Tuesday, November 30, 2010

I Am Going To Run for Council

I have been reluctant to post much in the last few days, as I have decided to make a run for City-County Council. Last night I announced my decision at the Decatur Township Civic Council meeting and resigned as Chair of the Land Use Committee. I am likewise resigning from McANA - as neither of those fine organizations need to have their independence tainted with 'politics'.

I have not yet decided whether I will run for the District 22 seat, currently occupied by Councillor Bob Cockrum, or for an at-Large position.

I am tending toward keeping this blog up for the duration, but I did want to be sure I extended full disclosure to my visitors so that they could read into it what they will.

It is obvious to me that the Council has been on a fast paced spending spree, looting every dime from TIF districts instead of paying off debts, selling assets that will cause long term cost of living increases and which amount to picking the pockets of future generations just so we have more money to spend today. The focus is on making a few well connected people and companies financial winners, while shorting the governmental functions that would make Indianapolis an even better place to live.

Friday, November 26, 2010

Cybershame Post to Be Temporarily Removed

Two days ago I posted about the Indiana Department of Revenue's Cybershame list, where they post online, the names of businesses that have not paid their sales taxes. That list is required by law, by the way.

In that post, I gathered 10 names that caught my eye from over 400 Marion County businesses listed as delinquent. In just two days, two of those have added comments that they are incorrectly on the DOR list.

I am pulling that post so that I can contact DOR about the accuracy of their list and expressly ask about the ten businesses.

I should think that the state law intended that the list be accurate. I'll be back with more information as soon as I can get it.

Thursday, November 25, 2010

Happy Thanksgiving, Everyone

Another Thanksgiving Day is upon us. This one just might be my favorite. Thanksgiving has somehow eluded the commercialization that other holidays have encountered. It remains about family, family traditions, and being thankful for all that life has provided to us.

On this day, I hope your family is near, happy, and healthy.

Monday, November 22, 2010

Schedule of Hearings for City's $98 Million Loan (Plus $45 Million Incidentals) for No-So Project

The sweetheart deal proposed for the developer of the North of South project, is working its way simultaneously through the Metropolitan Development Commission and the City-County Council.

See my October blog entry for more details of the project ("North of South - Details of the Proposed Deal"). Briefly, the deal is this: the City will float a bond up to $98 million, loan the No-So developer up to $86 million, pay the first three years of interest only payments from the proceeds of the bond, put in $9 million of infrastructure, pay Eli Lilly $14 million from an old loan on the Harding Street TIF (which Lilly will give to the developer), turn over its $5 million in proceeds from the area being designated a 'Certified Technology Park' to the developer, and help the developer pay the loan back by applying 100% of all property taxes collected in the area for 10 years. This is the project that was rejected by all financial institution(s) approached by the developer. The City would get a first mortgage on the development, but Eli Lilly would retain ownership of the land - so if there is a default by the developer, the City would become owner of partially completed buildings and have to pay the bonds off from property taxes collected elsewhere in the consolidated downtown TIF.

The MDC will take up the issue at its Economic Development Committee meeting at 8:30 am, Wednesday, December 1, 2010 (room 2001 of the CCB). They are expected to consider and vote on the deal that afternoon at 1:00 pm at their regularly scheduled MDC meeting (public assembly room of the CCB). The rezoning of this property will not be heard until December 15. The reason the zoning is claimed not to be required prior to voting on the deal, is that there is no abatement involved. Because Mayor Ballard's crew simply decided not to call the 10 year, 100% return of property taxes, an 'abatement', allows them to slide on the laws regulating such things, and to avoid protections built in for the taxpaying public.

The Memorandum of Understanding underlying this deal is posted here (you will have to put in a google account to access - so if you prefer, just email me at hadenoughindy@gmail.com and I'll send you a copy directly).

The Council has already introduced Prop 292, and assigned it to their Economic Development Committee, which next meets on December 15, 2010 (5:30 in room 260 of the CCB). The full Council would presumably take it up at its December 20 meeting - just in time for opening presents by Lilly and the No-So developer, but not the taxpayers of Indianapolis.

Thursday, November 18, 2010

Elected Officials Who Didn't Pay Their Taxes

While they are usually happy to raise YOUR taxes, some elected officials around Central Indiana aren't paying what they owe.

WRTV reporter, Kara Kenney, ran a story on Monday night, listing 8 Central Indiana officials who had not paid their own property taxes and fees and were in arrears by $1000 or more. (click here for transcript and video) Kenney has previously reported on the $21,000 owed by Wayne Township Trustee, David Baird, who has since paid up. Of the 8 Kenney followed on Monday night's report, 2 hold office in Marion County - both school board members - Cathy Wiseman of Decatur Township and Scott Veerkamp of Franklin Township. Roughly half of all property taxes paid in Marion County typically go to the schools -- and the School Boards are the ones that vote to raise those taxes.

