Township Government Reform

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House Bill 1376 was referred to the House Government and Regulatory Reform Committee on January 18, 2011.

House Bill 1469 was referred to the House Government and Regulatory Reform Committee on January 20, 2011.

Senate Bill 405 passed the Senate Local Government Committee 7-1 on February 11, 2011.

The Taxpayer Friendly provisions in HB 1376, HB 1469, and SB 405 were combined to develop the Watchdog Indiana Position on Township Government Reform listed next.

A. Place the public question "Shall the township government be retained?" on the ballot in every county.

B. Public funds from any source and other public resources may not be used by a political subdivision or by the state to promote a position on the public question.

C. If a majority of voters in a county vote NO on the public question, the powers and duties of all the township governments in that county are transferred to the county government on January 1, 2015, as outlined in the "County Assumption of Abolished Township Responsibilities" (see items 1-21 below).

D. For those township governments remaining after the public question referendum, reform provisions must be enacted to address the problems of Inadequate Township Government Oversight (see items 22-30 below), Excessive Township Fund Balances (see items 31-34 below), and Inconsistent Township Assistance Standards (see items 35-37 below).

Many Hoosiers have strong opinions both pro and con - regarding township government. These strong opinions exist because township government is part of out political DNA. One early reference to our township government dates back 216 years to the 1795 Maxwell Code of the Northwest Territory. The county justices of the common pleas appointed annually for each township two overseers of the poor, who levied the poor tax, built or rented a poor house, dispensed the public charity, and found homes or employment for orphans.

It is not right for any past or present elected representative, judge, or committee to support elimination of township government without the consent of their fellow Hoosiers. A public question on the November 2012 ballot in each county on whether to retain the county township governments is an excellent decision-making tool. Voters should be able to exercise their collective wisdom to decide the fate of their long-standing township governments in the same way they decide if candidates are sufficiently good public servants to justify election to the General Assembly.

Some contend that letting the voters in each county decide whether or not to keep their township governments will result in a patchwork quilt of different local governments between counties. This is really not a problem because we already have at least 160 years of legal precedence in the operation of our county and township governments.

A county-wide township government public question on a referendum ballot would have an added benefit in that the decision on the effectiveness of township government will be taken out of the hands of politicians and made objectively by the voters. It has been amply demonstrated that General Assembly members are collectively reluctant to eliminate the position of township trustee because of local political considerations. In short, let ALL the voters statewide decide for themselves whether or not township government is good because it is closest to the people.

Please act now to (1) make the delivery of township services more consistent and professional, (2) consolidate fire protection services to save tax dollars, (3) improve township government oversight, and (4) curtail the practice of accumulating excessive township fund balances without corresponding decreases in property tax rates. These desirable outcomes would result if the Taxpayer Friendly provisions in House Bill 1376, House Bill 1469, and Senate Bill 405 are combined to reform township government.

County Assumption of Abolished Township Responsibilities

1-HB1376. The powers and duties of the township assessor (if applicable) are transferred to the county assessor.

2-HB1376. In a county that dissolves its townships by election, the county executive is responsible for a county fire department (which will include the fire departments of the townships and the fire protection districts) that provides fire protection in the unincorporated areas of the county (but is not responsible for fire protection in an area served by a municipal fire department, fire protection district, or fire protection territory).

3-HB1376. A fire consolidation transition advisory group is established in each county in which township government will be abolished to do the following: (a) develop a strategic plan to determine resource requirements and resource deployments for the consolidated fire department, (b) submit recommendations to the county executive and fiscal body, (c) take steps as necessary to assist the transfer of powers and duties.

4-HB1376. The county legislative body appoints a fire trustee from among names submitted by the Indiana Volunteer Firefighters Association to a four-year term to manage the operations of the fire protection district.

5-HB1376. The fire trustee must be a resident of the fire protection district, and may not be an employee of the district or a relative of a member of the county fiscal body or county legislative body.

6-HB1376. Any balance in the township cumulative fire fund is to transfer to the county and must be used to pay for fire-related debt or lease rental obligations due after December 31, 2012, with any cash balances remaining transferred to the county's cumulative fire fund.

7-HB1376. The county firefighting maximum levy in the year of merger would be increased by the townships fire levies for the previous year multiplied by the assessed value growth quotient.

8-HB1376. Responsibilities for township assistance and distribution of medicines and vaccines are transferred to a county coordinator of social services who will be appointed by the county executive to administer township assistance on a countywide basis.

9-HB1376. A township assistance transition advisory group (consisting of one member appointed by the county executive to serve as chair and all the township trustees of the county) is established in each county in which township government will be abolished to plan for the provision of township assistance on a countywide basis.

10-HB1376. If township powers and duties are transferred to the county, a coordinator of social services appointed by the county executive must estimate the amount necessary to meet the cost of township assistance and administer township assistance on a countywide basis.

11-HB1376. The Department of Workforce Development, the county office of the Division of Family Resources, and all other state and local government agencies are required to cooperate with the county social services coordinator in providing assistance.

