Alice Luebke v. Indiana Department of Local Government Finance ( 2024 )

ATTORNEY FOR PETITIONERS: ATTORNEYS FOR RESPONDENTS:
JAMES P. FENTON THEODORE E. ROKITA
ATTORNEY AT LAW ATTORNEY GENERAL OF INDIANA
Fort Wayne, IN J. DEREK ATWOOD
TRENT D. BENNETT
DEPUTY ATTORNEYS GENERAL
Indianapolis, IN
MARK J. CRANDLEY
BARNES & THORNBURG LLP
Indianapolis, IN
IN THE
INDIANA TAX COURT
ALICE LUEBKE, TINA HUGHES, AMANDA )
SCHEITLIN, and ANN CORNEWELL, )
)
Petitioners, )
)
v. ) Cause No. 24T-TA-00007
)
INDIANA DEPARTMENT OF LOCAL ) FILED
GOVERNMENT FINANCE, ALLEN COUNTY, ) Sep 13 2024, 3:24 pm
INDIANA (an Indiana municipality), ALLEN )
COUNTY BOARD OF COMMISSIONERS, ) CLERK
Indiana Supreme Court
Court of Appeals
being F. NELSON PETERS, THERESE M. ) and Tax Court
BROWN, and RICHARD BECK, in their )
official capacities only, and the ALLEN )
COUNTY, INDIANA BUILDING )
CORPORATION, )
)
Respondents. )
ON APPEAL FROM A FINAL DETERMINATION OF
THE DEPARTMENT OF LOCAL GOVERNMENT FINANCE
FOR PUBLICATION
September 13, 2024
WELCH, Special J.
A coalition of Allen County taxpayers is objecting to the Allen County Board of
Commissioners’ plan to build a new jail, challenging the legality of a lease approved by
the Department of Local Government Finance (the “DLGF”).1 These taxpayers contend
that the lease is unlawful because the statutory framework for county leases does not
permit the sale-leaseback of historical buildings long owned by the county, such as the
venerable Allen County Courthouse. They further argue that the jail’s construction
cannot proceed because a resolution lacks the statutorily required determination of
need for the Courthouse sale-leaseback. The Commissioners, however, assert that their
plan to build the new jail must move forward, arguing that the taxpayers lack standing to
challenge it and that the lease and resolution comply with the law. Finding no merit in
the Commissioners’ standing claim or the taxpayers’ challenge to the lease and the
resolution, the Court holds the lease is legally valid for purposes of the disputed
statutory framework and affirms the final determination of the DLGF.
FACTS AND PROCEDURAL HISTORY
The Allen County Jail, which started operations in 1981, has undergone several
renovations and currently has 732 permanent beds. (See Cert. Admin. R. at 446.) In
recent years, its occupancy has ranged from 700 to 900 inmates, regularly exceeding its
maximum occupancy of just 586 beds.2 (See Cert. Admin. R. at 390, 448.) The
overcrowding issue, along with concerns about understaffing and safety threats, led to
1
For purposes of this opinion, Allen County and the Allen County Board of Commissioners are
used interchangeably, as the Commissioners are the executive body of the Allen County
government. See IND. CODE § 36-2-3.5-3 (2024).
2
“A jail is overcrowded long before every bed is filled. This is because there must be enough
beds in the proper cell locations so that prisoners can be adequately classified and separated.”
Morris v. Sheriff of Allen Cnty., No. 1:20-CV-34 DRL, 2022 WL 971098 at *9 (N.D. Ind. Mar. 31,
2022).
2
legal action, resulting in the United States District Court for the Northern District of
Indiana holding in 2022 that the conditions at the Jail violated inmates’ constitutional
rights. See Morris v. Sheriff of Allen Cnty., No. 1:20-CV-34 DRL, 2022 WL 971098, at *1
(N.D. Ind. Mar. 31, 2022). The court mandated corrective measures and ordered the
Commissioners to propose a long-term solution. Id. at *16-17.
In response to the court’s ruling, the Commissioners engaged Elevatus, a local
architectural firm, to evaluate options for addressing the Jail’s issues. (See Cert. Admin.
R. at 388.) Elevatus’s report analyzed several solutions, including expanding the current
Jail, establishing a regional facility, outsourcing inmates to nearby county jails, and
constructing a new jail at a different location. (See Cert. Admin. R. at 384-421.) The
Commissioners ultimately determined that building a new jail was the best course of
action. (See, e.g., Cert. Admin. R. at 204-73.)
