PRYING EYES

At 7 a.m. one morning recently, I posted The Number of the Day on my Non-Mayor page with Facebook.

The Number was 12.5 — the percentage of growth in property tax rates in Carmel since the last municipal elections. Nothing controversial. Numbers right out of the Hamilton County website.

A few hours later, the city council person for my district posted a comment:

“I believe your property taxes are lower today than they were in 2006. I looked at Zillow.”

Checking Zillow, I found partial data had been recorded. Only half of the 2017 taxes were listed and none of 2015’s. Zillow ain’t perfect.

Most telling, however, was the irrelevance of the taxes-paid to the tax-rate-charged. As tax assessments increased and decreased, the total tax bills increased and decreased.

That was as plain as the nose on your face. The same nose, theoretically, that pried into my personal property taxes in the first place.

I can defend the councilor’s spying on the ground that, indeed, ever-increasing tax rates (82.2 percent since 2007) is a gigantic embarrassment to anyone who voted for them.

I can defend the councilor’s ignorance of information Zillow didn’t provide.

Zillow also reports the mayor’s property taxes went up 6.7 percent since 2014 (2015 is missing, remember?) on his $999,277 house.

I apologize to the mayor for snooping. My councilor made me do it.

STORM CLOUDS

We non-mayors continue to be reassured by City Hall sycophants that a $1.3 billion debt is nothing about which to be concerned.

After all, they say, our property taxes are relatively low.

Of course, there is a direct link between debt and taxes, between deficit spending the borrowing needed to cover it. But, let’s not confuse the size of the debt with the size of a portion of a part of a percentage of the repayment.

To your property tax bill you can rightly append a $38,358 per household over-hang as your household share of $1.3 billion.

Meanwhile, as the municipal Dr. Panglosses preach the best of all possible worlds, some clouds dot the horizon suggesting stormy weather ahead:

  • The Indiana Department of Local Government Finance (IDLGF) 2019 budget order mandated budget decreases in Motor Vehicle Highway, Cumulative Capital Improvement, Cumulative Capital Development and redevelopment bonds because projected revenues were insufficient to cover the proposed budgeted expenses.
  • The Indiana General Assembly will decide in the next two weeks how to fix “abnormalities” in the distribution formula for distributing County Option Income Tax (COIT) among cities. Officials in Fishers claim Carmel is $21 million ahead of it this year will get even disproportionately more in years ahead. The law change would limit discrepancies for 5 percent or less. No final decision yet.
  • An investment rating service is re-rating a water department bond. No final word yet. Since Standard & Poors’ rating service downgraded Carmel debt and warned of “the city’s rapidly increasing debt burden” in 2017, the city has not returned to the traditional, regulated municipal bond market — preferring the lower-level oversight of the private equity (bank loan) market. Even there, it’s had great difficulty scrounging up $18 million for the luxurious Hotel Carmichael.
  • Questions persist as to whether the city is technically in default on a bond used to secure a guarantee from a developer to build five buildings by 2019. No finished buildings yet. (One of those buildings was to have been a hotel paid for by the developer. The executive director of the Carmel Redevelopment Commission claims financing is in place for the city to borrow $18 million or so to build the hotel the partner promised to build, etc., etc. No finished financing to assess.)Property tax revenues which had been growing at a 5-10 percent per year clip, last year grew just 1.6 percent.
  • Population growth, which averaged in the 3-5 percent range in past decades, was 1.01 percent last year.

Economists point to further declines in demand for retail and office space as an on-line, real-time world evolves. City-funded entertainments face similar pressures in the new scheme of things. The mayor pointed out Palladium audiences average under 500 patrons in the 1,600-seat music hall, for example.

Smart cities are eliminating congestion, easing tax burdens, replacing aged infrastructure with current revenues to avoid debt, and expanding the availability in both quantity and quality of information formerly kept secret.

Not Carmel.

Stay tuned.

PROMISES, PROMISES

In a moment of unplanned jocularity at the recent mayoral debate, the incumbent defended his breach of promises made in April 1995.

