Indy's Supposed Structural Budget Deficit - Too Soon

Man, I didn't see this coming.

Newly inaugurated Mayor Joe Hogsett has barely begun to get used to the view from the 25th floor and he's trying to ease the public psyche toward yet another tax increase.

Fox 59 reporter, Russ McQuaid, has published his interview with Mayor Hogsett, where taxes and spending and budget deficits and wishes and wants were all discussed.  At the end of it all, Hogsett said his staff will analyze the fiscal house left by outgoing Mayor Ballard and will come up with a plan within 90 days.

But, talking of a tax increase?

Too soon.  Especially since Hogsett supports a tax increase for public transit through a referendum this year.

Too soon.  And to mention building a new jail in the next breath is a bit of a jarring juxtaposition.  New jails don't finance themselves.

Hogsett said at his inauguration that there is a $50 M structural deficit - meaning the City-County takes in $50 M less than it must spend each year.  In McQuaid's piece, Councillor Jack Sandlin says the Council Democrats and Mayor Ballard agreed to spend down the fund balances for the last few years until we are at the unhappy place where "we don't have fund balances to spend down anymore...".

Well, I beg to differ with both gentlemen.

I pulled a few numbers from the 2012-2016 budgets to examine the changes in fund balances from January to December, and to see how the estimates of fund balances changed before and after the year's budget was passed.   The first is how much of a deficit the City-County expected or did run each year, and the second is how well they estimated how much money would be in the bank at the end of the year.

For those who don't like graphs and numbers, the bottom line is that, while we have been treated to expectations of deficit spending each year from 2011 through 2016, we have not actually spent more than we took in (after money from the sale of the water/sewer utilities is accounted for).  In addition, projections of future fund balances made before the budget is finalized, always get substantially improved a year later.

Every year the budget process begins mid-summer.  Year end fund balances are estimated at that time.  So, the numbers are estimates of money coming in and money going out in  6- 18 months in advance.  The budget book contains a summary of the previous few years' budgets, moving from 'adopted budget' to 'revised budget' to 'actual budget' as the years progress.  I pulled these numbers and found that the adopted budget nearly always predicted deficit or near-deficit spending each year.  By the time actual revenue and expenditure numbers where known, the bleak picture had not developed.

Let me pause for one second to note that I am using 'deficit spending' to mean spending more money than you take in.  This means that the year end fund balances should go down between January and December if there is deficit spending.

The numbers for changes in fund balance I used are those reported after one-time money is accounted for.  For instance, the water and sewer utilities were sold in 2011 - giving the City a huge cash influx.  That money was spent over time on infrastructure and cricket fields and $80 M was set aside in a 'fiscal stability fund', intended to recession-proof the City's AAA bond rating.

Below are the expected and actual changes in fund balance over the last few budget years as reported in the annual budget book.

As you can see, while the predictions of fund balance changes were consistent with deficit spending, the actual fund balance changes have been positive - meaning we spent less than we took in.  Of course, we await the actual fund balance changes for the 2015 and 2016 budget years.

Here we see that the estimated value of fund balances actually increase when recalculated after the budget passes.  The budget books don't report the actual fund balances, so I can only show you the two predictions.  I include this information only to note that the doom and gloom estimates at budget time don't hold up - at least if the last few years are any gauge.

True, nearly $40 M was taken from the consolidated downtown TIF in 2012 - but that was when the City was trying to wean itself off the infusion of funds Obama sent out to municipalities across the nation as the Great Recession settled in - they had gotten used to the money and the feds weren't sending as much by 2012.

True, the latest budgets have been 'balanced' with 'management reserves' - forced savings across the enterprise.  But, a simple budget cut would accomplish the same thing, as budgets were crafted with the expectation that 'savings' would be captured by years end.  So, its not exactly overspending the revenues.

Taxpayers have endured one tax increase after another - the latest round supposedly for public safety.  Yet, its hard to track whether or not these tax increases have gone to the expenses the public was told they would. We will soon have a referendum on a tax increase for public transit.  Stormwater management fees have gone up and will do so automatically for a while.  Water rates - up.  Sewer rates - up.

The last few months of the Ballard regime saw tens of millions of dollars that weren't budgeted, spent on unwise contracts signed without any public review.  These monies may cost us, but surely should not be used to claim any 'structural deficit'.  Unwise spending on unwise contracts should be avoided in the first place.

If the Hogsett administration is looking to make some changes to the way things are done for the benefit of the fiscal health of the City, I would offer the following suggestions:

Assign a sunset date to the consolidated downtown TIF, so future mayors and taxpayers have the financial resources the TIF was supposed to create. 

Ditch the idea of a new jail until the resources are identified and a tax hike is demonstrated as unnecessary to make ends meet or to fund the jail.  Neither should it be financed with job loss.

Change the 'management reserve' system of budgeting and replace it with a 5% across the board cut - its the same thing, but deficit spending would be harder to confuse with spending within one's means.

Pull jobs from high priced lawyers and consultants and cultivate those resources in house.  Review all contributions to local not-for-profits that do work for the City that could be done by City employees at a fraction of the salary.

It will be interesting to see what Hogsett's people come up with.

But, for right now, its too soon to hint about tax increases.  The data just aren't there that any structural deficit exists.

Follow the Money

A long time ago now, the Marion County Alliance of Neighborhood Associations began following the City's annual budget based on one proposition.  That proposition is that our elected officials can say lots of things, spin lots of yarns, and try to influence public impressions, but they will always put money into the things they feel are priorities regardless of what they say.

Today we sit with news reports of yet more MILLIONS of dollars going to the Pacers and their billionaire owners - voted on by the CIB prior to public disclosure of the actual deal agreement(read Gary Welch's excellent piece on Advance Indiana for more). 

Our elected officials are prepping us for goodly increases in income taxes to provide more cops on the street - while saying violent crime is actually down, its just shooter's aim that has improved.

Our elected officials will be looking to eliminate the local homestead credit - the third time for this push.

Our elected officials will look for a calm moment within which they can place the mass transit referendum on the ballot to raise taxes even more - and you just know that the light rail boondoggle will somehow be included once again.

But, where do we actually stand?  What priorities has Mayor Ballard-Vaughn actually placed on his spending of tax dollars?

Below are two charts comparing the actual budget numbers for some City Departments and Municipal Corporations for 2014.

First is a comparison of several Municipal Corporations as well as the collective revenue from Marion County's TIF districts.  The total budget for all Muni Corps is nearly that of the entire City-County budget ($955 M vs $1.0 B).

You will notice that our elected officials value sports as much as they value the current IndyGo and public Library combined.  The slush fund that TIFs provide, of course, also rivals the basic public service spending that I thought City government was supposed to provide.

The chart below compares spending on different departments included in the City's annual budget.  The Fire numbers include the fire budgets for the three Townships that still operate their own departments in addition to IFD's budget.  The Parks budget number shown below also includes money Ballard has moved into DPW's budget.  DPW's budget number has the Parks money removed.

Elected officials give a little more priority to police and fire than they do sports, but not substantially more.  Parks has been gutted by this Mayor.  In fact, Ballard-Vaughn's proposed RebuildIndy 2 program would spend just about as much on painting bike lanes as he budgeted for all parks in 2014.

