HomeMy WebLinkAboutCRC-06-28-10 CRC Meeting June 28, 2010
CARMEL REDEVELOPMENT COMMISSION Meeting, Monday,
June 28, 2010
President Ron Carter called the meeting to order at 6:04 p.m. Commission members
Carolyn Anker, Bill Hammer and Jeff Worrell were present, constituting a quorum. Also
present were Karl Haas, Les Olds, Don Cleveland and Matt Worthley.
Others present:
Mike Lee, Melanie Heck and Nancy Heck.
The Pledge of Allegiance was said.
Old Business
No old business at this time.
New Business
Appointment of Treasurer for the Carmel Redevelopment Commission
Mr. Olds gave an overview of the rationale to appoint a Treasurer /Chief Financial Officer
for the Redevelopment Commission that would fill the position left by the former Chief
Financial Officer due to her relocation. After reviewing individual candidates, staff and
consultants interviewed public accounting firms to find a Treasurer /Chief Financial
Officer. The duties of the public accounting firm as Treasurer /Chief Financial Officer
would include handling the overall financial affairs of the Carmel Redevelopment
Commission as well as overseeing and assisting the current CRC financial staff.
Emphasis was placed on finding an entity experienced in working with the public sector
of finance that had a broad knowledge of accounting rules and regulations, as well as
state laws and statutes.
State statue allows the CRC ability to appoint a Treasurer who is not a CRC member or
employee of the CRC.
Mr. Olds stated his belief that appointment of a Treasurer will help provide comfort to the
City Council, Clerk Treasurer, and State Board of Accounts that the CRC funds are being
handled properly and in accordance with state laws. Mr. Olds stated the CRC staff
recommends the Commission appoint London Witte Group, LLC (LWG) as the
Commission's Treasurer, subject to negotiation of a contract.
Mr. Worrell asked for an overview on how London Witte Group was selected and a
comparison of their qualifications to the other firms interviewed. Mr. Olds stated three
accounting firms were interviewed and were provided the mission of the position,
expectations of the role as well as the conflicts and needs of the Commission. All
interviewed firms were well- equipped to handle the tasks; however, LWG became the top
choice due to the fact the staff that would be assigned to the Commission had previously
worked with the State Board of Accounts and thus are very familiar with the rules and
regulations.
Mr. Worrell mentioned the differing opinions regarding the spending of TIF funds on
operation expenses and questioned the opinion London Witte Group provided. Mr. Olds
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CRC Meeting June 28, 2010
stated the London Witte Group agreed with the Commission's view, which is backed by
legal counsel.
Mr. Worrell also requested an estimate of the cost to the Commission for this contract.
Mr. Olds stated he could not provide a number as the scope of work was not fully
developed. The first portion of work would include a period of time to become familiar
with CRC operations and setup the accounting process. After this initial period, the
contract would transition into a maintenance contract for time and material. Mr. Olds
discussed the fact that by hiring LWG, the Commission would not incur as many bills
from C.L. Coonrod Company and Umbaugh Associates. In addition, the budgeted
salary allocated for the former Chief Financial Officer would be used to offset the
expense for London Witte Group, as the position would not be replaced.
Mr. Hammer requested an overview of the tasks London Witte Group would fulfill and
overall structure which would be coordinated with current financial entities and
consultants, including the City Clerk- Treasurer's office, C.L. Coonrod Company and
Umbaugh Associates. It was stated the London Witte Group will provide overall
financial and accounting services for the Commission. They will establish and maintain
any new bank accounts, maintain existing accounts, provide a more organized accounting
system for the different TIF Districts and assist the CRC staff. The current CRC financial
staff will still carry out preparing warrants but under the new structure would be able to
prepare the checks. Review of the checks and warrants as well as the approval for
payment would go through the Treasurer to provide proper accounting.
Mr. Hammer mentioned the decision to hire an accounting firm was shared with City
Council as well as the City Clerk- Treasurer's office prior to the CRC meeting.
Ms. Anker questioned the interaction between CRC and City Clerk- Treasurer's office in
both the immediate and near future if the Commission were to approve LWG as
Treasurer. Mr. Olds stated there will be a transition period as the City Clerk Treasurer
currently holds a certain amount of funds at this time. These funds will be transitioned to
LWG for their control and supervision.
