Massive Carmel refinancing plan approved

CARMEL, Ind. (WISH) - Carmel’s City Council addressed a challenge that one council member described as the largest debt the city has ever contemplated.  In its Monday night meeting, the council approved a proposal to refinance $195 million in debt incurred by the Carmel Redevelopment Commission.

Members of the council studied their options for months. Their unanimous vote represents a conclusion that refinancing is the lesser of the evils facing the city.

They didn’t want the Carmel Redevelopment Commission, the CRC, to go bankrupt.  They didn’t want to take money out of the city’s General Fund.  And, they didn’t want to impose a new tax on the city’s taxpayers. So, they devised a plan for the city to assume the debt and take advantage of the current low interest rates.

“This is a very, very complex situation,” said Councillor Luci Snyder.  She described how the funding from one project, the Parkwood complex at 96th and Keystone, will help with the CRC debt.  Parkwood bonds will be paid, soon.  So, the taxes it generates – through tax increment financing – will be available in 2014.  That money will accumulate at a rate of $1.8 million dollars a year and can serve as an emergency fund for Carmel.

Minutes before the vote, Councillor Eric Seidensticker told the chamber he didn’t like any of the options.  He said he would vote in favor of the refinancing because it was “the best solution that we are able to come up with.”  He also said he wants ”to ensure that this city is never put in this position, again.”

After the vote, Council President Rick Sharp called the refinancing package the “most complex” concept to arise during his time on the Council.  He noted that the debt comes from upstanding but unelected people.  And, he questioned the “judgment that brought us to this point."  To him, “the need to refinance was an overwhelmingly clear case for us.”

Sharp also said many in Carmel misunderstood the impact of new taxes, if they were to be imposed.  He said most taxpayers would see no increase in their bills because they are up against the tax circuit breaker.  It would be business customers, he said, who would pay that new tax.Council member Ron Carter, a former leader of the CRC, asked Mayor Jim Brainard to defend the commission members. 

Brainard said he is “not disappointed with what anyone has done” with the commission.  However, he did acknowledge a difference of opinion about how to manage the commission.  He also said he didn’t want to talk about just the debt.  He said people should also consider the revenue stream that will pay the loans that were approved by the council.  “Overall, we’ve done a good job.”

Carmel may sell the refinancing bonds before the end of December.