When an elected official talks to you about his or her priorities, ask them how they are really spending our money.

IMPD Budget Recap - It's Probably Not What You Expected

Last night's budget hearing for IMPD was quite well attended.  For those who missed it, let me recap.

Public Safety Director Troy Riggs, Police Chief Richard Hite, and Public Safety Deputy Director Valerie Washington present limited IMPD budget numbers; noting only that the money flowing to IMPD from one fund (the IMPD General Fund) would remain the same, at $187m.  

In 2014, the want to hire 35 civilians to take over duties now conducted by sworn Officers, allowing those Officers to return to patrol duties.  They also want to set up a recruit class of 50 new hires.  That, combined with 10 civilian hires this year, make the 90 new sworn Officers that is being bandied about in the media today.

But, in order to accomplish all of this, they need to have their budget cut by $5.65 m.

Now, I know you want to go back and re-read that last sentence.  Go ahead.  I'll wait.

Yes the IMPD budget is being reduced by $5.65 million.  This includes a $7.09 million decrease in salaries from the current year budget.  No wonder they glossed over all the numbers except that one fund's expenditure total.

So you say, but Pat, what about the $1.4 million in fees to be charged the Officers for use of their take-home cars?  Well, I assume that's in the budget somewhere, but there is  no line that says 'fuel surcharge fee' in the numbers available to the public.  And, all I can say is, what one hand giveth, the other taketh away.

And you say, but Pat, what about the two tax hikes the Council gave the CIB - the increased ticket tax and car rental taxes?  Wasn't the first year's $6m supposed to go to IMPD and IFD?  And, after that isn't 25% of those increases to continue to flow to IMPD and IFD?  Why, yes, that's true.  But the year began on March 1, so the is only two months of 100% CIB 'public safety' revenue in 2014 and the rest is at 25% - so maybe $1m to IMPD. 

But, Pat, you say, what about the proposed increase in the old IPD Tax District?  Isn't that assumed in the 2014 that is on the table?  Why, yes - yes it is.  I know they say it will net about $3 million in additional funds, but the additional revenue IMPD collects is only $1.6 m.  And it actually should show up as a decrease in the property tax circuit breaker.  But that number is just about the same as it was for the 2013 budget.  So, you got me.  I'm sure its in there.  Yet again, what one hand giveth, the other taketh away.

What about the $9 million that is supposed to come from elimination of the Local Homestead Credit?  Surely that's in the IMPD budget.  Ryan Vaughn and Troy Riggs are all over the media saying that if that credit isn't eliminated then the IMPD budget will lose $9 million and there could be no new hires next year if that happens.  Well, this one gets a 'not really'.  Should the Local Homestead Credit be eliminated, the IMPD budget would actually go down about $300,000.  IMPD is better off if its not eliminated.  The elimination frees up County Option Income Tax revenue, but IMPD doesn't see a penny of that money.

Lets add up all the new money that the Mayor Ballard, Vaughn and Riggs imply is in the IMPD budget, shall we?  $1.4 million in fuel surcharge fee, $1 million from the CIB, $1.6 million or $3 million from expanding the old IPD Taxing District, and the $9 million from eliminating the Local Homestead Credit - sounds like $13 million to $14.4 million more money to IMPD, doesn't it?

But - nope.  No $14 million more for IMPD.  The 2014 budget really is $5.65 million less than 2013.

Its all a game to use public safety to secure public support for this round of tax changes. 

They Call it "COUNTY" Option Income Tax for a Reason

In a previous blog entry I showed graphs comparing the impact of eliminating the Local Homestead Credit, expanding the old IPD Tax District, and doing both, on various units of government.  In that I showed only the aggregated impact on City and County government.  That is the government run out of City Hall.

Now, because of obfuscation and deliberate confusion being tossed around by the Mayor's Office to the media, I'd like to show you what effect these tax changes would have on the pieces of City and County government.

But, first...

The Local Homestead Credit is a reduction in property tax bills that is paid for by using County Option Income Tax (COIT) revenue.  They call it County for a reason - the income taxes collected go to the COUNTY.  Not the City of Indianapolis.  Not to the IMPD fund.  Not to the IFD fund.  But to the County of Marion. If the Local Homestead Credit is eliminated, there would be more COIT money to spend on other things.  But, again, it is COUNTY Option Income Tax.

There are 6 different property tax districts that provide money to City and County government.  Each has a different footprint in Indianapolis/Marion County.  I will give you the impact data for each of these at the bottom.  But, for clarity and a bit of simplicity, I want to concentrate on the tax impact on the Police district, the Fire district, the consolidated City, and the consolidated County.

So, without further ado...

The overview of how eliminating the Local Homestead Credit, expanding the old IPD Tax District, and doing both will affect the coffers of the Police, Fire, City and County.

The scale is Millions of Dollars

As you can plainly see, most of the additional revenue would go to the County government coffers.  That's the Sheriff, Clerk, Prosecutor, and more.  By comparison, IMPD sees only a blip in increased revenue, Fire less so and nearly imperceptible changes for the City. [edited - my mistake here, the consolidate County is actually the City's general money - but none of that fund is used for police or fire.]

Looking more closely at each individual group...

POLICE

The scale is Thousands of Dollars

The Police fund would see its best gain if only the old IPD Tax District were expanded and slightly less if both changes are made.  It sees a loss of just over $200,000 in revenue if only the Homestead Credit is eliminated. 

FIRE

The scale is Thousands of Dollars

The Fire fund would see less than half the gain that Police see if only the old IPD Tax District is expanded.  It would experience a loss of almost $800,000 if only the Homestead Credit were eliminated.  And it would see a modest loss if both changes are made.

CITY

The scale is Thousands of Dollars

City funds would grow by a bit if the old IPD Tax District were expanded.  It would see roughly a $2000,000 loss if the Homestead Credit were eliminated, and about $150,000 loss if both are enacted.

COUNTY

The scale is Millions of Dollars


The County gets buckets-o-cash if the Homestead Credit is eliminated and next to no change if the old IPD Tax District is expanded.  Please note that while the scale of the preceding three graphs has been Thousands of Dollars, this scale had to be Millions of Dollars.

Here are the exact numbers for all 6 tax districts.  You'll notice an additional 'County' district that brings in even more money to the County coffers.  Please do not ask me why there are two County districts.  Loss of revenue is highlighted in red.  Gain in revenue is black.

Name	HSC Elim. Only	IMPD Exp Only	Both
Marion County	$1,346,500	423,000	1,720,400
Indianapolis Sanitation (Solid)	(254,400)	94,000	(171,600)
Indianapolis Police Special Service	(234,100)	1,671,000	1,332,800
Indianapolis Fire Special Service	(749,400)	645,000	(130,600)
Indianapolis Consolidated City	(225,100)	90,000	(164,100)
Indianapolis Consolidated County	8,442,000	173,000	8,576,300

So, what have we learned here today?  While the Mayor's office continues to connect these tax changes with some improvement in IMPD's budget, it is a fabrication intended on selling the tax changes.  Expanding the old IPD Tax District does have a small, but real, affect on IMPD's revenues.  But eliminating the Homestead Credit has a negative affect on IMPD. 

It is a shame that we cannot get the real story from the Mayor or his Chief of Staff and that we citizens have to resort to examining the minutia of the numbers to learn the truth.

