Critics

Mar 3, 2010 — The Indianapolis Star

Chris Sikich

Mar. 2, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- CARMEL, Ind. -- Despite getting a rosy financial picture for the commercial-taxpayer funded Carmel Redevelopment Commission, City Council members who have been hounding Mayor Jim Brainard for months think they're still not getting to the bottom line.

Financial consultant Umbaugh and Associates reported Monday that the commission has more than enough money to pay back its $169 million in debt but provided no information about other obligations, including salaries, legal fees and building leases.

The mayor has used the commission to spark developments such as the Arts and Design District, the City Center and The Center for the Performing Arts but has drawn criticism from council members and citizens who have complained about a lack of transparency.

Council members renewed a request made last week for specifics about future operating expenses for the commission.

"I've never seen this kind of piecemeal report," said Councilman John Accetturo. "We need a report with everything."

The reason that information wasn't included?

Umbaugh's Loren Matthes, who gave the report Monday, said another firm handles those expenses. That comes under the review of Curt Coonrod, an accountant who specializes in municipal finance and advises Brainard.

Brainard said the council initially requested only information about debt obligations and told members he would provide details about operating expenses. Brainard did not say when those details would be available.

He called those costs in the future "miniscule" and said they can "easily be adjusted" to match income.

They haven't been miniscule in the past.

The commission spent nearly all of the $8 million in surplus money -- funds not tied to debt payments -- it received in 2009 and will receive $2.3 million in surplus money this year. The latter amount will be more the norm in upcoming years, Umbaugh warned, as more of the commission's funds are tied up in debt payment.

Brainard said the commission has been spending surplus money to complete projects, because it knew it would have less money available this year and beyond. He said it's prepared to cut back.

"We do not have obligations anywhere near that $2 million," Brainard said, pointing out that Umbaugh's report was "very positive" and shows that the city's system of financing the commission with commercial taxes has been successful.

Umbaugh reported that the commission has drawn more commercial taxes than expected, taking in $13.8 million in 2009 rather than the estimated $7.2 million. The firm re-evaluated projections made in 2005 and now expects the commission to continue to draw more taxes than anticipated.

City Council President Rick Sharp -- a former commission member -- questions whether those projections are skewed because the commission provides some of the information leading to the firm's conclusions. He began asking questions in 2009 when the commission funded several projects in the downtown area it had once claimed not to have money to cover.

"The commission has found such bounty that wasn't there before, and it's what sparks my concerns," Sharp said.

Brainard has said those projects -- including a parking garage -- were funded after the commission received the new estimates.

The council's questions also have been spurred by a State Board of Accounts audit in January that concluded the commission improperly granted $550,000 to the nonprofit foundation that is raising money to build and operate the arts center. The state board also indicated it would ask the attorney general's office to review whether taxpayers could wind up on the hook to pay back money the commission paid to developers to build the center.

Council members have repeatedly questioned whether the commission has enough money for the arts center or whether residential property tax dollars would be needed to pay back debt. That's because the initial $80 million bond the council approved to pay for the center is backed by residential taxes as well as commercial taxes.

Despite that, Brainard has maintained that no residential taxes would be used for the $150 million facility.

Newstex ID: KRTB-0095-42524915