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THE CITY-COUNTY OBSERVER An Online Community Newspaper Dedicated To Serving The Citizens of Posey, Vanderburgh, and Warrick Counties MARCH 31, 2010 VOLUME III, ISSUE 11 MSBAC dissolution leads to many financial questions By Jamie Grabert, Publisher listed as a “Non-Profit Domestic Corporation” There are times when departments have to as of March 30, 2010, according to the Indiana work together to get things done. There are Secretary of State. This entity was reportedly times when some duties overlap, and then, created on October 2, 1979. The Secretary of there are multiple departments that serve the State’s documentation states that the Business same purpose. Last, but certainly not least, Entity Report is past due for 2008. The state there are non-profits created by government documents also list Evansville Mayor Jonathan departments who get taxpayer monies to spent Weinzapfel’s Chief of Staff Roseann Young as without accountability to the taxpayers regard- the “Registered Agent.” According to the Sec- ing how that money is being spent. retary of State’s Office, the MSBAC is still an In previous issues, the staff of the City- active corporation. County Observer has discussed 501(c), non- After obtaining a copy of the 2008 tax re- profit corporations like GAGE (Growth Al- Tom Barnett, Executive turn for MSBAC, the first thing noticed was liance for Greater Evansville) and Evansville Director of DMD the address on the return – Civic Center, Room Brownfields Corp. This week, another City of 306 – which is the Dept. of Metropolitan De- Evansville-founded non-profit by the name velopment. The “Termination” box was also of Metro Small Business Assistance Corporation was located. checked on the left side of the return, which means the organiza- According to the Dept. of Metropolitan Development’s in- tion was terminated following the submission of the tax return. formation page on www.evansvillegov.org, “Business Develop- According to the tax return, the books are in the care of Jane ment” falls under the responsibilities of this division. The page Reel, Deputy Director of the DMD. states that DMD, “Promotes investment in the community by The tax return and other documents note that the purpose of providing financial and technical assistance to new and expand- the corporation is to “promote and assist the growth and de- ing businesses. Metro Small Business Assistance Corporation velopment of small business in the Evansville are by providing staff administers City and County loan funds, and provides long-term financing for capital improvements.” packaging for Small Business Administration’s 7(a) Guaranty The net assets to start 2008 equaled $1,805,542. The return Loans. Administers the Tax Phase-In Programs for the City of also states that $19,124 was received in the form of contribu- Evansville and Vanderburgh County.” tions, gifts and/or grants. Another $33,435 of revenue was from Metro Small Business Assistance Corporation (MSBAC) is interest income for a total 2008 income of $52,559. The total expenses for the year were $44,106, which were IS IT REALLY, REALLY TRUE we are still said to program service expenses and are later listed on “State- waiting for the answers from Dept. of Metro- ment 1” as insurance, payroll taxes, salaries and wages, depre- ciation and contractual expenses. On Part IV, the tax return lists politan Development Dir. Tom Barnett regard- officers, directors, trustees and key employees; however, no em- ing his financial involvement with GAGE? IS ployees are listed and all listed committee members reportedly IT REALLY TRUE it has been over 35 days listed no income from MSBAC. According to “Schedule N,” the total assets of MSBAC in the since questions were sent to him? continued on page A-2 pAGE A-2 MARch 31, 2010 ~ WWW.ciTY-counTYoBsERvER.coM NEWS MSBAC dissolution...continued from page 1 aamount of $1,813, 995 were transferred at net to the Dept. of Met- to be used for such projects. The money remains in an account sepa- ropolitan Development. This transfer was said to have been made rate from any city monies. on December 31, 2008. This agreement between the Evansville Dept. of Metropolitan The tax return was signed by Dept. of Metropolitan Develop- Development and the Vanderburgh County Board of Commission- ment Executive Director Tom Barnett on August 8, 2009. ers is for five years. DMD also receives $500 for writing up to 10 MSBAC board members stated that the organization was closed checks. If more than 10 checks are written, DMD and the County last year and that the money was supposed to go to GAGE. will renegotiate the charge to the county for its continuing service. On November 24, 2009, an “Inter-Local Government Agreement The agreement was signed by county commissioners Troy Tor- for Provision of Services” was entered