Council Meets Monday - CIB Agreement Fast-Tracked

The Council agenda for Monday night's meeting is now available (click here).

Being set for introduction AND final vote this night, is approval of the CIB/OFM agreement for the CIB to kick back 100% of the first year revenue from the increases of car rental and ticket taxes approved last month by the Council, and 25% of those revenues until 2017.  Unless one side backs out in writing, the agreement extends another 4 years.  This is Prop 54 which is posted as a Proposal and an Exhibit A; the latter of which as all the details.  The agreement does say that these monies will go to public safety, but it does not require that it cause an increase in the public safety budget.  So, there is no guarantee that there is any real benefit to public safety.  It is unusual for any proposal, other than those recognition type proposals pronounced with fanfare at the beginning of each Council meeting, not to be sent to a committee for a more thorough review than can be conducted at a full Council meeting.

Being introduced Monday night and sent to committee, are two that caught my eye.  Prop 44 changes the Charter School Ordinance to require the Deputy Mayor for Education to report to the Council whenever it reports to the Indiana State Board of Education on the 4 IPS schools just put under Mayoral control.

Prop 48 changes the body that 'decides' who gets Crime Prevention Grants from the Indy Parks Foundation to the Central Indiana Community Foundation.

On the agenda after going through committee, is Prop 33, which would direct that $3 million in RebuildIndy money go to infrastructure improvements in the Meadows/Avondale area.  The proposal is accompanied by a map of the area in Exhibit A.  This is to supplant the previously tabled TIF proposal. 

Not on the agenda are two proposals tabled indefinitely by the Metropolitan & Economic Development committee.  Prop 274 and 275 urge the MDC and State Legislature, respectively, to adopt the recommendations of the TIF Study Commission.  This Commission was the best thing the Indianapolis-Marion County City-County Council ever did in the 25 years I've been in this town.  This is the death knell of all that excellent work, killed off by greed and ambition disguised as helping neighborhoods in need.  What the recent work of the Council really does is pull anticipated tax revenues from already developing areas, and uses that money for favored developers and puts basic services at risk - services provided not only by the City, but by the Library, schools, and IndyGo.  The City gets tax dollars from other taxes besides property taxes - the Library, schools, and IndyGo do not.  So, the bottom line is that this Mayor and this Council are quite happy to line the pockets of the favored few, at the expense of the rest of us.

[edited to note:  Councillors Adamson and Mahern voted against the Mass Ave TIF, and Councillors Adamson & Mahern were joined by Brown, Holliday, and Scales in voting against the Mid-North TIF.  Credit should be given where credit is due.]

See Children? Extortion Works !

How do you get the Council Ds to agree to three tax increases, and to funneling money to City coffers from sources never intended to prop up the City budget?  Why you do exactly what Mayor Vaughn did - you slash funding for essential services not controlled by Republican office holders.

Of course, some Ds don't care if we raise taxes and funnel money that is intended for other uses, and some Rs just might privately disapprove.  Not that their vote will count.  Not that your voice and opinion in these matters will be of interest when the legally required hearings are held for show.

Here's what the press release has to say about the deal:

– Indianapolis Mayor Greg Ballard today announced an agreement with City-County Council President Maggie Lewis and the leadership of both caucuses on the framework of a long-term budget plan for the City. Pending approval by the full City-County Council, the agreement will result in the restoration of approximately $32 million in funding to county offices and cut the proposed budget deficit for 2014 to only $6 million.

 

According to the agreement:

 

• The Mayor and Council agree to restore $32 million in County Option Income Tax (COIT) revenue to the County General Fund.

• The Mayor and Council are committed to reducing 2013 operational spending by 5%.  The Mayor and Council will meet with agency directors and elected officials for individual budget reviews with the goal of introducing fiscal ordinances reducing 2013 appropriations accordingly in February.

• The Capital Improvement Board (CIB) will pay the city $5 million for public safety in 2013. The money is currently budgeted for the cost of repairing the Capitol Commons Garage.  In exchange, the City, via the downtown TIF, will fund the cost of repairs.

• The Mayor and Council will approve increases of 2% and 4% respectively in the car rental and admission taxes, effective March 1, 2013.
• An amount equal to 100% of the revenue from the first year of the increase will be directed to public safety (approximately $6.7 million).
• After the first year and beyond, an amount equal to 25% of revenue from this action (up to $3 million per year) will be directed to the City for public safety.

• The Mayor and Council will form a bi-partisan commission to make a recommendation on the elimination of the Homestead Credit Subsidy as part of the 2014 budget. This action, if approved, would generate approximately $9 million in funding for the city.

• The Mayor and leadership of both Council caucuses will hold monthly financial meetings.

