VALPARAISO, Ind. — Valparaiso's City Council and its mayor are headed for a veto fight over who polices contractors on the city's biggest construction jobs.
Council members voted 4-3 Monday night to pass Ordinance No. 19, 2026, Councilman Robert Cotton's amendment to the city code on preventing contractor fraud, PanoramaNOW reported. Councilwoman Diana Reed voted no along with the council's two Republican members.
After the vote, Mayor Jon Costas said he would veto the ordinance by not signing it, according to PanoramaNOW. To override him, Cotton would have to bring it back and win a two-thirds vote, or 5-2.
Key facts
| Item | Detail | Source |
|---|---|---|
| Vote | Ordinance No. 19 passed 4-3 on second reading and final vote | PanoramaNOW |
| Who it covers | Building permits for commercial work or residential projects with five or more units, worth more than $250,000 | Ordinance No. 19 text |
| New council power | Investigate contractors, review records including certified payroll, and compel evidence | Ordinance No. 19 text |
| Mayor's response | Costas said he will veto by not signing | PanoramaNOW |
| Override | Two-thirds of the council, 5-2 | PanoramaNOW |
What the ordinance does
The ordinance applies to building permits for commercial buildings and for residential developments with at least five units, when the work is estimated at more than $250,000. It adds conditions contractors must meet for the whole project, according to the ordinance text posted on the city's website.
It also hands the council investigative power. The council could look into contractors' compliance with city code and permit terms on payroll standards, review contractor records including certified payroll, and compel the production of evidence. An investigation would start only after a council vote at a properly noticed public meeting.
The ordinance's backers cite state law to justify it. The text points to Indiana Code 36-4-6-21, which lets a city legislative body investigate "the affairs of a person with whom the city has entered or is about to enter into a contract," and subpoena witnesses and records.
The ordinance notes the council voted 7-0 in 2019 to amend the city code to prevent contractor fraud. It says the council needs investigative authority to make that effort work. It also says the council does not mean to take over the Building Commissioner's job and will "work cooperatively" with that office.
The case against it
PanoramaNOW wrote that the ordinance treats building permits as contracts, "which they are not," and that it misinterprets the state law giving the council investigative authority over anyone entering into a contract with the city. The city attorney told the council that if the ordinance were challenged in court, it could draw intervention from the Indiana attorney general.
Costas asked why the council was considering what PanoramaNOW called a "legally questionable" ordinance. "Is this a solution looking for a problem," he said, according to PanoramaNOW.
The meeting agenda listed Cotton and Councilwoman Barbara Domer as presenters of the ordinance. Region N3 did not find on-record comments from Cotton on the veto in open sources Friday morning.
The budget: $71.6 million
The same meeting ran nearly five hours. It included the first reading and public hearing on the city's 2027 budget, Ordinance No. 23.
The proposed budget totals $71,598,362, up $3.5 million from this year, PanoramaNOW reported. About $2.9 million of the increase is personal services, which covers wages, retirement, medical and other benefits. Personal services make up about 55% of the budget.
A salary study is planned for next year, PanoramaNOW reported. City Administrator Steve Poulos, who gave the budget presentation, said department heads all asked for room for salary growth. The study would compare Valparaiso's salaries with those of comparable cities, according to PanoramaNOW.
Building permit fees may rise
The council also discussed House Enrolled Act 1001. The state law requires a fund for building permit expenses kept separate from the general fund, PanoramaNOW reported.
Valparaiso has kept permit costs low by covering part of the expense from its general fund. The city will have to decide whether to raise building permit fees or keep paying those expenses from the general fund, according to PanoramaNOW.
Other actions Monday
| Item | Outcome | Source |
|---|---|---|
| Resolution No. 10, NIPSCO staffing | Passed unanimously | PanoramaNOW |
| Valparaiso Community Schools 2027 budget (about $106 million, 6,239 students) | Passed unanimously | PanoramaNOW |
| Ordinance No. 24, 2027 salary ordinance | First reading; held for final vote. Adds language letting city employees accept tips, after Valpo Parks took over the Memorial Opera House bar | PanoramaNOW |
| Ordinance No. 27, Fire Territory fund | Appropriation to cover rising diesel costs | PanoramaNOW |
| Proposed Redevelopment Commission impact study (about $100,000) | Tabled so the contract can be revised | PanoramaNOW |
What's next
The 2027 budget and salary ordinance are set for second reading and final vote at the council's next meeting later this month. Region N3 will report whether Costas vetoes Ordinance No. 19 and whether the council tries to override him.
Photo credit
¹ Downtown Valparaiso near Courthouse Square (lead photo) — photo by Chris Light, Wikimedia Commons, licensed under CC BY-SA 4.0. Resized for web and license plates blurred; this copy is shared under the same license.
² Apartments and parking structure in Valparaiso — photo by Runner1928, Wikimedia Commons, licensed under CC BY-SA 4.0. Resized for web; this copy is shared under the same license.
³ Fifth Third Bank building, downtown Valparaiso — photo by hakkun, Wikimedia Commons, licensed under CC BY-SA 3.0. Resized for web; this copy is shared under the same license.
