Welcome to the Wednesday, May 20th, 2026, Finance Utilities and Rules Committee meeting.

First item on the agenda we have is ordinance D 2820-26, an ordinance of the common council of the City of Carmel, Indiana, amending chapter 3, Article 2, Section 3-58, and Chapter 8, Article 5, Section 3, Section 8-45 of the Carmel City Code.

We have Officer Hasty here from the Carmel Police Department to present how they came up with these fee structures and open for discussion for the public.

This all started with a parking study that was conducted in the central core related to complaints and so forth and parking.

The Carmel PD then investigated ways to increase enforcement.

And this is part of solving some solution creating some solutions and hopefully ensuring some compliance when it comes to parking in our central core and throughout the city.

Yeah, if you just give a brief overview of how we got here and then why uh chief and yourself are recommending these.

Okay.

Change.

I'm Zach HC, Sergeant Carmel PD.

We've been listening to our residents and listening to the counselors, and and we saw a need to explore options to increase our patrols of timed parking spaces within the city.

So historically we've we've just not had the tools to do that.

And so we started looking at at looking at options that we were going to be able to help turn over those spots that were in front of some of our businesses to encourage more visitation from uh from this from the community to them.

Um and then also to target some of our not necessarily target, but to help increase patrols around the high school and some of our neighborhoods that have the uh residential permit citation.

So we started looking at options that were kind of an all-encompassing type thing, something that could offer a way that we could effectively do the patrolling, and then also uh that would cover our permitting needs for our merchant parking and residential parking.

So we we started this process about 18 months ago.

We interviewed many different companies, many different styles.

Once we got the parking study back, um it was recommended in the parking study as well that an LPR based, which is license plate reader, an LPR-based system was recommended.

So that was already the route that we started looking at to begin with.

Um, so we we kind of dove all in on that.

Uh the equipment, it it essentially mounts onto a pre-existing vehicle that we have.

There's between three and four cameras that mount at at about eye level around the vehicle.

One one might be a little lower, but um essentially what it does is as the parking enforcement or CSO would drive around the city, it's it's collecting data, it's collecting license plate data.

What that will do is we're working with Passport now to kind of build out what the infrastructure looks like in the system.

Essentially, they took our local ordinances that have all of our locations for the timed parking locations already in it.

They're going to map out the entire city.

So whenever you scan a license plate, it uses GPS latitude and longitude technology to know exactly where that vehicle is and know what time spot it is in, and then it will start a timer based on that.

So if it's in a three-hour spot, it will start a three-hour timer based on the exact latitude and longitude GPS coordinates of where that vehicle is parked.

At that point, and it does this instantaneously as as the uh as the parking enforcement officers driving around.

So as they continue to drive around and do their patrols, if they come across a vehicle that's that's past the time, an alert will pop up on the computer that they can take enforcement action, whatever that may be a warning ticket, education, whatever, whatever that looks like.

But they'll be alerted from the system that hey, this car is not moved.

It's been here for four hours and a three-hour spot.

So then at that point, the parking enforcement officer can take enforcement action, whether, like I said, whether it's a ticket warning, education, um, but then they can they can then print off the ticket from the computer.

Um, the ticket we were working with Benjamin on the formatting and what kind of information is on there, but the tickets essentially going to give them a link to the passport payment portal.

Um, that's that's partly one of the things that we're still working through to get passport as the approved agent to be able to collect those funds.

But once that once that happens, payment will go to passport.

We have elected to get payment remitted back to us once a month from the collected fine revenue that comes from that, minus the fees that we pay passport to run their to use their uh their database to use their software to use their payment portal.

So we we would pay a fee for that, and then that would that would be taken out of whatever fines are collected for the month, and then we would get whatever's left over, or if we're in the in the red, then we would cut a check for the difference, whatever whatever that would be on a monthly basis.

We're also looking at getting three handheld devices that are LPR as well.

Um so it runs off of a um Android platform and it's got a camera on it and a printer.

So if it's a nice day, we're gonna encourage officers to walk around, be involved in the community, have conversations with folks.

Um but it does the same thing, but it's just a handheld unit.

So what they would do is they would go up to the vehicle, scan the license plate, they would mark on the application where like the valve sim or whatever would be, um, take a photo of the vehicle, it would start the timer, and then they could keep doing their patrols walking around.

The handheld devices and the mobile device that we're looking at will communicate with each other.

So if somebody scans a plate that another parking officer scanned earlier, they will communicate with each other, um, and then they'll they'll alert them if there's if there's a violation in the area.

Uh so I mean that's that's the 30,000 foot view of how this would work.

We're looking at hiring two part-time folks in the process of doing that now.

There uh is an application process that's open through tomorrow, um, and then we're gonna do some more interviews and try to identify a couple folks to to come on board part-time to help us with the parking enforcement.

So we have the we had the red line um ordinance in our packet, um, and then there was some uh we may uh Benjamin, we sort of give an overview of just the red line changes and how that uh how that impacts and then Sergeant Hasey will probably have a couple other questions, sir.

Yes, sir.

Okay, Benjamin Legal Corporation Council.

So if I may just add a little bit of uh framework to this, a parking ticket when issued now is under the jurisdiction of the ordinance violation bureau.

The ordinance violation bureau is a um statutory creature.

Um it's allowed for under city code, which means that it doesn't generate the ticket in court, it goes to kind of an administrative bureau.

Uh the council has adopted by ordinance to have uh ordinance violation bureau.

It has uh designated the city clerk to be the uh ordinance violation clerk, and it has set the fines um set forth in there.

So if a person gets a ticket, they can go ahead and just pay that fine, and once the fine is paid, it never it doesn't go beyond that.

If they don't pay the ticket or if they deny it, it then gets referred to the Office of Corporation Council, where we will then file in courts and it will generate a call's number, it will generate call fees, they will get an initial hearing in front of the judge to admit or deny, and then if they deny, if they admit, pay the fine with the call fees, um, and or if they deny them will go to trial.

So this is an administrative process that enables for efficiency.

Um, hopefully to remedy those unaware offenders that they they become aware, it's a low much lower fine.

The court costs are 139 dollars just alone, and so the fine currently is set at 25 dollars for for these types of offenses.

Um your regular parking offense is uh $50 if you're parked in a disabled handicap spot.

So what this does is the clerk is designated as the ordinance violation um clerk who would collect ordinarily collect the fees.

Statute says that it's either the clerk or an agent of the clerk as set forth by the legislative body.

So there needs to be an amendment to the ordinance by the city council to give the uh ordinance violation clerk the ability to be able to have an agent.

In this case, it would be passport to be able to collect the fees.

Otherwise, fees would need to be collected directly by the by the clerk.

So that's the first portion 358 B3 designates um allows the clerk to be able to designate agents to collect.

Um it's general here because the goal is to not have to come back to council every time something changes.

So it's the entity at this point it's passport, but it's the entity that um is is able to under contract with the city to provide assistance with parking enforcement.

In this case it's passport, that may change at a later point.

Um we don't know, but um that's to provide the flexibility.

The next portion under section three, this is under A45 amends C1.

Um currently this is the process where officers are it it outlines how officers issue tickets.

So what we have done here and the and the the price of the cost of those tickets, the fine.

So it currently has police officers and community service officers as the only two individuals that can go ahead and issue these tickets.

We're gonna have parking um enforcement officers who won't be sworn police officers to be able to do this.

Um and also this is kind of a new um new terminology, we've used it elsewhere to give flexibility uh to anyone that we're multiple different enforcement officers within the city from different departments to give a level of flexibility as the city's um resources demand.

Uh the next thing is it makes it so that it doesn't just you can either place it on the vehicle, the ticket, um print it off and placed on the vehicle, or it can be mailed.

Um this allows for it's kind of twofold really.

Um it allows for the um flexibility of increment weather, the inability to be able to properly keep the the ticket on the vehicle that the officer can then use their uh judgment to ask uh police records to then send out the ticket.

There's also a mechanism with that um passport will, if a payment is not made within a certain time period, will mail out the ticket to the individual.