• The Mayor and Council will continue working toward the implementation of a Public Safety Foundation by the end of 2013.

These actions taken together will produce a $12 million annual increase in general fund revenue beginning in 2014, leave the City with a manageable $6 million gap between estimated spending versus revenues for 2014, and leave $42 million in operating reserves at the end of 2013.

 

Let's look at the details a bit.  The Council has agreed to raise the admissions tax and the car rental tax - both of which are being introduced tonight.  No sense voicing your opinion in these matters when they go to committee in mid-January.  The Councillors won't even be able to feign interest.  These tax increases were authorized by the State Legislature as part of the CIB bailout package.  However, the City is taking all of those revenues this year and 25% of all subsequent revenues from these increases in future years.  I will be interested in what legal maneuvering they use to launder the funds from the CIB to the City.  It would be a hoot if they use a PILOT.   Hope at least one Legislator is totally pissed at this turn of events.

The CIB is, through the looking glass, going to compensate the City for police and fire protection this year to the tune of $5 million.  In return, the City will use property tax revenues from the Downtown TIF to pay for the $5 million renovation that was going to be the responsibility of the CIB.  So, the Downtown TIF is really giving $5 million to the City.  Just as a reminder, that money is being kept from IPS, IndyGo, IMCPL, and Health & Hospitals.  Sorry children, travellers, readers and sick people.

But, on the bright side, the Mayor's office will start to talk with the Council leadership on a regular basis.  And, they agreed to study a tax increase in 2014 from the elimination of the Homestead Credit.  Surely the Council will stop thinking for itself and just present the Mayor with a rubber stamp instead of doing the people's work.  Surely they will not actually recommend the Homestead Credit continue in 2014.  Because if they don't eliminate it next year, Mayor Vaughn will just slash the County budgets again.

Yes Virginia, extortion works.

The Act is Getting Old

Sometimes, when I go long between posts, it is because I have other things I must get done. Once in a while it is because I don't have anything to say. This time, it is because I have too much to say and needed to let things perk for a while.

I guess the core of it all is that I am so very disappointed in those Republican Councillors for whom I have some personal respect. Not that my opinion will carry any weight with them - or even should. But, with the exception of Councillor Christine Scales, the Rs have clearly demonstrated that they will get in line and do whatever their party leaders want them to do - regardless of what it means for their constituents, or for the City's welfare as a whole.

Last Monday night's vote on the CIB budget is just the latest in a string of truly bad decisions - all of which have just eeked by with the minimum of votes.

There was the vote last year, to approve the requisite zoning on 450 E. Market Street - that was the Council's only bite at the apple to shut down a plan by Mayor Ballard to spend $18 million on a garage that was only worth about half that, and give tens of millions of dollars of property to Tadd Miller Enterprises.

There was the hotel tax increase and the grant of permission for the CIB to take in a $27 million loan from the State - with no idea how they would be able to pay it back without raising yet another tax in 2012. Barnes & Thornburg lobbyists Bob Grand and Joe Loftus, who have insinuated themselves firmly in charge of the Mayor's office and now the Council, through Council President Ryan Vaughn, pushed all the levers to get their clients more money through the CIB. Hoteliers shamelessly hid behind the maids' skirts in order loosen the City's purse strings - then even more shamelessly, outsources the maids' jobs.

The sale of the sewer and water utilities had some bright spots. I think that Chris Cotterill tried to make as much information available as physically possible. Unlike others on the 25th and 23rd floors, he and Dave Sherman tried to sell the sale on the basis of facts and figures. Many people disagreed with them on the final decision - but it was an honest debate with honest differences of opinion.

The parking meter deal is cut from a very different cloth. What we are seeing now is a formula - make a PR push and keep to a script in order to sell the deal - but, make sure you do not share all of the relevant facts. We are seeing the very same thing with the North of South project.

But shades of this formula have been visible in the Council review of the CIB budget - particularly on the $10 million to be given to the Pacers in 2011, $8 million of which is from property taxes shuttled through to the CIB in a process that was the antithesis of transparency; it deliberately kept the deal from the light of day and any public scrutiny. There was much wringing of hands and gnashing of teeth and pseudo hard questions volleyed at the CIB representatives. All theater. And the act is getting old.

A friend of mine quipped, "Its amazing how much posturing can be done by a governing body with no spine."

Its all sad for Indianapolis. Lobbyists are in charge. Those folks elected to serve their constituents' interests, are instead serving their Party's interests. Its an abdication of their responsibility. And a mighty few are getting more and more wealthy because of that abdication. The bill keeps getting paid by the taxpayers and the ratepayers, and the bills will keep coming due for the next 50 years.

Council to Take Stand On Property Tax Dollars to Pacers

Tonight's City-County Council meeting will see final adoption of the various budgets for the City, County, and municipal corporations.

