Saturday, March 05, 2016

Mayor Brainard Creates Carmel Bond Bank Without Council Authority

Now that the City of Carmel has become a second class city, Mayor Jim Brainard has assumed he's a dictator of sorts who doesn't require council approval for anything. The IBJ's Lindsey Erdody tells us that Brainard just created a local public improvement bond bank and named its board without first seeking council approval to create it or fund it.

Indiana law allows second class cities to establish local public improvement bond banks by resolution approved by the council. A local bond bank is a body politic and separate from the city in its corporate capacity under Indiana law, but Mayor Brainard presumes he has unilateral authority to create separate municipal authorities just because he's mayor of a second class city.

Brainard has already appointed the local bond bank's five board members, which he is entitled to do under state law once the council has approved the creation of the corporate body. None of the five members he appointed are knowledgeable in public finance. They include: Jeff Carter, a retired deputy commissioner of the Indiana Department of Labor; Jarvis Jointer, director of business development for Shrewsberry & Associates; John Schuyler, a retired consultant; Anna Stout, a real estate agent for F.C. Tucker; and Patrick Thomas, an attorney for Neighborhood Christian Legal Clinic.

Brainard told the IBJ it wasn't necessary for the board members to have any knowledge of public finance. "I looked for a mix of people," Brainard said. "I was pleased with this group because we got some younger people involved that had not served in an official position before." He said the board will rely on financial advisers when making decisions, so members didn’t need financial expertise. "You’re not looking for people with particular expertise in bonds," Brainard said. "You’re looking for people who will have the best interests of the community at heart."

Brainard isn't worried about creating a separate staff and budget for the bond bank, even though state law clearly makes it a separate municipal authority. Instead, he is having Carmel's new Clerk-Treasurer, Christina Pauley, serve as its executive director. Pauley said her staff will assume responsibilities for the bond bank on a volunteer basis. A former executive director of Indianapolis' bond bank, Gregory Clark, questioned the legality and manner in which Brainard has gone about creating a bond bank. "You gotta make sure you’re doing things right. When done right, it can be extremely beneficial to local government," said Gregory Clark, former executive director of the Indianapolis Bond Bank. "[But] there’s so many things that could go wrong."

The newly-created bond bank is already working on its first bond issue, which will include a mix of funding for roundabouts, road projects, redevelopment infrastructure, and storm water and sewer improvements. Clark questioned the mixing of different projects in a single bond issue. "General obligation debt typically can’t be mixed with redevelopment debt or storm water or utility debt because payments are backed by different revenue sources." "I don’t think that can fall under one transaction,” Clark said, clarifying that he did not know all the details of Carmel’s bonds. "I don’t know how they could have done that."


Anonymous said...

"He said the board will rely on financial advisers when making decisions"

Those would be the bobbleheads at Umbaugh & Associates. They tell Jim Brainerd what he wants to hear.

Anonymous said...

Umbaugh & Associates make a good hunk of change by providing the ways and means of incurring debt (which are, really, only deferred taxes). Someone has to do the job because the public is so dumbed down that they view elected positions as popularity contests with "qualifications" often dependent on the candidate's hair stylists. Quaint Christian sorts used to know about Satan who went about like a roaring Lion seeking he whom he could devour. Umbaugh goes about seeking clients still capable of borrowing bonded money and perhaps they do not roar but they generally get first dibs at the kill.

Anonymous said...

Carmel Mayor Brainard follows to-the-bone-corrupt ex-soldier Marion County GOP Greg Ballard in lawless action.

The Carmel City Council does.... nothing just as the useless Indianapolis City County Councilors did....nothing.

ABOLISH CITY COUNCILS. All they ever seem to do is wail and moan while acquiescing and allowing the illegal.

Who needs ANY of these politicians?

Anonymous said...

Not sure how many John Schuler's live in Car-Mel but this one is, was, or currently trying to run for Repbulican Precinct Chairman for Cool Creek North District.

GO FIGURE.....Just another Brainard political backer considering the best interests of Brainard not Car-Mel. Seems most of Brainard's buddies are all Republican Precinct Chairman.

Bond Bank seems more like a Brainard bank to me with absolutely NO concern for the accounting of taxpayer dollars, regardless of how he or others spin the issues.

For the last person to leave the City, you will not have to worry about turning out the lights. The electorate that put all of Brainard's buddies on the Council have taken care of turning them OFF. (NO Government transparency)

Anonymous said...

Carmel likes being the first for everything. Why not be the first city in the state to create a bond bank without council approval?

Pete Boggs said...

Property tax is levied on statist notions of inflated value (non market) & hyper-factored (1,2,3) according to the categoric sin of ownership (homestead, rental, commercial); whereby TIFs & other public debt are unConstitutionally collateralized by private property.

That which is perpetual is not a lien but an unConstitutional or fraudulent claim of ownership by a corrupt & predatory state. Social engineering or styling of statism doesn't make it moral or less evil.

These stunts read more like securities fraud than legitimate government. WTF?

Anonymous said...

One lesson learned from the Indianapolis Bond Bank fiasco was that the board should in no way be staffed by unsophisticated, financially unqualified members who rely upon outside advisors to issue bonds.
In 2008, faced with a projected extra $354 million in losses, the Bond Bank was forced to unwind swap contracts costing $53 million for the $520 million water company buyout (Umbaugh & Associates as one advisor); $27 million in Circle Center bonds; $20 million in CIB bonds; $71 million for Lucas Oil Stadium and $35 million for the Convention Center both through the Indiana Financial Authority. The Airport Authority still holds leveraged swap bonds that now show a book value loss of $60 million. It is alarming to know that all of the restaurant tax collected in Marion County for the new stadium since 2008 has been extracted from our community and we are now back at square one on repaying LOS debt.
The $378,000 paid in advisor fees, to a firm accused of bid rigging, and the huge cost of buying out swap contracts has resulted in restructuring the Indianapolis Bond Bank but in Carmel they are intentionally organizing for taxpayer failure.

Anonymous said...

Notice how damn silent the Carmel Councilors are regarding their impotency, or intentionality, of NOT representing the best interests of the people as Tin Horn Emperor-Mayor Brainard (an attorney, right??) goes lawless rogue.

Just as Indianapolis City County Councilors are completely silent on all the illegal corruption that is all still there and which they intentionally allowed to stand, listen to the cricket roar from Carmel's useless own political class on that Council.

Sir Hailstone said...

"Carmel Mayor Brainard follows to-the-bone-corrupt ex-soldier Marion County GOP Greg Ballard in lawless action."

Other way around. Ballard was still in the Marines when Jim Brainard started with the massive Carmel spending spree.

Anonymous said...

Why do we even bother with constitutional government?

Pete Boggs said...

It's a fee for all- levy at will, whom you will...