Principles Matter - But, Evidently, That's Negotiable

Some power brokers in the Republican Party and some power brokers in the Democratic Party only care about how much money flows their way.  To them, there is no 'enough'. 

There is no 'enough' just because your parks aren't kept up.  There is no 'enough' just because there are too few police and the City can't afford to give them contractual raises.  There is no 'enough' just because all the sellable public assets have been sold. There is no 'enough' just because good public servants are being laid off so that well-connected organizations can get more lucrative contracts to do their jobs - and poorly at that.

There is no 'enough' as long as the City can cash in future generations' welfare for more dollars today.   There is no 'enough' as long as there are more square miles that can be turned into TIF slush funds.  There is no 'enough' as long as the City can gain, even if that gain causes an equal loss to Township Schools.  There is certainly no 'enough' as long as taxes can be raised.

Jon Murray, IndyStar city hall beat reporter, wrote an article that was posted last night online and delivered to subscribers on paper today, that clearly shows how little residents and taxpayers mean to some of those elected to serve the public - not elected to serve themselves and their money backers.  Paul Ogden, over at OgdenOnPolitics, commented on the story last night.

Murray reports on negotiations between Council President Maggie Lewis and Mayor Ryan Vaughn.  These negotiations are about eliminating the local homestead credit and expanding the old IPD taxing district.  He says of those two 'tax changes':

The combined upshot would include a tax cut for central parts of the city, higher taxes for outlying areas and a hit to township school districts’budgets. 

Council President Maggie Lewis, a Democrat, said the Republican administration was holding firm on the tax proposals but has been open to discussing options that include tapping into utility sale proceeds and unused money from tax-increment financing districts.

That could soften the blow of the tax changes by paying for council Democrats’ priorities, she said.

Its not about softening the blow to taxpayers.  The power brokers behind Lewis want those taxes raised - the more the merrier.  Schools be damned, taxpayers be damned - keep the tide of cash flowing ever greater.  Lewis is actually trying to find MORE money to spend to 'justify' voting for raising taxes.  If she cared about the public interest, she'd be negotiating to supplant some or all of the tax hikes with money in the $80 million 'fiscal stabilization fund' that was created with the utility sales money.  But, no, its all about ever more money for the power brokers and the well connected developers and the campaign contributors.

Lewis and Vaughn are just trying to soften the blowback on Councillors who vote for these tax increases.  They are trying to come up with a one-year token infusion of extra money into the budget to somehow bedazzle the public with a forever-year increase in taxes and hit to Township Schools' budgets.

Lewis' branch of the County Democrat Party is as corrupt as Vaughn's branch of the County Republican Party.  And all they want is more access to your purse so their 'friends' can broker more bond sales, lobby for more deals for their clients, land more contracts, and turn their campaign contributions into more tenfold taxpayer handouts.

There still are Councillors who act on principle and for the public good - a couple, all of the time - some, only 'negotiating' that principle away from time to time.   It is up to these Councillors how the City will move forward.

Budget Prestidigitation - False Long Term Solutions To Be Served Up

One consistent hallmark of all of City budgets since Ballard was elected Mayor, has been the early public relations effort flowing through the press, trying to shape what the public thinks about the budget.  For instance, in the first couple, while revenues were growing, the early press claimed near-crippling shortfalls.  The early press dictated the later press.  As the recession's impact actually began, and election rhetoric was heating up, the early press claimed near dodges of cuts in services - while the administration pulled tens of millions of dollars from the downtown TIF to make ends meet, hoping not to be noticed.

We now enter the post-recession era, as property values are rebounding.  Now what will they blame for any budget difficulties?  Income tax revenues are expected to grow.  Increased property values should lead to fewer people hitting the tax caps.  Budgets, by all revenue accounts, should be getting easier to manage than the past few years.

Yet, where are we?  I point to two news items by IndyStar's excellent City Beat reporter, Jon Murray.  Yesterday Murray reported on the property tax bills that are about to be mailed in "70% of Marion County homeowners to see higher property tax bills".  He writes:

In Marion County, the treasurer’s office estimates that 64 percent of the 366,264 bills it will send out for properties of all types will reflect an increase. The total amount being billed this year, slightly more than $1 billion, is up 4 percent.

There are three sources for the increased bills and the increased total tax collection.  First is the increased assessed value for Marion County property.  Property values outside of TIF districts increased by 1%, according to the budget order of the Department of Local Government Finance.  Second is the increased property tax revenue being requested by the various governmental units.  The third is all property value kept from paying for local government services because they are either consumed by TIF districts or deliberately kept as government-owned, tax-free, property.

Today, Murray's story is about the behind the scenes discussions on the 2014 budget, which are said to be veering necessarily to layoffs of police and fire personnel, among other cuts; "Indianapolis, Marion County leaders are finding $30M in budget cuts a tough task".

Now administration and council leaders are staring at options that range from eliminating vacant positions, renegotiating contracts and making simple accounting transfers to much more difficult considerations, such as cutting back on a parks after-school program or transferring some pools on school grounds back to Indianapolis Public Schools’ control.

Then there are the possibilities of police furloughs and layoffs of firefighters and deputy prosecutors, as well as cutbacks on public defender services.

They want you to blame property tax caps for any coming public safety service cuts.

A new wrench in the debate is recent notification from the state that tax caps were expected to trim $10 million more than expected from the municipal budgets this year, adding more pressure to cut back. 

So, how did property tax cap penalties grow so much?  If the assessed value is rising on 64% of all property owners, fewer people should be hitting the tax caps, and the tax cap penalty hitting local government should be dropping.

The silent player in all of this are the TIF districts - which were expanded significantly this year despite the fact that they accounted for over 40% of the tax cap penalties for local government last year.  The more property value consumed by TIF districts, the higher the hit on local government's coffers.  Its simple.

Any real long term solution will have to put more property value on the non-TIF property tax rolls.

We MUST retire older TIF districts as their oldest bonds become due. 

We MUST call on the Airport to return to the tax rolls, the hundreds of acres it does not need for aviation purposes.

We CANNOT grow fast enough through so-called economic development cash giveaways to compensate for the speed with which we have grown our TIF districts.

Yes, this year they'll blame tax caps, when they have shown no desire to limit the real cause of the post-recession budget difficulties.

Council Meets Tonight - Hold Onto Your Wallets

The City-County Council meets tonight.  Increasing your taxes and siphoning off property taxes from known future development to pay for corporate tax handouts instead of cops, are on the agenda.

The Council will vote on raising the local car rental tax from 4 to 6% (Prop 24) and raising ticket tax from 6 to 10% (Prop 23).  They will also vote on Prop 448, which puts back the nearly $32 million Mayor Vaughn slashed from County Office 2013 budgets; a move that made no fiscal sense, just created blackmail fodder.  These are all to have public hearings, as they are fiscal ordinances.

Prop 291, the Mid-North TIF, will be voted on as well, but no public hearing is to be held.  This plan specifically removes property taxes derived from the taxpayer-funded Broad Ripple parking garage from common good uses, like paying for public safety in places like Broad Ripple, to paying for public art near Broad Ripples innumerable bars and park upgrades to Tarkington Park.  Developer driven tax handouts are anticipated within the 1 square mile of the TIF district as well.  If things go well, Mapleton-Fall Creek, an actual area of need, just may get a project financed with TIF dollars.

