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Home My WebLink About01-23-2012 SpecialOffice of the Clerk Treasurer City of Carmel COMMON COUNCIL SPECIAL MEETING AGENDA MONDAY, JANUARY 23, 2012 6:00 P.M. COUNCIL CHAMBERS /CITY HALL /ONE CIVIC SQUARE MEETING CALLED TO ORDER 1. INVOCATION 2. PLEDGE OF ALLEGIANCE 3. RECOGNITION OF CITY EMPLOYEES AND OUTSTANDING CITIZENS 4. APPROVAL OF MINUTES a. January 9, 2012 Special Meeting 5. RECOGNITION OF PERSONS WHO WISH TO ADDRESS THE COUNCIL 6. COUNCIL, MAYORAL AND CLERK TREASURER COMMENTS /OBSERVATIONS 7. ACTION ON MAYORAL VETOES 8. CLAIMS a. Payroll b. General Claims c. Retirement 9 COMMITTEE REPORTS a. Finance, Administration and Rules Committee b. Land Use, Annexation and Economic Development Committee c. Parks, Recreation and Arts Committee d. Utilities, Transportation and Public Safety Committee e. Carmel Cable Telecommunication Commission f. Carmel Ethics Commission ONE CIVIC SQUARE CARMEL, INDIANA 46032 317/571 -2414 1 10. OLD BUSINESS a. Eighth Reading of Ordinance D- 2060 -11; An Ordinance of the Common Council of the City of Cannel, Indiana, By the Carmel Economic Development Commission ($130,000,000 The Barrington of Carmel Project); Sponsor: Councilor Snyder. Remains in the Finance, Administration and Rules Committee (1/19/12). b. Sixth Reading of Ordinance D- 2069 -11; An Ordinance of the Common Council of the City of Carmel, Indiana, Amending Chapter 9, Article 3, Division V, Section 9 -171 (Sewer Charges) of the Carmel City Code; Sponsor: Councilor Snyder. Remains in the Finance, Administration and Rules Committee (1/19/12). c. Sixth Reading of Ordinance D- 2071 -11; An Ordinance of the Common Council of the City of Carmel, Indiana, Authorizing the Acquisition, Construction and Installation of Certain Improvements for the Sewage Works System of the City of Carmel, Indiana; The Issuance of Revenue Bonds to Provide the Cost, The Collection, Segregation and Distribution of the Revenue of such System. Including the Issuance of Notes in Anticipation of such Bonds, and Repealing Ordinances Inconsistent ($11,200,000); Sponsor: Councilor Snyder. Remains in the Finance, Administration and Rules Committee (1/19/12). d. Sixth Reading of Ordinance S- 73 -11; An Ordinance of the Common Council of the City of Cannel, Indiana, Amending Chapter 9, Article 4, Sections 9 -196 (Availability Costs); 9- 199 (Oversizing); 9 -200 (Individual Connection Inside and Outside of City); 9- 207 (Allocation of Receipts) and Deleting Section 9 -205 (Individual Connections Cost Developed Areas) of the Carmel City Code; Sponsor: Councilor Snyder. REMAINS TABLED e. Resolution CC- 12- 05- 11 -02; A Resolution of the Common Council of the City of Carmel, Indiana, Amending the Contract with Carmel Fraternal Order of Police Lodge No. 185; Sponsor(s): Councilor(s) Sharp and Snyder. Remains in the Utilities, Transportation and Public Safety Committee. 11. PUBLIC HEARINGS 12. NEW BUSINESS a. First Reading of Ordinance D- 2079 -12; An Ordinance of the Common Council of the City of Carmel, Indiana, Approving the Transfer of Funds (From Keystone Avenue Improvement Fund #920 to Carmel Water Construction Fund #612) for Reimbursement of Utility Relocation Improvements Related to the Keystone Avenue Project ($1,500,000); Sponsor(s): Councilors Rider, Seidensticker and Sharp. b. First Reading of Ordinance D- 2080 -12; An Ordinance of the Common Council of the City of Carmel, Indiana, Making Technical Corrections to Ordinance D- 2070 -11; City of Carmel, Indiana, Junior Waterworks Revenue Bond of 2011; Sponsor: Councilor Snyder. 2 13. OTHER BUSINESS City Council Appointment Ethics Commission (Term expires 12 /31/13, two year term), one appointment (Democrat). 