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HomeMy WebLinkAboutCCM-05-31-05 Special MeetingOffice of the Clerk-Treasurer Cky of Carrne] COMMON COUNCIL SPECIAL MEETING AGENDA TUESDAY, MAY 31, 2005 - 6:00 P.M. COUNCIL CHAMBERS/CITY HALL/ONE CIVIC SQUARE MEETING CALLED TO ORDER INVOCATION PLEDGE OF ALLEGIANCE CLAIMS · Payroll · General Claims · Retirement OLD BUSINESS Second Reading of Ordinance D-1752-05; An Ordinance of the Common Council of the City of Carmel, Indiana, Approving a Lease Between the City of Carmel Redevelopment Authority and the City of carmel Redevelopment Commissign, and Addressing Matters Related Thereto (Performing Arts Center); Sponsor(s): Councilor(s) Carter and Sharp. EXECUTION OF DOCUMENTS 6. ADJOURNMENT ONE CIVIC SQUARE CARMEL, IND1ANA 46032 317/571-2414 COMMON COUNCIL SPECIAL MEETING MINUTES TUESDAY, MAY 31, 2005 - 6:00 P.M. COUNCIL CHAMBERS/CITY HALL/ONE CIVIC SQUARE MEMBERS PRESENT: Mayor James Brainard, Council President Kevin Kirby, Council Members Rick Sharp, Brian Mayo, Joe Griffiths, Fred Glaser, Ron Carter, Mark Rattermann, Clerk-Treasurer Diana Cordray and Deputy Clerk- Treasurer Lois Fine. CLAIMS: Councilor Mayo made a motion to approve the claims in the amount of $1,472,414.72. Councilor Glaser seconded. Council President Kirby called for the question. Claims were approved 7-0. OLD BUSINESS Council President Kirby announced the Second Reading of Ordinance D-1752o05; An Ordlnance of the Common Council of the City of Carmel, Indiana, Approving a Lease Between the City of Carmel Redevelopment Authority and the City of Carmel Redevelopment Commission, and Addressing Matters Related Thereto (Performing Arts Center); Sponsor(s): Councilor(s) Carter and Sharp. The following persons addressed Council in favor of Ordinance D-1752-05 (Performing Arts Center): Larry Creviston Tom Akins Wendy Farber David Bowden Sean Sullivan Linda Bachofner Ann Conrad Susan Smith Nicholas Rhoad Mo Merhoff Tracy Phillips Don Farrell Fred F. Todd Pam Retzlaff Sue Maki Jeanne Book 179 Aspen Way, carmel, IN 46032 (Carmel Community Players) 9650 Sunwood Way, Carmel, 1N (CSO) 11653 Rosemeade Drive, Carmel, 1N 46032 (City Center Children's Theatre) 11 1st Avenue NE (Carmel Symphony Orchestra - Music Director) 8440 Allison Pointe Blvd (Centex Homes) 5246 Sherwood Court, Carmel, IN (Cannel Arts Council) 410 2nd Avenue NE (Carmel High School - Choir Director) 12982 Wembly Ct, Carmel, IN (CCP) 222 Heritage Lane, Carmel, 1N 50 l 3 Buckeye Ct (Chamber of Commerce) 12265 Sydney Ct, Indianapolis, IN 46236 (Carmel Symphony Orchestra) 11533 Larkspur Lane, Carmel, IN (Actors Theatre of Indiana) 510 Deacon St, Carmel, IN (Carmel Station Homeowners President) 633 Hampshire Ct., Carmel, 1N (Central Indiana Dance Ensemble) 1300 Helford Lane, Carmel, IN 12550 Springmill Rd., Carmel, IN (Carmel Symphony Orchestra The following persons addressed Council in opposition to Ordinance D-1752-05 (Performing Arts Center): Bill Styring Charles B. Sampson Wayne A. Wilson Liz Wilson 3624 Brian Place, Cam~el, IN (attachment 1) 11716 Eden Estates (Tax Payers) 24 Wilson Drive, Carn~el, IN (Concerned Carmel Citizen's) 24 Wilson Drive, Carmel, IN The following person addressed Council in favor, but with concerns regarding funding of Ordinance D-1752-05 (Performing Arts Center): Nellie Pipkin 954 E. 108th Street, Homeplace Council President Kirby called a recess at 7:35 p.m. Council President Kirby reconvened the meeting at 8:38 p.m. There was extensive Council discussion. Mayor James Brainard, Sean Ryan, FRICS, Senior Consultant, Donnell Consultants Inc., Loren Matthes, H. Umbaugh & Company, and Bruce Donaldson, Attorney, Barnes & Thornburg LLP addressed Council's questions. Clerk-Treasurer Diana Cordray addressed Mayor Brainard. Loren Matthes made a presentation to Council. Councilor Sharp made a motion to amend Ordinance D-1752-05 by adding to the end of line 33, Section 1, delete the period, add a (comma), on the condition that the maximum original issue an~ol~nl of the Bonds shall not exceed $80,005,000. Councilor Mayo seconded. Council President Kirby called for the question. The motion to amend Ordinance D-1752-05 ~vas approved 6-1 (Conncilor Rattermann opposed). Council President Kirby called for the question. Ordinance D-1752-05~ As Amended~ was adopted 4-3 (Councilors Kirby, Glaser and Rattermann opposed). EXECUTION OF DOCUMENTS Council President Kirby adjourned the meeting following execution of documents at 9:18 p.m. ADJOURNMENT Re~ed, Clerk-Treasurer Diana ~ Apprqved, /~ ['~ ../~ M~d/qor James Brainard Bill Styring 3624 Brian Place My name is Bill Styring. My wife, Ellen, and I live at 3624 Brian Place. We have been residents of Carmel for nearly 25 years. I am an economist by profession. My remarks this evening will be brief and address only the capital side of the project. That is where my expertise lies. I sincerely mean them to be helpful to you in your deliberations. I've tried to be a good citizen and understand this project as best I can, in a way that even dumb me can get his arms around it. Mayor Brainard kindly sent me some material. The Performing Arts Center will be financed through a "Tax Increment Financing" or "TIF" District. My own experience with the TIF district concept goes back to roughly 198l. At the time I was the Vice President for Public Finace of the Indiana Chamber of Commeme. In other words, 1 was the tax lobbyist for the Indiana business community. My phone rang one day, and it was State Senator Larry Borst, then Chairman of the Finance Committee of the Indiana State Senate. He asked me what I thought of"Tax Increment Finance" districts. 