believes that the $25,000 budgeted for 2026 more accurately reflects anticipated expenditures for legal services expenses which are expected to be incurred by the VLACD in 2026.
ITEM NO. 2: Indiana Code Requires Lower Taxes When Funds Are Sufficient. The Remonstrators contend that Ind. Code 14-33-9-3 requires the VLACD to apply $492,000 from the previous year’s revenue to offset operating and maintenance expenses in 2026.
RESPONSE: Indiana Code 14-33-9-3(a) and (b) states as follows:
(a) The board shall deduct from the operation and maintenance expenses estimated under section 2 of this chapter the following:
(1) Any revenue actually received during the current year.
(2) Other money not obligated to paying or protecting the bonds or notes of the district.
(b) The board shall carry forward the balance after making the deduction required by subsection
(a).
For 2026, the board has estimated the operational and maintenance expenses as follows:
Personal Services: $88,900
Supplies: $2,000
Services and Charges: $335,500
Capital Outlays: $8,000
TOTAL: $434,400
Tax revenue received in 2025 is capped by the maximum levy advertised in the 2025 budget ($268,716), which leaves a shortfall that must necessarily be recouped through water rates or other sources. The VLACD must necessarily choose between a slightly higher tax levy and increased water rates. Water rates are set by ordinance.
The operations funded by tax revenues also includes stormwater services, which are not currently subsidized by rates, unlike other communities, including the City of Valparaiso, which imposes a monthly stormwater bill.
ITEM NO. 3: Cash Reserves Keep Growing While Taxes Keep Rising. The Remonstrators assert that cash reserves have increased from $562,889 in 2020 to over a million dollars and that “property taxes” have risen 81% over the past 12 years.
RESPONSE: The VLACD owns and operates all of the infrastructure located within the boundaries of the conservancy district. For that reason, the VLACD must necessarily maintain certain cash reserves sufficient to be able to repair aging infrastructure without the need to borrow or bond to fund repairs and improvements.
The relevant inquiry into the percentage tax increase should be limited to the 2026 budget, which proposes a four percent (4%) increase from 2025. As indicated in the Response to Item No. 2, the maximum levy proposed for 2026 will still fall short of the amount of revenue necessary for the budget estimate. The increase in the tax levy amounts to $10,748, which will be apportioned to the more than 900 freeholders located within the VLACD based upon assessed value.
ITEM NO. 4: No Plan to Spend Cumulative Fund Taxes.
RESPONSE: The Remonstrators are referring to the Cumulative Conservancy Improvement Fund special benefits tax which is imposed pursuant to Ind. Code 14-33-21-5. This Fund, and the special benefits tax imposed, was established as part of the district plan as allowed by Ind. Code 14-33-31-2. By law, these funds may be used for additional construction or repair of the VLACD’s infrastructure. The purposes for which the Fund may be used are set forth in the District Plan.