Carmel and City Government and Hamilton County and Development/Redevelopment and Regional News and Government & Economic Development

Carmel council axes funding for redevelopment commission boss

August 6, 2013
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Carmel City Council members exerted their influence over redevelopment commission expenses Monday night, denying a $60,000 contract extension for longtime Executive Director Les Olds despite Mayor Jim Brainard’s pleas to keep him on the job.

“I need him there doing the things he does very, very well,” Brainard said of Olds, an architect who has led the Carmel Redevelopment Commission as it essentially rebuilt the suburban city’s downtown.

Rejecting the contract extension “effectively shuts down the CRC,” he said after the resolution failed by a 3-4 vote.

Council President Rick Sharp, who sided with the majority, disagrees.

“I don’t think the situation is really as dire as it’s being portrayed,” he told IBJ.

The CRC paid Olds $116,000 in 2012, Councilor Luci Snyder said, but his compensation was cut along with the agency’s budget when the city agreed to refinance $184 million in redevelopment-related debt late last year. As part of the deal, council members passed a pair of ordinances giving them control of future debt and certain expenses, including large professional services contracts.

Redevelopment operations were transferred to a city department, and Olds in January signed a consulting contract that called for him to be paid $60,000 in 2013, plus a $120-per-month cell phone allowance. No hourly rate was specified, but Olds' invoices listed a $100-per-hour rate.

Attached to that contract was a 10-item list of services Olds was to perform—tasks such as overseeing development of Carmel City Center, coordinating master planning of the city’s blighted and underused sites, and working with assorted architectural and engineering consultants. LS/Olds Consulting LLC was not to do anything to run up the bill without written consent from the city.

At $100 an hour, costs accumulated quickly. Olds’ January invoice amounted to nearly $10,000, for example.

So in June,  with the $60,000 spent, members of the CRC quietly (and unanimously) approved another $60,000 deal to pay Olds for the rest of the year, asking councilors to OK the expenditure along with three other professional service contracts. The council must approve agreements that exceed $25,000.

Snyder, who chairs the council Finance Committee, balked at the $495,000 total request—presented without any supporting documents—and asked to review the actual contracts. Only financial consultant Umbaugh & Associates provided the requested information in time for the committee’s July 24 meeting.

Monday night, the council considered each contract separately. Members approved a $95,000 deal for Umbaugh with no discussion or dissent, then OK’d $40,000 for engineering firm American Structurepoint before having a lively discussion about a $300,000 contract with legal adviser Wallack Somers & Haas. Council members ultimately voted to allow the expense, which was included in the CRC’s 2013 budget.

But Snyder flagged the Olds contract as questionable, given the drastic reduction in redevelopment activities in the wake of the CRC debt restructuring. Why, she asked, should the executive director be paid more to do less?

She also criticized Olds’ job performance, saying the organization got into financial trouble under his watch. And the CRC failed to maintain proper records, Snyder said, citing project agreements with pages omitted, sales contracts without required signatures and an array of missing original documents.

“This was a mess,” she said, addressing Olds. “I don’t think you’ve done your job … and I will not vote for your contract.”

Council members Carol Schleif and Eric Seidensticker joined Snyder and Sharp in denying the request.

Olds, who declined to comment after the vote, acknowledged to the council that the CRC’s recordkeeping was “not perfect” in the past, but he said it’s improving.

“We’re going to get better,” he said. “We’re going to get smarter.”

Brainard said what Olds lacks in recordkeeping skills he more than makes up for in other areas such as architectural expertise. Olds’ years of experience—in the industry and in Carmel—have saved the city money on redevelopment projects, the mayor said.

“He has paid for his salary many times over because he knows how to do these things,” Brainard said.

Responding to a question from councilor Kevin “Woody” Rider, commission member David Bowers said Olds is a “vital part” of CRC’s ongoing operations.

The commission is working on redeveloping the former Party Time Rental site on Range Line Road, for example, and needs to find a new user for the City Center building that formerly housed Shapiro’s Deli.

Rider and council colleagues Ron Carter and Sue Finkam voted in favor of the contract extension, citing concerns about the consequences of leaving the redevelopment commission leaderless.

“I don’t want to see the commission go without an executive director,” Finkam said, suggesting the council OK the new contract and establish performance standards for Olds.

At times contentious, the debate continued even after the vote.

Sharp doesn’t weigh in during council deliberations, given his role as president, but he makes it a policy to explain controversial decisions afterward. He said he has “great respect” for Olds, but resents the CRC’s apparent disregard for the council’s expense-approval process.

“To just be handed it as a fait accompli—‘Oops, we spent it all and now we need another $60,000,’—that’s the kind of stuff that got us in trouble in the first place,” he said.

Brainard, who is an attorney, questioned the legality of the council-approval requirement, saying state lawmakers have given redevelopment commissions the right to use revenue as they see fit. He said he signed the ordinance to get the CRC refinancing done, but had reservations then.

“This is a direct grab of power from the state Legislature,” Brainard said.

Monday’s vote will kill the CRC, the mayor predicted—something he said council leaders promised wouldn’t happen.

“Is that really the council’s will?” he asked. “Just to stop redeveloping the Arts & Design District and City Center?”

Sharp said he doubts Monday's decision will have such drastic results.

“These things are rarely settled with one vote,” he said.

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