The Carmel City Council passed its 2016 budget this week and while no major changes were made, it doesn’t mean everyone on the council is happy with the end product.
Every year, Carmel Mayor Jim Brainard and his team inside City Hall draft a proposed annual budget based on their projections and the City Council can make cuts but can’t decide to increase any amounts.
In 2014, the City Council approved the 2015 budget but not before cutting $1.2 million at the last minute – 1.6 percent of the budget – because City Councilor Luci Snyder raised concerns about revenue projections.
This year, Mayor Brainard got the budget that he wanted but two city councilors – Eric Seidensticker and Rick Sharp – voiced concerns and voted “nay” because of two budget decisions: raising the property tax rate and increasing certain salaries. The budget was passed 5-2.
I spoke at length with Sharp and Seidensticker over the phone after the vote. Their votes represent a minority of the councilors but I feel it’s important to seek out the opinions of the minority and share all points of view in order to get a complete picture of what’s going on in Carmel.
The property tax rate will be set at 71.43 cents per $100 of assessed value, an increase from the current rate of 70.07 cents. This rate is about the same as it was in 2013, so Brainard describes it more as “going back to the old rate” instead of an increase. In the end, he said most property taxpayers won’t notice a difference because homes around $345,000 a more are already at the property tax caps and for a house valued around $200,000 the increase might be around $59 a year.
To give a comparison, Fishers is also increasing its property taxes around a penny, which is about the same as Carmel. For 2016, Fishers will set its rate at 63 cents per $100 of assessed valuation, which for a $200,000 house is about $20 more. Fishers rate is actually the same as it was two years ago and is the lowest among Hamilton County cities.
Sharp admits that the increase won’t kill families financially but that it’s still disappointing to him because he said the mayor promised he wouldn’t need to raise taxes to balance his budget.
Sharp also provided the following char of the tax rates for every year that’s been on the City Council.
2004 – 0.5284
2006 — 0.5282
2007 — 0.4329
2008 – 0.5033
2009 – 0.6664
2010 – 0.6664
2011 – 0.6664
2012 – 0.6788
2013 – 0.7007
2014 – 0.7007
2015 – 0.7007
Brainard said those numbers are misleading because that’s the rate cap — meaning the highest taxes can be — and not necessarily the actual rate.
” The rate cap does not usually become the actual rate. It is simply a cap,” he said. “Plus he gave you only the General Fund cap; others such as MVH will generally go down if the GF goes up. The rate caps make it look like steady increases of almost fifty percent but actual amounts paid by a homeowner have declined.”
Sharp said while the rates might not always increase he said he thinks there are “sly ways” that taxes can be raised by fees or other matters. Brainard counters that in many instances assessed value has gone done so the overall amount people pay is lower sometimes. Sharp disagreed with that and I’ll keep digging on that topic for future stories in Current in Carmel.
Seidensticker said he thinks it’s an example of small increases adding up over time and the slippery slope idea. If you give someone an inch, they’ll take a mile, he said.
Seidensticker and Sharp supported a rate cap resolution for 2016, which would cap the property taxes at This has been done several years in the past, although some years a “level levy” has been used instead which is a little different, but that’s a whole separate thing to explain.
Sharp said he believed he had four votes, but city councilor Carol Schleif asked to take her name off as a sponsor and she didn’t vote for the rate cap.
The resolution would have kept the tax rate level as it was in 2015 and also clarifies the rules about borrowing between funds for the city, as stated:
“Borrowing may only take place where it is necessary to enhance a fund in need of money for cash flow purposes. The borrowed amount shall be returned by December 31,2016, and may not exceed the amount needed to fund appropriations or other lawful disbursements. Borrowing may only take place where a fund has sufficient money on deposit that can be temporarily transferred. Only revenues derived from the levying and collection of property taxes or special taxes or operation of the political subdivision may be included in the amount transferred.”
Sharp and Seidensticker also raised concerns about salary increases in the budget.
There wasn’t much debate about the usual 3 percent increase in salary for cost of living. This is because this is very common in Carmel and other similar municipalities do the same thing. Zionsville increases salaries nearly that much but Zionsville leaders have stated in the past it’s based on performance reviews and not automatic. Whitestown leaders have said the same thing.
For Carmel, it’s pretty much automatic, which Brainard said is a way to stay competitive to attract and retain the best employees. He notes that’s more expensive to search for replacements than to retain good people and it’s better for the city. In addition, many of the city employees could make much more in the private practice and private companies often increase salaries by more than 3 percent for cost of living.
Sharp pointed out that the U.S. Social Security Administration decided for 2016 there would be no increase in the cost of living for benefits.
In addition, here are the cost of living increases for Social Security over the past 10 years:
January 2005 — 2.7%
January 2006 — 4.1%
January 2007 — 3.3%
January 2008 — 2.3%
January 2009 — 5.8%
January 2010 — 0.0%
January 2011 — 0.0%
January 2012 — 3.6%
January 2013 — 1.7%
January 2014 — 1.5%
January 2015 — 1.7%
January 2016 — 0.0%
Seidensticker said he doesn’t think a 3 percent increase is for “cost of living” but rather for “keeping up your lifestyle.” He said someone’s cost of living increase is different than another person’s year to year and it’s not all the same.
Seidensticker said he thinks some government jobs are way out of line with the market. He said there are people who are working in bookkeeping who are making far more – 30 or 40 percent – than they could in the private world.
Seidensticker admits that Carmel City Attorney Doug Haney could make more elsewhere in private practice, but he said his job is usually filled by someone in the beginning or twilight of their legal career. Sharp questioned why Haney is receiving a 20 percent raise right after he took a leave of absence for undisclosed reasons.
Sharp also questioned why Nancy Heck, director of community relations and economic development, is receiving more than a 10 percent increase. Brainard said it’s because additional duties relating to economic development were added to her responsibilities but Sharp said he would prefer a professional who is solely focused on economic development rather than someone who works in marketing. Brainard said that it is unfair and that anyone who works in Carmel knows how hard Heck works and the impact she has on the community.
Brainard also said the city is getting a bargain in Haney and it’s hard to find an attorney as qualified as him who is willing to work for a government salary but that Haney enjoys the work.