Ms. Anker questioned where the TIF funds from the County Auditor will go and if the
funds will be distributed to the various TIF accounts or if they will be distributed in one
Lump sum. Currently, the funds are forwarded to the City Clerk- Treasurer for
distribution, where the TIF funds are intermingled with the other funds available. Mr.
Olds stated this technicality will be worked out.
Ms. Anker questioned who was a part of the process to choose the public accounting
firm. It was stated that Karl Haas, Les Olds, Curt Coonrod, Ron Carter and CRC financial
staff members were involved in the selection process. Mr. Carter clarified he was in
attendance for two out of the three meetings, while Mr. Haas clarified he was present
only for the meeting with London Witte Group.
Mr. Carter discussed the June 28, 2010 Indianapolis Star article referencing the opinion
letter prepared by Mr. Bruce Donaldson of Barnes and Thornburg, dated June 23, 2010 in
response to Bruce A. Hartman's (CPA and State Examiner with the Indiana State board of
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CRC Meeting June 28, 2010
Accounts) letter to the City Clerk- Treasurer regarding disposition of sales proceeds from
land sold by the Carmel Redevelopment Commission. Mr. Carter stated the letter should
be a matter of public record and read the opinion letter in its entirety. [Letter is attached
to minutes for public record]. Mr. Carter stressed the importance of emphasizing the
redevelopment statutes referenced in the letter, as it has taken the CRC a great deal of
time and resources to work through this issue, which has proven the CRC has been
handling this issue correctly from the start. CRC will be working with the Star to correct
the article and the headline from the June 28, 2010 paper.
Mr. Worrell moved to approve Resolution 2010 -6 re: the appointment of London Witte
Group LLC as the treasurer to perform certain statutory financial duties on behalf of the
Carmel Redevelopment Commission, seconded by Mr. Hammer. Mr. Hammer reiterated
IC 36- 7 -14 -8 (b) provides that a redevelopment commission may appoint a treasurer who
need not be a member of the redevelopment commission and provide for the payment of
compensation to the appointed treasurer. Mr. Haas stated there is sufficient statutory
authority and the correct statute was cited for reference. Mr. Carter noted his belief this
will save money, both to the Commission and citizens of Carmel, due to the fact salaries
and benefits will not have to be paid to the outside Treasurer. In addition, the Treasurer
will interface well with the State Board of Accounts, as they are knowledgeable of the
rules and regulations, and thus save a great deal of time, and also allow personnel in the
City Clerk Treasurer's office to be freed up to work on the expanding duties of their
office. Mr. Hammer stated he is pleased that there will be a central point to respond to
Council's questions. Unanimously approved.
Approval of Grant to the Carmel City Center Community Development Corporation
Mr. Haas explained that, in connection with the original bond issuance to pay for the
concert hall, a reserve or escrow was established in the amount between $8 million and
$8.5 million. These funds are adequate in an amount to cover most or all remaining
expenses of the concert hall that will become due and payable between now and
November; however, this reserve is not available to the Commission until substantial
completion has been achieved as evidenced by a Certificate of Substantial Completion
delivered to the bond trustee. The deadline for substantial completion of the project as
determined by the Construction Manager is in November 2010.
By making this grant to the Carmel City Center Development Corporation (4CDC), the
4CDC can leverage the grant obligation, borrow against it, then make the payment of the
amounts that become due between now and November to complete the concert hall. It
was noted that this would be a borrowing of the 4CDC and not the CRC.
Mr. Worrell questioned what would happen should the concert hall not be completed in
time. Mr. Haas stated the risk is minimal with the chance of the concert hall not reaching
substantial completion being slim. If that were to occur, though, an additional plan is in
place to use $10 million in installment contract loans. With this scenario, the grant would
be converted by the 4CDC into installment contract loans to be paid out during the term
of that loan.
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CRC Meeting June 28, 2010
Mr. Olds stated that, based on the schedule the Construction Manager has prepared, the
chances of not reaching substantial completion were virtually incomprehensible, barring
catastrophe. Bond documents state the deadline for issuance of the certificate of
substantial completion as December 31, 2010.