The new jail was projected to take at least three years to build, with an estimated
cost of roughly $320 million. (See Cert. Admin. R. at 379, 408.) The Commissioners
undertook several steps to move this project forward. For instance, they established the
“Allen County, Indiana Building Corporation” to assist the County in financing its
facilities by acquiring, owning, constructing, renovating, and leasing both existing and
new county buildings. (See Cert. Admin. R. at 284-96.) In addition, they planned to
convey the historic Courthouse to this newly formed entity, which would then lease the
property back to the County during the new jail’s construction. (See Cert. Admin. R. at
284-89.) The sale-leaseback plan for the Courthouse sought to reduce overall costs by
avoiding approximately $28 million in capitalized interest expenses during the initial
construction period, thereby lowering the lease payments for the new jail. (See Cert.
3
Admin. R. at 195-96, 506-07 ¶ 67, 516 ¶ 104.) The Building Corporation and the
Commissioners executed a lease-purchase agreement (“the Lease”) to implement the
sale-leaseback plan and formalize the terms for leasing the new jail. (See Cert. Admin.
R. at 21-44.) Furthermore, the Commissioners reviewed two reports that analyzed
additional financing options for the new jail, primarily through either an adjusted gross
income tax (the “Jail LIT”) or an ad valorem property tax. (See Cert. Admin. R. 24-25,
368-83, 512-13 ¶¶ 91-94.)
Opposition to the new jail project soon emerged from the Allen County Residents
Against the Jail and others, proposing a vertical expansion of the existing Jail instead of
building a new facility. (See, e.g., Cert. Admin. R. at 470-73.) Over ninety Allen County
taxpayers filed a petition with the County Auditor, raising multiple objections to the
Lease. (See Cert. Admin. R. at 1-20, 218.) The Auditor certified the petition to the DLGF
on December 15, 2023, and a public hearing was held on January 4, 2024. (See Cert.
Admin. R. at 490 ¶¶ 16-18, 520-664.) On February 22, 2024, the DLGF issued a final
determination rejecting all the taxpayers’ objections and denying their petition. (Cert.
Admin. R. at 488-519.)
On March 21, 2024, Alice Luebke, Tina Hughes, Amanda Scheitlin, and Ann
Cornewell (the “Objectors”) initiated this original tax appeal, seeking to terminate the
Lease and halt the construction of the new jail. (See Pet’rs’ V. Pet. Jud. Rev. Final
Determination of the Dep’t Loc. Gov. Fin. Dated Feb. 22, 2024 (“Pet’rs’ Pet.”), ¶¶ 18-
38.) The Commissioners then moved to compel the Objectors to post a bond, arguing
that delays in the new jail project due to this lawsuit could add over $91 million in costs
for Allen County taxpayers. (See Resp’ts’ Br. Supp. Mot. Require Pl. Post Bond
4
Pursuant to Ind. Pub. Lawsuit Statute at 1-2.) The Objectors filed a brief in response to
the Commissioners’ motion for bond on May 8, 2024, followed by the Commissioners’
reply brief on May 15, 2024. The Objectors then submitted additional documents
regarding the motion on June 10, 2024. After an evidentiary hearing and oral argument
on June 12, 2024, the Court denied the Commissioners’ motion for bond on July 5,
2024. See Luebke v. Indiana Dep’t of Loc. Gov’t Fin., Case No. 24T-TA-00007, 2024
WL 3310423 (Ind. Tax Ct. July 5, 2024).
On June 28, 2024, the Objectors submitted a brief on the merits. The
Commissioners and the DLGF filed separate response briefs on July 12, 2024, with the
Objectors reply following on July 26, 2024. On August 9, 2024, the Court held an oral
argument on the merits in Allen County. During the argument, the Objectors requested
that the Court take judicial notice of the DLGF’s final determination, the bond hearing
transcript, and the related briefs. (See Oral Arg. Tr. at 9-10.) The Court granted this
request. (See Oral Arg. Tr. at 15.)
In addition, the Objectors moved for the Court to admit or take judicial notice of
the four exhibits previously admitted during the bond hearing. (Oral Arg. Tr. at 9-10.)
