Special Judge Heather Welch heard final arguments Friday in the Indiana Tax Court case attacking the Allen County Commissioners’ plan to put up the historic Allen County Courthouse as collateral for a construction bond for the new Allen County jail, the identified solution to the federal court order to address unconstitutional conditions at the current downtown facility.
After a federal judge found conditions, like overcrowding and aging infrastructure, at the current Allen County Jail in downtown Fort Wayne to be unconstitutional, he ordered the Allen County government to solve the issues.
The Allen County Commissioners then determined building a new, $300 million facility would be the best long-term solution to those unconstitutional conditions.
That plan required the Allen County Council to raise local income taxes to help fund the construction. Construction costs also required a bond from the Building Corporation that the county could only get with developed property as collateral. The commissioners decided to put up the historic Allen County Courthouse as that collateral.
The Indiana Department of Local Government Finance approved the plan, and the county council gave its approval, which appeared to put the construction plan on the fast track to get started.
However, the community activist group Allen County Residents Against the Jail sued the Allen County Commissioners, the Building Corporation and the Indiana Department of Local Government Finance to try to stop them from using the Allen County Courthouse as collateral and leasing it back to the county.
During Friday's oral arguments, the group’s attorney, James Fenton, argued the central issue of the case was whether or not the county government can levy income taxes while leasing the courthouse. He argued they could only levy new property taxes, not local income taxes like what the Allen County Council passed last year.
The commissioners’ attorney, Mark Crandley, said the crux of the case was the power to lease, given to the commissioners. He said they needed a petition with 50 or more taxpayer signatures and a government resolution stating the lease was necessary. Crandley said the county has 90 such signatures, and the Allen County Council passed a resolution stating the need for the lease plan.
Also at issue was how the taxes were decided upon. Fenton said his clients should have been able to vote for a referendum on the new taxes. Cranley said “if you're doing a project that is the result of a court order, you don't need a referendum.”
The activist group claimed they were being harmed by the lease plan.
Crandley said the lease plan was an effort to save money and avoid levying more taxes. Because of that, he questioned the legitimacy of the injury claim.
This lawsuit has delayed the start of construction of the new Allen County Jail for months.
Judge Welch said she planned to rule on the case by Sept. 9 or another time in September.
