With a new City Council taking office in January, Carmel Mayor Jim Brainard said he will advocate for changing the city’s rules for oversight of the Carmel Redevelopment Commission.
With many of the mayorally-backed candidates winning election, Brainard said he believes he has enough votes to roll back some of the current restrictions. As of now, the CRC – which is a part of the city government that promotes investment in parts of town – has to receive approval by the City Council before entering into any professional services contract of more than $25,000.
The oversight rules began when the CRC came to the City Council in 2012 to ask for help refinancing $184 million of debt. To achieve a lower interest rate in the refinance, the CRC wanted to use the city property taxes as a possible backup. Brainard said the tax backup was never meant to be used but helps get a lower interest rate. Some city councilors said this refinance effectively put the Carmel taxpayer on the hook for the CRC’s debt. Some described it as “bailout” and said the CRC was on the verge of insolvency, needing lower interest rates to stay afloat.
Brainard said the taxpayer was always on the hook and emphasized the CRC is part of the city. He said it was never a bailout because no money changed hands. He said the CRC was never on the brink of insolvency and points to high bond ratings as an example of good credit.
But when the City Council agreed to refinance the debt, strings came attached. The council assumed new oversight roles over the CRC. Many of these oversight responsibilities – such as approving construction projects – were expected to go into effect anyway due to a pending state law that has since passed. But Brainard said the council’s oversight goes too far.
“It doesn’t just exceed the state’s rules, it violates the state law,” Brainard said.
Carmel City Council President Rick Sharp, who has often expressed his concerns about redevelopment commission transparency, said it’s perfectly legal for Carmel to have stricter rules than the state law.
“It does not violate state law,” Sharp said. “The mayor, as an attorney, knows that.”
Professional services contracts include anything that isn’t construction, such as architects, marketers, lawyers, accountants and others. It could include employees of the CRC if they are on contract instead of a city employee. Les Olds, former director of the CRC, was a contract employee when the City Council declined to approve a $60,000 contract extension for Olds.
Since the rules change, there haven’t been any professional services contract requests from the CRC that were denied by the City Council, but Brainard said that’s because some contracts weren’t even introduced since it was believed the council wouldn’t vote for them.
The state’s new oversight rules were put in place to prevent redevelopment commissions – which include appointed members and not elected officials – from racking up massive amounts of debt without the voter having any say. Brainard said going back to the current state law would still allow for oversight.
Sharp said he worries that the CRC will now operate in a shroud of secrecy.
“Now that the mayor has captured control of the city council, he will roll back all of the promises he made in the past,” he said.