These exhibits were (1) a lease dated December 1, 2023, between the Building
Corporation and the Commissioners; (2) a letter dated January 18, 2024, written by
Mark J. Crandley; (3) a letter dated September 23, 2023, written by the Honorable
Frances C. Gull; and (4) a copy of the disputed resolution. (Notice, June 13, 2024.) The
Commissioners promptly objected to the Court taking judicial notice of Judge Gull’s
letter, arguing that it was not part of the certified administrative record. (See Oral Arg.
Tr. at 10-13.)
5
The Court sustained their objection, clarifying that, unlike the bond proceedings,
it is now limited to considering only the evidence within the certified administrative
record when reviewing the DLGF’s final determination. (See Oral Arg. Tr. at 13-15.) See
also, e.g., Bd. of Comm’rs of Clark Cnty. v. Indiana Dep’t of Loc. Gov’t Fin., 31 N.E.3d
552, 555 n.3 (Ind. Tax Ct. 2015); State Bd. of Tax Comm’rs v. Gatling Gun Club, Inc.,
420 N.E.2d 1324, 1326-29 (Ind. Ct. App. 1981) (discussing the limited nature of the
scope of judicial review of administrative agency decisions in general). While three of
the four exhibits were part of the record, Judge Gull’s letter was not. Consequently, the
Court cannot consider Judge Gull’s letter or any portion of it presented in the parties’
briefs.3
STANDARD OF REVIEW
The party seeking to overturn a final determination of the DLGF bears the burden
of demonstrating its invalidity. See Indianapolis Pub. Transp. Corp. v. Indiana Dep’t of
Loc. Gov’t Fin., 988 N.E.2d 1274, 1277 (Ind. Tax Ct. 2013). Accordingly, the Objectors
must demonstrate to the Court that the DLGF’s final determination is arbitrary,
capricious, an abuse of discretion, unsupported by substantial evidence, or in excess of
statutory authority. See id.DISCUSSION
The Objectors’ challenge to the legality of the Lease centers on two alternative
arguments based on Indiana Code section 36-1-10-7(c) (“Section 7”), which they
contend should halt the new jail’s construction. First, the Objectors claim that Section 7
3
The Objectors made an offer of proof regarding Judge Gull’s letter. They argued that the letter
was critical to determining whether the construction of a new jail is necessary. (See Oral Arg. Tr.
at 15-16.)
6
does not permit the sale-leaseback of the Courthouse. (See Pet’rs’ Br. Supp. [Pet’rs’
Pet.] (“Pet’rs’ Br.”) at 2-6.) Alternatively, they argue that the County Council failed to
determine in Resolution No. 2023-11-16-01 (the “Resolution”) that the sale-leaseback of
the Courthouse is “needed,” as required by Section 7. (See Pet’rs’ Br. at 3-5.) The
Commissioners and the DLGF respond that both the Lease and the Resolution comply
with Section 7. (See Comm’rs’ Br. Opp’n Pet. Jud. Rev. (“Comm’rs’ Br.”) at 8-17; Dep’t
Loc. Gov’t Fin. Br. at 10, 14-15.) Additionally, the Commissioners argue that the
Objectors lack standing to bring this challenge. (See Comm’rs’ Br. at 18-20.)
Given these competing claims, the Court must first determine whether it has the
authority to consider the merits of the case. “To seek judicial review of a dispute, a
litigant must have standing – that is, it must be a proper party to invoke the court’s
authority.” Solarize Indiana, Inc. v. S. Indiana Gas & Elec. Co., 182 N.E.3d 212, 215
(Ind. 2022). “Standing is a threshold issue: if it is lacking, the court cannot consider the
merits of the claim.” Id. Accordingly, the Court will first address the Commissioners’
argument on standing before proceeding to the substantive arguments raised by the
Objectors concerning Section 7.
The Objectors’ Right to Challenge the Lease Affirmed
The Commissioners argue that this case is not properly before the Court
because the Objectors lack standing “to challenge the lease of the Courthouse[.]” (See
Comm’rs Br. at 19.) They contend that the Objectors have not established an injury
sufficient to confer standing because they have focused solely on the use of the
Courthouse as a financing method for the new jail. (See Comm’rs Br. at 19-20.)
“Standing requires litigants to demonstrate a sufficient injury before a court can
7
decide the substantive issues of their claims.” Holcomb v. Bray, 187 N.E.3d 1268, 1286
(Ind. 2022) (citation omitted). This determination is made by examining the allegations
in the lawsuit, not by considering its outcome. Id. “An injury must be personal, direct,
and one the [petitioners] ha[ve] suffered or [are] in imminent danger of suffering.” Id.(citation omitted). While a statute can confer standing, it does so only if it requires an
injury. City of Gary v. Nicholson, 190 N.E.3d 349, 351 (Ind. 2022) (citing Solarize, 182
N.E.3d at 215, 218 n.4).