At that time, then-candidate’s Contract With Carmel contained 10 vows:

  1. REPEAL THE JOHNSON TAX INCREASES.
  2. FIND WAYS TO ACQUIRE NEW PARK LAND AND IMPROVE FAMILY-BASED RECREATIONAL OPPORTUNITIES.
  3. CUT OUT WASTE.
  4. CUT THE COST OF GOVERNMENT THROUGH PRIVATIZATION.
  5. STOP THE PETTY IN-FIGHTING IN CITY HALL.
  6. PROPOSE BUDGETS THAT ARE REALISTIC, FRUGAL, AND GOAL-ORIENTED.
  7. WORK CLOSELY WITH OUR SCHOOLS TO ACHIEVE A PARTNERSHIP THAT FOCUSES OUR RESOURCES ON OUR MOST IMPORTANT ASSET, OUR CHILDREN.
  8. MANAGE GROWTH PROPERLY AND RESPONSIBLY.
  9. NO PAY RAISE FOR MAYOR.
  10. GET STREET IMPROVEMENTS BACK ON TRACK.

“The Contract with Carmel is my commitment to you,” the mayor pledged. “I ask for your vote on May 2, 1995.”

When it was pointed out that No. 9 contradicted the mayor’s being the highest paid mayor in the state now that increases have taken his wage to $148,000-plus per year, the rotund mayor replied:

That was for four years and I didn’t take an increase for that term.

Obviously, he forgot to tell voters the Contract expired in 1999 — as did his pledges to cut waste and privatize costly government activities (like a $175 million Stonehenge of Song).

DOUBLE STANDARD

In conversation with fellow-non-mayors of Carmel, one topic that keeps coming up is the mayor’s driving habits.

T-bone crash into a school bus while making a left turn onto Westfield Boulevard at 99th Street November, 2002.

Head-on collision on 3rd Avenue Southwest April, 2017.

Sideswipe of a passing vehicle on Main Street at Knoll Court December 2018.

Published accounts of the accidents indicate the mayor, though causing all three accidents, was ticketed for none of them.

My friends believe — and I cannot argue with them — that a double standard exists in local law enforcement.

“If I drove my car into the side of a school bus, I’d probably still be in jail,” one said.

“How can you veer left from a right-turn lane, sideswipe a passing vehicle and not be charged with reckless driving?” asked another.

“The city needs to post the mayor’s driving schedule in advance so we can clear the streets of women and children,” said a third.

Humor aside, much American blood has been shed to guarantee equal protection under the law.

Everywhere but in Carmel?

CLICK, CLICK

As an official non-mayor of Carmel, I am a big fan of the city’s nifty website.

Two clicks and you’re into all the stuff the mayor of the Fab Five on the city council don’t want you to know.

Click on the “Gateway” link at the menu bar and you’re into the Indiana Department of Local Government Finance (IDLGF) records. There you can learn just what is involved in Carmel’s $1.3 billion (and growing) total outstanding debt obligation.

You’ll find, for example, the city officials have one month to report debts in Gateway Debt Management after issuance. “Some outstanding debts may not be currently reported,” the site notes, adding that data might not have been audited for accuracy or completeness by IDLGF nor is it responsible for any errors or omissions in the data.

But, it’s close enough for government work, eh?

Click on the clerk-treasurer’s menu and you’re into LaserFiche copies of bills, invoices and cash-flow stuff like:

–$18,000 for a study of the White River west bank as a gaudy, new tourist resort;

–$10,000 a month for a New York press agent who reports propaganda successes on Minnesota Public Radio, and radio stations in Sioux Falls, Hartford, Cincinnati, Orlando, Abilene, Phoenix and the greater Norfolk-Portsmouth, Va., area.

The latter splashes involve the Mayor of Carmel, Indiana, pronouncing on climate change as a run-up to the Climate Summit in San Francisco.

Presumably the mayor tells breathless listeners how climate change caused the closing of the municipal ice rink last winter when things were too warm to make ice. Bet that got a howl up in Minnesota.

So, click away, Carmelitorians. The best is yet to come. It’s IRS time when we all render unto Caesar. But even the emperor has to post the data.

Click. Click 

HIDDEN PICTURES

As an official non-mayor of Carmel, I always enjoy those “hidden pictures” puzzles. You know. The ones your parents gave you to keep you occupied during a long drive somewhere.