Among the Proposals being introduced tonight is Prop 33, sponsored by Councillors Talley and Robinson, which directs DPW to use $3 million of its 2013 RebuildIndy funds for Avondale-Meadows infrastructure improvements.  This proposal is being offered to substitute for the expansion of the Fall Creek Place TIF which proponents hoped to use to attract a grocery store.  These proponents now suggest more investments of TIF dollars were also hoped for, once the grocery was in place and the TIF fund grew.   I do not know what those projects were expected to be or if they simply expected to spend any and all TIF dollars that amassed beyond the initials needs.

Also likely making an appearance is newly selected Councillor Jefferson Shreve, whose residency qualifications for that office were called into question over the weekend.  Selected Saturday morning, questions arise, trail of documents unearthed by Saturday afternoon.  Somewhere in that time, they GOP hastily swore Shreve in.  You can read all about it on the Advance Indiana and Ogden On Politics blogs.

After Mayor's Folks Get There's - Everyone Else Can Pay More

Jon Murray, IndyStar reporter, did an excellent job in today's Star running down the Mayor's proposals for fixing the supposed $60 million shortfall in this year's City budget.  I still do not understand why we have a shortfall of this magnitude - but we have time to work on that.

I still have family in town and don't have much time to sit and blog - but the idea of getting rid of the homestead credit appalls me so greatly that I need to at least spit out a few thoughts that might give you the gist of my reaction.

First, if you pay more in taxes - its a tax increase.

Getting rid of the homestead credit clearly demonstrates that this Mayor and his administration never did care about the residents of Indy.  It just reemphasises the theme from previous budgets - cut parks budget each and every year - cut the library with token efforts to get them a million or two lately - cut IndyGo --- all the basics for quality of life for those of use who want it to be a great place to live.
The Mayor's people got their $20,000 raises - so what do they care if everyone else has to take a cut or pay more.

The homestead credit is real money saved for real people.  Money they can use to a) keep their homes, b) buy their groceries, c) put shoes on their kids' feet.  Its not just $22 per person, either.  Maybe the math works out when you throw in people who have reached the caps and no longer benefit from any property tax credit or deduction and all the people who do not own their own home.  But there is no way that the average sacrifice will be $22 for the people who are benefiting from the homestead credit - and it is disingenuous to suggest that is the case.

If the homestead credit were to be legally removed by the State Legislature, then the new tax revenue would flow to all the taxing units - not just to City coffers.  Is the Mayor suggesting he split the new millions with all the units, or keep it all to himself? 

One of the reasons belts needed to be tightened in all the taxing units except the City (for the City, revenues increased each year until the 2012 budget, when the Mayor just took $40 million from the consolidated downtown TIF to ease his pain) is that the property tax caps are in place to protect property owners. 

The TIF districts in Indy help push taxpayers into the tax caps and account for over 30% of the 'lost' revenue for the taxing units.  Ironically - the Mayor has 6 new TIF districts he wants to push through the Council so he has more gravy to spread to his favorite developers.  But he wants YOU to make up the difference in City coffers by donating your homestead credit to the cause.
So, here's the diagram of how Mayor Ballard sees public money --

give as much taxpayer money to favorite developers as you can lay your hands on - sell the city's assets when necessary

give obscene raises to a handful of co-workers

reopen union contracts where you still have unions in the City and cut raises

cut parks budgets

cut Library and IndyGo budgets

ask homeowners to dig even deeper in their pockets and give up their homestead credit to pay for the loss of taxes to the City due to the tax caps, 30% of which is because of TIF districts/slush funds

create new slush funds, aka TIF districts, because all the other slush funds have been run dry - blackmail the Council into creating these new slush funds by withholding your signature from the partner benefits ordinance

give as much taxpayer money to favorite developers as you can lay your hands on 

Oh  - one more thing -- the Pacers will be getting tens of millions more money from taxpayers just as soon as this budget and the 6 new TIF districts are all approved.

Public Safety Budget 'Shortfalls' Meeting

I was unable to view all 5 hours of last night's Public Safety committee meeting where claimed shortfalls in the Sheriff and IMPD budgets were discussed.  I have to carve out some time to view it from the WCTY archives.  Jon Murray, IndyStar reporter, has an article in today's paper.  Murray reports that Frank Straub, Public Safety Director, now claims a $15 million shortfall that extends beyond IMPD.  Personally, I remain sceptical of Straub's claims, while Sheriff John Layton made an excellent presentation at last year's budget hearings that convinced me back then.  What I did catch last night was primarily the Sheriff's budget issues, so I really need to hear what Straub had to say before etching my gut a priori feelings in stone.

With all that said, I hope the following did come up last night.

In the discussion of the Sheriff's budget, I hope someone asked :

1) why Wishard could not go back to the old system and pay the costs of arrestee care that occurs within their walls?  Health & Hospitals takes in over $109 million a year in property taxes and I don't see why we can't get some of that back.

2) at a minimum, why can't Wishard provide services free to those individuals who would qualify, had they not been arrested?

3)  when are Wishard and the Sheriff and IMPD representatives meeting to work out a better system of who really needs to be taken directly to the hospital upon arrest?

On the IMPD budget, I hope someone asked:

1) when will the $3.8 million from the CIB for super bowl expense be turned over to IMPD?

2) how much did it really cost IMPD and the rest of Public Safety for the Super Bowl?

3) why doesn't the CIB repay IMPD the $32 million it was loaned (according to former Council President, Ryan Vaughn) ?

4) how come you could make it on far less in previous years, but this year you just have to set records for expenditures?

5) how come at budget time you said character 3 was short by $3.5 million, but now your estimates are that it is at least $10 million short?  How did you mis-estimate the budget need by that much?

Budget Problems for Public Safety?

I noted in the last of my blog entries on the 2012 City-County budget, that there were some time bombs in it (see "2012 Budget Is Done").  Well, looks like notice is being paid to an 'emergency' in public safety.  Television news has reported on matters arising in the March 5 meeting of the Criminal Justice Planning Council (view the meeting for yourself in the WCTY archive, WRTV, WISH,  and FOX).  Council President, Maggie Lewis, has called an emergency meeting of the Public Safety committee for Wednesday, to discuss the budget shortfalls with Marion County Sheriff John Layton, Public Safety Director Frank Straub, and City Controller Jeff Spaulding.

A few folks have asked me about these claims, given that I followed the budget so closely for the past few years.  So, I slogged through the minutes etc from budget time, and I will recap what I can.

First, a few notes about the Criminal Justice Planning Council (CJPC) meeting.  The Marion County Sheriff's budget issues was an agenda item.  Sheriff John Layton talked about the same things he discussed back during the 2012 budget hearing (see the minutes from the September 7, 2011, Public Safety committee meeting) - unfunded mandates for Wishard services and the City-County building security contract with Securitec - amounting to a $12 - 15 million shortfall annually.  In September, Sheriff Layton spoke also of the nearly $10 million owed to Corrections Corporation of America, who runs Jail II.  These were due to ballooning costs for inmate medical care suddenly being charged by Wishard in 2010 and 2011, and not covered in the contract with CCA.  This backlog was taken care of by Prop 2011, 365, which appropriated $9.9 million to be paid to CCA for the outstanding balance.  In addition, a $1.5 million payment to the pension fund was fully addressed at budget time. Still the 2012 budget held unfunded mandates for Wishard charges, the Securitec contract, health insurance for employees, and contractual raises that would account for Layton's $12 - 15 million shortfall.  Rather than waiting for a bailout that may not come at the end of the year, Layton is considering pulling his staff from Wishard and stop transporting those in jail to the Courts, saving overtime payments and better matching his resources and obligations.

