The Lawrence Common Council on June 14 heard a lengthy presentation from its attorney, who provided an update about the council’s investigation into why the 2022 budget was not submitted to the state, leading to the city’s budget reverting to its 2021 spending plan.
Attorney John Hughes spoke for approximately two hours, providing details from email correspondence and other documents collected through the investigation process, along with excerpts from depositions of Lawrence Mayor Steve Collier and members of his administration.
Hughes stressed that the investigation is ongoing and the information provided is preliminary. However, he said, “evidence shows the Collier administration worked together to revert the budget.”
If a city in Indiana does not submit its budget to the state by deadline each fall, regulations require that the city’s spending plan revert to its most recent state-approved budget. In this case, that was the 2021 City of Lawrence budget.
The council’s approved budget for 2022 was several million dollars less than what Collier had requested in his proposed budget. Reversion of the budget led to more funds becoming available than the council intended.
Hughes told the council the investigation shows the city’s controller did not submit the forms to the state — which Collier’s administration has confirmed. After the budget reverted and the city had more funds than the council-approved budget would have allowed, Hughes said, city officials moved money between accounts without going to the council for approval.
Hughes added that the mayor’s office never formally told the council that the budget had reverted. Collier’s administration has noted several meetings in 2022 where the budget reversion was mentioned, but none were a formal notice to the entire council. Council members say their first official notification was in late 2022, about a year after the reversion occurred.
In his lengthy presentation, Hughes indicated a pattern of miscommunication on the part of the city’s administration. He showed emails from city officials that referred to providing “somewhat vague” answers to council questions. Other internal correspondence Hughes cited showed the city could work within the reduced council-approved budget, but city officials told the council that a smaller spending plan would lead to salary cuts and layoffs in multiple departments.
“What was communicated to this council (and) to the public was that you were trying to hurt public safety,” Hughes said. “You were trying to take away jobs in the public safety realm and that you’re going to cause everybody in the city to lose their money. But that’s not what the controller was saying in emails to his boss.”
Hughes also said that while Collier’s administration has said it didn’t submit the budget because the council failed to provide line-item details for the cuts it wanted to make, the council’s approved budget was in the correct form required by the state. He cited an email from the city’s controller, Tyler Douthit, that says he reached out to the state and they confirmed the only form the state needed was the ordinance that assigns fund totals, not line-item details.
Hughes showed budget ordinances adopted previously by the council, and submitted to the state by the city. Hughes said they are exactly the same format as the 2022 budget ordinance approved by the council in 2021.
Hughes did say that Collier and members of his team cooperated with the investigation to an extent. They provided emails and correspondence, and sat for depositions. However, Collier has refused to approve additional appropriations for the council’s investigation to continue.
Collier also has filed a petition with Marion County Superior Court asking the court to determine whether the mayor has the power to veto additional appropriations for council legal fees, and to determine who was at fault in the 2022 budget reversion. That case, filed in late March, has been assigned to a five-judge panel. A hearing has not yet been scheduled.
Following Hughes’ presentation, some council members asked questions. Democrat Lisa Chavis, an at-large member, asked whether the ongoing investigation also will look into how American Rescue Plan Act funds have been spent. Hughes said a federal audit will look into those expenses, and he has requested any publicly available results of that audit.
Council President Tyrrell Giles said the ARPA funds are a different issue, and this investigation is meant to focus on the 2022 budget reversion. He asked Hughes whether other communities in the past faced similar issues leading to a reversion.
Hughes said he wasn’t aware of one that matches Lawrence’s, but there have been other instances of city budgets reverting because they failed to submit required forms.
At deadline, there was no response to a request for comment from the mayor’s legal counsel, Brian Bosma in response to the presentation.