The CIB budget has become the poster child for how to glam up the usually boring budget process. Just try to pass $8 million of property tax money to a sport organization; that's apparently all it takes.

The rest of the budget should pass in with little excitement.

The CIB budget, however, is different.

It is time for the individual Councillors to take a stand on the movement of $8 million in property taxes from the consolidated downtown TIF to the Pacers, through the CIB. They can amend the proposed budget to redact the $10 million total gift, or just vote against the budget as it now stands.

If no new budget is approved, the CIB would have to live on the same budget as last year. Although the CIB cried wolf throughout all of their bailout hearings in 2009, they still managed to pad the 2010 budget enough so that there was an extra $10 million in it to give to the Pacers.

If you compare the proposed 2011 budget ($104 m) with the approved 2010 budget ($94 m), there is a request for $10 m extra dollars. But, if you compare the proposed 2011 budget ($104 m) with the amount expected to actually be spent in 2010 ($85 m) you find a huge increase, amounting to nearly $20 million in new dollars. And remember, that $85 m figure includes the $10 million 2010 installment of the Pacers gift from the taxpayers of Indianapolis.

As some Councillors will try to tie the IndyGo and Library budgets to their CIB vote, let me remind everyone that IndyGo got the budget it asked for and the Library got $800,000 less than it asked for. IndyGo's 2010 budget is $75.7 m, while its proposed 2011 budget is only $63.5 m; a $12.2 m reduction. The Library's 2010 budget is $49.5 m, while its proposed 2011 budget is only $45.2 m; a more modest, but still real, reduction of $4.3 m.

Isn't it time the priorities for how we spend tax dollars get put on services for Indianapolis residents, rather than on bailouts for sports teams?

It is time for the Council to say clearly to the Capital Improvement Board - "enough". We shall see how each Councillor votes tonight, after all of the hand-wringing and declarations of it being a hard decision are over. Remember folks - it is your money they are spending.

Its Raining in Indianapolis - Raining Money, That Is !

Are you rich, powerful -- or just know people who are?

Well then, Indianapolis is for you. We're GIVING money away ! Not chump change -- but MILLIONS !

You could be our next recipient ! Come on down !!!

Just call 1 (800) BAL-LARD !!!!!


void where prohibited by law -- aw ! forget that -- for YOU, we'll pretend it meets all our laws !

Don't walk !! Run !!

Call 1 (800) BAL-LARD !!!!

operators standing by

Muni Corps Committee Passes $10 Million to the Pacers

The Municipal Corporations committee passed the CIB budget, without amendment, to the full Council with a do-pass recommendation by a vote of 5 - 2.

Voting for the budget, which includes $10 million gift to the Pacers, were: All of the Republicans - Malone, Lutz, Cardwell, and Rivera - and one Democrat - Nytes. Voting against were two Democrats - Dane Mahern and Maggie Lewis.

Muni Corp Committee To Move Forward on CIB, Library, IndyGo Budgets

Tonight, the City-County Council's Municipal Corporations committee will do the final review, revision, and vote to move all of the municipal corporations budgets out of committee. There are 5 municipal corporations - the Airport, Health & Hospitals, IndyGo, the Library, and the Capital Improvement Board.

The Airport and H&H budgets will enjoy little to no drama tonight. This is not the case with the other three.

Will Higgins reports in this morning's Indy Star, that there is a deal to replace all of IndyGo's and much of the Library's proposed shortfall appeal with money set aside when the United TIF was created.

What's a shortfall appeal? Its easiest to explain by starting with how a tax rate is determined. You determine a tax rate by dividing the amount of property tax requested in a budget, by the assessed value of all property that will be used to pay that property tax. The taxing unit, whether it be a school, a library, or the City, are bound by the property tax rate. If somebody doesn't pay their taxes, too bad. If the property owners appeal their individual assessed value, and win, then the total assessed value drops. This, too, reduces the property tax revenue that the taxing unit gets -- unless it files for a property tax shortfall appeal. If granted, the next year's tax bills will show an additional line for those properties that have not already hit the tax caps - raising those property tax bills.

In the case of IndyGo and the Library, a shortfall appeal cannot be submitted to the State Department of Local Government Finance without the prior approval of the Council. If granted, the additional tax would be applied to next year's tax bill -- just in time for the reelection campaigns for Mayor and City-County Council. And, none of those folks want to HAVE to be explaining how its REALLY NOT a tax increase.

This alone would be incentive enough for the 'deal' that seems to have been struck by the Council leadership. Higgins reports,

A bipartisan group of council leaders on Monday agreed to recommend adding $1 million to the library's 2011 budget, partially offsetting the library's property tax shortfall appeal request for $1.8 million.