The Commissioners suggest that the Objectors have not been injured by the
sale-leaseback of the Courthouse, when viewed as a separate, unrelated transaction
from the jail project. However, they have provided no reason to consider these
transactions in isolation. On the contrary, the Commissioners have consistently
emphasized that the sale-leaseback of the Courthouse is integral to the new jail project.
Indeed, the sale-leaseback is designed to generate revenue that will reduce lease
payments by avoiding millions in capitalized interest during the new jail’s construction.
(See Cert. Admin. R. at 195-96.) This demonstrates that the construction of the new jail
and the sale-leaseback of the Courthouse are inherently interrelated, with the financing
and execution of one directly impacting and supporting the other.
An examination of the relationship between the sale-leaseback of the Courthouse
and the new jail project confirms the Objectors’ standing in this case. The sale-
leaseback of the Courthouse is a means of funding the new jail project that directly
impacts each of the Objectors individually as taxpayers and property owners. The
Commissioners and the Building Corporation executed a single lease encompassing
both the Courthouse and the new jail, creating a unified funding structure. The sale-
8
leaseback is not merely an isolated transaction, but plays a critical role in generating
substantial revenue to reduce the overall financial burden on other funding sources. The
funds required to cover lease payments are sourced from the Jail LIT, economic
development revenues from a local income tax and, if necessary, the County’s property
tax. (See Cert. Admin. R. at 24-25.) Without this revenue stream, any shortfall would
likely be offset by increasing reliance on the Jail LIT, economic development funds, or
property taxes, directly affecting the taxpayer Objectors. Thus, the sale-leaseback and
new jail project are not just parallel transactions, but form an interdependent funding
framework that materially impacts the taxpayers and property owners of Allen County.
The Commissioners’ own arguments demonstrate that the sale-leaseback of the
Courthouse is designed solely to fund the new jail project. Similarly, the Objectors
challenge to the legality of the sale-leaseback, inherently involves the entire financing
structure, which directly relies on taxpayer contributions, including the Jail LIT and
potentially the County’s property tax. As taxpayers and property owners, the Objectors
are directly impacted by the commitment of their tax liabilities in support of this funding
arrangement. Thus, their challenge is not just to the isolated transaction of the sale-
leaseback of the Courthouse, but to a funding scheme that imposes a personal and
imminent financial burden. Consequently, the Court finds that this impact constitutes a
personal and direct injury, satisfying the requirement for standing.
The Courthouse Sale-Leaseback and the Resolution Comply with Section 7
The Objectors challenge the lawfulness of the Commissioners’ plan to construct
the new jail pursuant to Section 7 on two grounds. First, they argue that Section 7 does
not explicitly authorize the sale-leaseback of the Courthouse. (See Pet’rs’ Br. at 2-5.)
9
Second, they assert that the Resolution violates Section 7 because the County Council
failed to determine that the sale-leaseback of the Courthouse is “needed.” (See Pet’rs’
Br. at 3-5.)
Section 7 Authorizes the Courthouse Sale-leaseback Transaction
The Objectors claim that the term “structure” under Section 7 does not
encompass a “project” like the sale-leaseback transaction at issue here. (See Pet’rs’ Br.
at 3-5.) In support of their argument, they reference a seminal treatise on textualism and
a dictionary definition, contending that “structure” must be interpreted in its ordinary
sense to mean “‘something (such as a building) that is constructed.’” (See Pet’rs’ Br. at
3-4 n.2 (citation omitted).) This interpretation, however, contradicts several principles of
statutory construction.
“The first step in statutory interpretation is to determine ‘whether the legislature
has spoken clearly and unambiguously on the point in question.’” Study v. State, 24
N.E.3d 947, 951-52 (Ind. 2015) (citation omitted). Clear and unambiguous statutes are
not subject to judicial construction; instead, courts must interpret the statute’s words
according to their plain and ordinary meanings. Id. Moreover, the words in a specific
section of a statute must be read within the context of the entire statutory act. See
Kokomo Urb. Dev., LLC v. Heady, 125 N.E.3d 15, 19 (Ind. Tax Ct. 2019); Minser v.
