A few weeks after being presented what some City Council members have called the most revealing report to date of the Carmel Redevelopment Commission’s debts and revenue, a majority of the council has drafted an ordinance that would increase its oversight over the commission’s spending.
On the agenda for the council’s Monday night meeting is a proposed amendment to the ordinance that created the CRC in 1989. The proposal would add text to the ordinance requiring the commission to get approval from the council before taking on new debt.
“The Redevelopment Commission may not enter into any obligation, directly or in combination with or through any affiliate, payable from public funds, secured by public funds or guaranteed by public funds without first obtaining the approval, by Ordinance or Resolution, of the Common Council of the City of Carmel,” the proposed ordinance reads.
The CRC’s recent financial report shows the CRC has issued nearly $249 million in debt, though slightly more than $140 million was issued through installment purchase contracts, certificates of participation and contracts that were not approved by the council. In a report on the CRC’s financial standing in the March 13 issue of Current in Carmel, Council President Rick Sharp was quoted as saying the commission did not have to take these debts before the council “because they are not called bonds.”
That practice is consistent with Indiana Attorney General Greg Zoeller’s 2010 opinion that state statutes only require redevelopment commissions to get approval for bonds, Sharp said at the time. The proposed ordinance, however, would require council approval for all new obligations, defined as “any bond, note, warrant, lease, synthetic lease, agreement, swap, derivative, hedge or other structure or instrument under which money is borrowed.”
The CRC’s report indicates the commission could have little cushion in covering its operating expenses and debt service in 2012. Multiple months are projected to begin and end with an operating balance of zero, according to the report, and of the more than $21 million the CRC projects to collect in commercial taxes through tax increment financing, it projects to spend all but $5,929.41. However, Mayor Jim Brainard has said the CRC can create some breathing room by deferring payments toward non-contracted projects, if necessary.
When reached via e-mail Thursday, Brainard said he had not yet read the ordinance and did not provide a comment.
Councilors Sharp, Kevin Rider, Carol Schleif, Eric Seidensticker and Luci Snyder are sponsors of the ordinance.