Now, the information that we have when it comes to a vehicle that's left is we don't necessarily have the information we have is a license plate that is the registered owner, and that may not necessarily be the person who is the person who has left the vehicle for over that time period and committed the violation.

So when the notice goes to the registered owner, that provides via letter, that provides an opportunity to the registered owner to also say, hey, this was not me, or typically it will be someone within the household, someone who has access to it.

It might it might very well be that, in which case um that then gives them the opportunity to pay the small monetary fine, remedy the problem going forward before it escalates to our office and us take them to court with 139 dollar core fees plus an escalated fine.

Because the fine escalates beyond that point, it can be up to the 2500.

So what this also does, um it also um increases um the current fine, which is 25 dollars, which is a very very small number right now for the fine, and that that would be once it's paid, it's done.

It increases that to $50, and um it does the same for a $25 increase, and it does the same for those violations where they are parked within uh handicapped disabled um access spot.

So um part of the the reasoning for that um request out of PD is there is additional uh cost involved in in having the ability to be able to move forward, and also quite frankly, um I don't remember the last time that we increased this fine.

I think it has been $25 for a very long time.

I think it was the initial amount.

Um that is that is the placeholder there.

I mean, up to this council ultimately what it decides that it wishes to set as the fine, but that that is the placeholder there.

The recommendation is it be increased from 25 and 50 respectively to a level that properly um uh uh covers the cost uh additional resources that will be pushed into enforcement in these matters.

Happy to take any questions questions from Benjamin.

Councillor Manor Thank you, Mr.

Chair.

Um Benjamin, a couple things.

One, I want to ask you some specific legal questions.

Sure.

Um let's say the license plate reader picks up a car, and then the police officer leaves, or uh community officer or the designee leaves, and then they come back say four hours later, six hours later, or whatever.

The car's still there.

Um how does how does legally, how does the police department then couldn't they contest that in court and say, well, I left and I came back?

I mean, how does that work?

I mean, they can try and do that, of course.

I mean, the presumption is that they were there, uh, there was at a time period that they were there at the start and they remained there in um uh since it would be it's the violate for our standard it's preponderance of the evidence, right?

I mean the presumption is that they were there uh there was at a time period that they were there at the start and they remained there in um uh since um it would be it's the the violate for our standard it's preponderance of the evidence right that's the lowest threshold that's the lowest burden so more likely than not is another way of saying it that's our burden approve more likely than not they violated the ordinance because their vehicle was there at X time and it remained there until Y time.

And then it would be on them to be able to explain that they were not there otherwise now I will tell you that typically we're pretty reasonable right we will if if they can provide evidence that they were not there for that that length of time and they actually were only there for five minutes left for three hours and then came back for that time period then we'll we'll look at that evidence.

I can't make any promises to it but it will be something that we will be able to review.

So this is their ability to be able to deny the ticket it's also deemed denied when they don't pay it right so after a certain time period if they don't do anything it will be deemed denied and it will be forwarded to our office.

At the point where we bring an action in court and we finally get and we speak to someone on it and we and we see the evidence we'll make it it's prosecute prosecutors determination as to whether or not we take it further if we take it further then it's up to the judge to make that determination as to whether or not the evidence is more favorable on one side versus the other side.

So I mean we're comfortable with it that way.

It's just you know it just seems to me you know it's just one little loophole I'm sure somebody could possibly take advantage of but that's okay.

We're trying to change behavior here not yeah go through those things.

The other question I had for you is um I noticed that we didn't put anything in the ordinance at all about regarding um construction vehicles being in parking spots or maybe you know expanding the um fine fees or fines for because we do have around the city where we have vehicles that are commercial vehicles parking in one two which which I know we have an ordinance for but there's nothing in the language that talks about that at all as well is there a reason why that wasn't a part of the ordinance it it just wasn't asked to be addressed.

Ultimately what this is a very narrow um amendment the narrow amendment is to enable to make those small changes that are required to enable the functionality of the new process there I mean there are a lot of things that can be fine-tuned when it comes to parking but these are the only things that need to be um with the exception of the fine amount I mean that's something that's there's flexibility there but the other things are are are strongly recommended um what absolutely required if we want to have passport to be able to process payments we need to have that part um included and to allow for flexibility we need to have other enforcement city enforcement officers and the mailing ability the fine itself is something that is recommended to be improved but uh increased but it it's entirely up to the council but if if the council uh decides to not go this route um we today um we have a passport contract that is pending at BPW we ask them to um table that because it can't move forward uh under the way it is currently set forth if the clerk cannot assign them as an agent to be able to collect fees the alternative is we can use their resources um but then the fees will have to be processed through the clerk's office which is a huge administrative burden um to be able to run it that way the the goal here is to use the entity that is and also the easiest way for people to pay because when the ticket comes it will have um uh a QR code um and a website that they can then click and it will enable them to quickly be able to make those payments well and I just want to say it's I'm really grateful that you raise the fees because I mean I'll pay $25 all day long to sit in the parking spot for four or six eight hours.

So I'm I'm really grateful that you guys made that jump in that price I don't know how my other counselors feel about um that that particular dollar amount but you know we're trying to change behavior here we're not trying to grab money we're not trying to to bilk our residents we're just literally trying to do something that can help everybody in the community and satisfy those concerns right yeah change behavior and cover the cost right I mean so the burden isn't necessarily placed back onto the city is the I think would be the goal here um at um uh that again it's it's discretion of the of the council to this is this is um what what we've well the CPD is recommended but um if the council wish to do it to increase it it could or if it weren't reached not change it at all it could as well right I mean it it really is there is flexibility here but while we were in it we thought it made sense at the timing because there is going to be additional expenditure that comes from having um the contract to buy the equipment because it it's not equipment we currently own right the printing equipment that will have to be updated and to have access to the databases and for the service that's being provided as well.

The printing equipment that will have to be updated and to have access to the databases and for the service that's being provided as well.

Okay, and then may I have one more question, Mr.

Chair?

Thank you.

I appreciate I appreciate the uh the time.

Um so the other, I guess the other uh question I have, and I guess uh either either one of you can answer this question.

Um when it comes to the fees that Passport is going to be collecting from the city of Carmel.

We can we spoke about it a little bit, but we can talk about it so it's on the record.

So when those parking tickets are paid, that payment goes to Passport.

Then can you explain I'd like for you to explain that on the record how that's going to work if you don't mind so that people understand how it how that process works?

Thank you.

Yeah, no problem.

Um Zach Hasty, Carmel PD.

So when payment is made to passport, passport that they're going to repay us on a monthly basis.

So they'll receive payments as the month goes on.

Once it's time to remit payment to us, they will then subtract whatever the fees are.

Um and I can I can provide you guys more detailed information on that.

I don't I don't have it with me right now, but um it's it's around a dollar per ticket is what uh passport charges to use their their system and and all of their their software.

So they'll remit, they'll take their payment or they'll take whatever fees we owe them out of the collected fine revenue, and then they will then submit the the money to the general fund on a monthly basis minus whatever their fees were to run that for the month.

I'm sorry I lied.

I have one more question.

Sure.

Sorry.

So uh what if and I'm I'm I'm gonna ask my fellow counselors here, would it be worth um relegating those funds to a specific um uh pot of doll pot of money?

Yeah, opposed to the general fund.

Is that something a non-reverting fund for cost cost recovery?

Or I guess well, it looks like Benjamin has an example.

So by statute, they go to the general fund.

Oh, okay.

Thank you.

Thank you.

Well, that answers that question.

Thank you.

And thank you, Mr.

Chair.

Councillor Green.

Thanks.

I uh um since you're up and forth.

Far away.

Um so uh are there any other uh who who else has the uh LL LPR based system?

Um other police units or cities.

So um Denison parking is is a big name that's been thrown around.

So Noblesville uses Dennison parking, Westfield uses Dennison parking.

Um there's there's other agencies throughout the state, but those are the two kind of closest ones that that we've looked at.

Dennison Parking utilizes the passport suite.

So Dennison is just the management company, whereas the police department will be the management company, but they're still using the passport software, they're using LPR systems for uh for doing parking enforcement.

It's it's pretty much the industry standard um for big city and and large scale parking operations just because of the efficiency and how how quickly and efficiently you can you can scan a lot of plates and be able to enforce these these large areas with with minimal amount of resources.

