The Bass Lake Beach and Campground’s operator won’t have to pay rent to Starke County in 2017, and it’s 2018 payment will be nearly cut in half. The Starke County Park Board decided Tuesday that upgrades to the facility’s well system made by Callahan Development, LLC were capital improvements, meaning the cost could be subtracted from the company’s rent payment.
Last summer, the well equipment was found to be out of compliance with the Indiana Department of Environmental Management’s regulations, requiring emergency upgrades. As part of that work, a new pitless adapter and well cap were installed for a cost of over $4,900.
While park board members generally agreed that equipment counted as a capital improvement, the replacement of two bladder tanks costing more than $2,300 raised some questions. “Myself, I feel that that’s part of doing business, right there,” said board member Roger Chaffins. “We’ll take care of this one, the $4,000 one. That one there is his. That’s my feelings on it. Because you used it. We didn’t wear it out. You wore it out.”
However, Richard Callahan told the park board that before the improvements were made, only one of the old tanks was in working order. Assistant Manager Larry Clarich said that’s how it had been for the six years that he’s been there. That led Chaffins to believe that the second tank was not operational when the county first leased the property to Callahan eight years ago. “The question here is who’s responsible for it,” he said. “Is it part of the county’s expense or is it part of his expense? And the way it’s reading to me is it was there before, and it wasn’t hooked up when he took over. So therefore, it’s our expense. I’m just going by my thinking, the way it sounds, and I’m trusting Larry back there to tell me that it wasn’t hooked up when they took over.”
County Attorney Marty Lucas offered some advice, based the county’s lease with Callahan, but he declined to make a judgment one way or the other. “Some things, you have to make an executive decision on,” Lucas told park board members. “Ordinary day-to-day maintenance is their expense. Capital improvements – in particular, the contract recognizes the plumbing was going to need some capital improvements and there have been some made in the past. And the question is, do you define these improvements as capital improvements or maintenance?”
In the end, the park board decided all of last summer’s emergency well repairs were capital improvements, giving Callahan a credit of more than $7,200 off its rent payments. With rent being $5,000 a year, that credit amount covers all of 2017’s rent, and a significant portion of 2018’s.