Now, some of what went on at the meeting was pre-arranged and may very well be motivated by party politics.  Nonetheless, Sheriff Layton's budget story has not changed, and he was up front back in September about all of this.

IMPD's budget may be different, however.  At the CJPC meeting, it almost seemed that Dr. Straub was piping up with new information, so as to not be left out of any re-budgeting efforts.  He said he might have to shut off the lights in some districts by the end of the month to compensate for an immediate hole of $10 million in character 3 appropriations.  Now, character 3 covers 'other services and charges', as opposed to personnel costs.  Straub did not give specifics other than saying the FOP wants new cars as half of the police cars have more than 100,000 miles on them.  If you know me at all, you know I am unsympathetic about a perceived need for a 3 year vehicle replacement plan - especially when times are as tough as they are right now.

The 2012 budget for IMPD seemed to be 1% less than the 2011, but, as I noted at the time, previous budgets were supplemented at the end of the year, making the cuts more like 5% (see "IMPD Budgets Show 5% Cut").  As I noted at the time, this did not give me much heartburn since it appeared that the IMPD budgets were padded, as they never seemed to spend as much as they requested.  Still, there was the upcoming Super Bowl, with IMPD costs of unknown magnitude (and still unknown), as well as a -$4 million placeholder that, to my knowledge, never was settled before the passage of the budget.  These placeholders were insidious, and are the 'time bombs' I was referring to in my posts about the budget.  These were the total amounts of cuts that each department or agency had to include in their budget.  But, many kept the negative number in their budget, without specifying whether personnel would be cut or if contracts would be curtailed or some other allotment of the cuts would be structured.  This left the questioning by Councillors quite impotent.  They would review the adequacy of the items that appeared fully funded.  And when attention was drawn to the large negative placeholder, there was no discussion about the realistic impacts on the budget items before them.

I did review the minutes of the September 21st meeting of the Public Safety committee, which was the hearing for IMPD's budget.  At that time, Straub did mention, on questioning by Councillor Aaron Freeman (page 7 of the pdf), that there was a $3.3 million shortfall in character 3.  The most jarring item, though, is found on page 11 of the pdf. The Council President, Ryan Vaughn is noted as saying

that IMPD has loaned over $32 million to the CIB on a contingency basis.  In addition, Director Straub has gotten over 120 grants, but these grants are contracts, and some of them come with unfunded mandates of over $2 billion.  He said public safety cannot be run on a contingent basis.

That's real money in exceptional sums.  There is a need to find out more about this topic, for sure.

The meeting of the Public Safety committee is this Wednesday at 5:30 pm.  The CJPC voted to have a budget solution proposal for Public Safety by the time it meets in April.  We will see what comes of all this, but we need to keep in mind that the City does not print money nor have the authority to raise taxes more than the State Legislature allows.  A solution may be in the offing, as $10 to $20 million could be pried from fund balances this year.  But, little fat, if any, is left for 2013, which is said to have a $50 - 70 million shortfall looming - and I can believe that.  Structural changes to the City's budget may be needed soon, if not this year, as the fund balances are slim, the rainy day fund is gone, the consolidated downtown TIF can't be relied upon a 2nd time, and the stimulus funds are no longer being offered.

Options are limited.  We shall see what comes of the attention being paid to the Sheriff's and IMPD's budgets.

2012 Budget Is Done

Well, its been going on since August, but the 2012 budget is finally completed.  Here's some of my impressions of it.

1) Between the sale of the sewer utility and the parking meters, and the near depletion of the rainy day fund last year, there is a $35 million hole in the revenue stream for 2012 as compared to 2011.  That money is never coming back.  Instead of dealing with it by meting out significant budget cuts in an election year, the Ballard administration chose, and the Council endorsed, robbing the consolidated downtown TIF district fund of $38.5 million.  This is not sustainable and next year we likely will be forced to pay the piper.

2) While the administration continues to repeat the phrase, "no layoffs", the truth is different.  The budget cuts demanded of the Clerk's Office will generate about 10 layoffs - and the Criminal Justice committee of the Council was so informed prior to their vote to move the budget to the full Council with a 'do-pass' recommendation.  Clerk Beth White requested an increase of $76,623 over what Controller Jeff Spaulding recommended.  This was still a decrease of over $300,000 from the previous year.  White testified that her employees tended to be single mothers earning salaries at the low end of the City's wage charts.  Add to that the fact that the Clerk's office and its workflow is critical to the jail overcrowding solutions, and you have a stance by this administration and the Council Republicans that is more than difficult to comprehend.  Let us hope that this cut, with real life ramifications for real people, was not generated out of party politics. 

3) The 'grown-up' award goes to the Public Safety Committee.  I have to disclose that I am an ardent supporter of the Council being an equal branch of local government with the Mayor and the Courts.  I really hate it when the Council takes on the role of Mayoral lapdog, instead of constituent watchdog.  That said, the Public Safety Committee, chaired and led by Ben Hunter, rolled up their sleeves and slogged through the numbers, asked hard questions, demanded changes, and made the budget for its departments and agencies all that much improved over what had been submitted by the Ballard administration.  Members of that committee are Republicans Hunter, Freeman, Pfisterer, Scales, and Vaughn, and Democrats Adams, Oliver, and Brown.
An additional 'grown-up' award must absolutely go to Sheriff John Layton, who stated his case and then worked with that committee to head his budget into the right direction.  He got the pension fully covered and is working toward solutions for his other, large, shortfalls.  And, he is doing so in an effective and cooperative manner that will bring results for the citizens and taxpayers of Marion County.

4) Parks is a mess.  Stuart Lowry has been a disaster as Director.  From comments during the budget debate it became clear that the budget for Parks still contains the -$1 million cut as a line item, instead of having been allocated to specific items.  Really?  Don't sit quietly and accept the cut if you can't make the decisions of where those cuts will end up.

5) Last but not least, I think there are a couple of time bombs in this budget that will have to be defused as 2012 moves along.  I also do not think that is any way to make a budget.  The Coroner's office is still using wishful thinking to hope for an additional $400,000 in revenue to come from who knows where.  The Controller's office is content to simply 'moniter' the situation as 2012 progresses.
There is still no rough, much less reliable, estimate of the cost of the Superbowl to Indy's taxpayers.  At least the Council has demanded that estimate be delivered some time in November.  Credit for that goes to President Ryan Vaughn and Councillor Brian Mahern.  The IMPD budget took a half million dollar hit this year in unbudgeted pre-superbowl activities.  Nothing has been budgeted for them, IFD, Code Enforcement, or Public Works for 2012.  That is not realist and the actual cost to taxpayers should not be held from the public.  Obviously, the November 8 election is a motivating factor in the reluctance of the Ballard administration to be clear and transparent in this matter.