into by Vanderburgh County natta and Lloyd Winnecke and attested to by the Vanderburgh Board of Commissioners with the Evansville Dept. of Metropolitan County Auditor William J. Fluty. Tom Barnett signed the agreement Development. on behalf of Dept. of Metropolitan Development as the Executive The agreement, which was provided by the Vanderburgh County Director. Auditor’s Office states:“Whereas the County was the recipient of a In an attempt to clarify holes in this article, questions were sent Small Cities Community Development Block Grant (“Grant”) un- to Tom Barnett, Rose Young, Audra Levy (Mayor Weinzapfel’s der the Indiana Department of Commerce’s Investment Incentive Communications Director) and Erika Taylor. Below are the ques- Program under Grant Agreement No. II 85-003 (“Grant Agree- tions, which remained unanswered at post time, were as follows: ment”) signed and dated by the County on May 5, 1986, and by •Questions to Tom Barnett included: Governor Robert D. Orr on June 4, 1986; and 1. How are you planning to use the $491,676 from the County Whereas, under the terms of the Grant Agreement, the County Revolving Fund? What project? can use Grant funds for economic development activities; and 2. Is that money supposed to be used for economic development? Whereas , the County first used the Grant funds to make a loan to 3. Was that money originally supposed to go to GAGE for loans Sunbeam Plastics Corporation, an Indiana corporation headquar- to small business start-ups and struggling businesses? tered in Vanderburgh County, outside the limits of the City of Evans- 4. On the tax return for MSBAC it lists salaries; can you tell me ville, repayable with interest at 4 ¾% per annum over a ten (10) who the employee is? year period in ten (10) installments of principal and interest; and 5. On the 2008 tax return, there was a transfer to DMD in the Whereas the County then assigned the Promissory Note evi- amount of $1,813,995. Can you tell me what that was for? dencing the loan to the Metropolitan Small Business Assistance 6. Where did the $1.8 million come from? What were the sourc- Corporation (“MSBAC”) for use by it in collecting the principal es? and interest due on the loan and using the proceeds to establish a 7. Are you the executive director of this organization as well? If ‘County Revolving Loan Fund’ for the purpose of making loans to so, are drawing any kind of salary or fee for contractual services? businesses in Vanderburgh County that are located outside the cor- If so, how much? porate limits of the City of Evansville; and 8. How many businesses have you loaned to money to out of Whereas, the assignment to MSBAC provided that if MSBAC MSBAC monies? ever ceased to exist, the County Revolving Loan Fund would revert •Questions to Rose Young included: to the County; and 1. According to the Secretary of State, the business entity re- Whereas, MSBAC no longer exists and the County Revolving ports are overdue. Can you tell me why those reports have not been Loan Fund is currently held by DMD for the benefit of the County; turned in to the state since 2007? and 2. Who is the salary employee listed on the 2008 MSBAC tax Whereas, the County Revolving Loan Fund currently has a bal- return? ance of four-hundred ninety-one thousand six-hundred seventy-six 3. Who are the contractual services with on the 2008 tax return? Dollars ($491,676.90); and 4. How did you become an executive committee member? Whereas, to ensure that the County Revolving Loan Fund is •Questions to Audra Levy included: always used for economic development projects approved by the 1. What can you tell me about the City’s decision to close the County, and not absorbed by the General Fund of Vanderburgh Metro Small Business Assistance Corporation? I know it was ter- County, the County wishes DMD to continue holding the County minated last year. Revolving Loan Fund, to invest such fund and pay out portions of 2. Why was it closed? such fund as may be authorized and directed by the County from •Question to Erika Taylor was: time to time.” 1. Did GAGE receive a $1.8 million payment from the Evans- According to county officials, any projects must be approved by ville Metro Small Business Assistance Corporation late last year? the Vanderburgh County Commissioners before any money can be As of post time, these questions had not been answered. More loaned. They consulted with counsel to determine there are no re- information will be presented as it is made available. strictions on how the money can be used, but because it was created as for economic development purposes, they wanted it to continue WWW.ciTY-counTYoBsERvER.coM ~ MARch 31, 2010 pAGE A-3 NEWS Flood Relief on the Way Submitted by the City of Evansville the existing Levee Authority detention basin located on Fickas (EVANSVILLE, IN)- Following through on his promise to Road.