Carmel not told projects' real cost

indystar

November 30, 2008 by indystar | Staff

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Carmel Mayor Jim Brainard wants the City Council on Monday to approve $28.5 million to keep construction rolling on the Keystone Avenue project -- an infusion the mayor has said is necessary because of an unforeseen rise in construction costs.

But documents obtained by The Indianapolis Star reveal that Brainard -- and the City Council -- knew months ago that the project could cost much more than the $90 million price tag Brainard pitched to the public.

In fact, a preliminary construction estimate in February 2007 -- completed before Brainard touted the $90 million cost in his re-election campaign -- estimated the price tag at $112 million to $138.6 million.

Brainard says he never intended to low-ball the cost to his fiscally conservative constituents. He said he simply erred in assuming the estimated cost could be reduced enough that the $90 million the state agreed to pay the city to take over the road would be sufficient to cover the project. He also said he didn't hide the cost problem from residents, but rather wanted to wait until he knew its full extent.

But others see a pattern as it relates to Keystone and Brainard's other multimillion-dollar pet project, the Carmel Performing Arts Center: In both cases, they say, the powerful and popular four-term mayor strategically waited until money was running out before he came clean with the public about the true financial picture of the projects.

"There's just no taxpayer input on these projects whatsoever," said Karen Carter, 42, who has lived in Carmel for 25 years. "It's a 'we're going to build it, like it or not' system here. And it shouldn't be that way."

Brainard sees it differently.

"The public hasn't put you there to take a poll on every issue," he said. "The public has put you there to make decisions. . . . They have delegated that power."

When asked why he didn't consult the public, Brainard said the city has enough money flowing in to cover the cost overruns without raising taxes. Still, money spent on the Keystone project could be spent on other transportation projects. The money for the Performing Arts Center could be used for other redevelopment.

But by the time the public became aware and engaged -- firing off phone calls and e-mails urging fiscal responsibility -- the bulk of the available money had been spent.

"If it's going to be a bad problem, let the community know right away so people can weigh in," said Tom Robinson, 57. "As a resident of Carmel, I'm going to have to pay for this. . . . So as soon as (the mayor) knows there's a problem, he has an obligation to let us know."

Exactly when the mayor and others knew there was a problem -- and the extent of that problem -- is the central question for many constituents.

A study in February 2007 put the total cost of the six-roundabout Keystone traffic improvement project at $138.6 million if the rebuilding took place over an 11-year period, according to calculations by project manager Jeremy Kashman.

However, running the project on a three-year timetable shaved inflation costs, Kashman said, and put the estimate at $112 million.

Brainard took that number and, figuring he could earn interest on the money and cut costs, publicly committed to finish Keystone with the $90 million the state gave Carmel to take over the road. He declined to bring the higher estimates to the attention of his constituents, who re-elected him by a wide margin two months later.

"If this piece of paper here (the preliminary study of the Keystone project) would have been public, there's no way anyone would have believed we could do it for $90 million," City Council member John Accetturo said.

Accetturo said he did not research the project initially because he trusted the mayor.

In February, e-mail records show, the mayor told the city's Finance Committee the project could cost an additional $10 million to $15 million -- a prediction that Finance Committee Chairwoman Luci Snyder passed on to all other City Council members.

By May, Finance Committee members were worried that the city had spent nearly $40 million of the state's first $50 million payment on just two intersections.

"We find those figures daunting and are concerned that if this trend continues, costs will exceed the amount we have available," the committee wrote in a May letter urging the mayor to clearly calculate the cost of the Keystone project before continuing to spend money on it. "There is a hard spending cap in place that must be respected."

But council members did not hear back from Brainard until nearly six months later, when he announced he would need up to $50 million in taxpayer dollars for the project.

Some council members expressed shock at that amount. But at no time during the previous six months had any of them made the concern public. When asked why, some said they didn't want to embarrass the mayor.

On Monday, the council will get its first say on the matter when Brainard wants it to approve an additional $28.5 million for the project.

That's less than the $50 million original request that created backlash, but Brainard also acknowledges it might not be enough to finish the project.

The council no longer controls the purse strings on the Performing Arts Center. The Redevelopment Commission oversees funding, and Brainard appoints a majority of its members.

In the summer of 2005, the council narrowly approved Brainard's plan to spend $80 million of city money on the 1,600-seat concert hall and 500-seat theater that make up the facility.

Brainard hoped to raise $40 million to $60 million more in private funds. But when contributors had donated only $3 million in three years, Carmel kept spending anyway, exhausting almost three-quarters of the city money by May.

City records show the Redevelopment Commission allocated more than $500,000 for a skylight and cast stone ornamentation, projects the public had been told would not come from city coffers. The group freed up an additional $700,000 for a limestone facade by paying for workers' parking and workspace out of its own budget.

Then, last month, with the money almost gone, Brainard asked commissioners for up to $45 million to finish the project, including an $8.5 million theater he originally hoped to pay for with the private money. They approved his request.

Redevelopment Commissioner Bill Hammer said the commission continued to spend money because funding was available in a revenue stream it controls from property taxes on developing businesses. Also, he said, components such as the skylight had to be included in the structure of the building and could not wait for private fundraising.

"I guess you could put some other type of materials on the outside, but we want it to be an appropriate building and serve its purpose," Hammer said. "The hope is we'll be able to eventually bring in those private dollars."

And, just as has been the case on the Keystone project, city officials have assumed they have a public mandate to plow on -- even if that means spending tens of millions more than what residents were told was needed.

Categories: Communities, Carmel

Tags: 

jim brainard, carter 42, indianapolis star, karen carter, construction estimate, mayor jim, pet project, construction costs, overruns, multimillion dollar, performing arts center, election campaign, enough money, price tag, Keystone, carmel, constituents, infusion, 5 million, 6 million, Metro

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