An ordinance giving the Carmel City Council final say over debt issued by the redevelopment commission is on track for approval, and Mayor James Brainard said he won’t stand in its way.
“I think we’re working together,” Brainard said.
The council's four-member finance committee agreed unanimously Thursday evening to recommend the ordinance for approval by the full council when it meets on May 7. The ordinance is sponsored by five of seven council members. Brainard said he won't veto the ordinance if the full council passes it.
In conversations with various council members since the ordinance was proposed in March, Brainard said he’s been reassured that the council won’t use its new authority to stymie his future redevelopment projects.
Plus, the council will help refinance the Carmel Redevelopment Commission’s $240 million in debt.
The refinancing is necessary if the commission is going to have cash available for future projects. Speaking for the redevelopment commission, Brainard said he would start working with consultants right away to find out which of the various debt issues can be refinanced.
In Indiana, redevelopment commissions must seek approval from the local town or city council for bond issues, but the Carmel Redevelopment Commission, or CRC, found a way around that law by issuing other forms of debt. The mayor-appointed commission has rung up $139 million in debt since 2009, all independent of the council.
If Carmel adopts the ordinance, the council would have final say over all types of debt issued by the CRC.
The commission drew its financing firepower from the city’s lucrative tax-increment finance districts, which generated $21 million last year. According to the redevelopment commission’s own projection, however, it would need almost every dollar of that revenue to cover all anticipated debt payments this year.
Commission member David Bowers told the finance committee that the CRC has enough cash flow to cover its payments at a ratio that exceeds 1-to-1, so there's more of a cushion than the projection suggests. The commission wanted to illustrate the need for refinancing, but he said there's been undue attention on the bottom line. "I've had bankers call me," he said.
One item that drove up the CRC's debt load was financing a $5.5 million operating subsidy to the Center for the Performing Arts. The CRC does not have enough revenue from the TIF districts to continue that support, Bowers said.
Brainard said his 2013 budget proposal will include a subsidy for the performing arts center. He said he thinks the city can provide some money without raising taxes. He declined to say how much he will propose.