The Carmel City Council unanimously approved a temporary fix for the city’s 2015 budget shortfall at a special meeting Dec. 14. The solution will allow Carmel to be able to pay its bills through the end of the year.
The solution taps the Carmel Redevelopment Commission to pay about $5 million in debt due this year. The loan is expected to be repaid through revenue collected in 2016 or existing funds that the current council did not want to access. New councilors will take office in January.
On Dec. 7, the council turned down a proposal to move money from several funds, such as the motor vehicle highway fund, so the city could cover its payroll and still have enough money left to make debt service payments. The debt due is from various bonds, such as those that helped build The Palladium.
Since the 3-3 vote was a tie, the proposal failed. Councilor Ron Carter and Carmel Mayor Jim Brainard – both of whom said they would have voted in favor – were out of town and unable to break the tie.
The Dec. 7 proposal would have zeroed out some funds, which left some councilors, such as Luci Snyder, uncomfortable, because there wouldn’t have been an adequate buffer left in her opinion. She voted against the proposal.
The city’s payroll needs were about $1.5 million, according to Council President Rick Sharp, and there was about $2 million left in the city’s general fund, so he said this was always about paying off debt and never about paying firefighters, police officers and city employees.
“The reports that the city was going broke were somewhat exaggerated,” Sharp said. “We were always going to make payroll, but this is a concern because it speaks to the mayor’s decision to spend every last dime and put the city right on the fiscal edge.”
Councilor Sue Finkam, who voted in favor of the Dec. 7 proposal, said she agrees that there was no need to panic, but she disagrees with Sharp’s call for concern.
“There was no need to be worried, because we always had the money,” she said. “It was just in funds where we couldn’t access the money.”
Finkam described the situation as one last chance for three outgoing councilors – Sharp, Snyder and Eric Seidensticker – to vote against Brainard before leaving office.
“I find it interesting that three member of the council acted like arsonists last Monday, then fueled the fire all week with negative headlines and now are acting like firefighters by fixing the budget,” Finkam said.
Councilor Kevin “Woody” Rider said he understands the concerns voiced by Snyder, Sharp and Seidensticker, but he thinks there would have been no issue with moving around funds, which is why he voted for the Dec. 7 proposal.
“The fix today is fine but it’s unnecessary,” he said. “We could have addressed this at the last meeting. If you wanted to voice your concerns, you could have done that and still voted for it.”
Brainard will be returning to Carmel on Tuesday after spending more than a week in Germany on a trip with the U.S. State Dept. to speak about climate change.