So there's several that are around us, but it's it's as far as on boots on the ground traffic or uh parking enforcement LPR is is pretty much the industry standard.

Now there's other options with like meters and things like that, but um as far as this type of enforcement LPR is is the is the industry standard.

Uh councillor Green, if you don't mind, I'd like to expand on that a little bit.

Um Sergeant Haiti, could you sort of talk about philosophically why it's important to keep this in-house versus outsourcing it?

Sure.

So when we started talking about this, we we were looking at it kind of the the holistic view of how we handle things in Carmel.

So we our our goal here, like Councilman Art said, is not uh a money grab.

This is this is to change behavior.

Um and we this is a this is an untapped area where we've just logistically not been able to do it before.

So I think we owe it to our residents and our business owners to to do something about this to be able to turn over those parking spaces to allow the maximum amount of visitors and and people wanting to come spend their money here, allow them to have the best opportunity to succeed there.

Um and by keeping it in-house, we're able to, like Benjamin said, we're able to review things on a case-by-case basis if there was a ticket that would come across, or if there's evidence that that they're to the contrary of what the ticket might show.

We're able to review that in-house and make a decision amongst ourselves versus having an outside management company whose primary objective is to generate revenue by parking citations.

That's that's not what we were interested in.

That was one of the avenues we looked at.

We quickly realized that that that's not the karma way of how we wanted to do things.

We didn't want this to turn into a predatory parking type situation.

We just want to change behavior, a lot of information sharing, a lot of uh education, and this was the best way that we could still remain hands-on um and and have the ability to apply this the way that we apply things here in Carmel.

Sorry, Councilor Green.

Any other questions?

I just wanted to expand on that a little bit.

You're good, and good follow-up.

Um since we're gonna maintain, I guess, functional control over it.

Um protections to the data, or will and and all the information data collected will be staying with us, or I mean who who controls the data.

So I that that's a great question.

Um, and and I do not have a solid answer for you on that.

Do you know for sure, Benjamin?

What's that?

Yeah, we have Benjamin Stephen here.

So um the data that's going to be pulled up is going to go to uh passports um database.

They're gonna be pulling from their connected uh databases that they have.

Um, and we have data protection languages within the contract that uh is being reviewed, and so we're comfortable with it.

I do want to make a point as well in relation to this is more globally as well.

I'm sorry to kind of step away from it, but I just there's been complications in the past with um uh those um individuals that have been granted um permits um to park in certain areas um for merchant vehicles or residential vehicles and stickers and that type of program.

The ability of having um the information tied to the car registration is that information, um those car uh the information of those um permit holders will be in will be in the database to be um flagged for the officer to know whether or not that vehicle is allowed to be there.

So they'll be a lot more um uh it will be much easier to manage and and it will be easier to to obtain and be able and for the person who has the permit feel comfortable to know that they're not going to be able to get it, they're not gonna get a ticket because they have the permit.

Uh everything will be included and assigned.

It it it will it will take a little bit to get that running, um, but that information will be much more streamlined.

Counselor Green, I wanted to expand on that a little bit.

Um this is important.

So currently those who apply for residential parking stickers for which their road is restricted for residential permit only must come into the records division of Carmel PD, fill out paperwork, and then can you talk about the ease of use for people in these residential parking areas and also for their yeah, also for their um visitors, etc.

or however they apply for the permit, how much this would be so much easier, not only for you but uh for the residential permit holders.

Sure.

Um so the way that this will work is uh the the resident will contact the police department, we'll verify that they do live in this area, and then through passport, we'll give them an authorized an authorization to create an account.

So once they create an account on passport, then they can submit pictures of their registration.

Um so then we can verify that yeah, your your Subaru belongs in front of your house, um, it belongs to you, your wife, your daughter, whatever.

Um we can verify that that indeed does belong there, and then based on we're not gonna limit how many cars, but we're going to be able to verify and make sure that that registration does indeed belong at that house.

Um, and then same goes with the the the uh visitor parking.

So they can go the the homeowner will be able to access their account to digitally input a license plate for a visitor parking pass.

We do have time limits in place for that, so we plan on keeping that just so we don't have someone having a hundred of their friends come and park in front of their house every day.

So uh we do and we we approve those at the police department level.

So whenever they apply for that, we review it and make sure everything's good to go, and then we approve it, and then they can everything's gonna be done, they can do it from their phone.

Um, they don't have to physically come to the police department.

Um, they can upload all of their information through their account.

We'll be able to verify it on our end, and then it'll be it'll be smooth sailing from there.

Same with merchant parking.

So with merchant parking now, they would have to come the uh uh an agent from the company would have to come to the police department and then bring the license plates that they need to get or the vehicles they need to get permits for, we would verify that yeah, okay, we'll we believe you that this person works for you, and then we would issue those those permits on an annual basis.

The same would apply with this.

So let's say richest deli, you want to have 10 of your employees be able to park in a merchant parking spot.

And they probably they drive subers too, right?

And it yeah, if they drive subers, yeah.

Um we can we can accommodate that as well.

So what what they'll do is you'll you'll appoint someone at your um at your business to be the account holder essentially, and then you will you will be the only one, your account holder will be the only one that will have access to that account to be able to uh manage your employees' plates within the merchant parking part of your account.

So if you fire an employee, you can delete that plate out of there.

If you hire a new employee, you'll contact us, be like, hey, I need to add this new one in.

Here's the information, we approve it, and it's added in.

So it it's a much more streamlined process for the use for the consumer and for the enforcement side.

That was my question.

Thank you.

Um, and then also I'm assuming it's much easier when they if they buy a new vehicle, right?

Correct, yeah.

So they they would just need to uh upload that that picture of their registration that's got their name on it, their address, the vehicle, and then we verify that all that stuff is correct, approve it, and it's done.

Council Green, Councilman?

Uh one more question for the officer before I go back to Benjamin.

Um assuming we approved this, when will it be operational?

So we're we're just I mean, we're in the final stages of I mean, we've got the contract in.

Um once we can get the account stuff set up and then get get the final details of the ordinance set up, we're ready to take this to BPW to get the money released and then start start getting the equipment purchased and the software set up.

They will act the company actually comes to us and does boots on the ground implementation, they help us with education, they help us with training.

So that's all included in the package as well.

So they will come to us, help us get everything set up, help us work through the kinks and the in the first little bit, however long it takes to get up and running, and then support us through that that that process as well.

Thank you.

Yep.

Yeah, Benjamin.

Um following up on Councillor Manard, a couple of her questions about fees or penalties, um, however, we define it, I guess.

When's the last time we raised uh the fees or fines?

I I think that the 25 dollar fine has been in place since the beginning of the ordinance violation bureau.

Okay.

Um it is potentially we increased it from $10, potentially.

Um, but it it's been a while since we have updated this.

Um and the increase will take it to what?

It'll take it to $50.

On tip.

It's a $20 $25 increase.

And you mentioned earlier, someone parks in handicap.

What's the that's currently $15.

And it would go to $70.

And that will go that will go 75.

You know, you could handcuffed and do whatever.

But that's a personal pet peeve of mine for people I know are disabled.

Uh maybe we should look at increasing that fine for people legally parking and handicapped spaces.

Yeah.

Um, so assuming we raise it to at least 50.

Um, how's that compared to other municipalities and everything?

Um, I'm not sure.

I'm not sure.

Yeah.

Sorry, it didn't work out now.

No, no, no.

No, I'm I'm glad that this is what we're here for.

Let's iron it out.

Um, so when when we when I was making recommendations to uh when when Chief went to present this to the mayor, I looked at um the niche top places to live, um, and then there was like two other websites I looked at.

I looked at the list to see comparable cities, um comparable cities based on um visitors and and population and all that stuff.

So I then reached out to I think six different places around the country that that are similar to Carmel, and we were as far as as far as all of them go, we were way too low on all of our parking fees.

Um but that's where and we were there's there's some that like in Westfield, it's a must appear, so they have to appear in court.

Um but some of the other comparable cities to us, it was anywhere between 40 and 75 dollars for a general parking violation, and then for handicap, it was anywhere from 100 to 500.