The group's plan also would provide IndyGo with the $1.5 million it initially sought in its shortfall appeal.

...

The money would come from a fund created in the 1990s to service debt from a tax-increment financing district that helped finance the former United Airlines maintenance hub at Indianapolis International Airport.

Under the proposed deal, the funding source would be recurring for the library but a one-time-only fix for the bus service.

This deal would not increase the proposed budget for either IndyGo nor the Library - and actually would decrease the Library budget by $800,000.

The drama with the CIB is still bubbling. I think we can be sure that the deal struck on the IndyGo and Library shortfall appeals will be played, behind the scenes of course, as a sufficient trade to allow the $10 million gift to the Pacers in the CIB budget. The question is, who will bite? Council President, Ryan Vaughn, has been quoted in previous Star reports by Jon Murray, as tying the two issues together. He quotes Vaughn as saying,

Members of both parties say they are reluctant to approve the CIB's budget. Council President Ryan Vaughn, a Republican, says it's a tough call when the library and bus systems' long-term fiscal health is in question.

"I think people are open to passing it as long as we are finding solutions to the library situation," Vaughn said in an interview. "We want to work hard to send the right message to the public."

We shall see what happens tonight. Will the Councillors on the committee think that not cutting the proposed IndyGo budget and cutting the proposed Library budget by only $800,000, is sufficient trade for $10 million to the Pacers in the CIB budget. If they do, then Councillor Vaughn is correct - if that deal is struck, the Councillors WILL BE FORCED to "work hard to send the right message to the public." I say that because I don't think the public is that dumb or ill-informed.

Councillors serving on the Municipal Corporations committee are: Republicans, Barb Malone (Chair), Jeff Cardwell, Bob Lutz, and Angel Rivera -- and -- Democrats, Maggie Lewis, Dane Mahern, and Jackie Nytes. The meeting begins at 5:30 in room 260 of the City-County Building.

Did the CIB Really Need Those Tax Increases & Loans?

Remember the CIB bailout saga over the last two years?

Back in early 2009, the CIB and its local allies, pleaded with anyone at the Statehouse who would listen. Everything was bleak. They absolutely HAD to have $43 million more money for operations and $43 million to avoid catastrophe with their bonds. Lucas Oil Stadium had not yet opened, but it was projected to cost $20 million a year more to operate than the old Hoosier Dome. The Legislature ultimately gave the City-County Council the authority to increase the hotel tax, increase the footprint of the Professional Sports Development Area, and the opportunity to get a $9 million per year loan from the State for each of 3 years.

Unpopular though it was, and armed with assurances that none of the money would be given to the Pacers organization, the Council passed the Legislature's bailout package in 2009.

Given the dire prognostications, and the fact that the Legislature and Council actions would increase annual revenue by $22 million at the most, you might think it impossible for the CIB to squirrel away $20 million in 2009 and another $20 million again in 2010. But, you would be wrong.

Each year, as part of its budget ordinance, the CIB estimates what the fund balance will be that year, and also what the fund balance will be at the end of the next year - given the budget they submitted for approval.

Ultimately, the CIB operating budget for 2009 was set at $65 million. They ended up actually spending 'only' $44 million. Those savings showed up in their fund balance. They estimated the December 31, 2009, operating fund balance at $5.6 million back in 2008, as shown in the 2009 budget ordinance. A year later, they improved their estimate of the December 31, 2009, operating fund balance to $26.0 million.

In August of 2009, they estimated that the operating fund balance at the end of 2010 would be $22.8 million, given the budget they introduced for 2010. Now the CIB estimates the fund balance at the end of 2010 will be $45.3 million.

To recap, while the Council raised taxes and allowed loans totaling less than $22 a year, the CIB managed to pad their operating fund balance by $40 million in two years.

Meanwhile, they managed to give the Pacers $10 million and collect $4 million of property taxes from the MDC this year.

So, did they really need the increased hotel tax and the increased footprint of the PSDA and the loan from the State?

CIB, H&H Budgets On Deck - Final Committee Votes Rolling Out

The end of the budget sessions are now in sight. The City-County Council committee meetings will begin focusing on amendments to previously discussed budgets started Thursday and will resume on Tuesday.

Monday night, however, sees the very last of the budget review and public comment sessions. Saving the most controversial to last, Monday night the Municipal Corporations committee will review the 2011 budgets for the Capital Improvement Board and the Health & Hospital Corporation.

This meeting begins at 5:30 pm in room 260 of the City-County Building.

The Admin & Finance committee meets on Tuesday night and will vote their portion of the budget out of committee. The Public Works committee will not meet this week; postponing its final budget consideration until October 21.

MDC / CIB Interlocal Agreement

I just got a copy of the MDC / CIB Interlocal Cooperation Agreement that commits $8 million a year from the Consolidated Downtown TIF to the uses of the CIB. While the Indianapolis Convention & Visitors Association is mentioned liberally, it is clearly a straw dog created to validate the $8 million price tag. It was approved by the Metropolitan Development Commission at their September 1, 2010, meeting.

I uploaded the agreement [edited to add page 5, which is missing from the other document] , if you care to review it. The terms of the agreement begin on page 7. Briefly, the agreement is for $8 million annually to be provided to the CIB, and requires 6 months notice or the agreement will automatically renew year to year.

While the stated purpose of the agreement is "to protect, further, increase and enhance the benefits that result from the operation of the Facilities and the activities of the ICVA", the agreement specifically states that the ICVA is not a third party beneficiary of the agreement.

With this agreement, property tax dollars are now flowing to the CIB. These are new dollars. They amount to $8 million per year on an ongoing basis. The only new expenses of the CIB are the operation of the expanded convention center and the $10 million cash gift to the Pacers. It is completely reasonable to connect these dots and see property tax dollars flowing from the City of Indianapolis to the Pacers.

These property tax dollars could be used to pay off the bond obligations of the TIF district early, or to promote $8 million in new projects. Such a project could even include upgrading parking meters in the downtown area.

But, no. The Pacers are given higher priority by Mayor Ballard, than being fiscally responsible in paying off debt, or fiscally responsible in crafting an upgrade to the parking meter project, or underwriting some other deserving project in the downtown area that would actually make Indianapolis a better place to live. The Council should reject the $10 million gift in the 2011 CIB budget and let the CIB and MDC unwind this agreement.

The DMD Budget Hearing - Say What ?

The 'great catch award' goes to Councillor Brian Mahern for his persistence in questioning at last night's budget hearing for the Department of Metropolitan Development, on an item that turns out not to be in DMD's budget at all -- the $10 million gifted to the Pacers by the Capital Improvement Board for 2011.

The questioning and answering was dispersed throughout the budget discussion - so I noted the timestamp in case you'd like to fast forward to these segments -- timestamps 45:00 - 49:00, 50:30 - 52:40, and 1:00:50 - 1:05:50 on the Channel 16 broadcast (click here, then on 'video' for September 13, 2010).

Mahern was following up on an IBJ article by Scott Olson last month (see also my blog entry "CIB Says Its Budget Increase Isn't What It Looks Like") where it was first disclosed that $8 million in funding for the ICVA would come "from downtown-development funds", freeing dollars that the CIB usually sends to the ICVA. The CIB was then able to build a budget within which they could donate $10 million to the Pacers.

Upon reading that article previously, I had assumed this was money from the Sports Development Area, that was created, and recently expanded, to provide funds for the downtown sports and tourist industry. Wrong ! These "downtown-development funds" are actually coming from the downtown 'consolidated TIF' area. So, now we have expanded the footprint of the tax dollars being redirected to these endeavors that really should be self sustaining.

The information illuminated last night was that the Metropolitan Development Commission has the authority to dispense TIF revenue any way it pleases, as long as it abides by the parameters set up for that TIF area by the Council. It pleased the MDC, evidently, to send $8 million to the ICVA. (David Reynolds, City Controller, actually called it an 'opportunity' to fund the ICVA.)

Mahern made a particularly salient point, when he referred to last year's increase in hotel tax. He noted that the Council amended the ordinance with a provision that the hotel tax could not be used to enrich any sports team.

Mayor Ballard and that clever lot on the 25th floor, struck a deal with the Council to get the hotel tax increased, then quickly engineered a way around the deal, it would seem.

The municipal corporations committee, Chaired by Councillor Barbara Malone, will consider the CIB budget on October 11 at 5:30 in room 260 of the City-County Building. It is worth repeating, the CIB-Pacers agreement gives an out should the Council not fund that item in the CIB budget for 2011. The Council can just say 'no' to gifting the Pacers with the 2011 installment of $10 million. And they should.

What Will Become of the MSA Parking Lots?

Through a series of variances over the years, the two gravel parking lots on the site of the old Market Square Arena have been allowed to operate without the usually required paving. Well, the variance extensions are just about over - the current variance expires on August 6, 2010.

The approval letter reads in part:

This Approval shall be temporary, expiring August 6, 2010, at which time the parking lots shall be hardsurfaced and striped by the petitioner per the Central Business Districts Zoning Ordinance, or the petitioner shall cease parking facility operations.

The owner and petitioner are none other than the Capital Improvement Board, which is so flush with cash, that it just yesterday agreed to give the Pacers another $10 million per year for 3 years AND make at least $3.5 million in improvements to Conseco Fieldhouse.

In 2008, the CIB netted an income of $788,693.12 for those two lots.