For the vote on the City-County budget, the Assessor's budget was pulled out because Councillor Adams and Councillor Lewis' spouse work for that Office.

The final vote on the 2012 City-County budget (sans Assessor) went primarily along party lines - 16 yeas and 13 nays.  Democrat Brian Mahern joined all 15 Republicans in voting for the budget.  Lone Libertarian Coleman joined the rest of the Democrats in voting against the budget.  The Assessor's budget vote was 22 yeas, 5 nays, and the two abstentions.  Voting nay were Coleman, Gray, Minton-McNeill, Oliver, and Sanders.

The individual municipal corporation budget votes were interesting in who voted against them.

The airport budget was passed 26 to 3.  Councillors Coleman, Mansfield and Sanders voted no.

The CIB budget passed 19 to 10.  Voting no were Republican Councillor Hunter, Libertarian Coleman, and Democrats Bateman, Brown, Evans, Gray, Dane Mahern, Mansfield, Oliver and Sanders.

Health and Hospitals budget passed 27 to 1.  Councillor Coleman was the sole no vote.

The Library budget passed 25 to 2 with Councillor Nytes abstaining.  Councillor Hunter had left the meeting to attend to an emergency.  Councillors Brown and Coleman voted no.

The IndyGo budget passed 24 to 4 (Hunter absent), with Brown, Coleman, Oliver, and Sanders casting the no votes.

2012 Budget - Big Picture, Big Problems

Over the next couple of weeks the City-County Council committees will offer final amendments to each of their segments of the 2012 budget.   The full Council will vote on the entire budget in two weeks, on October 17.

As I've noted before, I've been spearheading the McANA effort to review the budget for the 5th year running.  Today, I'd like to take the eagle's view of the budget and talk about what I've been able to glean from the big picture.

First of all, this has been the most difficult budget to review.  There are stylistic changes, like how charges are made and for which departments.  There have been changes in the presentation that do not normalize out the unique expenditures or revenues that happen from year to year.  The practice in previous years made it easy to compare apples to apples.  In addition, there are significant issues with this budget regarding from where the money will be coming - specifically the administration's plan to tap excess revenue from both the consolidated downtown TIF and the Ameriplex TIF. 

We are told, but not shown with clear data, that there is a $64 million gap between revenues and spending for 2012.  To bridge this gap, we are told, that the Ballard administration has cut $20 million from individual department and agency budgets through their request for a 5% cut in base expenditures.  The administration also desires to take $38.5 million from the consolidated downtown TIF.  This all totals $58.5 million.  One item they are not publicizing is the extraction of $7.5 million of funds from the Ameriplex TIF to cover anticipated shortfalls in the debt service for the 'redevelopment district'.  I have asked for a list of the items funded by this district.  That brings the total to $65 million.  Close enough to $64 million for government work.

On the revenue side, I have had to pull figures together on my own, as my request for the summary revenue page has been met with the statement that the Controller's office does not want to put it out without being sure it is correct, and that they hope to release it prior to the full Council vote on budget.  Swell.

So, here is what I found about revenue shortfall for 2012 compared with 2011.

Total tax revenues - including property and income taxes and accounting for the effect of the tax caps - is $16.5 million less for 2012 than 2011.  One would expect these numbers to rebound as the economy recovers.

Federal grants are expected to drop by $15.7 million.  One would expect these numbers to rebound as the economy recovers.  However, the statement made regarding all grant funded programs has been that if the money does not materialize, the program is cut.

The healthy rainy day fund was nearly depleted last year, creating a drop from that source of money of $15.8 million.  I would not hold my breath on the recovery of the rainy day fund any time soon.

Last year, $3 million was taken from the golf course subfund of the Parks fund - but it was one time only.

The sale of the parking meters caused a $4 million revenue drop that used to go to IMPD and DPW.  This revenue will never come back.

The sale of the sewer utility caused a $13 million revenue drop that used to go to IMPD, IFD, and DPW.   This revenue will never come back.

The total revenue shortfall from the 2011 budget to the 2012 budget noted above comes to $68 million.

However, I see these revenues falling into three categories - revenue that will recover with the economy, money to fund projects that will not happen if the funding does not come through, and revenue that will never come back again.  One would expect the best effort to be made to bridge the gap for those revenue streams that should recover - trying to make ends meet until a better day returns.  One would expect to forgo those projects funded by grants.  And one would expect structural changes to the operation of the City-County to accommodate the reality that some funds are gone forever, as the assets that generated the revenue are gone forever.

Using those categories, the $16.5 million reduction in tax revenues should be bridged.  This was already accomplished with the $20 million in budget cuts.

The $15.7 million reduction in federal grants should simply mean that those programs do not happen.

The $17 million from the sale of the parking meter and sewer utility assets is never coming back and there really should be permanent cuts made to reflect this reality.

The $18.3 million from the loss of the rainy day fund and the lack of new funds from the golf course subfund could go into either the first or last category - but I think they belong in the latter, since they cannot come back until much after the economy recovers.  This would bring the need for a structural budget change to $35.3 million.

Instead of dealing with this reality during an election year, the Ballard administration prefers to rob the downtown TIF district in order to make ends meet. 

The statement has been made that there will only be $20 million in excess funds left in the consolidated downtown TIF to appropriate for the 2013 budget.  The Ameriplex TIF has been robbed to depletion over the last couple of years.  There will be almost no wiggle room left and severe cuts, the need for which are being ignored this year, will have to be made next year.

Council To Meet Tonight

The City-County Council will meet tonight, October 3rd.  The agenda indicates a public hearing on the budgets of the Municipal Corporations (CIB, Library, IndyGo, Airport, and Health & Hospitals).  At the last Council meeting there was a public hearing on the budget.  Discussion led to this second opportunity for the community to speak up, as these budgets had not yet been presented at any Council committees.  There were, however, a couple of City-County budgets that were in the same situation, most notably those budgets for IMPD and IFD.  Perhaps tonight's public hearing will allow for comments on those budgets, as well.

Of those proposals being introduced, one caught my eye.  That is Prop 277, sponsored by Councillors Mansfield, Coleman, Sanders, and Brian Mahern, that asks Mayor Ballard to "cease and desist from all efforts to rename Georgia Street".  The agenda indicates that the proposal will be assigned to the 'committee of the whole' meaning the entire Council.  Thus, it could be discussed and acted upon tonight.

Besides the budget ordinances still working through the committees, Prop 242, which seeks county option income tax refunds to certain qualifying low wage downtown hotel workers, was tabled by the Rules committee on September 27 by a 4-2 vote.  This may have gone down party lines, as those committee members in attendance were Republicans McQuillen, Cockrum, Lutz, and Rivera, and Democrats Mansfield and Gray.

Sheriff's Budget Discussion - A Fine Example Of Open Government

I continue to slog through all of the budget numbers, and along with that, I have limited time to post on the blog.  Time constraints aside, I did not want my comment on the best budget hearing I've attended so far to go unmade.  So, here it is.

Last week I attended the public safety committee hearing on the Sheriff's budget.  There was a very good exchange of ideas and concerns aired, primarily between Sheriff John Layton, committee Chairman Ben Hunter, and Council President Ryan Vaughn - although others contributed as well.