1 told him I'd never heard of them. He said OK, he'd just heard of the idea, and could I please research the idea for him and give him my thoughts. He did that, I suspect, because even though I was a lobbyist I had also worked as his iasues guy for a number of years before that. In the end I wrote the original state statute for Sen. Borst which authorized the use of TIF's. In other words, I wrote the original statute under which you will be issuing these bonds. What I told Sen. Borst when I got back to him is that the concept ofa TIF is very simple. Sometimes we confuse ourselves by making it more complicated than it is, which 1 suspect is the case with the P. A. C. At root, the TIF concept is absurdly simple. A TIF revolves around the outlay of public money, usually for infrastructure, which FINANCES ITSELF. In other words, a governmental unit spends the money, and that very act generates enough additional tax revenue to recoup the oringinal expense. It has to be an addition to the tax base which would NOT have occured were it not for that particular public outlay. That's why it's called "tax increment finance". It's a sort of"up by the bootstraps" concept. The public spending is supposed to finance itself by generating additional tax revenue. Let me give a classic example. Suppose the city of Carmel has a signed contract with Styring Consolidated Industries (that's a mythical company I just made up). I agree to build a new facility if Carmel makes some infrastructure improvements, an access road, for example. My new facility adds enough taxable assessed valuation to generate enough additional property tax revenue AT THE CURRENT CITY TAX RATE to pay for the access road. If Carmel doesn't build the access road, then I don't build my facility. If Carmel does, then I do. That would be an easy decision for the Council Build the access road and Carmel would get a fmc new facility, employing lots of people and at no cost to the taxpayers. That would no doubt get a 7-0 vote from the Council. I've made a few back-of-the-envelope calculations to see how the TIF concept might or might not work in the case before you. I've a'iad to be reasonably accurate but keep it simple so dummies like me can understand. We intend to borrow $80 million to build the PAC. Let's say at an average 5 1/2% interest rate. If debt service "normalized" (i. e. level annual payments as in a standard residential mortgage...the actual repayment schedule would not be level, but let's make it so for analytical purposes) would be roughly $6 million per year (initially $4.4 million for interest, plus partial principal paydown). So, we have a simple question. Wilt building the P. A. C. generate enough additional taxable assessed valuation to yield an additional $6 million a year in property taxes at the current city tax rate? That's not additional taxable property that would have happened anyway. That's additional taxable property that will take place IF AND ONLY IF we build the P. A. C. How much taxable property is that? Well, again to keep it simple, we have a city tax rate, if my addition of the various rates to get a gross rate is correct, of slightly over $2 per $100 of AV. Call it two bucks. A little math says: IF THE P. A. C. IS TRULY GOING TO BE A "TIIv', IF IT CAN BE BUILT WITH NO TAX INCREASE ON THE AVERAGE TAxPAyER, THEN WE HAVE TO IDENTIFY NEARLY $1 BILLION IN ADDITIONAL TAXABLE ASSESSED VALUATION THAT WILL COME ON STREAM IF AND ONLY IF WE BUILD THE P. A.C. OUR CURRENT A. V. IS 5-ODD BILLION, SO THAT'S A 15-20% INCREASE IN THE CARMEL TAX BASE THAT WILL OCCUR IF WE BUILD THE P. A. C. VERSUS NOT BUILDING THE P. A. C. And 1 don't think you can count anything Pedco might build as part of this calculation, lfl understand the action of the Redevelopment Commission at their May 17 meeting, that property is already spoken for in a different, separate TIF District. So, it seems to me if you are going to vote to approve thi9 project you have to legitimately look atthe vote before you in one of two ways: I. You can say, "Yes, I believe, ex-Pedco, the P. A. C. will add a billion bucks in additional taxable assessed value over and above what would happen if we don't build the P. A.C. It will not increase property taxes on the average Carmel homeowner". lfso, it is incumbent upon you to identify where that billion dollars is likely to come from. Show us the billion bucks. 2. Or, you could say, "OK, the P. A. C. won't generate that mui:h additional taxable property, but I think this project is so important for the image of Carmel that the average taxpayer should accept a properly tax increase to pay for it." If so, we should do it with our eyes wide open that that is what we are doing and you should be honest with your constituents that that is what you are voting for. Personally, I find is difficult to believe that even over time the P. A. C. will give the Carmel tax base that much ora boost. I value the arts-not as much as those directly involved with the arts, perhaps--but not enough to pay for it ifl see a noticeable increase in my tax bill. Ill were in your shoes I would vote "no". I would be pleased to entertain any questions.