Mr. Hammer and Ms. Anker both confirmed recent conversations with the Construction
Manager that the project was on schedule.
Mr. Hammer requested verification from Mr. Haas that IC 36 -17 -14 -12.2 (26) provides
explicit authority for grants to community development corporations. Mr. Haas
confirmed that was correct.
Ms. Anker requested an explanation between the November and December completion
dates mentioned. Mr. Olds stated the November deadline had been set by the
Construction Manager for the project to allow additional time for any problems that may
arise.
Mr. Carter noted that group tours of the concert hall were being curtailed as the
scaffolding was taken down and flooring was being placed in the lobbies.
Mr. Hammer moved to approve Resolution 2010 -7 re: a grant to the 4CDC in an amount
not to exceed $10,000,000.00. Seconded by Ms. Anker and unanimously approved.
Approval of Construction Contract for RPAC Exterior Retaining Wall Limestone and
Utility Vault Masonry
Bids for Parcel 7 Regional Performing Arts Center Masonry Cladding Package P11
were opened at the May 19, 2010 regular CRC meeting. Mr. Olds referenced a map of
the project and reviewed project details. Mr. Olds stated funding was allocated in the
budget to cover this project and recommended the contract be approved.
Mr. Worrell requested clarification on where the funds had come from within the budget.
Mr. Olds stated the funds were taken from various budget items, including the landscape
budget and furniture budget. Bids for the furniture package came in significantly lower
than expected, thus freeing up the funds. In addition, the Construction Manager has
allowances in some areas that can be used. Mr. Olds stated this project was a good long-
term investment and cautioned if it was not done now, there may be regrets later.
Mr. Carter stated additional funds were available due to a $40,000 cut on a project in the
Arts Design District. In addition, a reduction on the Kiku Obatu sign package for the
RPAC is a possibility.
Discussion ensued regarding the importance of the project, the original project budget
and how the bid compared to what was originally estimated.
Mr. Worrell stated his concern regarding lack of funds needed at a later date if this
project is approved. Discussion ensued regarding other project plans and their priority of
completion for the concert hall opening.
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CRC Meeting June 28, 2010
Ms. Anker asked for the opportunity cost of not completing this project at the present
time. Mr. Olds stated the pricing was significantly lower at the present time due to unit
prices on the majority of the limestone as well as lower overhead costs from the
construction company.
Mr. Hammer moved to approve a contract with Gibraltar Construction Corporation in the
amount of $335,000, subject to available funding. Seconded by Ms. Anker and
unanimously approved.
Approval of Invoices for Umbaugh Associates
Mr. Olds stated the Umbaugh Associates invoice in the amount of $74,521.25 was not
included in the June 16, 2010 packet due to concern for funding. Funding is now in
place. Mr. Olds noted the bills are high due to the time Umbaugh Associates has spent
responding to City Council on a regular basis.
Mr. Worrell inquired regarding a reimbursement from the City or the creation of a policy
to limit the frequency of the Council to engage our paid consultants. Mr. Carter stated
this issue should be brought to the president of the Council and inquired regarding a
request to consultants for a separate time and billing statements regarding City Council
requested items.
Discussion ensued with regard to concerns on the amount of City Council related items
included in the invoice, structure and logistics of future billing, additional items on the
invoice that can be reimbursed from separate entities and timing of reimbursement.
Ms. Anker emphasized the dialogue was not an issue with the services of Umbaugh
Associates but rather a discussion on content of the invoice. Mr. Worrell echoed Ms.
Anker's sentiment regarding Umbaugh; however, would prefer billings quarterly or
monthly.
Mr. Hammer moved to approve an invoice from Umbaugh Associates in the amount of
$74,521.25 for accounting and financial services. Seconded by Ms. Anker and passed
unanimously.
Adjournment
Mr. Worrell moved the meeting be adjourned and seconded by Ms. Anker. The meeting
was adjourned at 7:10 p.m.
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BARNES ÞBURG LLP
11 South Meridian Street
Indianapolis, IN 46204 -3535 U.S.A.