12-HB1376. Money in the County Township Assistance Fund at the end of the year does not revert to the county general fund.

13-HB1469. The Interim Study Committee on Township Assistance is established to study (1) the base level of township assistance that a township or county should be required to provide and (2) changing references to "township assistance" in the Indiana Code to "emergency assistance."

14-HB1376. The cemetery duties imposed on the township trustee will transfer to the person designated by the county executive, a county legislative body may approve purchases, and the township cemetery fund transfers to the county fund established for that purpose.

15-HB1376. Indebtedness and lease obligations incurred by a township government are to be defeased, paid, or refunded by the county which may levy a property tax only in the area of the township.

16-HB1376. Any balance remaining in a debt service fund after the county has paid the indebtedness or lease rental for which the fund was established transfers to the county general fund.

17-HB1469. If a school township exists in a township that will be abolished, the school township must reorganize under the school reorganization statutes before January 1, 2014 (three school townships are potentially affected).

18-HB1469. The responsibilities of Marion County township trustees and township boards concerning township small claims courts are transferred to the (a) Mayor of the consolidated city, (2) City-county Council of the consolidated city, and (3) Clerk of the Circuit Court.

19-HB1469. The bill abolishes the Office of Small Claims Court Constable in Marion County, and the Department of Public Safety of the consolidated city will perform the constable duties.

20-HB1469. If the local public question is approved in Marion County, each township fire department that has not previously been consolidated is consolidated into the fire department of the consolidated city on the earlier of a date set by executive order of the county executive or January 1, 2014.

21-HB1469. If Marion County approves the public question, the judges of the small claims court will continue to be elected to a four-year term of office, and the County Auditor will provide clerks for the small claims courts.

Inadequate Township Government Oversight

22-SB405. After December 31, 2012, the county fiscal body in every county must exercise the legislative and fiscal powers assigned in the Indiana Code to township boards, including the authority to adopt the township's annual budget and to levy township property taxes for township funds.

23-SB405. Township boards are abolished in every county on January 1, 2015, and the township board's only responsibility after December 31, 2012, is to submit to the county fiscal body a proposed annual budget, levies, and rate which the county fiscal body may reduce and modify but not increase.

24-SB405. If a township reorganizes after December 31, 2012, with at least one other township, and the resulting new political subdivision is not a city or town, the county fiscal body becomes the fiscal body of the new political subdivision.

25-HB1376. A township may not transfer or expend more than 1% of the balance in its rainy day fund in any 12 month period without approval of the county fiscal body.

26-HB1376. Any amounts transferred from a township's rainy day fund may only be used to pay (a) any outstanding indebtedness of the township and (b) for infrastructure within the township.

27-SB405. The Office of Management and Budget must annually prepare a report that includes the following information for every township: (a) the township population; (b) the budget, property tax levels and property tax rates; (c) the assessed valuation; (d) the balance in each township fund; (e) a summary of township assistance information; (f) a summary of any statutory compliance issues or exceptions; (g) a description of any interlocal agreements; (h) a description of any resolutions or petitions concerning the township; (i) a description of the property owned or leased by the township.

28-SB405. The Department of Local Government Finance is prohibited from approving the budget or additional appropriation of a township that fails to file a fiscal report or personnel report for the preceding year with the State Board of Accounts.

29-SB405. A township trustee's annual report filed with the State Board of Accounts must list separately each public business expenditure that is made to reimburse the trustee for the use of tangible property, including a private residence, personal telephone, or personal vehicle.

30-SB405. A public meeting or a public hearing of a township official or governing body must be held in a public place.

Excessive Township Fund Balances

31-SB405. After December 31, 2012, a township may only collect property taxes for cumulative and capital projects funds in a particular year if the township trustee prepares, and the county fiscal body approves, a proposed or amended capital improvement plan in the immediately preceding year that estimates expenditures from, and revenues to, the various township cumulative funds for at least three years after the plan is adopted.

32-SB405. After December 31, 2012, excess fund balances contained in cumulative and capital projects funds would be based on the capital improvement plan, and any excessive amount is transferred to the township's levy excess fund.

33-HB1376. The Department of Local Government Finance is to review balances in township funds to determine if an excess balance exists and to determine the amounts to transfer from the township to the county.

34-HB1376. The township executive must transfer any excess township fund balance (other than a debt service fund or cumulative fund) as determined by the DLGF to the county treasurer who must apply 25% of the transferred amount to provide property tax credits for persons paying property taxes in the county and place 25% in a special fund or account to be appropriated by the county fiscal body for programs designed to alleviate poverty.

Inconsistent Township Assistance Standards

35-SB405. The county executive of every county will appoint a nine-member township assistance planning board to prepare and annually update a plan of countywide township assistance standards for adoption by the county fiscal body.

36-SB405. After December 31, 2012, the county fiscal body must adopt township assistance standards for all townships in the county.

37-SB405. Each township office must include the address, phone number, and regular office hours (if any) of the township office in at least one local telephone directory.

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