Monday, February 25, 2013

City-County Council Meets Tonight

The Indianapolis-Marion County City-County Council meets tonight and there are a couple of interesting items on their agenda.

Being voted upon tonight will be Prop 33, which seeks to allocate $3 million of RebuildIndy funds for infrastructure improvements in the Avondale-Meadows area.  The intention is for this expenditure to substitute for a TIF district proposed earlier, whose stated goal was to entice a grocery store to locate and serve the neighborhoods.  This same proposal was voted on at the last Council meeting, but did not get a required 15 votes either up or down (final vote was 14-13, with two absent Councillors).

Several items to be introduced tonight caught my eye.

First is Prop 58, which seeks Council approval for the MDC to refinance a series of old bonds.  From the proposal itself, it is impossible to say if the bonds are part of a TIF district or not.  But several characteristics of this refinancing are more than interesting.  The effect of the proposal would be to retire old bonds from 1999/2002, when the principle was $29,365,000.  During the intervening 11-14 years, the City managed to pay less than $2 million in principle, leaving the current principle at $27,445,000.  The hope is to float no more than $28.5 million and sell bonds with a term ending in 2029.  So, while the City managed to pay less than $2 million over 14 years, they'll have to pay at least that each of the next 16.   Lots of questions arise in my mind about the fiscal stewardship exemplified here. 

Another, somewhat alarming, feature of Prop 58, is the indication that the City just might take out bond insurance on this beast.  Is our ability to repay these bonds in jeopardy?  Isn't the $80 million sitting idling in the 'Stabilization Fund' enough to ensure our City's full faith?

Keep your eye on Prop 58.

Second is Prop 60, which is to my knowledge, the first time the Council has considered granting a 100% 10 year abatement of taxes on equipment likely to have a less-than-10-years lifespan.  If approved, Prop 60 would allow Exact Target to avoid paying taxes on 'information technology' it intends to install.  I have requested more information on this.

Third is Prop 72, which would appropriate $11,630,000 in the CIB's budget to allow them to give the City 100% of this year's proceeds from the two recent tax hikes, as well as a $5 million shuffle between the CIB-City-MDC.  This shuffle begins when the CIB pays the City $5 million instead of spending the money on repairs of the Capitol Commons garage - the repairs will be paid for by the MDC with TIF money. So, bottom line is that the City will get $5 million from the TIF for public safety - which I expect is not on the list of allowed expenses of TIFs.

Its all about spending money, shuffling money, not collecting money, and avoiding paying obligations in a reasonable time frame only to find that doing so has penalties. 


Anonymous said...

If the city can't pay more than $2 million on 29+ million of bond debt in 11-14 years does anyone have any faith in their ability to pay for Banker's Life or Lucas?
There isn't any fiscal responsibility at all in this town, Charles Ponzi would be proud.

Had Enough Indy? said...

I've received the MDC resolutions named in the prop 58. These are bonds floated in the downtown TIF area.

All I've done is scan through pieces of the docs and it is clear that I'll need to construct a spreadsheet to follow all the interwoven bond issues. And, what is distressing is that there is at least one instance of a lengthy, legal looking document, with all sorts of blanks - spaces for interest rates and how much money and things one might think are important.