One example: Take a map of Carmel. Plot the home addresses of the city council members. Look where the at-large council persons live. Take a further look at the at-large council candidates next May.

See how many live west of Keystone.

Now, thoughtfully, our civic savants have provided another example for us. It comes in the form of a Carmel Christkindlmarkt report that the latest fiscal folly grossed nearly $1.4 million its first year. Adding $420,000 in civic subsidy and deducting expenses, the Markt has a cash balance, a physical inventory and total assets all in six figures.

Wonderful. So, what’s missing from this picture?

Well, Quite a bit.

In its report to the Indiana Department of Local Government Finance (IDLGF), the Carmel Redevelopment Commission (CRC) reported $966, 2389 in ice rink construction costs plus another $32,917 for ice rink equipment and inventory (ice cubes?).

In April, the CRC reported $500,000 for the plastic vendor shacks and $2.9 million to pay off the ice rink contract balance.

No indication of the costs for the new warehouse to store the Christkindlmarkt rink, shacks and (presumably) physical inventory.

Finally, as you drive past the massive public-private apartment, retail and office buildings, count the empty spaces. Over-supply meets under-demand.

We Carmelots can’t wait for the next hidden pictures, can we?

If you find errors in the above, please quickly surrender them to me at bill@gatea.com.  And, if your club, society, association or other group would like me to bring tidings of great journalistic curiosity, I’m always up for a free cup of coffee.

ANNOUNCEMENT

As an official non-mayor of Carmel, I was intrigued by the mayor’s surprise announcement that he would seek re-election in 2019.

In his last run, he attracted 9,584 votes – enough to be elected but a scant 15 percent of the 63,335 eligible voters, according to Hamilton County Election Board data.

Face it. The man has had the same job for 23 years and never gotten a promotion.

And, he says he just underwent radical surgery for sleep apnea, a condition which apparently is irreversible and incurable. I talked with him about it, and he heartily agreed we all – mayor and non-mayor alike – need to give generously to support research via the sleepapnea.org.

We all wish the mayor well as he fights the condition which, if untreated, can cause severe oxygen depletion to vital organs, including the brain, and ultimately cause premature death.

That said, go get ‘em, Mayor. With patience, he may challenge Bob Butler over in Marion, Illinois. He is preparing to retire after nearly 55 years as mayor. Said Bob, “I have been given more credit than I deserve and more criticism than was warranted.”

One wonders, though, what chance anyone has against an entrenched mayor with $1.3 billion total outstanding debt obligation and a so-what music hall, an enormous array of festivals, fetes and other diversions, and so many political cronies, promises and paybacks to track.

Who’d want the job? There’s even a report that a challenger was offered $140,000 not to run. I’d do it for a lot less.

As quoted in the fount of wisdom, the Reader’s Digest, Bill Gates says:

“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

A TALE OF TWO CITIES

As an official non-mayor of Carmel, I have always enjoyed little mental experiments. Albert Einstein was famous for solving huge problems with simple, mind hypotheses.

[Full Disclosure: I was given a C in analytical geometry with the understanding that I not come back for calculus.]

So, here’s a little mind research project for you:

You are an up-and-coming business pro whose employer is transfering you and your family to Indianapolis. You’re replacing another pro who’s been promoted and who agrees to sell you his Colts and Pacers season tickets.

So, having the important things covered, you look for a place to live. You and Spouse narrow things down to two possible cities:

City A: Named on of the nation’s highest-ranking places to live by CNN Money Magazine. City B: Ditto.

City A: Top schools, just finished first among all school districts in statewide reading and math testing with a score of 80.5. City B: Finished third with 78.3.

City A: Median housing price of $163,600. City B: $320,400.

City A: Total municipal debt obligation of $136.6 million. City B: $1.3 billion.

Commute time to work: Identical.

To which town would you move your family? Brownsburg or Carmel?

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GHOST TOWN

As an official non-mayor of Carmel, I wondered about the five ghost buildings Pedcor “guaranteed” it would build in the Carmel City Center by this year.

City Council President Jeff Worrell, a 15-plus year veteran of the Carmel Redevelopment Commission that oversees these things for the Council, confessed there actually are seven buildings in the City Center plan that have yet to materialize.

Kite Realty has yet to build its project at 116th and Range Line? On June 2, 2016, cub reporter Adam Aasen wrote in Current in Carmel:

“Kite Realty is looking to transform the southwest corner of 116th Street and Range Line Road from a struggling strip mall to a brand new mixed-use development with more than 200 new residential units.” Kite promised the $15-20 million project would include commercial, retail and 250-275 units on upper floors.

I e-mailed Kite to ask what the schedule is today. No answer yet.

So, why no City Center buildings? Why no Kite Realty edifice? Why the ghost buildings?

In a phrase:  No takers.

Retail space is no longer in high demand in Carmel. Currently, there are 217 commercial properties available in Carmel, according to OfficeSpace.com.  A brief survey of Merchants’ Square found 21 vacant stores.

Moody’s Investors Service recently provided the reason: the winnowing of the weak.

Moody’s noted U.S. retailer default and bankruptcy trends are slowing. But, it warned, weaker, smaller companies with excessive debt and limited financial flexibility will continue to struggle.

Fewer firms, fewer renters of retail space. The same could be said of the demand for office space and apartment space in Carmel, from the delays and deferring of public-private projects.

The whole tax incremental funding scheme pivots on renters filling the new spaces lovingly provided by the city and its cronies – err, partners. No renters, no rent; no rent, no tax payments.

Add to that the Retail Ice Age gripping the nation, and the rosy forecasts that led City Hall to run up $1.3 billion in debt seem a bit lame today.

Retail trade expert Burt Flichinger, founder of Strategic Resource Group, says a major contributor to the decline of Fifth Avenue, New York, and State Street, Chicago, is easy to spot:

“Big city mayors have choked off the cities.” Lousy traffic, exponential tax growth and inability to adapt to the digital age complete the analtomy of boa constrictor local government.

Is Carmel immune or just a small-time example of the big-time trend?

You can bet your bottom dollar, as the saying goes, that lack of demand is at the heart of this entire essay. Put another way, if the winds of overwhelming response were strong enough, Kite would fly.

NON-ANSWERS

An official non-mayor of Carmel respectfully asked the City Council a week ago:

” “Where are the buildings that developer Pedcor ‘guaranteed’ but which are not constructed?”

Citing 2015 statements by the council that the developer, Pedcor Cos., guaranteed five structures would be in place between 2015 and 2019 as part of a deal paid for with $20 million in borrowed money.

Logically, the non-mayor as for ” documents showing what action the City Council has taken to enforce the ‘guarantees’ which the Council alleged were protecting the taxpayers.”

City Council president Jeff Worrell, longtime member of the Carmel Development Commission and current candidate for an at-large position on the council, replied by letter that seven buildings were in the works. He provided no documents showing how the council was enforcing the guarantees.

His non-answer is the latest example of official deflection, distraction and attempted befuddlement by both elected and appointed officials.

Asked about the $1.3 billion total debt the city now carries, Worrell told me Carmel was able to borrow more because it only paid a small percent of revenue toward debt reduction. Nothing about the debt itself or how much more the city planned to borrow.

Another council member, asked about the $1.3 billion debt, said not to worry, only 4 percent of property tax revenues were used to pay down the debt. Noting about the debt itself or how much more the city planned to borrow.

Officials long have touted the fuel and time savings roundabouts provide now that a quarter-billion dollars has been borrowed to build 122 of them. Asked for copies of pre- and post-roundabout fuel and time consumption, the city engineer was mute.

Officials also have long touted the growth in corporations and businesses moving to Carmel. Asked for 2017 and 2018 totals of companies moving into and moving out of Carmel (or going out of business altogether), the city director of economic development was mute.

A third example (as if more were needed to prove the point), the city attorney explained why he refused to provide Center for the Performing Arts financial information:

“I serve as legal counsel for the City of Carmel, not the Center for the Performing Arts, a separate legal entity.” This explains why so many shell corporations and hidden transactions.

Famed German sociologist Max Weber once described secrecy as the dominant characteristic of a bureaucracy. Social psychologists describe official secrecy acts, while necessary for national defense, merely provide cover for fraud, deceit, corruption, favoritism and power.

Take your pick.