Now there is no way I am privy to what gets discussed and wheeled and dealed behind closed doors.  This, though, was some of that but out in full public view - and it was reassuring as to the caliber of discussions that should be taking place as this difficult budget moves forward.

Sheriff Layton expressed his concerns that his department is falling further and further behind with, as he put it, unfunded mandates.  His tally was about $21 m to catch up; a number that included $1.5 m to fully fund the required pension payment.

Councillor Vaughn promised that the pension payment funding would get included into the budget before final passage by the Council.

The remaining exchanges involved ideas on how to trim back the deficit for the Sheriff and where additional funds might be found.  I should point out that all were not in agreement on the actual figure assigned to the Sheriff's deficit.  But, the discussion was civil, respectful, thoughtful, and rigorous.  All sides were listening and responding not to any politics, but to what was actually said.

It was a good night.  Real problems were outlined.  Real solutions were thrown onto the table.  The people's business was conducted in the open air for all to see.  And, that business was conducted in an elevated manner befitting our community.

I'm not trying to be patronizing here, but --  good job Sheriff Layton, Councillor Hunter, and Councillor Vaughn.  It was a fine demonstration to this citizen, that the people's business can be done well and in full view of the public.

IMPD Budget Shows 5% Cut

The introduced 2012 budget is curious in many ways.  Some of the anomalies will surface in this blog entry.  The topic for this morning is the fact that the 2012 IMPD budget is 95% of the 2011 budget - and why I care and why I don't care.

Why I care is easy - Because Mayor Ballard, in his introduction of the budget to the Council, said

The 2012 budget proposal reflects my commitment to public safety. I’ve proposed flat line spending for all public safety and criminal justice agencies, which together consume 85 percent of the 2012 general fund budget.

This is Mayor Ballard's fourth budget, and the fourth time that the facts did not support what he told the public and the press.  I care because I believe that the public has a right to know the truth at all times.

Why I don't care about the 5% decrease is more involved in how IMPD has approached budgeting in the past and what that likely means for the introduced budget.

Lets start with the 2012 budget for IMPD that is under consideration by the Council.  It calls for a total of $192 million.  For the current 2011 budget, IMPD got $199 million, plus it was just appropriated an additional $2.7 million through Prop 171 (see "The Public's Right To Know - Dragging The Super Bowl Expenditures Out Into The Open"), for a grand total of $202 million.

So, simple math -- the difference between the current 2011 budget and the proposed 2012 budget amounts to a 5% cut.

I must stop here to mention one of the 'anomolies' that I alluded to.  That is the use of placeholders to represent budget cuts that have been demanded by the Controller, but the Departments have not yet decided exactly where to fit into the line items.  This was the case for the Parks budget, with a -$1 million line item.  It was the case for the Superior Courts, with a more modest -$21,000 line item.

For the IMPD budget there is actually a -$4 million placeholder that has not been distributed into the various line items.  Will it go into salaries, supplies, third party contracts?  At this moment, nobody in the public can really know.  We'll have to wait until September 21, when they will hand out changes in the line item budgets just before the Public Safety Committee meeting starts.  And then we have to hope that, unlike Parks and the Superior Courts, officials have actually made the decision on where to allocate the cuts.

There is another interesting line item that I just don't know how to interpret.  That is the line item for 'lease and rental of equipment'.  The 2010 actual spend on this line was $2.4 m, the 2011 adopted budget for this line was $8.5 m, but the 2012 introduced budget for this line is -$733,287.  Curious.

And last on my 'anomalies' list, there is no footprint in the introduced IMPD budget of any portion of the $4.2 m 'donation' from the CIB to cover super bowl expenses.  The overtime line item actually drops from $7.2 m to $6.5 m.

So why don't I care that the IMPD budget is being cut by 5%?

First, this is the second Ballard budget where revenue drops, and the first where real cuts of significant amounts must be made.  I mention in my last post (see "Is The Sale Of City Assets The Real Reason For This Year's Budget Chrunch [sic]?"), that the drop in tax revenues is relatively modest and handled by the 6% reduction requested of all non-public safety departments.  The real hit to the budget appears to be another $50 million, and stem from the sale of the sewer utility and the parking meters.  So, even though I disagreed with those sales, they still must be dealt with in this and future budgets.  In my opinion, that means that we must make cuts in all departments and not spare some, especially those with the largest dollar appropriations and therefore the most wiggle room.

Second is the apparent practice of IMPD to pad its budgets significantly.  If you look back through the last few years' budgets you find this:

2009 budget
In 2008, a budget for 2009 was adopted for a total of $222 million
In 2009, while the next year's budget was introduced, the projected spend for IMPD in 2009 was noted as $192 million
In 2010, the actual 2009 spend was reported as $187 million - a full 15.8% less than the adopted amount

2010 budget
In 2009, a budget for 2010 was adopted for a total of $210 million
In 2010, while the next year's budget was introduced, the projected spend for IMPD in 2010 was noted as $208 million
In 2011, the actual 2010 spend was reported as $196 million - a more modest 6.7% less than the adopted amount

The third reason is the Hummer I saw parked near City Hall one day with IMPD logos on it and an additional decal thanking the crooks for the car.  I assume it was forfeited as property obtained through drug trafficking.  But, come on boys (and girls).  Did you HAVE to keep the Hummer, or did you just want to drive around in it?  These are tough times and all of our public servants should abandon ostentatious and unnecessary displays of opulence.  I know this is a petty reason on my part.  But, keeping that car and trying to justify it on the car itself was petty on the part of whoever made that decision.

With these large budgets, a million is less than a percent.  But, it is real money that can be used elsewhere and not tied up in a game of pad the budget.

We'll have to wait for the updated line item expenditures to see where IMPD officials allocate the $4 million in budget cuts, over and above the nearly $6 million cut already distributed among line items, to be sure where the fallout will be felt.  At that time we can all decide what we think is fair and prudent cuts for IMPD in a particularly bad year for the budget.

Is The Sale Of City Assets The Real Reason For This Year's Budget Chrunch?

This is the fifth year that I have spearheaded the budget review effort of the Marion County Alliance of Neighborhood Associations.  Each year is different to some extent.  This year there are some real anomalies and, frankly, I'm still trying to wrap my head around them.  So, none of that in this post.

Mayor Ballard and his administration are focusing their comments, and hoping thereby to focus the public's attention, on decreased tax revenues and waving their hands about a $64 million shortfall in order to justify transferring $38.5 million from the consolidated downtown TIF to make ends meet.  I cannot actually locate the $4.2 million transfer from the CIB in the 2012 budget, so I am leaving that off for now.

The rhetoric is that property taxes are stable, but income taxes are off $85 million from their peak in 2010.  A closer look at the numbers provided in the 2012 budget book show a drop of $11 million in combined local tax revenues, an increase of $7 million in property tax revenues, and a drop of $15 million in income tax revenues between the 2011 and 2012 budget years.  Add it all up and you have a drop of $19 million.  Real money to be sure, but the City claims to have cut the budget by $20 million simply by requesting non-safety departments that rely on these very tax revenues to each cut their budgets by 6%.