Also in 2008, the Regional Center Zoning Ordinance was revised to prohibit parking lots in the Mile Square, which would include this site. So, even if the CIB wanted to pave the lot, it would have to file a variance to allow the lot itself. The CIB has not filed for any petition as of today.

You will recall that just last year the CIB claimed it couldn't get by without at least $43 million more per year, plus a one time infusion of another $43 million.

The State Legislature authorized an expansion of the Professional Sports Development Area, allowed the City-County Council to increase the innkeeper tax by 1% in 2009, and offered a $9 million a year loan for each of three years. In addition, they allowed the City-County Council the option of increasing the car rental tax by 2% and the admissions tax by 4% in 2013.

At the time, the Legislative Services Agency estimated that the expanded PSDA would provide the CIB with about $600,000 in 2010, predicted to grow to $6 million by 2012 as the new hotels and amenities in that area come on line. The increased innkeeper tax was estimated to give an additional $4 million per year. So, that amounts to a total infusion of $13.6 million in 2010, growing to about $16 million by 2011, and dropping back to $10 million in 2012 as the state loans dry up.

Of the $43 million the CIB claimed was bare bones, absolutely necessary to avoid bankruptcy and worse, there was provision for $15 million to the Pacers.

The new Pacers deal suggests that the CIB could actually get by on a whole lot less than they made out. (I know, imagine that !) Even though the CIB got roughly $13.6 million in new cash this year, they are able to give away a full $10 million to the Pacers, promise at least $3.5 million in Fieldhouse renovations, and give up on about $800,000 in revenue from the old MSA parking lots. Next year the new money should provide a cushion of a couple million dollars. But in 2012 the influx of new cash should drop back down, again eating up any cushion for CIB operations. That might suggest to some, that the CIB wasn't in nearly the dire situation they made out. If you can give it all away, maybe you didn't really need it to begin with.

I sure would like to hear what the Legislators, who ran quite a gauntlet just to come up with their CIB bailout plan last year, think about the CIB at this point in time. Wonder what the Councillors who voted for the CIB bailout think, too.

The CIB Is Working Hard For the Pacers

Time is tight for me today, so I will be sending you to read some good blogs arising from two IBJ articles on the CIB and its finances. Short story is that the CIB is crowing about how well it turned around its failed finances; so much so they are pulling a profit now and don't need the State's gracious offer for a $27 million loan at 5 % plus interest rate. All that despite the partially successful 'end times for downtown' campaign they waged all year to secure wads of money that at times added up to $50 million this year and another $50 million this year and every year going forward. A few short hours later the CIB is reported to be eyeballing that loan and talking about that $15 million gift per year, every year going forward, to the Simons and Pacers to run Conseco Fieldhouse. The Pacers already get 100% of all revenue from the Fieldhouse, but you know how hard it can be to pull a profit when you can't fill the seats for your home games because you picked players whose antics turned the community sour on your franchise.

Here are the originating IBJ article links:

http://www.ibj.com/cib-finances-improving-though-concerns-remain/PARAMS/article/11031

http://www.ibj.com/cib-may-accept-27-million-state-loan-after-all/PARAMS/article/11050

And the great blog entries by Paul Ogden and Gary Welsh:

http://www.ogdenonpolitics.com/2009/11/cib-likely-to-accept-27-million-loan.html

http://advanceindiana.blogspot.com/2009/11/cib-sees-surplus-but-will-still-borrow.html

Let me just add, all the seats for the Capital Improvement Board of Managers are ended January 15, 2010 -- this by the same legislation that allowed the City Council to increase the Hotel Tax by 1% to capture another $4 million a year and expand the Professional Sports Development Area to capture another $8 million a year, and offer the $9 million a year loan for three years from the state to the CIB. The same old people can be reappointed, but hopefully the appointing bodies will not be so lame in their decisions. Top of my list to be gone are Bob Grand, who represents the Pacers and has always had a clear conflict of interest, and Pat Early who has served on the CIB for nearly a generation and helped negotiate the original Conseco Fieldhouse contract and who has been the prime cheerleader for giving the ENTIRE store away to the Pacers, just like he voted for the ENTIRE store be given to the Colts.

All of this sudden burst of energy directed to the benefit of the Simons and the Pacers may be so that their work is done before a responsible Board takes their place. Well, I would hope a responsible Board takes their place. That awaits the list of appointees and some time for their ambitions to be assessed.

CIB Budget in the Black - WISH TV Reports

Mike Corbin of WISH TV, channel 8, reports that the CIB budget is in the black - so much so that Bob Grand, President of the CIB, says they may not have to take receipt of the State of Indiana's $9 million loan for this calendar year.

Cuts at the financially-strapped Capital Improvement Board may have come to an end for now.

