By Adam Aasen
Carmel clerk-treasurer Diana Cordray sent out a strongly worded report on Nov. 10, claiming that the city’s debt has led to the point where an independent audit is needed to avoid a special benefits tax being imposed.
That alone would have made headlines, but Cordray’s impassioned plea for a closer look at the Carmel Redevelopment Commission was somewhat derailed by what some are calling a “tasteless joke” that accidentally made its way into the report.
On page 11 of the document, a flow chart explains the steps needed to take to avoid the special benefits tax. In one box it states a step as, “Issue SBT in amount necessary to cover obligations. Kiss political positions goodbye!” and another box answering what would happen if there wasn’t enough money to cover obligations states that Carmel residents should, “Shoot council, castrate mayor, Put head between legs, Kiss [explicit]goodbye!”
The chart, which included the comments, was created by Carmel City Council President Eric Seidensticker. When he submitted this chart as a part of an ordinance creating a revenue deposit agreement, a set of guidelines to follow with regards to managing revenue, he made sure to edit out these jokes. But Mike Shaver, a consultant with Wabash Scientific, accidentally used the old document when he helped Cordray create this report. As a result, some people are focusing more on these comments than the substance of her report.
“Needless to say I was appalled to see that one of the boxes in the chart called for the castration of the Mayor of Carmel and shooting of the Carmel City Council followed by a rather crude statement,” City Councilor Ron Carter said in a statement.
Mayor Jim Brainard said he was disappointed and he feels the report was politically motivated.
“This is typical of the sloppy work she has provided the council and the taxpayers,” Brainard said in a statement. “City finances are serious business. The clerk-treasurer is paid well by the taxpayers and it is unfortunate she is using her time and city resources to promote political campaigns. It is regrettable to see this sort of immaturity from the clerk-treasurer and Councilor Seidensticker. We work very hard to promote and grow confidence in our city. I regret that the the Clerk-Treasurer is focused on hurting our city. Carmel deserves better.”
In an interview with Current, city councilor Sue Finkam said she was annoyed by the content of Cordray’s report, as well as the tone. She said the clerk-treasurer’s role is as a fiscal office, not someone who recommends policy for the city. She said there had been plenty of misinformation about the level of debt Carmel has and on the financial picture of the city. To her, the jokes made in the report reflect that level of preparedness.
“To say I’m deeply disappointed by the remarks would be an understatement,” she said. “Those remarks provide another reason why that report shouldn’t be taken seriously.”
Seidensticker told Current that he thinks the other side is making a big deal about the joke so they don’t have to address the real truths in the report.
“If they want to make a big deal about it, let them,” he said. “My only comment is when you’re putting something together like that, sometimes you think of funny things and sometimes you put them together and sometimes you don’t. The unfortunate part is if anyone is offended by it the reality is there’s some truth to it. It wasn’t done to offend anybody. It was done in the process of writing it up. If somebody wants to make a big deal about it, if that’s what they have to make a big deal about, I would encourage them to look a little further.”
Seidensticker said he hoped the offensive humor wouldn’t distract from his intent to explain what’s going on with Carmel’s finances.
“If you’re distracted, read the real one,” he said. “Not the one with the offensive humor. Read the real one and it says exactly what happens to the money.”
Shaver sent an e-mail out to several media outlets to explain what happened. He stated that he apologizes for sending out the wrong chart and, “the responsibility for the error is entirely mine,” but at the same time he doesn’t want people to overlook what he thinks is factual substance addressing a serious issue for the city of Carmel.
In an e-mail which he said he was sending, “personally and independently of the Clerk-Treasurer’s office,” he said he believes Brainard’s reaction — along with other city officials — “actually reinforces the need for an independent audit to provide unbiased fiscal facts related to repayment of the CRC’s debt obligations.”
Shaver provided e-mail threads to show how he believes Brainard uses “political spin” to change the topic when he doesn’t like what is being discussed. He said focusing on an error like this is an example of distracting the taxpayers from the real issue.