So we were just kind of trying to split the difference there.

Um that's that's kind of that's that's where we started was for what the research was just looking at comparable cities.

So that makes sense.

It's good to be as efficient as possible.

Um where was I going with this?

Um so uh it was been discussed a couple of times.

Um the intent to change behavior um and the fees are gonna help us re um pay for the cost.

So if we are successful in changing the behavior and there's less fees, kind of what will be the potential impact down the road?

So that's a great question.

It's a five-year contract from the jump.

So we'll be able to reevaluate this once we get to the point where, hey, is this working?

Are we able to scale down?

Are we able to manage it with something else?

Where do we want to go from here?

And five years is also about the shelf life of some of the equipment.

So the LPR cameras are going to be mounted on the exterior of the vehicle.

So they're going to be exposed to the elements.

So that's that's kind of the sweet spot of the contract that we did a five-year, a five-year contract with them.

So is it three?

Yeah.

Did we settle on three?

Okay.

Okay.

All right.

So that was that was amended then.

So yeah, we initially looked at five and it's been it's been a minute down to three.

So I'm sorry.

So we'll be able to evaluate the success of the program and how we want to move forward at that point.

So we can we can reevaluate and see what's see what's working best um once it comes time to do that.

But if if we do change behavior, that's that's what we were looking for.

So we can we can reevaluate how we're gonna how we're gonna go forward depending on the success of this.

So Mr.

Chair, would you uh entertain a motion?

Yes, Councilmanar.

Um first of all, I'd like to amend the fee for parking in the handicap spot from 75 to 150, 100, 150.

Um it needs to be less than 250, 50 over low because it's an ordinance violation bureau.

Okay, but you could also take it out of the ordinance violation bureau if you wanted to.

That's also the flexibility, and so it then would just go directly to court.

This is just something that has been placed in um for them to pay the ticket.

But I'll suspend my I'll I'll suspend my motion and can we discuss that?

Would you guys like to discuss that?

Yes, why don't we?

Yep.

Okay.

Could you uh articulate the key differences of taking it out of the ordinance violation bureau?

So yeah, within um I think it is uh City Code 358, it designates what um ordinance violations um are under the jurisdiction of the ordinance violation bureau.

So we have uh golf cards, we have alarm permit violations, we have um a lot of the parking stuff is under it.

Um to the extent that this council and uh the handicapped disabled parking um the access parking is something that is is there right now because historically it has been you could take it out of it by amending that particular provision to take out.

I think it's uh 850 would be what would be taken out.

Um, and then it would then go to court.

So it wouldn't then it wouldn't be under possible.

Um it would be up to the uh uh officer who sees it to then write the ticket as a must appear.

And who would then set the fine?

The court.

Um so that is uh the council's discretion to set the fine.

So it can be a set amount, which is sometimes helpful for the court and and for the prosecutor as well as to what it would be.

Um the the fine itself um for a first-time violation is up to 2500.

That is that is the limit by um by statute.

So um it can be an up to number, it can be um uh uh between, or it can be a set find that this is what it is.

Um I'm trying not to let my personal feelings get involved with this, but I do have an older sister who has MS and is required to have hand handicap parking, and she requires wheelchair from time to time, but she's very disabled.

And so I'm trying not to let my personal feelings get involved with this, but yeah, go ahead.

Um what happens?

Let's say we raise it to 150 for like the first time offense, you know.

Then what happens if there's a second offense?

So we have um currently it's fifty dollars for the first violation and a sum of 125 dollars for each subsequent violation.

So there is an escalation there, um, but it would be uh so the max would have to be 250 for the second one, so 150 for the first time, two fifty for the second.

I believe so.

I'd have to check that.

It's definitely two fifty for the first time.

Yeah, um so you could have it at 150, 250.

Um and then because I'm I think I'm more comfortable with like the first first time, you know, hitting them with 150, 250, and then second and repeat offenders.

Yeah.

Yeah.

We can do that.

But yeah, so something like that.

Sergeant Hasey, do you have any opinion or any of your research?

Have you specifically looked at handicap parking?

Yeah, so when I was when I was looking at the comparable cities, um, the the handicap, I mean, we were on the embarrassing low end of it at $50.

Um like I said, I mean that they were anywhere from I think the other the second lowest I saw was 150 all the way up to 500.

Some were must appears, um, and some were subject to impoundment as well on the first offense.

So there it was kind of all across the board.

Um I I definitely agree that um the council should look at increasing it.

Um but as far as uh industry wide, I mean it like I said, it was anywhere between 150 and 500 were the majority that I saw with a couple that were must appear violations as well.

Um it keeps it clean, I suppose it's must appear.

Yeah, current current currently um for the any of these violations, there's no ability to tow.

There is yeah, I I believe I believe there is um there is a uh a clause in there that that gives the ability to tow for uh a parking violation local local ordinance.

There's there's some subsections in there.

I'd have to I'd have to go back and double check the verbiage on that.

But is that the same as impound it?

I I guess I don't understand.

Yeah, I mean we would the ability to tow, is that the same as N pound and legal terms in the ordinance?

It's as far as the police department is concerned, yes.

So if we would if we would tow a vehicle, we would be impounding it, and then they would have to go do through the the whole tow release process through the police department.

So there so currently now if uh somebody is violating a handicapped spot and just remains there.

We do have the ability to impound currently.

I believe so, yes.

So council green, you you uh mentioned a um required to appear, shall appear.

Um I mean I that I think that'd be less confusing.

Maybe less confusing for everybody, you know.

I was thinking escalating, but you know.

Um, and I'm hesitant on the the towing because you never know, and it mistake or somebody who is handicapped who doesn't have the thing with them at the end of the year.

It's usually never known.

Isn't it though that um the permits for uh for handicap parking they're attached to your registration?

Are they not in the state?

Sometimes I I have seen some that are um and it that's usually on like permanently handicapped folks.

Um if it's let's say you break your foot and you don't have it with you and you've got a temporary, then it would not be attached there.

So we see it both ways.

Um the the times that I've seen it defended in court, some people it they'll say it fell between their the crack of their car or whatever, but the the way it's written is it must be displayed.

So um, but yeah, yes and no to your answer.

Yeah.

Yeah, I I don't have an issue with I think you're right, keeping it clean because I was thinking escalating as well, first offense, second offense, but I always I'm sympathetic to the judge.

I don't want to overburden this court, but you know, but it probably doesn't happen very often anyways.

No.

And they have to be caught too.

I mean that's that's the other thing, they have to be caught doing it.

So is a consensus we're discussing here increasing the fine to 150 and further violations or shall shall appear, or it's always shall appear with a minimum violation of 150.

I'm good with that.

Shall appear with a minimum violation of 150.

Okay, you uh did you may you started a motion, but there wasn't a second, so by Robert's rules, you can restate your motion if you'd like.

So uh thank you, Mr.

Chair.

I would like to amend the mo amend ordinance D 2820-26 to incorporate um the initial fine for handicap um violations to uh uh also to appear at 150 fine and a notice to appear.

So we have a motion to amend the current ordinance as presented.

Second.

We have a second.

All those in favor.

Good job.

Motion is amended.

Do we have uh is there another motion?

Move to approve.

Second.

Uh technically motion to send to the oh yeah, sorry, yeah.

So I'm so used to uh I move to a uh send this to city council with a positive recommendation.

We have a motion and second to send this amended ordinance to the full city council with a positive recommendation.

Please vote passes unanimously.

Passage unanimously.

I just want to clarify that this is probably going to result in multiple sections of City Code just being updated to pull that um A 50 out of the OBB's jurisdiction.

Um so I will make the necessary changes pursuant to the request and the language you can approve it at a later point.

Great.

If you wouldn't mind distributing that to the committee, and then we'll uh make sure the full council receives it.

Absolutely.

Thank you.

Thank you, Sergeant Hasty.

I appreciate your work on this.

Um again, the goal is to change behaviors, support our small businesses and property owners in our core for those people like to camp in these spots.

Um I'm excited for the more efficient process, especially for these uh residential permit holders.

