Tuesday, August 23, 2011

The Cash Flows At The CIB

Its like we have our very own soap opera.  Instead of who is sleeping with whom, we have the always entertaining exhibition of the Capital Improvement Board being dirt poor one day, flush with cash the next, only to fall into abject need soon after.

Gary Welsh over at Advance Indiana (see "Georgia Street Project Includes Heated Street and Sidewalks") and Paul Ogden at Ogden On Politics (see "CIB To Spend $8 Million on Super Bowl") have both taken up WTHR's Mary Milz report that the CIB has an additional $8 million to contribute to the super bowl effort.  I began leaving comments on their blogs, but I have too much to say.  Figured I'd say it here.

Milz reports that the CIB will contribute about $8 million to the superbowl effort -- $4 million to help pay for Indianapolis' Department of Public Safety costs and another $4.2 million for more private security and other gameday expenses, which the CIB says the NFL will repay.  Some excerpts from Milz' report:
On Monday, the board approved a plan to cover private security as well as some of the other operational costs including staffing and utilities. Also included in that $8 million appropriation is $4 million for the city's Department of Public Safety. A spokesperson for Public Safety Director Frank Straub said it's earmarked to cover overtime for police and firefighters during the Super Bowl, noting 150 officers would be positioned inside the stadium alone.

Lathrop said the NFL has agreed to reimburse the CIB roughly $4.2 for specific gameday expenses including private security. She said the CIB hopes to recoup the remaining $4 million from the extra tax revenue generated during the Super Bowl.

Right now they're looking at a net loss of roughly $800,000. Lathrop said the goal of the CIB wasn't to make money off the Super Bowl but to help the city facilitate an event expected to generate millions in economic impact.

She said the lease between the CIB and NFL for the use of LOS and the Convention Center will cover the reimbursements. She said it's expected to be finalized very soon.
Here are my thoughts in no particular order -

1) Mayor Greg Ballard is facing reelection and cannot afford, politically, to cover the costs of IMPD and IFD overtime due to the superbowl - while cutting all departments except the Department of Code Enforcement. 

2) Last year the Mayor, through the MDC, gifted the CIB $8 million a year that is really destined for the Pacers, but which began with a December payment of $4 million that amounted to a surplus over what was "needed" for the Pacers.  The CIB now re-purposes that gift and returns it to Mayor Ballard for superbowl expenses that the public was told would not be.

3) The CIB knows full well that it will be back to begging for more tax increases next spring.  So, as a foreshadowing, it says that they will incur a "net loss of roughly $800,000".  The CIB bailout passed by the Indiana Legislature a couple of years ago, still has two tax rates that are scheduled to come up for consideration during a couple month window in the spring of 2012.  The City-Council can vote to raise the car rental tax and the admissions tax during that window.  If it fails to act, the option dies.  So, the CIB cannot go full tilt boogey with their flamoyant lifestyle at this time, lest they lose the sympathy of the Council next spring when they will again claim that hard times  have once again descended upon them - through no fault of their own, mind you.

4) Nobody will release the terms of the agreement between the City and the NFL for hosting the superbowl next year.  The City appears to be using the Host Committee (officially known as Our 2012 SB, Inc.) as a shell to protect the City from disclosure of the deal to the public.  The state has agreed to turn over to the NFL all of its parking garages and their profits, as well as the State's tax profits from the superbowl.  HB1125, passed in 2008, grants an exemption covering all state and local taxes, including the 6% admissions tax,  to the NFL and the NCAA when Indianapolis is the host city for a Super Bowl or Men's or Women's Final Four event.  It isn't a stretch, nor does it invoke a vast conspiracy theory, to conjecture that the City also agreed to such things.  It is a bit more than curious that the CIB's Ann Lathrop says that the $4 million 'gift' is just about the same as the $4 million the CIB expects to profit from increased taxes during the superbowl.  This can easily be the slight of hand employed to turn over all tax proceeds to the NFL - by paying for one of the NFL's legitimate costs.  If that is not true, the City can prove it by releasing the terms of the deal with the NFL.

Gary Welsh said it all, when he said : "How stupid do they think people are?"

Meanwhile, the soap opera continues.

1 comment:

Anonymous said...

It appears Mark Miles has lied to us and the NFL.

They did not have $25 million in private funding locked in before making the pitch for the city.

I thought hosting the Superbowl was a reward for building a $750 million football stadium and was intended to be a huge money maker for the city.

It appears this event will lose money based upon all the NFL give aways and additional taxpayer contributions.

Mark Miles seems to be following Carmel's mayor example of over promising and under delivering with private funding except he will have nothing to show for it after the party is over.

So much for accountability!