Ordinarily I would also be commenting upon all of the other sources of revenue in this paragraph.  But, unfortunately this year's budget book does not supply a summary table of revenues.  I will have to slog through the details of the budget, which has been provided online, create my own spreadsheet and from that, my own summary table.  I have not had the time.  Representatives of the Office of Finance and Management insist that a summary table will be provided before the budget ordinance is passed.  Great.

Moving on.

The budget for the Department of Public Works is more than interesting this year.  That Department operated the profitable sewer utility that was the sweetheart part of the sale of the water and sewer utilities to Citizens Energy - a deal that closed this past week.  DPW's budget is also the one that serves as the collector of parking meter fees.  You will recall that the meters were sold via a 50 year lease with ACS and some local parking companies with enough political clout to get themselves included in this great giveaway of public assets.

Comparing the DPW budgets for 2011 and 2012 it is easy to see that expenses (p. 41 of the link) have dropped by $78.4 million (largely due to the off-loading of the sewer and water utilities), but a drop in revenues (p. 37 of the link) of $153.0 million.  Looking closer, there is a drop in contribution from the Indianapolis Foundation/Central Indiana Foundation from $8 million to $200 thousand. 

Under parking meters you can see a drop from $2.3 m in 2011 to $1.3 m in 2012.  This, of course, is part and parcel of the fee-sharing demanded by the parking meter contract.  None the less, it means less money for the City each year.  In 2012 it means $1 m less.  Still real money.

The rest appears to be mostly sewer utility related - so, roughly a drop of $144 m, give or take a couple of million.  There is a PILOT (payment in lieu of taxes) that was increased this year and continues to flow from the sewer utility.  That seems to be contained in its own fund which shows revenue for 2012 of $7.5 m.  There is also another roughly $3.5 m scattered among a number of funds from PILOT payments from Waterworks.  Good money, but not enough to cover the cash cow that the sewer utility was for the City and its taxpayers. 

All of this distills down to about a $50 million revenue shortfall due to the sale of the sewer and water utilities and a $1 million revenue shortfall due to the 50 year lease of the parking meters.

It is apparent that the sale of our assets, especially our profitable assets, is having a much larger impact on the 2012 budget than is any drop in tax revenues.  And while tax revenues will recover, loss of our assets will be a permanent loss to all future City/County budgets. 

It therefore becomes imperative that the cuts be considered permanent and structural changes be made for sustainable budgets going forward.  Sure, Mayor Ballard can transfer (aka 'rob') $38.5 million from the consolidated downtown TIF to make ends meet in 2012.  But, lets not pretend that that is a permanent solution to a permanent change in City finances.

The Public's Right To Know - Dragging The Superbowl Expenditures Out Into The Open

It is my contention that the public has an inherent right to know how much the Superbowl is costing us, and how the City's deal with the NFL is affecting our laws.  I now see the beginning of bipartisan movement within the Council to pull at least the costs out of the Ballard administration.  While more is needed, I'll give one big HOORAY ! to the Council for getting the ball rolling.

There were two proposals considered on Monday night that, together, illuminated the fact that its not just those of us accustomed to the cheap seats who do not know what is going on, but also the Council whose statutory role is to hold the purse strings.

First up was Prop 171 which both changed how previously appropriated Public Safety dollars could be spent and added new money to that budget.  Fellow blogger Gary Welsh has posted about the lack of toilet paper and other essentials in Public Safety offices (see "Life in Straubville" and "More On Life In Straubville"). 

The overall reasoning offered to the Council for the need to shuffle funds between categories of types of expenditures was this -  The usual pattern of expenditures for supplies is about $1.5 m a year.  Public Safety was allowed to ask for only about $800 k for supplies in last year's budget and "challenged to find operational efficiencies" with the understanding that they would then go back to the Council and shuffle those savings into the supplies category.  In addition, there is money in the federal law enforcement fund that has never been appropriated.

Now, I did attend those budget hearings and it was never disclosed aloud that such an agreement was working.  I don't know what the Councillors were told. 

They seem to have found "operational efficiencies" in personnel costs, as that is the only category from which money is being shuffled.  But, supplies is not the only category getting the newly allocated funds.  The category that includes outside contracts is actually getting more money from the combination of "operational efficiencies" and the federal law enforcement fund.  While $731,650 is now going into supplies, just over $2 million is going into the category of "Other Services and Charges", which includes professional contracts and outside consulting contracts and the like.  No explanation was given at the Council meeting for the need for beefing up that category.

During the explanation of all of this, it also came out, that the Department of Public Safety has already spent over $500,000 this year on expenses for the Superbowl.  During last year's budget hearings, absolutely no mention was made of the need for money for the Superbowl and it seems to have been news to the Councillors that the total was already so high.

The vote on Prop 171 was 20 yeas and 7 nays.  The yeas were Democrats Brown, Evans, B. Mahern, D. Mahern, Minton-McNeill, Oliver, joining Republicans Cain, Cardwell, Cockrum, Day, Freeman, Hunter, Malone, McHenry, McQuillen, Pfisterer, Rivera, Sandlin, Vaughn, and lone Libertarian Coleman.  The nays were Democrats Gray, Lewis, Manfield, Moriarty, Nytes, Sanders along with Republican Lutz.  Councillor Bateman was listed as "not voting" and Councillor Scales was absent all evening.

This leads to Proposal 188, the Superbowl Ordinance, and its discussion.  An amendment was offered by Councillor Brian Mahern to get an accounting of the City's costs for each civic event each year by May 1.  There was a gentleman's agreement that Council President, Ryan Vaughn, would ask that the accounting for actual and expected Superbowl expenditures be provided to the Council by November 1, 2011.  I think I heard that it would be offered at a public meeting.

The Mahern amendment was offered with the bipartisan support of the sponsor of the Superbowl Ordinance, Councillor Angel Rivera.

The vote on the Superbowl Ordinance, Prop 188, was 22 yeas and 5 nays.  The yea votes were cast by Republicans Cain, Cockrum, Day, Hunter, Malone, McHenry, McQuillen, Pfisterer, Rivera, Vaughn, along with Democrats Brown, Evans, Gray, Lewis, B. Mahern, D. Mahern, Mansfield, Minton-McNeill, Moriarty, Nytes, Oliver and Sanders.  The nay votes came from Republicans Cardwell, Freeman, Lutz, Sandlin joined by Libertarian Coleman.  Councillor Bateman was listed as "not voting" and Councillor Scales was absent all evening.


So, through all of this, we, the Citizens of Indianapolis, will be getting some advance knowledge on how much money has been spent and how much more is expected to be spent on the Superbowl by the City/County.  It may be worth it or not, but at least we will have the information upon which we can come to our conclusions.
 
We still do not have similar information regarding which of our laws will be avoided by the passage of the Superbowl Ordinance, and unfortunately, no real push evident on the part of the Council to get just such an accounting.  I'll continue to write on this blog about the effect of the illusive agreement between the City and the NFL, as I firmly believe that it is an inherent right of the public to know exactly what has been promised the NFL in return for their naming our City as the host of the 2012 Superbowl.
 
For now, though, it is a good sign that the Councillors are waking up to the fact that this Superbowl will actually have scarce City and County government dollars spent on it.  They are the fiscal body for the City and County and they are asserting that role - which is very good to see indeed.