A lot of them don't know how to apply and have really struggled with the process, so some very, very, very helpful.

Thank you for all your work on this, Sergeant.

Thank you guys.

Yes, sir.

Next um item um in our uh items in our agenda, um item B.

Oh wait.

Item B through H.

And E through H are all related to the bond refunding item.

Items related to the repair and maintenance, um creation of the fund and ordinance.

We received an email just moments ago with some recommended verbiage, so um from another counselor.

So we'll hold that over until the finance committee on June 1st at 4 30.

Okay, Zach.

Perfect.

The floor is yours, all right, Mr.

Jackson.

Uh thank you, Mr.

Chairman, and and members of the finance committee.

I'm Zach Jackson, CFO and controller of the city of Carmel.

I've got uh uh Brad Bingham here with me, uh, and then uh Heidi Amsbaugh and Josh Janik.

I never know if I say close.

Uh so uh as I mentioned to City Council uh you pass this out.

So as I mentioned to City Council uh on uh uh uh Monday night during first reading, uh we have an opportunity to refinance uh our 2016 uh bonds, uh take advantage of lower market rates that we're seeing today.

Uh the anticipated savings uh were you will really depend upon the actual market rates whenever we we uh close.

Uh but we're estimating uh in the nine to twelve million dollar range, 12 being uh 12.3 being the high end that I've seen, and and and nine being probably the low end, hopefully coming in closer to 12.

Um the way we we will see general fund savings in every year as a result of this refunding, but we've prioritized uh most of the savings to hit uh in fiscal years 27 and 28, just with uh declining uh property tax revenues and increasing uh personal service costs as well as other uh inflationary costs.

Uh the this the savings won't be uh a situation where just ah, here's an extra four million for council to allocate in the next budget.

Uh the the budget that we will recommend in a few months, this will effectively help to make that budget work by buying down uh some of our expenses out of the general fund to the tune of about four million in each of the next two years.

Um impacted here are the uh stormwater fund.

We've got uh 2016 bonds and 2020 bonds.

We're using uh the reserve balance uh as part of the refinancing here.

Uh and overall on the stormwater fund, we're going to see uh savings of approximately uh uh a half million a year.

Uh again, that's probably high end.

Another way to look at that would be of the six dollars and eighty cents that we charge today for the stormwater fee.

Uh this refinancing frees up about 70 cents of of every six dollars and eighty cents.

Um with that overview, I'm gonna turn it over to Brad to kind of talk about the history of these bonds first.

Thanks, Zach.

Uh Brad Bingham, Barnes and Thornburg, we're serving as bond counsel on the refunding.

Uh so I think it helps to kind of understand a little bit about the background, kind of why why it is uh that the bonds were structured that way and kind of some of the history.

So back in 2016, the city wanted to embark on a number of various uh capital projects, multiple roundabouts, road improvements, street improvements, various public infrastructure improvements, economic development projects, stormwater projects.

And with that in mind, uh it also had to decide about how to how to pay for it, how to finance uh the bonds that were to be issued, whether it was from direct tax levy, whether it's from TIFF, whether it's from local income taxes, uh, as it was called then, it was COET or stormwater revenues.

And what what resulted from that was um based upon the law at the time that was also taken into consideration, you we ended up with 17 different bond issues.

Uh there were a multiple series of just straight general obligation bonds of the city.

There were uh three separate series of bonds of the redevelopment authority that were structures of lease financing, and there were a series of uh stormwater revenue uh stormwater bonds secured by a uh special benefits tax.

So at the end of the day, all of the various bonds were either payable directly from a uh property tax levy or with a backup, uh basically a credit enhancement, we call it an SBT, a special benefits tax, which really is just another term for property tax backup.

Because all 17 of those bonds had were either secured by a direct levy or a backup, they had that commonality, which is at the end of the day, um an investor would say, you know, I'm I'm buying those on the the basis of the city's uh property taxing authority.

Also at that same time in 2016, Carmel became a second class city.

And because of that, uh Indiana law allows for the creation of a local public improvement bond bank.

And bond banks uh really serve two functions.

One is um it's a mechanism cities can put their moral obligation on on bonds.

The other is to pool together multiple obligations, and you roll them up into one series of bonds that are then offered into the market.

And so rather than doing 17 separate bond closings, which and and public offerings, which would have been an enormous amount of work, uh the the conclusion was to roll it all into uh a bond bank offering, which was then sold into the market.

And that's the the bulk of what Zach mentioned is is uh up for refunding at this point in time.

And then the add on to that is the 2020 stormwater uh revenue bonds, um, those are also eligible for refunding.

So again, it just in our view made sense to throw that into the refunding as well to do it as part of this transaction.

That's a broad overview.

I I'll maybe turn it over to Heidi to talk more about numbers, but I'm happy to come back to talk more specifics on uh at this point.

Questions for Zach or if I could just make one point that I I spaced it on, we are not extending the maturities of this debt uh and then when we um when we do do the uh individual review of each of the refundings, it would be great if we could um show those on the video for public record if you don't mind.

Oh, I st did I steal your oh you got it.

Thank you.

Um while she's Brad, while she's um getting prepared here, there's a lot of confusion, I think, to some in the community related to SBT, because it in the past we issued city back TIFF bonds, which were backed by SBT.

So there's some members of our communities that are concerned about the use of SBT.

Could you explain the difference between that use of SBT and how you know the city of Carmel and some of those early TIFF bonds were on the hook for the repayment of this and how this differs here expanding upon what you said earlier, that really um about the credit enhancement feature of this.

Yeah, uh so uh again, as I've said earlier, because I think it's helpful to folks to understand an SBT, which it stands for a special benefits tax, it it really is the same thing as an ad valorum property tax.

I mean, let's just call it what it is.

But the statute uses the term of our special benefits tax.

Um because of that, that is um from a credit standpoint kind of the gold standard.

If that is securing an obligation, you're gonna get if it's a rated obligation, you're gonna get probably the highest rating you can get, and therefore the lower interest cost on the financing.

But you always want to make sure, and and it and uh you have to have reasonable expectations to use some other source of funds to actually repay the debt uh if you're gonna put it as a backup.

If you don't have those reasonable expectations, there's a whole nother, it's considered a controlled project, and you have to go through separate process.

So any time that SBT is put on a deal as a as a backup, we look at, you know, what do you reasonably expect to use to repay the bonds?

Because we because again, you're saying you're not going to levy the SPT, it's just there just as a backstop, just in case.

Um so in in 2016, coming back to this deal, um one series of the bonds, the the expectation was to use COET because COET was healthy coming in, it's available.

That was the expected source and has been the source of repayment for that series of bonds.

There was another series of bonds, these are the 2016 Bs issued by the Redevelopment Authority.

Those were expected to be paid from TIFF from a variety of the various TIF areas in the city.

Again, we looked at and made sure there was enough coverage, enough for TIFF revenue there to ensure repayment of those obligations.

And again, that's the way it's worked.

We've never had to levy the SBT to pay that.

Um then there was another, there was another series of bonds, 2016 C, which is actually there was a refunding of some 2010 bonds that were issued to finance a component of the palladium.

Um again, TIFF was the expected source, and it was in fact the source of repayment.

So it's um it's a fair question, and it's it's one of those, I mean, it is it is the uh you you you put your taxing authority on the line, but you structure the deals to really make sure you don't really have to use it.

But from a credit standpoint, that's what you know lenders look to as they say you know, worst case scenario, if you had to, could you, and you'd say yes.

And that gives you a very strong uh credit rating.

Thank you.

That kind of sets me up for my questions.

So with the change with SEA 1, and um it looks like we're going towards local income tax and we don't have the ad property tax.

How does that work?

So I'd love an explanation.

Yeah, so a couple things there, and this kind of got to go to the weeds a little bit more.

Um so the law has changed as well from 2016 to 2026.

And one of the most important things that I would flag is road and street system projects are now categorically exempt from control projects.

So regardless of whether that's a million-dollar road project or a hundred million, the law says it's a it's not a control project, can't be.

Um so when you with that in mind, when you put an SBT backup on a deal that's a road and street project, you can still do it and sort of say I expect to use some other sources, this is just a backstop.