The head of the group that oversees the Indiana Convention Center and Lucas Oil Stadium said major cost-cutting has put their budget back in the black.

"We got the emergency loan from the state to take care of our potential one time deficit which would've essentially put us under," said CIB President Bob Grand.

That loan is for $27 million over three years. But, Grand said the CIB may not take this year's scheduled $9 million payment.

"Which we're not sure quite frankly that we're going to need at this point given the reduction in costs and all the things that we've achieved in operational savings," Grand said.

Grand said about a dozen layoffs and other reductions have saved about $12 million. The CIB's operating budget is now $62 million.

The logical question I would have to ask Grand is, "So, you don't need the loan, but you said the CIB would have gone under without it. How does that make sense?" But, of course, Don Welsh of the ICVA is still on the hunt for his $3 - $5 million increase over the roughly $9 million they already get from he CIB. Corbin's report continues:

But, the Indianapolis Convention & Visitors Association, which itself cut eight jobs, said it desperately needs at least 5 million dollars of that budget to keep other cities from stealing away two key conventions.

"We're in ongoing negotiations with Fire Department Instructors Conference and Dealer Expo, two of our largest, top five conventions that we bring into Indianapolis annually," said Bill Benner of the ICVA.

With both contracts up by 2012, the city is speeding up work on the new Convention Center.

Then Corbin pulls out the old malarkey numbers that really should be vetted by somebody besides Welsh, whose $400,000 salary plus benefits does not qualify him as an independent expert on the subject. Here's what Corbin reports:

So why should you care whether or not the city is able to lure conventions?

Well, leaders say tourism accounts for $800 million a year and if the city didn't have that money property taxes would go up $100 a year per household.

Leaders say it's the age old issue: cut costs or raise taxes.

"I'd be willing to pay more if it's for incentives for conventions because that'll help overall I think," said Indianapolis resident Michael Warshauer.

"A lot of my friends are out of work. So, I don't think that would be an alternative. I think there are other places the city can look to cut," said Carol French.

I'd like to know what cuts Ms. French would have made to keep Mr. Welsh in high cotton. But back to Corbin's report:

Grand said the CIB is deferring decision on the loan until December 31.

They're now working with the city-county council on a long range financial plan that would include other localities. A new committee will be looking into that option within the next few weeks.

So, while the taxpayers get a small boost in that the CIB may actually say "thanks but no thanks" to at least the first $9 million loan from the State, the push for more and more money continues.

The CIB Is Up - Part 3 of Series

The budget process for the Capital Improvement Board (CIB) ended up surprising me. I thought for sure the Council would put in more money than was requested.

The CIB, like the Airport Authority, Public Library, IndyGo, and Health & Hospitals, is a Municipal Corporation whose budget is not part of the City-County budget, but which does have to submit its annual budget for approval by the City-County Council.

The adopted budget for the CIB for 2010 is $145,932,200 -- $65,402,700 operating fund + $32,246,000 bond fund + $48,283,500 that passes through the CIB budget back to the State to pay off the bonds for Lucas Oil Stadium. $9,030,500 of the CIB's budget will be passed on to the Indianapolis Convention & Visitors Association to promote the Convention Center, offer discounted hotel rooms (which, as I understand it, the ICVA underwrites -- see Advance Indiana's blog entry about that issue), and promotion of Indianapolis as a tourist destination.

But, the process of getting to those numbers was more interesting than the numbers themselves. At the original committee hearing on the CIB budget, a lot of questions were asked about the perceived need for new carpeting in the existing Convention Center. There were a whole lot of questions asked and answered at the time, and this piece didn't ping my radar. There were also a whole lot of comments about how the ICVA needs more money to promote the new space. That pinged my radar, for sure.

At the end of the day, the Council moved $1.25 million from the budget category that included the new carpeting, to the budget category that includes the ICVA. So while the ICVA was enriched, no net new money was added.

The CIB budget is one of the more confusing ones to explain. That is because they had to revise the 2009 budget since it was adopted to recognize several things. The taxes that fund their operations were hit by the economy and were down, as are the profits from those operations. The tax increases and state loans increase their revenues this year, as well as in the future. There were cutbacks in expenses also made. In the end, they revise their 2009 budget, dropping it by almost $13 million. The bailout money allowed them to not spend as much of their cash reserves on the 2009 budget as had originally been planned. The budget for 2010 drops by another $3.5 million from the revised 2009 budget.

At the Council meeting where the CIB budget was finally voted on, Ben Hunter (R) joined Ed Coleman (L) and Democrats, Bateman, Brown, Evans, Gray, Lewis, Brian Mahern, Dane Mahern, and Oliver in voting nay. All remaining Councillors, 17 of them, voted yea. (Smith and Minton-McNeill were absent all night.)

