Carmel City Council suggest clerk-treasurer misused funds  


Disagreements remain between the Carmel City Council and the city’s clerk-treasurer, as the council voted Oct. 17 to slash more than $200,000 from Clerk-Treasurer Christine Pauley’s office budget and questioned her use of public funds.



Conflict arose in early October when Pauley submitted a letter to the council questioning why she only received a 2 percent raise in the city’s proposed salary ordinance for elected officials, while Carmel Mayor Jim Brainard was originally suggested to receive a 40 percent pay raise, or $50,000. The city judge and city councilors were also set to receive raises of 20 percent or more.

The council eventually voted to give all elected officials only a 2 percent raise with the exception of a 15 percent pay bump for city councilors.

Some councilors had been openly critical of Pauley’s job performance, and she hired Indianapolis-based law firm Betz and Blevins to represent her and threatened legal action because of gender-discrimination claims.

Pauley then tried to submit an invoice for $5,000 from Betz and Blevins in the city’s usual claims, but councilors caught wind and voted to amend the claims document to remove that item.

Councilor Sue Finkam said it was inappropriate for the city to pay that charge since Pauley’s personal email was listed on the document.

“It appeared to be for a personal matter,” she said.

Pauley defended herself, saying that it was completely appropriate since it involved her role as clerk-treasurer and the city’s budget. She said she believes some on the city council are “out to get” her.

“I think that’s evident,” she said. “I don’t know why, though.”



City Council President Ron Carter asked City Attorney Doug Haney to look into whether the Indiana State Board of Accounts needed to be alerted about potential misuse of city funds. He questioned Pauley’s reasoning, saying she was essentially asking taxpayers to pay for a lawsuit against the city so she could receive a higher salary.

“The Betz & Blevins invoice is not an invoice that should be paid by the city,” he said. “This is a personal issue. Let me use this example. If an employee decides he or she has an issue with how they are treated, would we say, ‘Oh, here is an open city checkbook for you to sue us?’ The answer is a decided no. And it is a no because that could open up a potential floodgate of threats and litigation against the city. Christine was not and is not acting in a public role here. She is acting in a private role.”

Carter referenced Carmel City Ordinance No. D-2286-16, which states that the city only pays for legal expenses for city officials and employees for cases, “filed against them in their official or individual capacities.” He noted that it doesn’t cover initiating lawsuits.

Carter said he thought Pauley might try to get the council to pay for the legal expenses, so the council went through the financial claims carefully, and Finkam caught the law firm expense under “consulting fees.”

“The way Pauley did it, I wonder if she was trying to sneak it in without us noticing,” Carter said.

After refusing to pay for the legal costs, the city council then decided in a separate ordinance to cut approximately $200,000 from Pauley’s requested office budget for 2017, including $105,000 for legal fees and consulting fees and $97,000 in wages and benefits for an additional employee. Carter said he wants Pauley to have to come to the council if she wants money for legal fees.

“I didn’t want her to have any money in the pot that she could use for inappropriate actions,” he said.

Finkam emphasized that cutting Pauley’s budget was not a form of retaliation and that the council has a good working relationship with the clerk-treasurer. She said that Pauley’s office budget is increasing from the previous year, just not as much as Pauley requested. She also said that Pauley has hired new employees at higher rates than previous salaries to recruit experienced accountants, which should have negated the need for as much outside consulting dollars.

Pauley defended her budget, saying extra eyes on Carmel’s finances can save the taxpayers millions of dollars. She also noted she has increased responsibilities as head of the Carmel Bond Bank.

“If they hired someone else to run the bond bank, it would cost the city thousands and thousands,” she said.

Brainard endorsed Pauley in her recent election to unseat long-time incumbent Diana Cordray and was joined by many city councilors, including Carter and Finkam.

This is not the first time Carter has been critical of a clerk-treasurer. He had harsh words in public for Pauley’s predecessor, and he’s expressed disappointment with Pauley’s performance. He said the position is not “ceremonial,” but he has nothing but praise for her staff members, including the deputy clerk-treasurer.

After the Oct. 17 meeting, Pauley was critical of Carter’s handling of the city budget, pointing out errors in the process.

“There’s been a lack of leadership on the budget from City Council President Ron Carter,” she said. “The process has been handled poorly.”

Pauley admitted that the Clerk-Treasurer’s Office is not responsible for the city’s overall budget. That is the domain of the Mayor’s Office and the city council.

In January, the council voted to eliminate Pauley’s position at the end of her term and become a second-class city with a mayor-appointed city controller. Pauley has said she doesn’t know what she’ll do when her term is up, but she hasn’t ruled out running for a different elected position.