DeKalb Cnty. Plan Comm’n, 170 N.E.3d 1093, 1100 (Ind. Ct. App. 2021). The Court
may not expand or contract the meaning of an unambiguous statute by reading into it
language to correct supposed omissions or defects or substituting language that it feels
the Legislature may have intended. Hutcherson v. Ward, 2 N.E.3d 138, 142 (Ind. Tax
Ct. 2013). Thus, the Court begins its analysis with the text of the statute itself, which is
10
clear and unambiguous.
At the time the Lease was executed, Section 7 provided as follows:
(a) As used in this section, “threshold amount” means two hundred
fifty thousand dollars ($250,000).
(b) This section does not apply if the total annual cost of the lease
is less than the threshold amount.
(c) A leasing agent for a political subdivision, other than a school
corporation, may not lease a structure, transportation project, or
system unless:
(1) the leasing agent receives a petition signed by fifty (50)
or more taxpayers of the political subdivision or agency; and
(2) the fiscal body of the political subdivision determines,
after investigation, that the structure, transportation project,
or system is needed.
IND. CODE § 36-1-10-7 (2023). For purposes of Section 7, the term “structure” is
statutorily defined as either “(1) a building used in connection with the operation of a
political subdivision; or (2) a parking facility.” IND. CODE § 36-1-10-2 (2023). A “leasing
agent” is defined as “the board or officer of a political subdivision or agency with the
power to lease structures.” I.C. § 36-1-10-2.
Given the facts of this case, Section 7 unambiguously specifies that a political
subdivision (excluding school corporations) cannot lease a structure (e.g., “a building
used in connection with the operation of a political subdivision”) if the total annual cost
exceeds $250,000 unless two conditions are met: (1) the leasing agent receives a
petition signed by 50 taxpayers from the political subdivision, and (2) the fiscal body of
the political subdivision determines, after investigation, that the lease is needed. I.C. §
36-1-10-7. Here, the estimated annual lease rental of $22.2 million for a 20-year term
exceeds the $250,000 threshold, requiring that the two conditions under Section 7 be
11
met. (See Cert. Admin. R. at 23-24, 518-19 ¶ 118.)
On the most fundamental level, a sale-leaseback transaction comprises two
separate yet related components: the sale of the Courthouse and its subsequent lease.
See, e.g., BLACK’S LAW DICTIONARY 1068 (11th ed. 2019) (defining a “leaseback” as
“[t]he sale of property on the understanding, or with the express option, that the seller
may lease the property from the buyer, usu[ally] immediately after the sale”). The
Courthouse is unmistakably a “structure” under Section 7 as it is “a building used in
connection with the operation of a political subdivision[.]” I.C. 36-1-10-2. Thus, the
Objectors’ focus on whether the sale-leaseback transaction is consistent with the
dictionary definition of “structure” overlooks the statutory definitions and requirements
for leasing the Courthouse and is misplaced. See Minser, 170 N.E.3d at 1100 (“‘A
legislative purpose, shown by the context of a statute, should not be defeated by mere
blind adherence to definitions of words found in dictionaries, however reputable.’”)
(citation omitted).
Under Indiana’s Home Rule Act, a governmental unit like the Commissioners,
has the authority to “‘exercise any power it has to the extent that the power: (1) is not
expressly denied by the Indiana Constitution or by statute; and (2) is not expressly
granted to another entity.’” See Anderson v. Gaudin, 42 N.E.3d 82, 86 (Ind. 2015)
(citations omitted). “Any doubt as to the existence of a unit’s power must be resolved in
favor of its existence.” Id. (citation omitted). In the absence of statutory prohibition, it is
reasonable to presume that the Commissioners have the authority to transfer the
Courthouse – a property that the Objectors concede the County has owned in fee
simple for over 120 years – to the Building Corporation. Moreover, the right to convey
12
property is a fundamental aspect of the “bundle of rights” inherent in property
ownership. See BLACK’S LAW DICTIONARY 1332 (defining “ownership” as “[t]he bundle of
rights allowing one to use, manage, and enjoy property, including the right to convey it
to others”). Indiana’s Home Rule Act grants the Commissioners broad discretion to
manage and leverage county assets, including engaging in financial transactions like
sale-leasebacks that are neither expressly prohibited nor limited by statute.