Kenney reports:

Decatur Township School Board member Cathy Jo Wiseman’s home was sold in a tax sale when she didn’t pay $3,427.24. Her home phone was disconnected, and she did not respond to e-mails. Her husband told 6News he hadn’t worked in two years.
Scott Veerkamp, a realtor and Franklin Township School Board member, owed more than any other official we found. As of the end of October, he owed $7,825.82 on his Beech Grove business and $922.23 in sewer bills on three other properties. His house was all paid up.

"He's taking care of his own property, making sure it's current, but he's not taking care of the other things," said Creasser [Marion County Deputy Treasurer].

Veerkamp refused an on-camera interview but wrote in an e-mail, “As I am sure you are aware, school board members are paid a meager amount of money to serve public $3,000-$4,000 per year. In the full time job that I hold, real estate sales, it has been a pretty tough road the last few years, as you know. That being said, we are doing our very best as we navigate these challenging economic times.“

All but Wiseman and Schmidt paid their property tax bills as soon as 6News started asking questions.

Veerkamp paid some, but not all of his property tax bills.
Veerkamp told 6News via e-mail, “Our company has remitted payment for the property taxes on our building located at 626 Main Street,” but Creasser said Monday that Veerkamp still owes $7,632.24 in taxes and penalties on his Beech Grove business, which includes the 626 Main St. address.
In Wiseman's case, she has voted to raise taxes by some astonishingly high percentages in the last few years. In 2007, she voted to raise the property tax rate for the Decatur School District by 46% for the following year. (see Department of Local Government Finance tax rates for Marion County 2007-2010) At that point, the State of Indiana took responsibility for paying the operating expenses for all Indiana School Districts. Of what remained, Wiseman voted in 2009 to raise the property tax rate by 14% for taxes collected this year. If she could not afford to pay the huge tax bills, why did she foist them on others in our Township?

Parking Meter Deal - How They Voted

I've been off on vacation and now I'm playing catch-up. Here's how the vote came down Monday night on Prop 229 - the 50 year lease of the parking meter system to politically connected ACS.

Voting in favor : Democrat Councillor Bateman joined all but one Republican to generate the 15 votes needed for passage. Those Republicans voting in favor were Councillors Vaughn (who declined to recuse himself even though he is chin deep in conflicts of interest in this matter), Cain, Cardwell, Cockrum, Day, Freeman, Hunter, Lutz, Malone, McHenry, McQuillen, Pfisterer, Rivera, and newly appointed Sandlin (who replaces Speedy on the Council).

Voting against : One Republican, Councillor Scales, joined lone Libertarian Councillor Coleman and all but one Democrat. Those Democrats voting against the proposal were Councillors Brown, Evans, Gray, Lewis, both Maherns, Mansfield, Minton-McNeill, Moriarty-Adams, Nytes, Oliver, and Sanders.

Monday, November 15, 2010

Council Meets Tonight - Parking Meter Lease Up

The City-County Council will meet tonight, beginning at 7:00 pm. On the agenda is the 50 year lease of the parking meter system to politically connected ACS.

This effort to privatize a publicly owned monopoly is far from being in the best interest of the citizens of Indianapolis. The City can easily take $8 million from the downtown consolidate TIF district, where there will be nearly $100 million in excess cash by year's end, and pay for the meter upgrade themselves. We would then be able to collect twice the amount of money we would get under this deal - even after spending $10 million every ten years for newer technology.

There is nobody who can predict what new advances will come along that the City could turn to advantage by retaining our parking meter system and adding the new features.

If you are just now tuning into this matter, I would recommend you read my blog entries here and here, some from Ogden on Politics (here, and here), a couple from Advance Indiana (here and here ), as well as a couple from IndyStudent (here and here). As well as urban experts, Aaron Renn of the Urbanophile, and Dr. Phineas Baxandall, of the U.S. Public Interest Research Group.

Hopefully the Republican caucus will vote as individuals and in the best interest of the community -- and not as a rubberstamping caucus who just do what they are told.

Saturday, November 13, 2010

Your Signs Are Still Waiting to Be Removed

To all of those candidates for office on the November 2nd ballot - if you haven't done so already, please get your signs out of the rights of way. They were placed there illegally by your campaigns before the election. Please do not make taxpayers pay to have your refuse removed.

Thank you.

