The mayor of Carmel says of the city’s $1.4 billion total indebtedness, “Our debt is reasonable for our revenue.” So said the IndyStar Sept. 6.

The city’s budget is $141 million according to information it filed with the Indiana Department of Local Government Finance. The mayor thus thinks a 10 to 1 ratio is reasonable. In Westfield, the ratio is 4.4 to 1  ($145 million debt, $33 million budget), in Noblesville,  6.9 to 1 ($298 million debt, $43 million budget), and in Fishers 6 to 1($401 million debt, $66 million budget).

That’s 10 to one versus 4.4, 6.9 and 6 to 1 among our neighbors.

A different view was expressed by Standard  Poors Global Rating service Nov. 14, 2017, when it said of its  decision to downgrade Carmel’s bond rating:

“The downgrade reflects our view of the city’s rapidly increasing debt burden, with mounting leverage that can pressure flexibility and budgetary performance over time.”

Citing the 2015 financial flap when the general fund was tapped to pay debt, S&P observed that “this demonstrates the risk of high leverage and a heavy dependence on sometimes more volatile tax increment revenues.”

Potential investors in Carmel bonds were warned:

“Furthermore, the city doesn’t have a high reserve cushion, relative to the size of annual debt service, to carry it through extended stressful periods.”

Separately, the city must report debts to the state after issuance. The current report of $1.4 billion total outstanding debt obligations is 9.4 times that of Westfield ($146 million), 4.6 times that of Noblesville ($298 million) and 3.4 times that of Fishers ($402 million).

Looked at as a household and eliminating three zeroes, Carmel’s income is $141,000 and its debt is $1.4 million. Its debt is 9.4, 4.6 and 3.4 times its neighbors as shown above.

And, the health the mayor uses as an index is 10 to one versus 4.4, 6.9 and 6 to 1 among our neighbors.

I recall that famous country and western lyric: “Who you gonna believe? Me or your lyin’ eyes?”

What are we to believe? The opinion of an incumbent running for re-election or the facts the city embarassingly has to report to the State of Indiana?



Fellow non-mayors of Carmel will remember Bernard L. Madoff. Bernie is a confessed fraudster and operator of the largest Ponzi scheme in history.

Prosecutors figures he bilked clients of $64.8 billion. At least that’s the estimate of the 4,800 clients they investigated. 

A Ponzi scheme, Wikipedia informs us, “is a form of fraud in which a purported businessman lures investors and pays profits to earlier investors using funds obtained from newer investors.” Something for nothing postponing all the risk now to “someone” and “sometime” the schemer-in-charge never identifies by name.

Carmel’s $1.4 billion total outstanding debt obligation is a form of fraud in which a purported representative of the people borrows money without the people’s consent and says it will be paid using funds from new people.

A Ponzi scheme is illegal. Bernie’s in the Big House.

Carmel’s debt is legal. As a council member explained it to me, the city doesn’t need your agreement because “Indiana is not a referendum state.”

This is a simple tautology — like saying a bachelor is an unmarried man. The council member forgot that Indiana law can be changed. That Indiana trusts local politicians means Indiana has not established stricter controls on council members — like requiring people’s permission before amassing the full faith and credit of the people to borrow hundreds of millions of dollars.

Our debt is legal, but is it polite? Is it ethical? Is it moral to make decisions now that ham-string future councils and future Carmelitics?



Earlier this year, the Downtown City Center Development Corporation (DCCDC) was formed and registered with the Indiana Secretary of State.

In its articles of incorporation, it said its purpose was “to benefit, perform and carry out the charitable, education and other public purposes of the City of Carmel, Indiana.”

Curious, I asked the person listed as the registering agent, the executive director of the Carmel Redevelopment Commission (CRC) , Henry Metstetsky, a few logical questions. No. 1 on the list was “Why was the DCCDC formed? What problem does it solve?”

I wondered why we needed a DCCDC when we already have a CRC and a Carmel City Center Community Development Corporation (CCCCDC). Then there’s the Carmel Redevelopment Autority and the Carmel Bond Bank, to name just two of the legal entities in the game.

Metstetsky did not answer in writing but phoned me to not answer. He did tell me how much he enjoyed riding his two-wheeler along the Monon Trail and gazing at the Palladium.

Undaunted, I e-mailed Ron Carter, a council member and then listed as secretary to the CCCCDC, asking the same questions I asked Metstetsky.

He replied that he couldn’t speak for the DCCDC (which I hadn’t asked him to do) but offered his views:

“Indiana Code provides for the establishment of Community Development Corporations to assist Redevelopment Corporations in achieving and maintaining their missions.”

Then, a day later, he offered:

“I must tell you also that I am responding to you only because you are a citizen and not because you hold yourself out as a journalist, columnist or what have you. That is because I read a couple of your first letters to the editor.

“I do not consider your writing factual, well-researched or, in any way, funny.

“My thought on your writing is that what you do is not intended for the betterment of the community, but only to provide yourself with a sense of somewhat perverse gratification.”

Truer words were never written. I am a citizen and do not write for wages. I did that with The Associated Press in Chicago for a number of years and went on to other things.

I fear Carter won’t read this but I humbly ask you, my fellow non-mayor, how can anyone write factual, well-researched reports when the official sources clam up?

AP taught me politicians clam up when they have something to hide. I researched that and found it factual. In Carmel, where fact are hard to find.

Oh, in its most recent (2016) IRS Form 990, the CCCDC spent 7.6 percent more than it took in. Another Carmel fact and typical of the breed.


You’ll recall the theory that says you convince yourself a ridiculous claim is rational because a more irrational person is coming along behind you to bail you out.

Well, as you wait, you can consider how to spot a ridiculous claim in the first place and thereby avoid the Great Fool trap.

the omniscient Wikipedia essay on Ponzi Schemes (something for nothing) includes a series of red flags the Securities and Exchange Commission will warn the prudent:

  1. High investment with little or no risk. A $1.4 billion total outstanding debt obligation carries high risk. City Hall keeps saying there is little or no risk. How are these chaps on the Tooth Fairy?
  2. Secretive and/or complex strategies. Ask your council person to explain the City’s debt structure and Pixie Dust, magical repayment formulas.
  3. Difficult paperwork. Errors and inconsistencies abound in the published stories of prior Carmel Redevelopment Commission finances. There is even a rumor now that, because it bought Certificates of Deposit with bond issue funds, current bills are being held until the CD’s mature next year. Just a rumor.
  4. Secrecy. If you want a week or two of fun, submit a formal Freedom of Information request for income and expense data on X (pick you favorite public-private partnership — Palladium, Tarkington Theatre, apartment/mixed-use project). Wait two weeks and get this reply from the City Attorney: “The City has identified no records that are responsive to your request.

Why keep things complicated when simple taxpayers ask simple questions about the simple fact that millions of dollars have been borrowed to build and buy that which is not necessary — indeed, that which is luxurious and irrelevant?

Stay tuned, Carmelonist.


As an official non-mayor of Carmel, I delight in the offerings of our splendid library.

More, I profit from its research resources. Too lazy to fire up a search engine at home, I wander to the edifice of learning and use theirs. Or, rather, I use ours, since Carmelias of all stripes pay the bills, volunteer to serve and otherwise make a first-class treasury of wisdom. And, soon, we will be able to vote for a bond issue to create a second library — one west of U.S. 31 — to bring wisdom to the frontier.

At the old library,  I recently discovered two useful nuggets:

First, the 19th Century Romantics presented a warped view of reality that led directly to World War. Convinced their balance of power would insure peace forever, they built up their militaries and built down their national wealth, buying guns and hoping they were buying time.

Second, the Great Art Con is alive and well. The scam works like this: Find someone with lots of money and little taste. Drip and drool paint onto a blank piece of canvas. Frame it. Sell it for millions of dollars and have it displayed in a brand new, ultra-modern museum in New York City which a wealthy heiress built to impress her cocktail party pals.

Two thoughtless products of idle minds, you say? Well, Carmelon, you are right. Thoughtless is the operative word.

Thoughtless, as in running up a $1.4 billion tab and betting economic, social and ethical blindness will go on forever and ever. Thoughtless as in confusing extravagance with taste. Thoughtless as in ignoring ordinances and statutes and good sense.

Think about it and share your thoughts with me via bill@gatea.com.

And, if your book club or association would want to hold a discussion with me, I work cheap. A chair. A table. A cup of coffee. I’m there, Carmelinian.


After another conversation with an elected Carmel official, the subject of Carmelonic debt arose.

Again, the representative of the people asked why I couldn’t swallow the Party Line. He wondered why I thought $1.4 billion was excessive.

The Party Line is available via Facebook (Jim Brainard for Carmel Mayor page, April 28, 2015 at 10:06 pm). To wit:

Mayor: “Carmel is in great shape. all the experts agree . . .  My friend Ron Carter has provided the information below.”

Carter: “We have total outstanding debt principal of $598 million. (Rival Candidate) wishes to add in interest so he can drive that number up to his $1 billion figure. . . (But) debt is paid back at varying times and at varying rates. (Hence, adding interest to principal is not the way to think of debt.)

“One penny of your residential property tax rate goes to pay the debt you are responsible for as a homeowner.”

He then itemized the percentages involved in the debt repayment formula the City uses. Business property taxpayers were on the hook for 52 percent; utility rate payers, 25 percent; County allocation of taxes, 16 percent, and capital leases, 1 percent (lease payments for police and fire vehicles).


You only pay residential property tax? You don’t pay utility  taxes? You didn’t pay the taxes the county returns on a pro-rated basis? Businesses don’t pass along all their costs  — including taxes — in the prices you pay for goods and services?

Who is fooling whom?

In Econ. 101, we learned of the Greater Fool theory. The price of an object is not derived from its intrinsic  value, but by irrational beliefs and expectations. In the Mayor-Carter Great Fool Corollary, one may pay a foolishly low price because a greater fool is paying elsewhere.

In a future blog, I will share what I’ve learned about (a) how to spot a Ponzi Scheme, (b) why people withhold information and (c) why using good words to hide bad deeds got us into big trouble in the 20th Century.

Stay tuned, Carmelats.


As an official non-mayor of Carmel, I have always enjoyed Monty Python, the Three Stooges and Roadrunner comedy.

But, for pure zany folly, nothing beat a few minutes with Jim Brainard for Carmel Mayor, a Facebook funny well worth reading.

Take this zany, boffo exchange:

Mayor: “Carmel is in great shape . . .If you want to delve more deeply into the numbers, my friend Ron Carter has provided the information below.”

Carter: ‘We have a total outstanding debt principal of $598 million. (X) wishes to add in interest so he can drive that number to his $1 billion figure. . . In practice you do not do that because debt is paid back at varying times and at varying rates.

“The debt that has to be paid from Property Tax is just 3 percent of the $598 figure.” He then coyly notes business property tax is 52 percent; county-allocated income tax; 16 percent, utility taxes, 25 percent, and so on.

If you’re diagramming it, A relates to B; C relates to D. Therefore, don’t worry about debt because you can borrow 3 times your income and your property taxes (presumably $17.9 million) pay down debt but not much.

The profound absurdity is too obvious. But, let me risk insulting your intelligence my merely noting:

  1. Truth in Lending requires (note that word) lenders to inform borrowers not only of principal but also of interest over the life of the loan. Lenders also want to know how much a borrower already owes. That’s why Standard & Poor’s and Moody’s raised warning flags and lowered bond ratings recently.
  2. Income to total outstanding debt for the City now is $130 million to $1.4 billion — a ratio of 10.6 to 1 (versus the Federal ratio of 6.29 to 1 or $21.4 trillion debt to annual $3.4 trillion income).
  3. Who pays? You. Not only personal property tax but income tax and utility taxes directly, and every penny of business property indirectly in cost of goods and services. Faith, hope and wishful thinking cover the balances.
  4. Implied are an end to any further borrowing, a sustained economic growth (the China model of growing your way out of debt), the sustainability of deficit spending and the morally questionable subsidies infecting the whole system.

Note, too, the learned lecture failed to include the larger questions:

Why borrow money without the consent of the governed?

What civic needs do the borrowed funds meet?

And, though he couldn’t have answered then, “Why borrow millions for a music hall for the Nitty Gritty Dirt Band in 2018?”

Or, “Why more roundabouts when the new ones do nothing to lower traffic accident or injury accident rates?”


Should the $15,120 per capita share of Carmel’s $1.4 total outstanding debt obligation now impress you, try this:

The City says there are 28,997 households in Carmel.

That would be $47,480 per household.

That’s 47 and a half large, as they say in New Jersey.

Pretty soon we’re talking real money.

And, we learned last week the City plans to spend it (in part) on the Monon Boulevard to buy a $125,000 bocce ball court; a $45,000 shuffleboard court; a $12,500 ping-pong table set-up, and a $300,000 “Luckey Climber” and a $17,500 slide as part of $417,118.75 worth of playground stuff.

Oh, and don’t forget $150,000 for an irrigation system.