From a functional perspective, the sale-leaseback’s predominate purpose is not
the sale of the Courthouse but is its lease back to the County, which is governed by
Section 7. Sale-leaseback transactions are structured to facilitate leasing, providing
immediate use of the asset while leveraging it for financial purposes. See, e.g., 2
Richard R. Powell, POWELL ON REAL PROPERTY Ch. 17A (Michael A. Wolf ed., 2024)
(characterizing the sale-leaseback as an example of a modern lease); 2 Richard R.
Powell, POWELL ON REAL PROPERTY § 17.04 (Michael A. Wolf ed., 2024) (examining the
financial and tax implications of the lease component in sale-leaseback transactions);
APPRAISAL INSTITUTE, THE APPRAISAL OF REAL ESTATE 466 (14th ed. 2013) (describing
sale-leasebacks as “financing vehicles”). Here, the sale is an integral but auxiliary step
designed solely to enable the lease, bringing the sale-leaseback of the Courthouse
within the statutory framework governing the leasing of structures by counties.
The Objectors nonetheless argue that this transaction could not have been
authorized under Section 7 because the statute does not apply to sale-leasebacks. (See
Pet’rs’ Br. at 5-6.) They maintain that Indiana Code section 36-1-10-16 is the only
statute within the statutory framework for county leases that authorizes sale-leasebacks,
and it limits these transactions solely to refinancing situations. (See Pet’rs’ Br. at 5-6.)
13
Indiana Code section 36-1-10-16 provides that “[a] political subdivision or agency
owning a structure with respect to which its revenue bonds are outstanding may, to
refinance those bonds, convey the structure to the lessor in fee simple and lease it from
the lessor[.]” IND. CODE § 36-1-10-16(a) (2024). As just mentioned, Allen County has
owned the Courthouse in fee simple for over a century. The Objectors’ arguments
regarding Indiana Code section 36-1-10-16 therefore fail to gain traction because the
statute addresses circumstances not relevant to this case, and nothing within the terms
of Section 7 suggests it does not apply to sale-leaseback transactions. See ESPN, Inc.
v. Univ. of Notre Dame Police Dep’t, 62 N.E.3d 1192, 1195 (Ind. 2016) (providing that
courts must be “mindful of both what [a statute] does say and what it does not say”)
(citation and internal quotation marks omitted). Indeed, Section 7 explicitly addresses
leases of governmental structures and does not restrict the financing methods used;
thus, it encompasses, rather than excludes, the sale-leaseback model employed here.
The Objectors emphasize that the Commissioners claimed, but did not provide
evidence, that sale-leasebacks like the one in this case are routine financing methods
used by municipalities. (See Pet’rs’ Reply Br. Supp. [Pet’rs Pet.] (“Pet’rs’ Reply Br.”) at
2-4.) However, the absence of evidence proving the widespread nature of this practice
does not alter the statutory authority that permits engaging in such transactions. By its
plain language, Section 7 authorizes the Commissioners to lease the Courthouse after
its sale, provided the statutory conditions are met. The certified administrative record
establishes that the first condition was satisfied: 91 Allen County property owners – well
exceeding the 50-taxpayer threshold – signed a petition supporting the Commissioners’
lease negotiations with the Building Corporation. (See Cert. Admin. R. at 218-73.) As for
14
the second condition, the Objectors have not contested the adequacy of the fiscal
body’s investigation into the need for the lease of the Courthouse on appeal. (See
Pet’rs’ Br. at 2-11; Pet’rs’ Reply Br. at 2-11.) Thus, the sole remaining issue on the
Lease’s legality is whether the County Council determined in the Resolution that leasing
the Courthouse is needed. If this determination was made, the Lease stands as legally
valid under Section 7.
The County Council Determined the Courthouse Sale-leaseback is “Needed”
The Objectors’ next argument is twofold. First, they contend that the County
Council failed to expressly determine in the Resolution that the leaseback of the
Courthouse was “needed,” as required by Section 7. (See Pet’rs’ Br. at 4-5.) Second,
they maintain that no implicit determination of need can be inferred because “[t]he
ordinary meaning of the term ‘project, as used in the [County] Council’s Resolution[,]
does not mean ‘structure.’” (Pet’rs’ Br. at 4-5.) These arguments, like their other claims,
misinterpret the principles of statutory construction by narrowly focusing on isolated
terms without considering the full context of the Resolution.
