The Journal Gazette
Friday, July 31, 2020 1:00 am


Where's the fire?

Long-standing dispute costs city in many ways

In a sense, the standoff began in 1987, when the city annexed the first of 15 areas within the Southwest Allen County Fire Protection District.

As other areas were annexed, the city began to provide fire protection. The last of the territories was annexed in 2006 – as Indiana's annexation rules were changing to make it much more difficult for cities to grow.

But the tax revenue for fire protection in the annexed territories continued to be directed to the original fire protection district.

Tera Klutz, who was then Allen County auditor, relied on an earlier court ruling that said the tax revenue should remain with the district.

Years passed. In 2014, the city began to formally challenge that arrangement. All along the way, the courts seemed to agree that the city should receive the revenue. There were many areas of dispute, including whether the issue should be remanded to tax court.

The Indiana Court of Appeals in 2016 dismissed the tax-court issue, then sent the matter back to the lower courts. The issue was annexation-related, the court said, since the tax rate wasn't at issue.

In February, the matter was back before the state court of appeals, which ruled – in a 25-page opinion – the city was entitled to the fire-tax money going forward. And last week, the Indiana Supreme Court agreed. As The Journal Gazette's Matthew LeBlanc reported, the courts settled on this straightforward directive from state law: “When a municipality annexes areas that are part of a fire protection district, and then provides fire services in the annexed areas, the fire protection district ceases to exist in those areas.”

“It's not surprising it took so long to get a final decision on the case due to the complexity of the tax issues involved,” Klutz, now state auditor, wrote in an email Wednesday.

But perhaps that's the problem. All those lawsuits, all those lawyers, all that court time – to resolve something it would seem common sense could have settled if the city had pursued the matter from the beginning. If state law needed to be sharpened, the city might have pursued that.

The upshot is that in recent years Fort Wayne has lost out on perhaps $600,000 a year in fire-protection funds, according to a 2018 city estimate. There's no way to recover that now, and both sides have paid a lot in legal fees as this case wound through the various courts.

Common sense? It came late to the fire.

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