14. ANNOUNCEMENTS 15. EXECUTION OF DOCUMENTS 16. ADJOURNMENT 01/23/12 CC Special Meeting Agenda 3 1 COMMON COUNCIL SPECIAL MEETING MINUTES MONDAY, JANUARY 23, 2012 6:00 P.M. COUNCIL CHAMBERS /CITY HALL /ONE CIVIC SQUARE MEMBERS PRESENT: Council President Richard L. Sharp, Council Members Carol Schleif, W. Eric Seidensticker, Sue Finkam, Luci Snyder, Ronald E. Carter, Kevin D. Rider, Clerk Treasurer Diana L. Cordray and Deputy Clerk Treasurer Lois Fine. Council President Sharp called the meeting to order at 6:00 p.m. Pastor Paul Swartz, King of Glory Lutheran Church, pronounced the Invocation. Councilor Finkam led the Pledge of Allegiance. RECOGNITION OF CITY EMPLOYEES AND OUTSTANDING CITIZENS: There were none. APPROVAL OF MINUTES: Councilor Seidensticker made a motion to approve minutes from the January 9, 2012 Special Meeting. Councilor Snyder seconded. There was no Council discussion. Council President Sharp called for the vote. Minutes were approved 7 -0. RECOGNITION OF PERSONS WHO WISH TO ADDRESS THE COUNCIL: John Roberts, speaking on behalf of Mayflower Communities, Inc. addressed the Council in favor of Ordinance D- 2060 -11 (The Barrington of Carmel Project). Bruce Bittner, Attorney, Church, Church, Hittle Antrim, representing the Stratford, addressed the Council opposed to Ordinance D- 2060 -11 (The Barrington of Carmel Project). COUNCIL, MAYORAL AND CLERK TREASURER COMMENTS /OBSERVATIONS: Councilor Snyder addressed the Council regarding the Hamilton County Humane Society and provided the following statistics for 2011: 501 animals at the start of 2011 3,461 animals received in 2011 3,101 animals adopted in 2011 599 lost animals returned to owners in 2011 3,700 total animals placed in 2011 1 ACTION ON MAYORAL VETOES: I There were none. CLAIMS: Councilor Seidensticker made a motion to approve claims in the amount of $2,079,998.54. Councilor Snyder seconded. There was no Council discussion. Council President Sharp called for the vote. Claims were approved 7 -0. COMMITTEE REPORTS: Councilor Snyder reported that the Finance, Administration and Rules Committee met and discussed Ordinance D- 2060 -11. Councilor Snyder will present the committee report when the item appears on the agenda. Councilor Seidensticker reported that the Land Use, Annexation and Economic Development Committee had not met. Councilor Carter reported that the Parks, Recreation and Arts Committee had not met. Councilor Rider reported that the Utilities, Transportation and Public Safety Committee had not met. Carmel Cable Telecommunication Commission. No report was given. Carmel Ethics Commission. No report was given. OLD BUSINESS Council. President Sharp announced the Eighth Reading of Ordinance D- 2060 -1 An Ordinance of the Common Council of the City of Carmel, Indiana, By the Cannel Economic Development Commission ($130,000,000 The Barrington of Carmel Project). Councilor Snyder presented the Finance, Administration and Rules Committee report to the Council. This item was referred back to the Council with a 4 -0 favorable recommendation. There was no Council discussion. Councilor Seidensticker made a motion to approve Ordinance D- 2060 -11. Councilor Rider seconded. There was no Council discussion. Council President Sharp called for the vote. Ordinance D- 2060 -11 was adopted 7 -0. Council President Sharp announced the Sixth Reading of Ordinance D- 2069 -11; An Ordinance of the Common Council of the City of Carmel, Indiana, Amending Chapter 9, Article 3, Division V, Section 9 -171 (Sewer Charges) of the Carmel City Code; Sponsor: Councilor Snyder. Remains in the Finance, Administration and Rules Committee. This item was not discussed. Council President Sharp announced the Sixth Reading of Ordinance D- 2071 -11; An Ordinance of the Common Council of the City of Carmel, Indiana, Authorizing the Acquisition, Construction and Installation of Certain Improvements for the Sewage Works System of the City of Cannel, Indiana; The Issuance of Revenue Bonds to Provide the Cost, The Collection, Segregation and Distribution of the Revenue of such System. Including the Issuance of Notes in Anticipation of such Bonds, and Repealing Ordinances Inconsistent ($11,200,000); Sponsor: Councilor Snyder. Remains in the Finance, Administration and Rules Committee. This item was not discussed. 