“This reliance on political responses in lieu of facts represents the core reasoning behind the Clerk-Treasurer’s suggestion of inviting unbiased facts from an unbiased third-party into the discussion of CRC debt obligations,” he stated. “In comparison, the clerk-treasurer’s document provide facts, including documents prepared and approved by the CRC, itself. Diana Cordray, her staff and Wabash Scientific, inc., have performed extensive research of the CRC’s documents, and collectively respectfully suggest that the council undertake an effort to sanitize the public discussion by removing the political spins and providing the taxpayers with real facts.As noted above, the entire purpose of Ms. Cordray’s suggestion was to attempt to provide Carmel taxpayers with information that was not political and the entire basis of Ms. Cordray’s documents were documents from the CRC, itself.”
Looking at the content of Cordray’s report, she alleges that there’s a lack of transparency with the CRC, which she claims places the taxpayers at “increasing risk.” She has told Current numerous times that she hasn’t received the documents she needs to do her secondary role as “treasurer of the CRC” and when she does she reports such as the May 29 financial report done by H.J. Umbaugh and Associates, she questions whether the numbers have been massaged to support a position. She claims when she asks questions she is given political spin instead of answers
“Furthermore, there comes a point where political rhetoric erodes all attempts at transparent and objective discussion and there is no objective platform for implementing the public policies necessary to protect the interests of taxpayers,” she writes. “I believe the CRC has reached a point where politics must be replaced by unbiased fact.”
It’s for this reason that Cordray is asking for an independent audit of the city’s debt obligations in order to assess the risk of the Special Benefits tax to the Carmel taxpayers.
Carter dismissed Cordray’s call for an audit.
“So far as her call for an independent audit of the CRC is concerned, most of the report containing the now-infamous flow chart, was prepared by Shaver,” Carter writes.”Shaver admitted in an email to the City Council last June that he was not competent to review the finances of the Carmel City Center Community Development Corporation. Based on that alone it would seem he is not competent to review the finances of the Carmel Redevelopment Commission either and his employment by Cordray is a total waste of Carmel tax dollars. This call for an audit based on Shaver’s recommendation is nothing more than partisan politics at its ugliest.”
Brainard has addressed some of the concerns about the SBT in a recent interview with Current, saying it’s only used as a credit enhancement for loans and it will never be used. In his mind, the SBT provides another layer of protection so lenders feel so secure that the lower interest rates for bonds and save Carmel money.
Brainard was asked, “What would have to happen to see the Special Benefits Tax go into effect?” and he responded with an extreme situation.
“Oh, Canada would have to bomb us, the buildings would go away and there would be no revenue to rebuild them,” he said. “Although the buildings are insured. The buildings would literally have to all be destroyed.”
Brainard also cited city reserves as another protection against the tax.
“You have to remember, the special benefits tax isn’t an automatic thing either,” he said. “Say you were $300,000 short, the city’s got almost $30 million in cash.”
But others aren’t as convinced and not just Cordray. City Councilor Rick Sharp has told Current that if the SBT will never be implemented, then why don’t you just remove it from these loans? He ask why do you need it if it will never be used?
Seidensticker asked that very question to Loren Matthes, an advisor to the city from Umbaugh, an accounting firm. She responded that interest rates might rise from around 4 percent to more than 10 percent if loans were obtained without using the SBT as a “credit enhancement.”
City Councilor Luci Snyder said that if interest rates would dramatically rise without the SBT then that’s the free market showing a lack of faith in Carmel’s ability to pay back the loans without taxing the citizens.
Regardless of the debate on the risk of an SBT — which should continue for some time — some are still focused on the accidental joke in the report.
Carter says the carelessness that led to the joke being included puts into question the accuracy of all of the figures in Cordray’s report. He said it doesn’t matter to him if it was Shaver or Seidensticker, he thinks Cordray should have caught the error.
“It really doesn’t matter who is responsible among these three for having and distributing these thoughts,” he writes. “What does matter is the total lack of professionalism and competence that her action signifies. It went out over her signature. Didn’t she bother to read the packet. I have said for years that Mrs. Cordray is not competent to be the Clerk-Treasurer of a city the size of Carmel, either from a professional experience standpoint or from the standpoint of having the temperament to work with others for the common good of all our citizens. For years the Mayor has had to cover for her in many instances when she advertised the city’s budget improperly. This blunder is just one in a long line of incompetent and politically motivated things that have emanated from her office.”
Here’s the full document (see page 11 for the joke in question):[gview file=”https://youarecurrent.com/wp-content/uploads/2014/11/Clerk-Treas.-docslow.pdf”]
Here’s a chart that — according to Shaver — shows what could happen with the SBT: