Terre Haute Mayor Duke Bennett says he is complying with state law by directing the city controller to take over 19 checking accounts from the Terre Haute Redevelopment Commission.
Bennett says the transfer of authority over the accounts is outlined in a new state law and must be completed by July 1.
However since those accounts have been moved to the authority of the controller, Department of Redevelopment Executive Director Cliff Lambert says the city has been withdrawing funds ear marked for redevelopment purposes.
He says state law mandates Tax Increment Financing or TIF dollars be used for projects within a designated district.
"They cannot be used for any activity other than in direct support of that TIF project," Lambert says.
Lambert has requested account withdrawal histories from the city for the month of May but has not received them.
Account histories from the month of April, which is when the city took over the accounts, show withdrawals from redevelopment accounts of almost $2 million.
Mayor Bennett says some funds have been moved into a cash account but only temporarily.
"We don't expend those funds permanently for anything that's not related to what it's supposed to be paid for," Bennett says.
The Mayor says pooling cash to cover short term costs is a common practice.
"We move money around all the time," Bennett says. "So examples would be you put money in the cash account because you've got big payments coming up from somewhere."
Bennett says his actions are subject to review by the state board of accounts and he feels he is on strong legal footing.