Worrell writes to clarify points made by Shaffer

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Dear Editor:

The letter to the editor, Carmel’s debt service payments serve as warning for rest of county, Feb. 2, 2022, raised points worth clarifying regarding the fiscal health of the City of Carmel. As Chairman of the City Council Finance Committee, I can offer some facts and perspective.

As of this time, the city’s finances are excellent. The budget for 2022 is balanced, and it has not been necessary to raise the city property tax rate in six years, keeping Carmel among the lowest in all Indiana cities. Despite the COVID-19 pandemic, the city returned $3 million of its 2021 appropriations back to the General Fund. I attribute that feat to the frugality of Carmel’s dedicated employees.

The figure $86 million was cited as the amount of Carmel debt due by the end of the year, which is a misleading generalization. Actually, much of this amount is not city debt at all, but rather bonds purchased by private firms to fund public improvements that are needed for their own developments to succeed. These bonds are financed by the private firms themselves, with no claim at all on the city treasury or Carmel homeowners.

Only 6 percent of the city’s property tax rate is needed to fund debt payments. That is less than Fishers, Noblesville or Westfield. Of that amount, not all is paid by homeowners. Thirty percent of Carmel’s general property taxes are paid by commercial and industrial property owners and other non-homeowners, many of whom are not even Carmel residents. Commercial interests pay all of the special “tax increment financing (TIF)” taxes. These TIF taxes have contributed mightily to Carmel’s development. Without them, our city would be underdeveloped, our streets congested, and our home values depressed. Compare the market value of a Carmel home to a similar home in other suburban communities. You will quickly realize the benefit Carmel homeowners enjoy from investments in streets, curbs, sidewalks, roundabouts, parks, trails, art, cultural venues, and other public works. The city also pays $21 million per year of debt from other, non-property tax sources of revenue.

A significant portion of the city’s debt is for expansion of the water and sanitary sewer utilities, but not a dime of tax money is needed to pay that debt. Carmel’s utilities are self-funded by monthly utility bills. Much of our utility revenue comes from industrial and commercial sources as well as from users located outside the city limits who tap into Carmel’s utilities and pay full freight. A Carmel homeowner pays only for the city utility service used by his or her own family, with no city tax subsidy.

Over the years, the city’s debt has been prudently acquired at historically low, fixed interest rates. Rising interest rates will not harm us, and inflation will make it easier, not harder, for Carmel to retire debt.

There is a reason Carmel is ranked among the best places to live in America. The results of smart investments in superior services and strategic infrastructure are something we can all see and judge for ourselves – without a letter to the editor.

Jeff Worrell

Carmel City Council At-Large