You don't have to legally establish a reasonable expectations because you've already met, I'm categorically exempt because of road and street.

But that being said, uh local income tax still continues under SCA1 last year and House Bill 1210 this year, uh now through July of uh 28, at which time that existing structure will go away and the city will have to decide its fate for the future going forward.

Um I think the plan is that that is gonna, you know, until 2028, that is still the expected source repayment for that particular series of bonds, and then whatever the council chooses to do uh from some revenue source is what you would then use to repay those those bonds.

Again, I think the intent here is you're not gonna levy the SBT to repay that series of bonds.

So we'll be we'll be back to to have to we'll have to rewrite all of these bonds, I'm assuming, or will the language have to change?

I I'm not sure I understand that part of it.

So these bonds will be offered, and in the offering document, it will be very clear that what these bondholders will get is a pledge of lit until that law expires.

And at that point in time, the disclosure will say, you know, the council may, but it's not obligated to consider a municipal lit if it chooses.

Um it would be very clear from a from a credit because those bonds aren't rated based upon the credit of the of the lit pledge.

It's based upon the SBT backup.

Whenever there's a double barrel pledge, they look to the stronger of the two, which in this case would be the SBT.

Does it change the rating?

No.

Um, you know, given that kind of ambiguity.

No, I mean I think a lot of times people think, well, if I'm pledging two things, do I get a better rating?

The answer is no.

That SP would say when they have a double barrel pledge, what they call that, they look at the stronger of the two credits and they rate it based on the stronger.

So in that case, it's the SPT.

Thank you.

Sorry.

No, it's okay.

I like questions.

So the summary that you have in front of you, I'll just walk through again overall, Brad's just explained it.

Um but the first um one, the QE one through 13 are the original um 2016 bonds.

Those all are payable from the property tax bonds.

As you can, if as you go over to the right hand columns, you can see the net present value savings, the total for all 13 bonds payable from property taxes is the 880,000.

Those will continue to be paid for with a property tax levy.

And then you have the final maturity date column there.

I have that included in there, just to remind you all that the maturity dates for each one of these is not changing and it is staying the same.

So we are not extending the term of any of these bonds.

They're staying at the normal original maturity date for all these pieces.

So wanted to include that there.

Those are the 2016 A bonds that were public infrastructure funded bonds back in the day.

The net present value savings total for those is a little over 9.4 million.

And again, those the maturity date will stay January 15th of 2036.

And then the next two pieces are TIFF with a property tax backup.

Again, they are special benefits tax bonds with the anticipation of paying them with TIFF revenues, is how the security is out in the world.

And so you can see the savings on those two combined is about 682,000 and some change.

Is are the two stormwater bonds, the 2016 and the 2020.

The total combined savings for that piece is 1.3 million to get you the total overall of the 18 bonds of the high end being 12.3 million, and these numbers are based off of the end of April.

The market, as you know, is changing.

So that is the total savings, and again you can see the final maturity dates on each one of those.

The total savings on an annual basis if you flip to the second page of your handout is more even more detailed out if you want to take a look at it on the that view on a semi-annual basis.

You can see all of the outstanding principal and interest payments on the left-hand side of all of those bonds compared to the proposed refunding total bonds to get you to the semi-annual savings of 18.3 million.

We have to net out of the 18.3, the prior bond funds that we will be releasing and allowing you to pay down these bonds into the net present value savings of the 12.3, which is 7.8% savings, net present value savings.

Our minimum threshold for our clients to do a refunding bond issue is like 3%.

So you're definitely well above the 3% range that we is kind of our minimum category.

And then as you go through the next schedules, the next schedule is the property tax bond portion, and you can see the annual savings for the property tax bonds are about 135,000 each year, or about 880,000, as I mentioned before.

These are those numbers.

So we decided because of the term being so short, just to go ahead and wrap it into this financing.

And then the next schedule is the second TIFF supported bonds of 2016 Cs, and those have about 95,000 of annual savings or a net present value of seven or six hundred and seventy-two thousand.

And then the following schedule is the stormwater revenues.

And you can see on an annual basis for the storm that it's about 640,000 of savings each year in the beginning, and then drops down to 540,000 as the one of the bond issues rolls off.

So the net present value savings is about 1.3 million on the stormwater.

So I just think it's important that you look revenue by revenue to see what the impacts are going to be so that you can plan ahead accordingly.

So wanted to address that.

With this bond issue, it's obviously a 10-year bond issue.

And when you go out to issue a 10-year bond issue, you will not have what is called optional redemption or the option to refund these bonds again because a 10-year term is pretty short.

So you do get rid of the opportunity to refund at a certain point in time.

But with that, what I would say is that right now, what we know based on the Fed future funds rate in the scale, is that the interest rates are anticipated to go up by the end of the year and stay up in 2027.

And Josh can add more color to that as far as the market impacts and economics.

But really, we're kind of in a sweet spot in a window right now that if um the plan is to get these issued by the end of June and to close by July 16th.

And so once we price them, that rate will stay in place.

So by the end of June, if we're in the market, we should be in really good shape to stay within the eight to twelve million dollar savings range.

So just wanted to be sure to address that.

Yes, Councilman Arm?

Thank you, Mr.

Chair.

Do you know the yield is going to be?

Do you have any idea or range of the yield?

On the interest rate, yeah.

Um the true interest cost or the tick is 3.19% as of the end of April.

Uh we do know the market has shifted um since April already, um, but as you can imagine, it changes on the daily basis.

I wish we all had a crystal ball to know what's going to happen in Iran and with federal politics, but um yeah.

So but we have heard at least our pricing desk has heard that FOMC does plan to raise rates in December.

So I don't know if there's anything else you'd like to add.

All right, before before you get into the really good questions, yeah.

I want to try to simplify things.

So you know, yeah, because it makes more sense kind of going through it, obviously, tonight, than you know, the kind of the quick thing that we did on at the council meeting.

So this isn't kind of uh a refinancing per se, it's a refunding, you know, um a terminology, but but the refinancing, you know, when I hear refinancing, you know, you slip the you know, maturity dates and and you you lock in whatever the interest rates are um and that raise all kinds of questions on Monday, you know, when you know if that's what we're gonna do for trading kind of long-term increase interest payments, you know, for the short-term gain that you know, because we're gonna be going through kind of crunch time in the next couple years.

Uh but that's not the that's not the case.

That's not what we're doing.

So could you kind of explain kind of the difference in kind of the terminology?

Because it is refunding.

So maturity dates aren't in we're just taking these bonds and kind of reissuing them as new bonds.

That's really it.

And to mention the prior bond funds and stuff, you might have to do that.

Yeah, so so um just uh terminology-wise, in my view, called a re refunding is sort of in the bond terminology, what we use.

We call them refunding bonds, statutes talk about refunding bonds, but it really is a refinancing.

So when the original bonds were issued in 2016, they were they were 20-year bonds.

And as Heidi mentioned, the norm in the market is you when you sell those for the first 10 years, they're non-callable, meaning you can't prepay the bondholder.

You're you're kind of stuck.

We're now at that 10-year mark where you have that optionality.

And what you're doing is issuing new bonds for the remaining 10 years.

So you you're you're issue you are reissuing bonds, but you're kind of replacing the old ones.

And I think what what Josh Chinock was saying earlier at the other meeting today, is you're kind of uh moving down the yield curve.

So when you when you issue um 10 years ago, you're issuing 20-year bonds.

So we were now refunding the bonds maturing like in years 11 through 20, but we're doing it now on the shorter end of the yield curve, which is a lower, lower yield.

So that's how you're able to take advantage and get savings over the remaining term of the of the original deal.

That that helps because all right, so when we were doing 20-year-cause you you just think all right, interest rates seem fairly high right now compared to I don't know what they were 10 years ago.

Um, you know, um, but we're we're getting a lower rate anyways because we're only going for another 10 years versus the same.

That's we're going from a 20-year mortgage to a 10-year mortgage.

And that's really what you know, there is no extension of the maturity.

So, like oftentimes this is called scoop and toss, like in other states where they basically take it.

Look, what you're saying in the mortgage world like another 30 year.

No, no, no.

