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Carmel approves $233 million in new debt

January 19, 2016

The Carmel City Council approved $233 million in new debt Monday night after setting side one councilor's concerns about the large amount of borrowing.

The bonds will fund road and sewer improvements, redevelopment efforts and land acquisition.

Thirteen of the bonds—up to $2 million each—would fund 13 road projects, mostly construction of roundabouts.

Most of the projects have a smaller price tag than $2 million. Barnes & Thornburg LLP attorney Bruce Donaldson, who specializes in municipal finance, told the council the city can adjust the bond amounts after they receive final estimates. Any excess funds would be used to pay off debt.

The projects include roundabouts at the intersections of 96th Street and Delegates Row, 96th Street and Gray Road, 96th Street and Hazel Dell Parkway, 136th and Carey Road, Hawthorn Drive and Carey Road, Carmel Drive and City Center Drive, Guilford Road and Carmel Drive, Guilford Road and City Center Drive, Pennsylvania Street and City Center Drive, 116th Street and Rangeline Road, Executive Drive and Rangeline Road, and 106th Street and Towne Road.

Also included on the list is construction of Monon Boulevard from Second to Main streets.

A stormwater and drainage-improvements bond initially introduced for $44.5 million was reduced to $34.5 million to comply with limitations under state code. Carmel Mayor Jim Brainard said the city overlooked the limitation, and can issue a separate bond to make up the difference.

The bond will cover stormwater improvements at four locations, drainage improvements in 11 subdivisions, various storm sewer replacements and other projects. The debt would be paid off with revenue from stormwater fees.

A $160 million bond  will fund an additional 12 road projects that are expected to receive federal assistance that requires a local contribution.

Council member Kevin Rider tried to reduce the amount, arguing the city should postpone some projects and save about $2.5 million per year in debt payments.

"I wouldn't mind seeing this trimmed a little bit," Rider said. "I believe the number I've used is $130 million."

He said he believes the city could afford the full $160 million bond, but he's worried about the possibility of another recession, which could cause the city to dip into reserves.

"We're going to be building a lot of stuff," Rider said. "I'm saying, do we need to build it all at once?"

Rider introduced amendments to reduce the amount by $30 million and $15 million, but both failed. The council approved the full $160 million.

The council also approved a $12 million bond to help pay for construction or renovation of sidewalks or paths, hotels, plazas, streetscape or “other local public improvements or other infrastructure projects” within several redevelopment districts. It could also be used to acquire land for right-of-way purposes or pay for utility relocation.

Brainard said the vague language was intended to give redevelopment staff flexibility.

The bond would be backed by tax increment financing district revenue.
 

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