Carmel City Council OKs borrowing $2.9M from CRC reserves

The Carmel City Council approved a plan Monday afternoon to meet its debt obligations and pay its bills for the rest of the year.

The agreement between the City Council and the Carmel Redevelopment Commission gives the CRC the authority to use $2.9 million in its supplemental reserve fund to make a bond payment for the city.

The city has 60 days to reimburse the supplemental reserve fund.

The arrangement will give the city the ability to use its $2.2 million cash on hand to pay for claims, payroll and other expenses for the rest of the year. The city is also expecting a $1 million payment from Clay Township for its fire protection obligation that will help cover costs.

Council president Rick Sharp said he’s been assured there is enough money to pay the city’s standard obligations.

The deal required council approval because the CRC is only allowed to use the reserve fund for its own bond payments, according to Sharp.

As of Aug. 31, the CRC had $3.78 million in its supplemental reserve fund. The commission also has an additional $1.3 million in other reserve funds.

Earlier this month, a proposal introduced by Mayor Jim Brainard to reappropriate an additional $5.38 million the Indiana Department of Local Government Finance had previously cut from the budget failed due to a lack of a majority. It would have dropped the city’s general fund, which serves as its checking account, to nearly nothing.

Sharp, along with council members Luci Snyder and Eric Seidensticker, voted against the proposal Dec. 7 and criticized it as unwise financial planning.

The City Council approved the new funding proposal 6-0 Monday. Council member Carol Schleif was absent.