2 1 1 1 Council President Sharp announced the Sixth Reading of Ordinance S- 73 -11; An Ordinance of the Common Council of the City of Carmel, Indiana, Amending Chapter 9, Article 4, Sections 9 -196 (Availability Costs); 9 -199 (Oversizing); 9 -200 (Individual Connection Inside and Outside of City); 9- 207 (Allocation of Receipts) and Deleting Section 9 -205 (Individual Connections Cost Developed Areas) of the Carmel City Code; Sponsor: Councilor Snyder. REMAINS TABLED. This item was not discussed. Council President Sharp announced Resolution 12- 05- 11 -02; A Resolution of the Common Council of the City of Cannel, Indiana, Amending the Contract with Cannel. Fraternal Order of Police Lodge No. 185; Sponsor(s): Councilor(s) Sharp and Snyder. Remains in the Utilities, Transportation and Public Safety Committee. This item was not discussed. PUBLIC HEARINGS There were none. NEW BUSINESS Council President Sharp announced the First Reading of Ordinance D- 2079 -12; An Ordinance of the Common Council of the City of Cannel, Indiana, Approving the Transfer of Funds (From Keystone Avenue Improvement Fund #920 to Carmel Water Construction Fund #612) for Reimbursement of Utility Relocation Improvements Related to the Keystone Avenue Project ($1,500,000). Councilor Seidensticker made a motion to move this item into business. Councilor Snyder seconded. Councilor Snyder presented this item to the Council and made a motion to suspend the rules and not send this item to committee and vote this evening. Councilor Sch.leif seconded. There was no Council discussion. Council President. Sharp called for the vote. The motion was approved 7 -0. Councilor Seidensticker made a motion to approve Ordinance D- 2079 -12. Councilor Schleif seconded. There was no Council discussion. Council President Sharp called for the vote. Ordinance D- 2079 -12 was adopted 7 -0. Council President Sharp announced the First Reading of Ordinance D- 2080 -12; An Ordinance of the Common Council of the City of Carmel, Indiana, Making Technical Corrections to Ordinance D- 2070 -11; City of Carmel, Indiana, Junior Waterworks Revenue Bond of 2011. Councilor Seidensticker made a motion to move this item into business. Councilor Schleif seconded. Councilor Snyder presented this item to the Council and referred to Rich Starkey, Attorney, Barnes Thornburg, to address the Council. Councilor Seidensticker made a motion to suspend the rules and not send this item to committee and vote this evening. Councilor Rider seconded. There was no Council discussion. Council President Sharp called for the vote. The motion was approved 7 -0. Councilor Seidensticker made a motion to approve Ordinance D- 2080 -12. Councilor Schleif seconded. There was no Council discussion. Council President Sharp called for the vote. Ordinance D- 2080 -12 was adopted 7 -0. OTHER BUSINESS City Council Appointment Ethics Commission (Term expires 12/31/13, two year term), one appointment (Democrat). Councilor President Sharp opened the floor for nominations. There were no nominations. This appointment was set aside until the next Council meeting. 3 1 ANNOUNCEMENTS Councilor Carter informed the Council that Monday, January 23, 2012 is the start of the Year of the Dragon (Chinese New Year) and wished the Chinese population health, happiness and prosperity this coming year. EXECUTION OF DOCUMENTS ADJOURNMENT Council President Sharp adjourned the meeting at 6:40 p.m. Respectfully submitted, ATTEST: Olin/ l2 CC Special Meeting Minutes Diana L. Cordray, IAMC, Clerk- I asurer Clerk Treasurer Diana L. Cordray,f1AMC Approved, 4 Jales Brainard, Mayor INTERNAL REVENUE SERVICE P. O. BOX 2508 CINCINNATI, OH 45201 Date :DEC 0 2011 MAYFLOWER COMMUNITIES INC C/O I7AKE BARNEY 2200 ROSS AVE STE 2200 DALLAS, TX 75201 -6776 Dear Applicant: G DEPARTMENT OF THE TREASURY Employer Identification Number: 26- 1446350 DLN: 1 Contact Person: RONALD p BELL Contact Telephone Number: (877) 829 -5500 Accounting Period Ending: December 31 Public Charity Status: 5O9() (2) Form 990 Required: Yes Effective Date of Exemption: May 15, 2010 Contribution Deductibility: Yea Addendum Applies: Yes ID4 31.185 We are pleased to inform you that upon review of your application for tax exempt status we have determined that you are exempt from Federal income tax under section 501(c)(3) of the Internal Revenue Code. Contributions to you are deductible under