Thursday, November 11, 2010

Vaughn Hammers His Caucus

Council President, Ryan Vaughn, sold his soul to the devil, and has been busy hammering the daylights out of his Council Republican caucus to get them to sell theirs as well.

You know, I used to think the driving force was to place Party interests over the welfare of the community. But, now I am inclined to think that Vaughn puts the interests of Barnes & Thornburg, his employer, over the interests of the Party -- and the interests of the community doesn't have one neuron associated with it in his brain. The distinction is slight, I grant you, as B&T owns the Marion County Republican Party, the Mayor's office, the Controller's office, and Vaughn.

Just Tuesday night, the Council Committee on Committees, chaired and unilaterally run by Vaughn, unceremoniously dumped Councillor Christine Scales from the Public Safety Committee. This was a) to punish Scales for not getting in line and casting the same Stepford vote all the other Republican Councillors have been casting, and b) to send a strong signal to all the other Rs that they best stay in line.

Meanwhile, Vaughn has doing backroom deals to ensure that the pork runs to his district first and, if there is any left over, to downtown. And while working the system behind the scenes and out of sight of the public, he refuses to recuse himself in matters where he has a clear conflict of interest.

If any of the other Republican Councillors have any glint of high standards left, they will remember why ran for office in the first place. In doing so, they just might see their old selves in Christine Scales. If they still have any fire for right and wrong, they would stand with Scales and tell Ryan Vaughn that they elected him to his position, and they can unelect him. They can say, that the game doesn't need to be played this way. They can say it is dead wrong to put the community dead last. They can declare that every Councillor should vote in the best interest of the community - not for the best intests of the Party, not for the best intests of B&T, and not in the best interests of Ryan Vaughn.

Tuesday, November 9, 2010

I'll Speak Slowly - Let's Pay For The Parking Meters Ourselves

Deputy Mayor Mike Huber continues to bring forward ONLY information that he thinks helps his cause of privatizing a City monopoly and public asset to a politically connected firm, ACS, for 50 years.

Let me speak slowly - or type slowly in this case - The City of Indianapolis has $8 million on hand, which it can use to buy technology-enhanced meters. THE CITY DOES NOT HAVE TO BOND $25 MILLION to pay for $8 million in new meters.

Huber refuses to show the income stream to the City, if we pay up front and keep the asset under public domain. Instead, he does a bait and switch, only referring to bonding - and for $25 million, to boot. In his latest presentation (see slide 13), he even omits the $25 million bond revenue as cash flow to the City under a bonding scenario. Curiously enough, boost that curve up by the omitted $25 million and it becomes highly competitive with the revised proposed deal with ACS, and outshines the original deal. Also, please note the difference in cash flow in slide 13 (amounting to less than $400 million in 50 years) and the 'increased income' shown in slide 5 (topping $600 million in 50 years). These guys refuse to stick to just one story, they are so eager to slant whatever information they think will sell this deal to the public.

But, that is not the point.

If we do the fiscally responsible thing, which seems to run counter to anything the Ballard Administration fancies, and pay $8 million for our own upgrade, the City would keep an asset that the next generation would find useful to have.

I asked for the spreadsheet used to generate the curves on slide 13 - but have received no reply, much less the spreadsheets. So, I analysed the predicted cash flow for the current proposal as follows:
I noted the year in which the curve crossed a $50 million line.
I divided the increase in cash flow between these years by the number of intervening years, to get the average cash flow per year.
I estimated that the average cash flow below $2.1 m was 30% of the $7 m threshold, and any amount over that $2.1 m represented 60% of the total revenue above the $7 m threshold.
I subtracted $10 million for the initial upgrade and an upgrade every 10 years.

Here is the comparison you get if you pay as you go:

Cumulative Cash Flow ($ Millions)
YearProposed 50 Year LeasePay Up-Front

The years with an asterisk (*), denote years where an additional $10 million upgrade of the system was calculated.

If the City took a pay as you go approach, we would see a net improvement in revenue over the proposed ACS deal by year 11, even with having paid for two system upgrades in that time.

By year 48, the City would see a net cumulative cash flow of $655 million, $305 million MORE than if we pursue this ACS deal. That is 87% HIGHER revenue.

If the slide 5 prediction of over $600 million in revenue to the City under the ACS deal were more accurate than the slide 13 prediction, then the City might actually generate $1.125 Billion, even after subtracting $50 million for periodic upgrades. That's a whopping $525 million more.

We don't need to craft a deal that makes ACS rich. We should keep this monopoly asset and pay the modest upgrade costs and let the cash flow to the owners of the rights of way and the meter system - the public.