The interpretation of a county resolution is subject to the same rules that
governed the construction of Section 7, requiring the text to be read in its entirety and
understood within the broader context. See Hochstedler v. St. Joseph Cnty. Solid Waste
Mgmt. Dist., 770 N.E.2d 910, 914 (Ind. Ct. App. 2002), trans. denied; Payne v. Town of
Austin, 523 N.E.2d 245, 248 (Ind. Ct. App. 1988), trans. denied. With these principles in
mind, the pertinent portions of the Resolution provide as follows:
WHEREAS, to provide for [the] acquisition of certain real
estate in the County, including the existing Allen County
Courthouse located at 715 Calhoun St, Fort Wayne, Indiana (the
“Existing Real Estate”), and the real estate located at 3003 Meyer
15
Road, Fort Wayne, Indiana (the “New Facility Real Estate”), and the
financing of the acquisition, construction, improvement, and/or
equipping of all or any portion of a new county jail facility to be
located at the New Facility Real Estate, together with any related
improvements, all to be used for the purposes of providing
incarceration, community corrections, or other law enforcement or
criminal justice services by Allen County, Indiana (the “Project”), the
[Commissioners] will consider a resolution approving the terms and
conditions of a lease between a building corporation (the “Building
Corporation”), as lessor, and Allen County, Indiana (the “County”),
as lessee (the “Lease”), for all or a portion of the Existing Real
Estate, the New Facility Real Estate, and the Project, including any
appurtenances or improvements thereto[.]
*****
NOW, THEREFORE, BE IT RESOLVED BY THE COUNTY
COUNCIL OF ALLEN COUNTY, INDIANA, AS FOLLOWS:
Section 1. Findings: Approval of Lease. After investigation, the
[County] Council hereby finds and determines that a need exists for
the Project and that the Project to be financed through the Lease
will be of public utility and benefit to the County. The [County]
Council further determines that the Project cannot be acquired,
constructed, improved, and equipped from any funds available to
the County. The County shall proceed to take such steps as may
be necessary to secure the acquisition, construction, equipping,
and leasing of the Project as provided by Ind. Code 36-1-10.
(Cert. Admin. R. at 275-76.)
The Resolution’s text demonstrates that the determination of need for the
leaseback of the Courthouse was made as part of the broader Project. The Courthouse,
identified as the “Existing Real Estate,” is explicitly included within the scope of the
property to be acquired, improved, and leased under the Project. In Section 1, the
County Council expressly finds and determines that there is a need for the Project,
which necessarily includes the leaseback of the Courthouse given its inclusion as part
of the defined Project.
The Resolution further clarifies that the County Council’s approval of the Lease
16
encompasses all property within the Project, including the Courthouse. This explicit
connection supports the conclusion that the leaseback of the Courthouse was
determined to be needed as an integral part of the Project. The County Council’s
approval and findings satisfy the statutory requirement of need under Section 7, a
conclusion also reached by the DLGF.
The certified administrative record establishes that the statutory conditions were
met regarding the Courthouse sale-leaseback, and the Resolution’s language is
sufficient to conclude that the County Council determined the leaseback of the
Courthouse was “needed,” both expressly and implicitly. Therefore, the Court holds that
the Lease is legally valid under Section 7.
Finally, during oral argument, the Objectors introduced an entirely new complaint
against the construction of the new jail, asserting that the Lease does not comply with
Indiana Code section 36-1-10-17 because the County imposed an income tax instead of
a property tax to fund the project. (See Oral Arg. Tr. at 20-24.) However, this issue was
not raised during the administrative proceedings, as the certified administrative record
contains no evidence of it being discussed. (See Cert. Admin. R. at 488-664.)
Procedurally, issues must be raised at the administrative level to be considered on
appeal; thus, the Objectors have waived this issue. See, e.g., Inland Steel Co. v. State
Bd. of Tax Comm’rs, 739 N.E.2d 201, 220 (Ind. Tax Ct. 2000), review denied.
Even if waiver did not apply, the Objectors’ argument lacks merit. The statute
cited by the Objectors permits the use of property taxes to pay lease rentals but does
not require property taxes to be the exclusive funding source or prohibit funding lease
payments through other means, such as income taxes. See IND. CODE § 36-1-10-17(a)
17
(2024) (“A political subdivision or agency that executes a lease under this chapter shall .
. . make an annual appropriation and tax levy at a rate to provide sufficient money to
pay the rental payable from property taxes stipulated in the lease.”).
CONCLUSION
For all these reasons, the final determination of the DLGF that upheld the sale-
leaseback of the Courthouse as one of the financing methods for the new jail is
AFFIRMED.
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