Carmel CFO outlines zero‑based budget priorities, police and fire pay plan, and state tax uncertainty

Carmel’s chief financial officer, Zach Jackson, told the Small Business Network that the city moved to a zero‑based budgeting process for the mayor’s first full budget and that the fiscal 2025 priorities include public safety and infrastructure spending while preserving reserves.

Jackson said the city asked departments to justify programs from the ground up rather than relying on incremental increases. “With 0 based budgeting, this really gave us an opportunity to just start from scratch,” he said, adding departments were asked to group expenses into programs and link them to mayoral priorities.

The budget includes a new wage matrix for sworn police and fire employees that Jackson said will cost roughly $5,000,000 in the first year as the city phases in broader career‑ladder increases to better align pay with peer communities. “We built more comprehensive matrix that stretches out over 25 years,” he said, explaining the change is intended to improve recruitment and retirement parity with other departments.

Jackson described several fiscal moves that affect near‑term capacity: a November lease‑rental bond to fund construction projects, a debt refinancing of roughly $22,000,000 to lower interest and move payments to a dedicated property tax stream, and the identification of an alternate $3,600,000 of revenue this year after the city missed a September deadline to notify the state to begin collecting a wheel tax and surtax. He said the Department of Local Government Finance (DLGF) told the city the state needs notice by Sept. 1 to collect in the same fiscal year.

The CFO reported reserves have grown in recent years—combined general fund and rainy day balances rose from about $21,000,000 to nearly $29,000,000 in 2024 and he projected a possible $32,000,000 by year‑end if revenues and spending track expectations. Jackson described the adopted budget as “an honestly balanced budget, with no gimmicks.”

Jackson also said the city is using restricted opioid‑settlement dollars for a mobile integrated health initiative and is investing more in health insurance, life insurance and a 3% cost‑of‑living adjustment for civilian employees. He described a salary study and job analysis to better match titles and pay with responsibilities.

On the state policy front, Jackson and Mayor Sue Finkham discussed pending legislation that could change county tax structures. The city flagged two measures moving through the Indiana General Assembly that could shift revenue between property tax and local income tax; Jackson said the ultimate effect on Carmel remains uncertain and the city is modeling different scenarios.

Jackson closed by previewing a new spending‑monitoring tool that requires departments to report monthly expectations and then compares them to actuals to identify timing or overspending issues early.

Attendees asked about benchmarking against peer cities and whether reserves should be used to smooth any sudden state funding changes; Jackson said the rainy‑day fund is intended for one‑time uses not ongoing recurring costs.