Rules Committee to Take Up Parking Meter Deal - Again

The Rules committee of the City-County Council meets tonight, beginning at 5:30 pm, in room 260 of the City-County Building. On the agenda is consideration of the revised 50 year lease of the parking meter system (a monopoly) to ACS.

This committee is purposely stacked with Republicans, and all controversial proposals that might not eke out every last Republican vote, seems to find its way to this committee.

Bob Lutz serves as Chair. The other Republicans on that committee are Bob Cockrum, Mike McQuillen, Angel Rivera, and Ryan Vaughn. Vaughn, you will recall from posts on OgdenOnPolitics and AdvanceIndiana, was listed with the State of Indiana as a lobbyist for ACS for a full year, until he claimed it was an error and had that information removed from the State's website. He also works at Barnes & Thornburg, where a Partner, Joe Loftus, serves both as a lobbyist for ACS and Counsel for Mayor Greg Ballard. Vaughn has refused to recuse himself from voting on this matter, saying that only if his law firm become partners with a client in a deal, not merely representing that client, then and only then would it become a conflict of interest requiring his recusal. That logic sets the ethics rules on its ear. Democrats on this committee are Monroe Gray, Angela Mansfield, and Joanne Sanders.

Monday, November 8, 2010

Paul Ogden Hits a Home Run

Paul Ogden, author of OgdenOnPolitics, has hit a home run with today's blog entry "Cancelling the ACS Contract, What the Ballard Administration Doesn't Want You to Know; And About That ACS Jobs Promise...It's Not Legally Enforceable". I recommend you read it in its entirety.

Here are the CliffNotes:

1) While Deputy Mayor Mike Huber is touting the cancellation feature of the newly revised deal to privatize the parking meter system (a monopoly) through a 50 year lease with politically connected ACS, the contract has some nasty penalties should the City actually go through with cancellation.
2) If the City chooses to turn the cancelled contract over to another firm to operate, neither that firm nor the City can MAKE ANY MONEY from the meters FOR TWO YEARS. Unless, the City forks over an additional $5 million penalty to ACS.
3) If the City chooses to cancel the contract it is PROHIBITED from floating a bond to pay the cancellation penalty.
4) The promised movement of 200 ACS jobs to Indianapolis is totally unenforceable because a) it is not included in the contract and b) only Huber signed the letter of agreement and he is not legally authorized to commit the City to anything.

This proposal to privatize a monopoly that is owned by the citizens of Indianapolis, to benefit a few politically connected people, is short sighted and totally in keeping with Mayor Ballard's apparent effort to spend every last cent this City has before he is booted out of office.

Council Committee - Some Curious Items Introduced In Mysterious Ways

I was pulling down the public notices of this week's Council committee meetings when what did I see, but an example of a proposal that comes in by the side door - usually too late for the public to realize what is happening - and some Councillors don't even realize that this side door exists.

The prescribed pathway for introduction of Proposals is to meet a date certain to submit the Proposal in writing - usually 10 days prior to a full Council meeting. Then, the Proposal is read into the Council record along with all of the other Proposals introduced that night. The introduction of the Proposals always includes the name of the committee to which that Proposal is assigned. The committee then takes up discussion of all Proposals assigned to it, the next time they have a scheduled meeting.

This pathway does not hold for some Proposals that come before the Economic Development committee. I am still not clear on the limitations of topics that may avoid the usual pathway, but they include applications for State financial assistance to build apartments that will include some low income units - or section 42 housing. It seems there are other uses for the side door, as well - as in hiding the setup for a development called 'North of South' - or No-So, as dubbed by a commenter on another blog. There is also a pesky little $14 million bond for Harlan Bakeries that is using that side door tonight.

Proposals 284 and 293 will be considered by the Economic Development committee of the Council when they meet tonight at 5:30 pm in room 260 of the City-County Building.

The digest of Prop 284 states:

consents to the waiver of certain recovery zone bond volume to the state in exchange for an allocation of midwestern disaster area bond volume

The digest of Prop 293 states:

authorizes the issuance of one or more series of Economic Development Revenue Bonds in the aggregate principal amount not to exceed $14,000,000 for Harlan Bakeries, LLC for the design, construction, renovation, improvement and equipping of a new building and expansion located at 7575 Georgetown Road (Council District 1)

If you were to look for these Proposals online, you would be disappointed. They have not been posted. I have asked for a copy of Prop 284. But, each individual having to make an open records request for a Proposal to be discussed within 12 hours is more than preposterous, and begs the question - what are they trying to hide?