section 1/0 of the Code. You are also qualified to receive tax deductible bequests, devises, transfers or gifts under section 2055, 2106 or 2522 of the Code. 13ecause this letter could help resolve any questions regarding your exempt status, you should keep it in your permanent records. Organisations exempt under section 501(o)(3) of the Code are further classified as wither public charities or private foundations, We determined that you are a public charity under the Code sections) listed in the heading of this letter. Please see enclosed Publication 4221 -PC, Compliance Guide, for 501(a)(3) Public Charities, for some helpful information about your responsibilities as an exempt organization. Letter 947 (DO /CO) Z0'd EES2 29 ESS SdI 6b:ET 6002- 0T -D3C MAYFLOWER CDMMUNITIES INC Enclosure: Publication 4221 -PC We have sent a copy of this letter to your representative as indicated in your power of attorney. Sincerely, c4;,„ 57. Lois G. Lerner Director, Exempt Organizations Letter 947 (DO /C) E0'd EES£ 29d ETS SJ1 OS:ET 600E- 0T -930 RE: The Barrington development to use your tax money now and forever Dear friend; The City of Carmel (i.e.: the taxpayers) is being asked to provide The Barrington development with 2 subsidies: both low property taxes and taxpayer subsidized financing. These costs will come out of all of our pockets. Our tax money is being used to subsidize a Developer and their consultants whom will take out most of their profits up front from a bond issue (leaving a non- profit shell). Our tax money is being used by a so called "non- profit" which is building and selling healthcare and retireffnent housing to the wealthy. The Developer has asked the City's taxpayers to allow it to issue $130 million of bonds to fund a 134 independent living units (i.e.: apartments for the wealthy) and 127 healthcare units (none of which are for the poor). This is more than $500,000 per unit! Tax Free financing for development was meant to finance public purposes. As the tax free rate is a subsidy of the interest rate by ALL taxpayers as the investor does not have to pay as much tax as the rest of us would on any of our investments. Do you think it is right to provide a subsidy for an entity serving the wealthy? And for such subsidy to allow the Developers and their consultants to take out large cash flow profits up front? The Developer has stated they will create jobs. Are you getting money from other taxpayers for the jobs you create? And if the jobs are truly supportable why is our tax money needed for them? In addition, the Developer has obtained an agreement from the City (i.e.: us) to only have to pay $300,000 in an annual fee instead of having to pay property taxes. Note: you and I would pay about $1.2 million in property taxes on a development which costs $130 million. In other words: we are being asked to subsidize both: 1, upfront profits to this Developer to build homes for the wealthy; and 2, to continue to subsidize the wealthy to live there as they will pay less in property taxes than you and I. And their annual fee in lieu of property taxes is a fixed amount. Is your property tax rate fixed on your ($500,000) home? Or will it go up? If you think this is unfair, and a foolish use of our tax money, then call the Mayor and the City Council and let them know you are opposed to the use of our tax money to fund Developer consultant profits and housing for the wealthy. The Barrington might be a good development. The Developer should obtain non- subsidized financing and pay the same property taxes as the rest of us have to do. PS: My spouse and I should have signed this but 1 of us has to continue to work with 1 of the entities making so much money off of the Barrington development. DOUGLAS D. CHURCH, PC JACK G. HITTLE, PC J. MICHAEL ANTRIM, PC BRUCE M. BITTNER, PC LESLIE CRAIG HENDERZAHS, PC DAVID R. DAY, PC ERIC M. DOUTHIT, PC ANN M. O'HARA, PC SAMUEL R. ROBINSON, PC STEVEN M. LUTZ, PC ANDREW A. MANNA, PC Ladies and Gentlemen: NOBLESVILLE OFFICE 938 CONNER STREET P.O. BOX 10 NOBLESVILLE, INDIANA 46061 PHONE (317) 773 -2190 FAX (317) 773 -5320 CHURCH, CHURCH, HITTLE ANTRIM