Is Carmel about to go broke? By the end of the month, or a little before, it appears likely Carmel will run out of cash in its general fund to pay its bills.

Chris Sikich | IndyStar

By the end of the month, or a little before, it appears likely Carmel will run out of available cash in its general fund to pay its bills.

Mayor Jim Brainard and his financial advisers overestimated the amount of tax revenues the city will receive this year. And now it appears the general fund may not have enough money available to make payroll, among other matters.

Is Carmel going broke?

No, the city will receive a new infusion of tax payments in 2016. But the mayor has to move around money this year to pay some basic bills. And that's proving to be difficult at a time when he has political opponents on the City Council.

Brainard proposed a solution to the funding predicament. He deappropriated — cut — money he said is not needed this year from several other city funds, including the highway fund, capital projects fund, sewer fund and fire pension fund. Carmel has millions of dollars at hand from various funds and reserves.

​All told, Brainard found $5,385,651. But he needed the seven-member City Council's OK on shifting the money over to the general fund.

On Monday, the council said no. The 3-3 vote, with one council member not present, surprised him.

City finances have been a dispute between the mayor and three outgoing council members. Council President Rick Sharp, Luci Snyder and Eric Seidensticker all voted against the measure. Voices for fiscal restraint, they felt he should have managed finances better.

They also are political opponents. Brainard defeated Sharp in the mayoral Republican primary. Candidates backed by Brainard beat Snyder and Seidensticker in the primary.

The three said they had been warning the mayor that revenues were not meeting his projections. That the city was spending too much money. That Carmel might run out of cash in its general fund.

And they said those warnings went unheeded.

The mayor's financial adviser, Curt Coonrod, for his part, said that council members had been correct to be concerned and that revenues have not met expectations this year. But he said, regardless, the city needed their help now to pay its bills through year's end.

Sharp said Brainard can figure out another way.

"You're not going to call me a liar and then when it turns out I told the truth, I’m not going to fix it for you," Sharp said. "He’s just going to have to do it himself, and there are numerous ways to do it. It’s just that Mayor Brainard is used to bullying, and that’s what he’s trying to do now.

"I’m not going to be an enabler. This is not a question about dollars and cents. It’s a question about ethics and policies."

The city needed the council's approval to appropriate the money from the other funds to pay debt service due on bonds in December, according to documents filed with the city. Coonrod said the city also needed the appropriation to make payroll in December.

So what happens next?

The clerk-treasurer's office is trying to determine exactly when the available cash will run out this month and what to do when it does.

Brainard is out of the country. In a prepared statement released Tuesday, he suggested that the clerk-treasurer's office issue checks to make payments anyway. He said he believed the new City Council could retroactively approve the transfer of money in January to make that legal.

The $5 million plus that Brainard deappropriated is now sitting in the general fund. But he can't use it without council approval.

"We are simply working through the actions of some outgoing City Council members who felt the need to try and paint a bleak picture about the city’s financial strength," he said in a Wednesday email to The Star. "The problem is it’s not true."

He thought he had four votes in favor of transferring the funds. But Ron Carter, a longtime political ally, was absent from Monday's meeting. Sue Finkam, Kevin Rider and Carol Schleif, who all will remain on the council next year, voted for the measure.

With this council failing to approve the ordinance, Brainard is looking toward his suggested alternative.

"I encourage the clerk-treasurer to make payments as if the ordinance had passed," Brainard said in his Tuesday statement. "I further offer my support if she chooses to do so. I will also plan to ask the incoming council to legitimize the payment of claims by approving the ordinance retroactively."

The clerk-treasurer's office was mulling that over Tuesday, exploring its legality. Officials from the State Board of Accounts, which audits city finances, could not be reached.

Sharp, for his part, said he would not support Brainard's suggestion, calling it breaking the law.

Sharp said this should have been handled months ago, through reduced spending if necessary. He believes Brainard should have managed finances more prudently.

"There has been no attempt to deal with this problem until the last minute," Sharp said. "This is a classic Washington setup and classic Mayor Brainard setup."

In his statement, Brainard admonished the outgoing council members.

"The council members voting against the ordinance could have offered an alternative, and they did not," he said in the statement. "They are outgoing council members (defeated in the election), and the city should not suffer because they could not make a responsible decision."

Brainard pointed out the city has about $8 million in a Rainy Day Fund that could be used for emergencies. But touching that cash requires council approval, as well.

Sharp thinks Brainard will find another source of cash to make payments, potentially using the Carmel Redevelopment Commission for a loan. Or, Sharp suggested, the mayor could forgo the money he is owed from his own salary.

Commissioner Jeff Worrell said he hasn't talked to Brainard yet about potentially using the redevelopment commission to help. Worrell defeated Snyder and will take her seat on the council in January.

"I think it’s a shame that it’s come to this and it’s happening so close to the end of the year," Worrell said, "but it is what it is, and we’re going to have to deal with it."

The city has about three weeks, or a little less, to figure it out.

Call Star reporter Chris Sikich at (317) 444-6036. Follow him on Twitter: @ChrisSikich and at Facebook/chris.sikich.