(317) 236 -1313
Fax (317) 231-7433
Bruce D. Donaldson www.btlaw.com
(317) 231-7290
Email: bdonalds @btlaw.com
June 23, 2010
Honorable James Brainard, Mayor
City of Carmel, Indiana
One Civic Square
Carmel, IN 46032
Re: Carmel Redevelopment Commission
Dear Mayor Brainard:
I have reviewed the letter dated May 24, 2010, from Bruce A. Hartman, CPA, State
Examiner for the Indiana State Board of Accounts, addressed to Ms. Diana L. Cordray, Clerk
Treasurer for the City of Carmel, regarding disposition of sales proceeds from land sold by the
Carmel Redevelopment Commission "CRC Mr. Hartman's letter appears to set forth the
position of the State Board of Accounts on this issue as set forth in its accounting policy manual,
but does not address the provisions of the governing statute, IC 36 -7 -14 (the "Redevelopment
Act which contains several technical and somewhat complicated and vague provisions
regarding the required disposition of land sales proceeds by a redevelopment commission in a
couple of specific situations.
All of that aside, if the CRC were to follow the directive in Mr. Hartman's letter, then
the proceeds from the sale of land purchased with tax increment finance "TIF moneys from a
TIF allocation fund would need to be returned to that TIF allocation fund. Even if that is the
case, the Redevelopment Act permits TIF moneys in a TIF allocation fund to be spent on a very
broad spectrum of redevelopment and economic development activities. Section 39(b)(2) of the
Redevelopment Act sets forth the specific authorized uses of TIF moneys. Section 39(b)(2)(J)
authorizes a redevelopment commission to use TIF to "[p]ay expenses incurred by the
redevelopment commission for local public improvements that are in or serving the allocation
area. Public improvements include buildings, parking facilities, and other items described in
Section 25.1(a) of this chapter." (Emphasis added.) Section 25.1(a) of the Redevelopment Act
allows for payment of "all expenses reasonably incurred in connection with the acquisition and
redevelopment of the property, including....all reasonable and necessary architectural,
engineering, legal, financing, accounting, advertising, bond discount, and supervisory expenses
related to the acquisition and redevelopment of property or the issuance of bonds."
In addition, as noted above, Section 39(b)(2)(J) of the Redevelopment Act permits the
CRC to spend TIF moneys on expenses incurred for "local public improvements." That term is
not defined in the Redevelopment Act, but is defined in a companion statute, IC 36- 7- 14.5 -6(2),
to mean, among other things, "[a] purpose of a commission under IC 36 -7 -14 or IC 36- 7 -30."
Chicago Elkhart Fort Wayne Grand Rapids Indianapolis South Bend Washington, D.C.
Honorable James Brainard, Mayor
June 23, 2010
Page 2
Therefore the CRC may spend TIF moneys on any of its purposes under the Redevelopment Act.
Those purposes include, among others, the "clearance, replanning, and redevelopment of areas
needing redevelopment" (Section 2(a)); the "assessment, planning, replanning, remediation,
development, and redevelopment of economic development areas" (Section 2.5(a)); to
"investigate, study, and survey areas needing redevelopment within the corporate boundaries of
the unit" (Section 11(1)); and to "promote the use of land in the manner that best serves the
interests of the unit and its inhabitants" (Section 11(3)). To further those purposes, the CRC is
granted the powers under the Redevelopment Act, among others, to "[a]ppoint an executive
director, appraisers, real estate experts, engineers, architects, surveyors, and attorneys" (Section
12.2(a)(14); to "[a]ppoint clerks, guards, laborers, and other employees the commission
considers advisable" (Section 12.2(a)(15)); to "[rjent offices for use of the department of
redevelopment" (Section 12.2(a)(19); to "[e]quip the offices of the department of redevelopment
with the necessary furniture, furnishings, equipment, records, and supplies" (Section 12.2(a)(20);
and to "[e]xpend, on behalf of the special taxing district, all or any part of the money of the
special taxing district" (Section 12.2(a)(21).
From all of this it seems clear that a redevelopment commission, including the CRC, has
very broad authority under the Redevelopment Act to expend TIF moneys in a TIF allocation
fund for a wide spectrum of activities that relate to the promotion, development and staffing of
its projects.
If you have further questions on this matter, please do not hesitate to contact me.
Very truly yours,
ruce D. Donaldson
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