Carmel's mini debt crisis

I’m a gushy big-government liberal. But fiscal fiascoes like the one currently taking place in Carmel, Ind., make me sympathize a bit with the tea partiers I usually hate.
 Just a little bit.

Last November, after already having borrowed more than $260 million to pay for massive redevelopment projects, the Carmel Redevelopment Commission approved another $15 million worth of debt to allow itself to continue running. That money is projected to dry up before the end of this year.

During the last four years, the commission has been the golden child of the civic planning community. Its work within the City of Carmel is frequently called one of the most ambitious and effective redevelopment projects in the country.

But according to city documents, the commission, which represents a partnership between public appointees and private ventures, engaged in multiple questionable practices to finance this success.

The commission engaged in risky loan practices and developed a $6.4 million operating budget without ever identifying a permanent source of funding for it by exploiting a loophole in the law governing their financial activities.

This all happened because Mayor Jim Brainard said he knew he didn’t have the backing on the city council to get funding.

Now, Brainard and his commission need a favor from a city council they have snubbed for the past four years just to stay afloat.

The foolish actions of Brainard and this commission are sure to become fodder for the cannons of small-government proponents everywhere.

I do see their point. Brainard has done what they accuse liberals everywhere of doing. He and the commission have been optimistically rubber-stamping spending programs without giving a thought to how they could possibly pay for it.

Worse, Brainard did it by dodging a portion of the democratic process designed to allow the people of Carmel to have their say.

Technically, the actions of Brainard and the commission were legal. Rather than floating municipal bonds, which required city council approval, the commission merely allowed contractors to take out loans backed by public funds. The debt was technically acquired by the contractor and not outside the scope of the commission’s abilities.

But the contracts and loans were backed entirely by the commission and appeared on the city’s books as its own debt.

Brainard’s willingness to so blatantly and intensely sidestep a process meant to place restrictions on the power of appointed officials is a clear indicator of his flawed moral character.

And, as we all know, legality and morality are two very different things.

­— drlreed@indiana.edu