The only thing that comes to mind for Prop 284 is No-So, because it calls for the use of 'midwestern disaster area bonds'. That caught in my memory, because the area proposed for the development isn't the site of a disaster, by any means.

Yup, this side door has been opened to allow the consideration of these Proposals without taking a chance that the public might object and want to appear in person to speak out against them.

How's that for transparency?

[edited to update - 11-8-10] I received a copy of Prop 284 from Melissa Thompson, Clerk of the Council office. It proposes swapping an UNSPECIFIED amount of stimulus money bond volume that is due to expire at the end of 2010, for an equal amount (whatever that might be) of bonds from the 'Midwestern Disaster Area' bond volume, that will expire at the end of 2012. The swap would be between the City and the State. The Proposal further says that this deal was struck by the Director of the Indianapolis Bond Bank, who would be Deron Kintner. Kintner is the City's point person in pushing the No-So deal. At the Economic Development committee of the MDC meeting that I attended a week or so ago, Kintner told the Commissioners that they wanted to close the No-So deal by the end of the year to take advantage of the stimulus bonds. Guess that's not so important now. Since the MOU with the No-So developers mentioned the Midwestern Disaster Area bonds and not the stimulus bonds, I have to be suspicious of his comment to the Commissioners, anyway.]

Sunday, November 7, 2010

Blog Roundup

There are two particular blogs by fellow bloggers that caught my eye and which I'd like to recommend to HadEnoughIndy readers.

First was an article penned by Aaron Renn, author of the Urbanophile blog, that he wrote for NewGeography.com, entitled "The Privatization-Industrial Complex". In it he illuminates the concern that few cities have in house talent or hire impartial outside review of privatization plans. Thus we are all at the mercy of those whose livelihoods depend upon 'working deals'. In this piece, he also notes the difference between privatizing jobs that are already being done by numerous businesses and privatizing government monopolies. The former, in theory at least, can bring competition and its resulting efficiencies to tasks that the government can outsource or privatize completely. The latter, does no such thing and as Renn notes :

"But these transactions differ markedly from the Goldsmith-style privatization. They are driven not by efficiencies but by an investment banker mindset focus on money and narrow parameters of the asset operations. They also provide enormous temptation to elected officials to grab the money now even at the expense of future generations. They are also rife with potential conflicts of interest and incentive problems."

That sounds exactly like what is happening in the sale du jour - the 50 year parking meter deal that is proposed between Indy and politically connected ACS.

Which brings me to another post - this one by Paul Ogden, over at OgdenOnPolitics, entitled "What's Wrong With the ACS Parking Contract? How Much Time Do You Have?". In his entry, Ogden lists broad categories whereby the deal fails to protect the best interests of the true owners of the City's rights of way and parking meters - our citizens. His title truly tells it all, but its a review of the facts that we all should be conversant with.

Friday, November 5, 2010

New Tangential Impacts of Proposed Parking Meter Deal

Its funny, the more I hear about the proposed parking meter deal, the more I see value in the City holding on to the PUBLIC ASSET. Last night was no different. I attended the public meeting called by Libertarian, Councillor Ed Coleman. There were a couple dozen people in attendance, including maybe a dozen representatives of the City or 'ParkIndy', which turns out to be the combination of private businesses that will benefit financially from OUR meters.

The Council Rules committee is expected to review the revised proposal next Tuesday, November 9, beginning at 5:30 pm in room 260 of the City-County Building.

Right now, I'd like to go into two new ideas that I heard last night - ideas that could bring a lot of money to the City, if the City only holds on to the rights. Deputy Mayor Mike Huber claims that the rights to these ideas are not being handed over to ACS along with the parking meters. I cannot find such limitation in the proposed agreement yet, though.

The first new use of the parking meter system was that the computerized system will allow a real time view of which meters are occupied and which empty. Huber envisioned a phone app whereby drivers could locate the nearest open meter. Cool. But, there is money in apps. And, there is a future in competition among app writers that can be good for Indianapolis. Huber says that the data are public records. But, it is not realistic to think that ACS could or would make real time public records available to app writers who would like to compete in the public arena.

The second new use of the parking meter system was to install electric car charging stations on the meter. I fully realize that the solar cells to be used to run the electronics of the new meters would not power an electric car. But the meter posts could be adapted in the future. The posts are part of the 'Metered Parking System' being contemplated as part of the 50 year lease. Here is the definition from the proposed agreement:

"Metered Parking System" means the Metering Devices, supporting structures, computer systems and software used in connection with the administration of Metered Parking Spaces and the collection of Metered Parking Fees and Temporary Closure Fees therefrom, and all improvements of any and every kind whatsoever forming a part of and used in connection with the operation and maintenance of the metering system associated with the Metered Parking Spaces (including all Metering Devices but excluding any interest in the streets, sidewalks, paving or similar real property).