ATTORNEYS AT LAW Established 1880 Mayor and Members of the Common Council City of Carmel, Indiana A PARTNERSHIP OF PROFESSIONAL CORPORATIONS WWW.CCHALAW.COM January 23, 2012 VIA E -MAIL Re: Ordinance D- 2060 -11; An Ordinance of the Common Council of the City of Carmel, Indiana, By the Carmel Economic Development Commission ($130,000,000 The Barrington of Carmel Project) We are serving as special Indiana counsel to Stratford Retirement, LLC, an Indiana limited liability company, with respect to the above referenced proposed bond ordinance. Stratford Retirement, LLC operates "The Stratford," a continuing care retirement community "CCRC located at 2460 Glebe Street in the City of Cannel. The Stratford, which opened in 2007 with a total investment of $61,500,000, consists of 132 independent living villas, 38 independent living cottages and a 43 -bed health center. The Stratford employed 90 persons in the latest payroll (equal to 74 full time equivalents) at an annual payroll of $2.6 million, an average wage of $35,360 per year per full time employee. The Stratford pays $606,833 in local property taxes plus about $8,000 in personal property taxes for a total of $615,000 per year in property taxes. The Carmel Economic Development Council has approved and recommended that the City Common Council adopt Ordinance D- 2060 -11, pursuant to which the City of Carmel would issue up to $130,000,000 of its tax exempt revenue bonds (the "Bonds to finance the construction of a CCRC to be located at 1335 S. Guilford Road in Carmel and known as "The Barrington of Carmel." The Barrington will be owned and operated by Mayflower Communities, Inc., a Delaware nonprofit corporation, and will be developed by Greystone Communities, a for -profit developer based in Dallas, Texas. In addition to the substantial subsidy that would be provided by the Bonds, The Barrington also is receiving a 50% discount on its property taxes pursuant to a PILOT agreement required when the Common Council adopted Ordinance Z- 526 -09 on March 2, 2009. (During an initial phase -in period that could last up to five years, e.g., during construction and occupancy fill -up, The Barrington will receive more than a 50% discount on its property taxes.) The Bonds would be issued under I.C. 36 -7 -1 1.9 and -12. Under LC. 36- 7- 12 -21, the Carmel Economic Development Commission was required to consider whether The Barrington "may have an adverse competitive effect on similar facilities already constructed or operating" in FISHERS OFFICE 10765 LANTERN ROAD SUITE 201 FISHERS, INDIANA 46038 PHONE (317) 773 -2190 FAX (317) 572 -1609 JENNIFER L. WILLIAMS SEAMUS P. BOYCE ALEXANDER P. PINEGAR SARAH J. RANDALL JENNIFER C. HUGHES BRENT R. BORG OF COUNSEL MANSON E. CHURCH JOHN M. DAVIS MARTIN E. RISACHER J. DAVID HOLLINGSWORTH JENNIFER C. MESSER TIPTON OFFICE 118 SOUTH INDEPENDENCE STREET P.O. BOX 219 TIPTON, INDIANA 46072 PHONE (765) 675 -2400 FAX (765) 675 -2401 the City of Carmel, such as The Stratford. Ordinance D- 2060 -11 recites that the Carmel Economic Development Commission conducted the required public hearing on September 29, 2011 and found that The Barrington would not have an adverse competitive effect. In Section 3 of Ordinance D- 2060 -11, the Common Council is being requested to confirm that finding and conclude that The Barrington will not have an adverse competitive effect on any similar facilities in the City of Carmel. Notice of the public hearing conducted by the Economic Development Commission was only required to be published once in the newspaper at least 14 days prior to the hearing. No members of the public other than representatives of The Barrington attended the public hearing. Our client did not see the notice in the newspaper and, therefore, was not aware of and did not attend the public hearing. Upon becoming aware that the Common Council was considering proposed Ordinance D- 2060 -11, our client has been diligent in presenting facts regarding adverse competitive effect to the Members of the Common Council. During the December 19, 2011 Common Council meeting, and in written materials submitted prior to the January 