This is like you're just taking the final 10 years and replacing them with new bonds with effectively lower yields on those bonds.

Yeah, and a couple of things I forgot to mention um that are really important is that on both of the stormwater bond issues, there are debt service reserve funds in place.

And uh one of them is about 2.98 million, and the other one is a little over 700,000.

Both of those are going to be released.

So those are allowing you to also pay down a portion of the bonds as well.

And so and then two of the TIFF bonds have sure debt service reserve sureties in place.

Those don't actually have cash sitting in a fund anywhere.

Those were like an insurance policy.

You paid a premium at closing and then you have it.

We are also going to release those as well.

We have talked with um Statement Poor's just to make sure that it was not going to affect the city's bond rate.

That that portion was going to affect the city's bond rating, and they said no, because the consistent revenue streams that we have now, historical revenue streams on all of the revenue streams, um are strong enough now to show that you don't need the debt service reserve fund.

So that is another big portion of this.

So sorry, that's in that.

I'm so glad you brought that up.

Because that was something that I was going to ask you.

So I appreciate you uh touching on that.

Um this is gonna seem like a really strange question because that I'm glad Tony simplified it too, because when this whole process started, I was thinking, oh my gosh, this is like a mortgage.

You know, when I think of finance and budgets, that I think of my own finances and budgets, and so watching all of this and learning about it all was very helpful.

So thank you for those clarifications.

So we don't have any prepayment penalties for now that we've hit this 10-year mark, correct?

Yes, we are at the call date and it's uh yeah, you know, so that that's what defines correct.

No more PMI as I like to call it in my own personal world.

No PMI.

And so premium.

And we're not going to because I think I I think someone asked the question in the redevelopment um authority about um insuring the bond issuance on this as well, and you said no.

We will not be getting bond insurance on either one of these, or nor a new surety policy at all as well.

And maybe just explain why, just so it's uh again, people maybe somebody will watch this video and learn from it too.

So yeah, so um really bond insurance I would say is based off of the city's credit rating, and since the city's credit rating is a double A, if it remains that way, then really bond purchasers are not going to need the bond insurance because bond insurance really are more often seen on um deals that are uh maybe an A-rated client.

And so the purchaser of the bond would buy insurance to basically get the rates at the double A level, and it which is why they buy bond insurance.

Uh it used to be a bigger thing back in the day, uh, but as uh credit ratings have been um pretty stable.

It really you see it on like a basically double A and below rated deals.

Yeah.

Any other questions?

Counselor Group.

Yeah, just will this impact our overall bond rating?

Um it is a refunding of uh an already existing bond issue, so it should not be.

So there's no, it doesn't have to go through the whole process again.

It does have to go through the whole process.

Yes.

So we um are sending everything to SP on Friday, um, and we will have the rating call probably in like two weeks on it, and we'll get it rated.

So that that is why we have an anticipation on how it impacts our overall.

Um this bond issue itself should not impact it because again, it's an existing bond and you're lowering the payments.

So and we're not changing the security, we're not scoop and tossing, we're not uh I mean it's pretty straight up refunding, so um it should not affect it, no.

Councilman.

Thanks again, Mr.

Chair.

Um Zach, you and I talked, and I think it's important for people to understand the why, why are we doing this now?

What are we going to use these the savings?

What holes are we plugging?

What is this money going to be?

Is it going to be used for something else?

I mean, anything out there that's just floating in the wind that we that we as a council should know about or our our constituency.

Thank you.

And Zach, to expand on that, um, you know, assuming our property overall property tax rate stays flat, we're decreasing our debt service levy, frees up cash flow, right?

Um most importantly for 27 and 28.

So assuming a flat tax rate, can you uh to expand on Shannon's question, those those positive impacts to the budget?

Yeah.

So uh thank you, Mr.

Chairman.

With the if we were to maintain our our same tax rate, uh we are essentially uh historically we've been able to maintain the same tax rate, and that brings in more revenue uh every year as uh as assessed values go up with the the new deductions that the the state has has phased in.

Um you know, there's some number out there uh where we have to grow uh assessed value would need to grow by like 10% a year just to kind of tread water with the with the same tax rate.

So that's gross and that assessed value.

Correct.

Yep.

Um what we're doing here by by freeing up whether it's three or four million a year, uh, as a reminder, I think the budget that council passed this year uh was essentially uh 144 million dollars of uh appropriations tied to 144 million of of revenue.

Um we're certainly not seeing revenue grow over the next couple years with with these new uh uh deductions because of SEA1.

And so what this does is allows us to decrease our operating expenses and part of our general fund budget, uh maybe calling operating expenses in the right uh way to phrase it, but essentially what we have to appropriate dollars for in the next budget uh are these debt service payments.

And so this lowers that obligation for the next two years by three to four million a year.

Um, you know, given that insurance costs go up, given that uh uh health insurance costs that is go up every year, uh given that we uh have uh police and fire on a matrix where they will have uh increases.

We have a few employees, civilian employees that have not met the the the they're they're still moving up in the steps, they're not already at that last step.

Even before we start thinking about Ecola for next year, there are our uh personal services costs are going to go up.

Uh you know, you start to layer in gas prices going up, uh utilities costs going up.

We need more money in next year's budget uh to to make the numbers work.

I can't do that much on increasing revenue, but this does buy down our expenses for the for the next two years.

So basically, same tax rate, less of that tax rate's going to debt service, which more of it can go to operations.

On um and I wanted to make sure is this a uh competitive over negotiated issuance.

This won't be a negotiated issuance.

Okay.

Um you have a minute though, I would like to go back to one question about the variance in interest rates.

You want me to cover that now?

I can't.

Yes, my name is Josh Chinock.

I'm with Robert W.

Baird.

We've been engaged service underwriter.

Um, do you want me to put it on the screen or just hand you a piece of paper?

It would be great if it was if it was shown on the screen so the public can see what you present.

Yeah.

Is there still the uh camera over there?

Yeah, just put it in the like tape area.

You'll walk up to the microphone, press the button, uh the light around the microphone turn on.

And then yep.

Thank you.

Mainly it's just what uh interest rates have looked like here the last couple years.

I I want to make it clear that we've kind of been in a volatile market, especially over the last couple years, and especially recently.

I'm sure you've when you go to the gas station, I'm sure you've seen that uh maybe you're spending 40 percent more to fill up your car, um, which has kind of caused inflation throughout the entire economy because oil is an input to absolutely everything.

Typically, when you go to a war with another country, I would think that you know rates would would come down.

But in the case of oil, that's that's not what has happened.

So since kind of February, um we kind of hit like a bottom part, which you can see um in that dot over there, there's the start of the Iran conflict.

We were at a kind of the low point over the last really several years.

Um rates have kind of come up a bit.

There were some expectations that the war was over and there was going to be a peace deal, rates have come down, and now people are a little unsure of where things are have been.

So I do have a mark there of where the numbers are run that Heidi was referenced at at the end of April.

Um rates have come up a little bit.

But it's what's been talked about is that there to expect some variance.

But I don't think that's really the the expectation at this point is this could drag on, and getting oil back through the system is probably going to take several months, maybe for the rest of the year.

So I do want to stress one thing that of the last five years that uh people have act quickly on refundings have typically won.

Um so I think you know, going quickly on some of these matters just to make sure you take advantage of an opportunity that's that's here is typically been a good thing.

And um we're you know, we're around the 11 to 12 million dollar present value savings mark right now, but we're still 35 to 40 basis points of wave market movement to 8 million.

So if that's kind of the lower threshold, then we still have a decent runway.

And our job with Bakertilly is to update you and and the administration on when that happens and make sure that you're comfortable with where savings is at.

So FMOC intends as signaled possible future rate decreases, but that doesn't necessarily track to bond rates.

Could you touch on that a little bit for when the Fed lowers rates and why that doesn't necessarily directly correlate to bond rates?

Yeah, so you know, six months ago, um, I think everybody kind of thought that rates were going to be in kind of a rate cut.

So we're gonna be rates were gonna be coming down, and and they did they've done that recently.

They have cut rates and then towards the end of last year, and then they've kind of held steady.