Its a fantastic idea to make electric car charging stations readily available throughout Indianapolis. And, yes, the technology is currently too cumbersome to fit in a parking meter - but that won't always be the case. Shouldn't the City clearly retain rights to future improvements in OUR rights of way?

These are the PUBLIC's rights of way. These are the PUBLIC's meters. We should be very circumspect when trying to predict what razzle and dazzle new technology will provide in the next 50 years, and, the amount of money these assets could generate in the future. Every time I hear about this proposed 50 year lease to ACS, I hear of another use that the City should retain for the next generation of City leaders and City residents to enjoy.

US PIRG Issues Analysis of Indy Parking Meter Deal

Yesterday, the United States Public Interest Research Group, contacted a few local bloggers with their in-depth analysis of the revised proposed 50 year lease of Indy's parking meters to ACS. Dr. Phineas Baxandall, US PIRG, sent the analysis in pdf format, which I have uploaded should anyone want to print it out. Below I have cut and pasted the report in its entirety. Dr. Baxandall tells me that they did this same sort of analysis for the recently proposed Pittsburgh deal and many of their Council members found it very useful. That proposal was defeated, by the way.

Fellow blogger, Gary Welsh, ran with the US PIRG analysis yesterday, adding his own comments and dissection of the deal. You can view that here: "Public Interest Group Questions Ballard's Parking Meter Privatization Deal".

Here is the US PIRG analysis in its entirety - I have formatted it to be as close to the original formatting as blogspot will allow:


Questions about Indianapolis’ Proposed Parking Privatization

Why is Indianapolis considering leasing its public parking system in the first place?

Cities throughout the country have been considering leasing important public assets in response to budget crises. Unlike ordinary outsourcing to private companies, these deals provide elected officials with upfront cash that is borrowed against the higher fees they agree to charge citizens in future decades. The current proposal is akin to introducing a new tax, while borrowing $20 million against its future revenue and dividing the proceeds with a private tax collector. If the goal of the City-County Council is merely to outsource the operation of its parking system and pay for those services with a share of revenue, then there is no need for an upfront payoff and future parking fees charged to citizens could be much lower. The Mayor has stated his intention to use upfront proceeds from a parking deal for capital improvements. The city, which can borrow at much lower rates than a private company, would ordinarily finance capital improvements through bonds.

What is the current status of the proposal?

The Mayor has asked the City-County Council to grant him authorization to sign the proposed contract by the end of December. The Mayor selected the bid from Affiliated Computer Services (ACS) on August 20, 2010. The original contract and corresponding ordinance were introduced to the City-County Council on August 23. Subsequently, members of the City-County Council voiced concerns and the Mayor negotiated some provisions in the proposal without changing its basic features.

What would happen to parking rates?

Under the current proposal, the private operator would have the authority to raise rates nearly 1,000-percent over the course of a fifty year lease. This means an hourly rate increase from $0.75 per hour to about $7.50 per hour.

Did the changes that the Mayor made to the proposed deal fix the problems?

Some sections were improved slightly, but a few new problematic provisions were introduced. The main changes were: a provision for early contract termination, a reduction in the city’s upfront payment, and an increase in its share of revenues. The mechanism for the city paying compensation to ACS for policies that reduce profits has also changed. Instead of paying penalties separately, the city will simply have the money docked from its monthly share of meter revenue shares. A provision added to the new contract proposal also states that should 30 percent of validly issued parking tickets be challenged, the city must pay a penalty to ACS.

Would the city maintain full control of the public parking system?

Not if the private company believes public decisions would hurt its bottom line. Under the contract, the city would cede much of its control over Indianapolis’ parking system to Affiliated Computer Systems, a Xerox affiliate, and other contractors including the companies Denison Global Parking and Evens Time. When making future decisions about the city’s parking systems and street management, the public would need to weigh decisions about what is best for the community against their contract’s requirement to pay compensation to the concessionaires for actions or inactions that the companies claim infringe upon their profits. In response to virtually any action taken by the city that might reduce the parking system’s revenues or divert drivers to other locations, the city could be forced pay compensation to ACS. These actions might include holding new parades or street fairs, repairing nearby roads or closing roads to repair other infrastructure, improving nearby public facilities for parking , reducing scheduled parking rate increases, changing parking tax rates, or not enforcing ticketing rules strictly enough. Even the calculation of the compensation contains additional hidden costs. The city would be forced to pay for a day’s worth of meter revenue even if the meter is only blocked for four hours. In some areas, the contract would require the city to pay ACS compensation for meter "closure" that would nonetheless exceed the amount that the meter could collect if it was occupied for every minute of the long operating day.