19, 2012 Finance, Administration and Rules Committee meeting, our client presented substantial evidence that The Barrington will have an adverse competitive effect on The Stratford, which is a similar facility already constructed and operating in the City of Carmel. The Barrington will compete with The Stratford for many of the same prospective residents, with substantial tax subsidies providing it a cost advantage, siphoning off residents who would have otherwise occupied units at The Stratford, causing fill -up and stabilized occupancy of The Stratford to be delayed or perhaps never obtained and/or resulting in The Stratford being required to reduce its pricing to attract additional residents. Because the issuance of the Bonds to finance the construction of The Barrington will have an adverse competitive effect on The Stratford, we believe that adopting Ordinance D- 2060 -11 is inconsistent with the requirements of the Act and would be subject to challenge; therefore, our client urges you not to adopt this Ordinance. There have been some suggestions that providing tax subsidies to The Barrington is not "unfair" because they are equally available to The Stratford. These tax subsidies, however, are not equally available to The Stratford. For example, if The Stratford were to convert into a charitable nonprofit organization and attempt to refinance the debt on its existing facility with tax exempt bonds, it would be required under Section 145 of the Internal Revenue Code to set aside at least 20% of its units for low and moderate income residents, which put it at a significant economic disadvantage in comparison to The Barrington. (The only other option under the Code would be to substantially rehabilitate The Stratford, which is unnecessary because The Stratford is a relatively new facility that just opened a few years ago.) If, notwithstanding the adverse competitive effect on The Stratford, the Common Council is still willing to consider adopting Ordinance D- 2060 -11, our client urges the Common Council to require that the PILOT agreement be revised to require Mayflower to provide an annual certification that they are providing charitable benefits to the Carmel community in an amount at least equal to the lost tax revenue (i.e., the 50% of property taxes they are not paying) or to pay additional property taxes to the extent that they are not. This will insure that the citizens of Carmel are getting the benefit of the bargain embodied in the PILOT agreement, and is consistent with Indiana law. National Assn of Miniature Enthusiasts v. State Board of Tax Commissioners, 671 N.E.2d 218 (Ind. Tax 1996) (to qualify for the charitable purpose exemption under I.C. 6- 1.1- 10 -16, a taxpayer must demonstrate "a present benefit to the general public sufficient to justify the loss of tax revenue" (quoting St: Mary's Medical Center of Evansville, Inc. v. State Bd. Of Tax Comm'rs, 534 N.E.2d 277, 279 (Ind. Tax 1989)). The Internal Revenue Code does not specify any particular amount of charitable benefits that a nonprofit CCRC must provide in order to obtain or maintain federal tax exemption; therefore, the only way for the citizens of Carmel to be assured that Mayflower will actually provide charitable benefits at least equal to the lost property tax revenue is to amend the PILOT agreement to require certification of those benefits to the community. Our client supports the Common Council and the Carmel Economic Development Commission in your efforts to promote economic development in the City of Carmel; however, given the adverse competitive effect on The Stratford that would result from a tax subsidized competitor such as The Barrington entering a difficult housing market, we do not believe such financing is permitted under the Act and our client believes it is fundamentally unfair. Moreover, as a corporate citizen that pays all of its property taxes, our client does not believe that The Barrington should receive property tax breaks unless it provides charitable benefits at least equal to the lost property tax revenue. Very truly yours, Church Church Hittle Antrim 7ft tn. Bruce M. Bittne