And that's why we saw that kind of trough there in February was the expectation was that the job market was slowing down and inflation was returning back to the Fed's 2% target, which is that's the goal.

And if the job's slowing down, inflation's coming down, then you lower rates to stimulate the economy.

Now the opposites happen where inflation has picked up again due to this oil problem, and the United States economy seems to be maybe a little more resilient than people have expected.

So there's actually about a 50-50 chance that the Fed could hike by the end of the year.

That is assuming a lot of different variables, though, and one of them being that the war lasts a really you know a few more months.

So it's just all very uncertain when you think that you know a war is gonna continue on.

There's been reports just this morning and last night that uh our President Trump was gonna attack again the last couple of days, and then leaders in the Middle East were kind of called him off and said, No, or Iran wants to negotiate now.

So I mean it's just it's up in the air at this point.

We could we could see rates come down here due to everything opening back up and going back to normal, or this conflict could continue and rates and inflation will cause rates to continue to rise.

The market chatter is though that uh FOMC is going to raise rates in December, and that it does directly affect the meaning market.

So yes.

I think we're gonna hit it at a sweet spot if we if everything goes as planned.

Correct.

So that does that does directly correlate.

Yes, it does.

It does, especially on the short-term rates, and when you're borrowing for a 10-year term, the short-term rates are very important.

Um then for uh I think it's important for the public that these um these savings, the net present value savings, the they are shown after the impact of issuance cost of the new debt, correct?

That's correct.

Yeah, it's after the net present value savings take into consideration the issuance costs, so that's under our discount uh all services that are involved in that bond issuance, and it also takes into consideration the value of time over the 10 years, so it takes into that in consideration as well because time there's a value to time.

So that's why you see when that present value is lower than like the actual savings, it's because there's a time factor that decreases that amount as well.

There were some concern in the community who I've spoken with when the 2016 bonds were issued back by TIF uh uh the 2016 B and C lease bonds that were uh TIFF and supported by TIFF and SBT, um, that the TIFF revenues maybe would not uh materialize and there was significant risk in their mind of triggering SBT.

About how and and also in light of you know removing the bond insurance for these particular two bonds.

One to ensure bond insurance wouldn't keep SBT from triggering.

That's just in the full event event of default, is that correct?

Correct.

Thank you.

Two let's touch on a little bit how decreasing creating savings or by effect decreasing the debt service payments of these bonds helps even ensure even further that SBT would never be triggered on these two bonds.

That is correct.

And the schedule that's shown here again.

Those are for the uh second TIFF bonds.

Yep.

Um you can see the annual savings uh of ninety-five thousand a year.

So yeah, we are in fact decreasing the annual payment on these bonds.

Yep.

And I do have um the TIFF coverage schedule if that's something you would take a like to take a look at.

I'd like to look at it just because I'm a nerd, but um, but I also think it's important, then it also frees up that that increment revenue to be used for other other things, just yeah, 95,000 a year will be excess now revenues that they can use on different projects.

Um so the schedule has lots of moving parts on it, but um over on the left hand side are the CRC revenues that have been coming in and growing over time.

Uh you see them drop off at different periods of time because of TIFF areas ending.

Um so that is in here.

Also, what's in here is some vacancy assumptions.

Um so the total revenues column here is the column that you should be looking at compared to the total obligations column over here that my cursor is by, and so you can see the annual surplus or um deficit in a couple of years down here, which I can explain, and the annual coverage factor uh along those lines here.

So this meets reasonable expectations test that we will not have to levy a property tax on this bond issue.

And this is this is perfect, and this is why I love you guys.

So um, because this is the this is the big TIF, which includes the meridian corridor, which we have seen the assessed values of that area decline.

And so I love that you've included some of that uh to uh the uh US meridian uh 31 quarter vacancy rate.

That is awesome.

That provides e that hedges even more, and then also um let's talk about so the annual surplus and and deficit, these are the bonds that are that are coral or uh tied to the debt interest reserve account.

Yes, and a few scroll over on the schedule over to the right-hand side.

This talks about the special reserve.

So with these bonds, and Brad can explain uh in more legalistic terms as needed, but essentially uh these there are two years in which there is a shortfall that you can see here highlighted, and that's in 2036 and 2037.

So, due to those shortfalls, due to structuring um of prior bonds and which is causing that shortfall, um, there was a special reserve that was put into place, and it is a contract um between the redevelopment commission and the council to essentially set aside TIFF excess TIFF funds on an annual basis to cover these shortfall payments.

And so this 1.5 million to 1.31.6 special reserve contribution is excess TIFF that's being set aside in these amounts each year that is accumulating into a special reserve.

There's also some Zotec roundabout repayments.

Um so this cumulative special reserve column is um revenue that is accumulating held by the redevelopment commission that you can see is gonna be more than enough to cover the shortfalls in these two years, and so the net annual CRC revenues after the payment of those reserve contributions is here out in the far right hand column.

Plus now we're creating an um additional annual savings by the refunding.

Correct, which is implemented into here.

Yeah.

Thank you.

I want to make sure we touched on that.

Yeah, great.

And the schedule that I just showed you is a part of the big official statement that will be going out to the market.

It's the accounting report portion of the uh preliminary official statement.

So in the fact at the end, at the last two payments of these bonds, it'll be about six million dollars outstanding, but currently in the bank we have about 8.8 million dollars.

And the special reserve in the special reserve to cover those.

So more than enough to cover those.

Yes.

Thank you.

Questions from Tony or Councillor Minor or Counselor Green.

Any further discussion?

If not, does uh committee member have a motion?

Go ahead.

We just do and B.

Uh actually, so we we actually talked about Bundle.

Uh uh we talked about B through H.

Um E through H.

All right.

Um real quick, can I go address the committee?

Um so on item E.

So this is the resolution CC 05182601.

This is the resolution that would approve um the amendment to the to the lease and the 2026 A refunding bonds.

Those are the bonds, as you recall, that were uh secured by a pledge of both lit and the SBT.

So the double barrel pledge.

Um as I mentioned to Zach and uh Councillor Taylor, I mentioned to you as well.

There's one sentence in that resolution we would like to strike.

Uh it's the very last sentence of section one.

Do you do you mind um I don't have my the IT as my computer today?

Do you mind showing it for the record page page four of the resolution?

It's this very last sentence up here, and I don't know if you can see that.

Umright we we drafted that to say upon the issuance of these refunding bonds, the pledge of lit to that lease would terminate.

Um, after giving it more consideration, um we we decided that it's better to actually leave that lit pledge in place because under existing lit law the uh tax rate and the allocation to the city can't be reduced to to impair to to provide less than 125% coverage, and so that was really the reason why it was done in 2016 was to protect the city's back then co it distribution.

So it really wasn't for the value of the pledge itself, it was to uh essentially protect the city so that there couldn't be some change by the local income tax council that would reduce your uh co it distributions for certified shares.

So in effect, if another community in Hamilton County that can hire a very effective lobbyist and was uh not ranked number one in the nation in this money magazine report recently, uh decided to try to change artificially uh go through the Indiana General Assembly to change the lit formula.

This would ensure that this leaving that sent uh restriking that sentence would ensure that we're still able to capture lit to repay this debt.

Yes, and until the existing lit statute changes changes in 28, correct.

So for my committee members, um for a suggestion on the a motion would be uh to include items B, F, G, and H.

Um with also E, but the first motion will have to be to amend to amend um item E.

You good with that, Benjamin?

So um I'll motion to amend resolution C C 05-18-26-01 by striking the last sentence in section one.

I'll second that.

We have a motion and a second.

Please vote.

Motion amends carries.

Yep.

Um I'll motion to approve or send back with a positive recommendation to the full council.

Um meeting agenda for Wednesday, May 20th, 2026.

Uh item B E F G and H.

I will second that.

We have a motion.

We have a motion and a second to uh to send back these item uh items B E F G and H to the full council with a positive recommendation.

Motion carries.

Um we will uh address items uh C I and D uh D at our council meet our finance committee meeting on June 1st at 4 30.

No other items on the agenda agenda.

Uh is there a motion to adjourn?

Thank you.

We will adjourn at 724 p.m.

Thank you.