Does the deal shift future financial risk from the city and onto the private operator?

Proponents tout parking privatization as a means for reducing the city’s financial risk in the future. If people stop using parking lots or meters in Indianapolis, the private companies would lose out. But the measures in the proposed contract that require the city to pay compensation are designed to shift those risks instead onto the public. Meanwhile, the city takes on the added risk of ACS demanding anticipated compensation for city policies that could be decades in the future and may result in expensive lawsuits.

Bottom line, how much would the city receive, and how much would residents pay?

ACS estimates the city would receive $620 million over the fifty-year lease. The company’s anticipated revenues and costs are not known because ACS refuses to disclose that information. But plugging this figure into the contract implies that city drivers would pay at least a billion dollars and perhaps close to 1.5 billion. ACS’ share would therefore range between almost $400 million to almost $830 million. These are conservative figures because they assume the city never pays additional compensation to ACS for actions that inadvertently block meters. These numbers are calculated based on average historical levels of inflation. Since the precise share taken by ACS will depend on thresholds adjusted under the contract by future inflation rates, the actual numbers could be somewhat higher or lower.

What is ACS’ track record as an operator of privatized public assets or services?

ACS does not have a favorable track record in operating public assets and services. The company is best known for its role in Indiana’s failed privatization of social services and the additional costs that Washington D.C. suffered as a result of ACS mismanagement detailed in the City Auditor’s scathing 2007 report. When Chicago and Pittsburgh were considering exploring privatization of their parking systems, they opted against ACS.

After Indiana contracted with ACS to manage the state’s social service eligibility review and claims processing, the state decided to cancel the ten-year contract after less than a third of the term. State officials justified this move because of inferior quality of service, including long waits, slow approvals, lost files, and erroneously cancelled or denied eligibility for food stamps, Medicaid, and welfare. Governor Daniels brought the privatized functions back in-house after losses that some estimate may have reached $500 million to the taxpayers of Indiana.

The Washington D.C. auditor’s report on the performance of ACS in the maintenance and operation of the leased parking system showed that from the years 1999 to 2005, costs under ACS privatization were 33.4 percent higher and resulted in $8.8 million additional spending of taxpayer funds than if services had remained in-house. ACS also improperly fined patrons $159,975 when they parked at broken meters. Overall meter complaints increased over 900 percent. Moreover, ACS inappropriately billed the city for $644,952 in penalties that the city did not owe them for temporary meter closures.

How long would the parking system lease last?

The lease would last fifty years. Provisions that were recently added to the contract for early termination would be extremely expensive to make use of because of crippling hidden fees. After the first ten years, the penalty for the city to terminate the contract is $19.8 million– nearly the entirety of the upfront payment received from ACS. If the city, having lost the in-house capacity to manage its parking system, seeks to contract out to other companies after terminating with ACS, then the city would owe ACS an additional $5 million. With a 50-year contract and these hidden fees, ACS would feel almost no competitive pressure to perform well to renew its contract. Moreover, toward the end of fifty years the private operators will have less and less incentive to properly maintain and invest in the facilities. A reduction in the length of the contract would relieve the numerous types of risks posed by privatization to the city.

What about ACS’ promise to bring 200 jobs to Indianapolis?

As a part of a separate agreement that is not tied to the lease of Indianapolis’ parking system, ACS made this promise. The promise is not dependent upon the parking system contract. Moreover, the separate agreement does not stipulate the quality of jobs that ACS would bring to Indianapolis or even if they would be full time jobs. Nor are there provisions for the city to adequately hold ACS accountable and determine whether they created the promised number of jobs – Indianapolis must rely on reports from ACS itself that can not be easily validated and penalties for noncompliance are relatively small.

Is the Indianapolis privatization proposal being handled better than in Chicago?

There are some improvements from the Chicago meter privatization deal. The simple fact that we have the opportunity to view various versions of the proposed agreement, that both the mayor and council have accepted and requested public comment, and that there have been changes made to the original agreement are improvements in themselves. That said, the Indianapolis proposal still contains many of the same problems as the Chicago deal.

Could the proposed parking lease agreement be improved?

