WINONA LAKE - Island residents involved with Winona Lake in a lawsuit over canal property rights further addressed the matter Tuesday during a town council meeting.

A letter was read by Janice Nelson, who represented the Channel Owners Steering Committee, the group of plaintiffs involved in the dispute with the town.

This reading came in response to a letter introduced earlier this month by the council, in which they reported all canal maintenance funds had been depleted due to attorney fees incurred during the litigation.

"The town council has publicized the amount of money it has spent on an expensive Indianapolis law firm to represent it in the litigation," Nelson read. "Again the town council does not want to tell you the whole story. We believe that, were a majority of the town council members approaching this matter with logic rather than emotion, the matter would have been settled long ago in a fashion beneficial to all."

In February, Kosciusko Superior Court I Judge Duane Huffer ruled in favor of the town and assigned the canal as a public use property owned and maintained by Winona Lake.

The town used attorneys from the Indianapolis-based company Ice Miller, and town officials said this law firm had been used numerous times by Winona Lake over the last 10 years. Ice Miller is a legal firm related to Indiana Association of Cities and Towns, an organization of which Winona Lake is a member.

The town's legal fees for the canal lawsuit were reported at $57,800.

The Steering Committee also questioned the total, saying funds were used outside the restrictions of the maintenance account.

According to a 1998 town ordinance, the canal maintenance fund was established for "any purpose directly or indirectly related to the dredging, widening, repairing, maintenance or otherwise improving (of) such canal."

"The very terms of the ordinance creating that fund clearly do not specify or include expenditures for attorney's fees," the letter stated. "Anyone who has voluntarily donated money to that fund for maintenance has had their intentions ignored by the town council's improper use of a maintenance fund for legal expenses."

According to town office clerk Karen Shingledecker, the use of account funds to pay attorney fees was allowed after consultation with the Indiana State Board of Accounts. Clerk Treasurer Retha Hicks contacted the state organization, and was told the town had the legal right to pay lawsuit expenses through the maintenance fund.

The letter continued, "In addition, according to the Town's records, the town council has expended money from the fund for such things as parking permits for the Town Manager; license plates and pancake breakfast; postage rolls and bananas out of petty cash; all of which are debatable as 'maintenance' expenditures."

While town financial records do show transactions with such descriptions as "Bananas" and "Pancake Breakfast" were taken from the account, Shingledecker said the titles of the withdrawals are confusing due to the 10-year old computer program that prints out the financial reports.

Funds withdrawn from petty cash that were questioned by the Channel Owners Steering Committee were used for food and beverages bought during the mediation process which took place December 2005.

While withdrawal titles don't necessarily match up with the intended uses of these transactions, documented receipts kept by the town verify the connection to lawsuit expenses. Even a small claim of $3 for beverages is recorded for mediation purposes.

Financial records aside, the Steering Committee still questions how the town can claim property rights to the canal and all adjacent streets. In the letter, the committee claims the town acquired the properties through a quitclaim deed with Grace College and its predecessor Winona Assembly. The committee claims neither of the organizations "acted in any fashion to claim ownership of either the canal or the streets."

"The Town Council is overreaching in that regard and leaves no alternative but further litigation," the letter states.

A Sept. 2004 article in the Times Union reported town attorney James Walmer made a comment during a special meeting regarding property rights which would appear to contradict the town's current claim in the lawsuit.

According to the article, Walmer said a canal owner's property extended in the middle of the canal.

The written minutes of this meeting contain no direct quotes from Walmer, and the audio recording of the meeting could not be found inside of town hall.

Town officials believe the Steering Committee will appeal the February decision by Judge Huffer. [[In-content Ad]]