Greatly. Despite the fact that the lease agreement has been improved from its original form, there are major problems and areas of concern. Indianapolis can not be sure that it is the best private deal obtainable because, unlike Pittsburgh, it has not gone back to original bidders to see if they would improve the terms. Moreover, City-County Councilors could demand removal of provisions that require compensation to the companies for actions that indirectly hinder parking revenues. The deal could also be made shorter to better manage unanticipated risks in future decades. All these changes would likely result in an even lower upfront initial payoff on the deal.

Is the proposal process fully transparent and protected against conflicts of interest?

By revising the original contract, posting the contract online, and holding public comment periods, Indianapolis has improved upon the abysmal lack of transparency in the Chicago parking privatization deal. But public disclosure is lacking when it comes to the financial arrangements and assumptions set out between ACS and its financiers. This information is vital to understanding the private partners’ expected costs, profits, and respective legal obligations. If ACS wishes to do business with the city, it should not keep this information secret under the guise of “proprietary” business secrets.

Indianapolis’ earliest mistake was to pay Morgan Stanley as its advisor. The company is one of the primary investors in the Chicago deal and stands to gain from the deals they advise on. That is a clear conflict of interest. Likewise, a senior advisor to the Mayor, Joe Loftus, is a registered lobbyist for ACS. After the apparent conflict was revealed, Mr. Loftus claimed his duties with ACS were unrelated to the parking deal. Regardless, disclosure should have provided upfront.

U.S. PIRG (United Stats Public Interest Research Group) is a non-partisan non-profit organization with thousands of citizen members, 25 state affiliates, and dozens of college campus chapters across the United States. http://www.uspirg.org/ Questions can be directed to Phineas Baxandall, Ph.D. at Phineas@pirg.org or 617-747-4351

Thursday, November 4, 2010

Public Meeting on Parking Meter Proposal TONIGHT

Councillor At-Large, Ed Coleman, the sole Libertarian on the Council, has arranged what may be the only off-site, public meeting regarding the revised proposal to lease the City's parking meters for the next 50 years.

The meeting is tonight, November 4th, beginning at 6:00 pm in the Wilkey Blue Room of the Anthenaeum, 401 E. Michigan Street.

Evidently, Deputy Mayor Mike Huber and the (get this) "ParkIndy" team, will be present.

Tuesday, November 2, 2010

Election Day - Some Fun For After You Vote

I'm writing this up a day early, and setting it to post on election day, as I'll be occupied working a polling site.

Make sure you vote, if you haven't already.

Now, for some fun. My husband was listening to WTTS, out of Bloomington, the other day and they were talking about a YouTube clip that claims to have identified a time traveler in an old Chaplin film.

Take a look - what do you think?

Monday, November 1, 2010

Why I'll Vote "YES" On The Tax Cap Question

There is a public question on the back of this year's ballot. It would put the property tax caps into the Indiana State Constitution. Here is how the question is written:

SHALL PROPERTY TAXES BE LIMITED FOR ALL CLASSES OF PROPERTY by amending the Constitution of the State of Indiana to do the following: (1) Limit a taxpayer's annual property tax bill to the following percentages of gross assessed value: (A) 1% for an owner-occupied primary residence (homestead); (B) 2% for residential property, other than an owner-occupied primary residence, including apartments; (C) 2% for agricultural land; (D) 3% for other real property; and (E) 3% for personal property. The above percentages exclude any property taxes imposed after being approved by the voters in a referendum. (2) Specify that the General Assembly may grant a property tax exemption in the form of a deduction or credit and exempt a mobile home used as a primary residence to the same extent as real property?

The main reason I will vote YES, is that the property tax caps do confer significant protection to property owners and posting them in the Constitution would provide protection to the tax caps themselves. To undo the tax caps, the same multi-year, multi-vote, public process would have to be engaged. This increases the likelihood that the tax caps will remain unscathed for years to come.

Another reason is that the State took over many obligations that had previously resided with property tax payers for schools and cities. In return, they increased the sales tax by 1%, and projected the net effect to the State would be an increase in revenue - even after accounting for the increased obligations. Back in 2008, the estimate was for an net extra of $128 million a year. The State should be encouraged to share more of the revenue with local cities, libraries, etc. But that is an independent course that should be taken regardless of whether or not the tax caps become incorporated into the State Constitution.

Some like to say that the tax caps don't stop increases in Assessed Value of your property. And, that is true. But, the assessed value is supposed to reflect market values. I know our house lost assessed value for the past two years running. Again, the tax caps do not exclude any discussion of also limiting assessed values, say for as long as one owner retains the property.

The tax caps may not be the entire solution to the onerous property tax burdens we saw a couple of years ago. But, they are a mighty step forward in assuaging that burden. I shall be voting YES on the public question, as that is the best route for keep the burden as low as possible for the forseeable future.