The Councillors promised to work with the CIB to find ways to fund their operations, most notably by having a committee push forward to get financial support from surrounding Counties and to show a united front with next year's Legislative Session.

They also made comments that indicated to me they would also be looking at how the CIB and other downtown organizations go about doing the jobs they are doing and even consider restructuring how they interact. If I understood those comments correctly, that would be a very positive development, indeed.

Notes on the Budget Hearings - August 20

Just some stuff I thought was interesting and not a list of the important issues discussed.

Last night the budget hearing for the Department of Public Works was on the agenda. The committee was chaired by Councillor Ben Hunter. The meeting went on an hour and forty-five minutes before it was time for public comments. Three of us spoke. Before the 2nd member of the public commented, Hunter noted that he should be aware a 'few of us up here have a commitment at 8:00'. I was the third speaker. Now, I have no problem with the length of time allotted for public comments, and I was actually done with mine when Hunter abruptly thanked me and Dave Sherman, head of DPW, as a way to cut us off.

Now, silly me, I just thought they were working so hard they actually had another meeting to attend yet last night. Until, that is, I saw the traffic backed up on I-70 at the Lucas Oil Stadium exit. Guess what started at 8:00 ? That's right, the Colts game. It must have been Council appreciation night. Hope they enjoyed the free tickets and the great seats and the swell food all paid for by the overly generous taxpayers.

[edited on August 24, 2009, to add: I received a private email from Councillor Hunter who explained that, although he did attend the Colts game, his reference to a 'few of us up here have a commitment at 8:00' did not include any other Councillors attending the game, rather they had different personal commitments. He specifically named Councillors Speedy and Adams as having the personal commitments to which he was referring, and he noted that he did not know of any other Councillor from his Committee that attended the game that night. The issue of free tickets to sporting events, especially in this time of CIB bailouts, is a particularly hot one. I was too overly broad in my assumption connecting Hunter's comment and the fact that the game began at 8:00. I'll be keeping this episode in mind for some time as I review my blog entries for assumptions vs. verifiable facts.]

Heads Down - Break's Over

There's an old joke that I won't be able to tell well. Something about some bad guy going to Hell and the Devil gives him three choices of 'rooms' in which he can spend eternity. One is your typical vision of hell - fire and brimstone; screaming and suffering. The next is different, but of equal torment. The third room is full of feces with the eternal sufferers wading about waist deep. Stinks to high heaven, so to speak. So, the bad fellow decides this is the room for him. Just as he climbs in, a voice come over the loudspeaker - "Okay folks. Heads down. The break is over."

Just Monday night the City-County Council voted 15-14 for what they called a two year bandaid for the Capital Improvement Board.

This morning - maybe 2 and a half days later - the Star runs a piece about the CIB needing MORE MONEY ! The 'end times for downtown' campaign was so successful, they have extended its run.

Heads down Indy. Break's over.

The 'End Times for Downtown' Ad Campaign Scores

It was nip and tuck last night, but in the end, the 'End Times for Downtown' campaign waged by Mayor Greg Ballard, CIB President Bob Grand, and Council President Bob Cockrum, won 15-14.

Voting aye on Prop. 285 to raise the hotel tax, increase the Professional Sports Development Area, and accept a $27 M loan from the State with no plan on how to repay same, were:

Jackie Nytes -- D
Virginia Cain -- R
Jeff Cardwell -- R
Bob Cockrum -- R
Susie Day -- R
Ben Hunter -- R
Bob Lutz -- R
Barbara Malone -- R
Janice McHenry -- R
Mike McQuillen -- R
Marilyn Pfisterer -- R
Lincoln Plowman -- R
Kent Smith -- R
Mike Speedy -- R
Ryan Vaughn -- R

In an ungainly hand-off to the next sitting Council and the next sitting Mayor, this Council action will necessitate the 2013 increase in two less popular taxes; car rental and admissions taxes.

Meanwhile, Councillor Nytes' Prop. 331, which creates a 5-member panel to promote even more money for the CIB bailout to come from the donut Counties, passed unanimously. Nytes said the aim was to find a permanent solution, even though there will be no study of what the real problems with the CIB have been. This was no game changer.

Councillor Lutz began a front court press for more money to go to the Indianapolis Convention and Visitors Association, even though that was supposedly taken off the table as part of the game plan.

The Public continues to pay the price of admission, only to be relegated to the cheap seats.

All sports dynasties come to an end. But, the one led by the CIB gains more and more tax money every year and has receives no critical review for job performance. When it fails, the claim is made that it is only because the taxpayers were not generous enough, not because the whole thing is a Ponzi scheme that has gotten out of hand. The action last night was as shameless as the Pacers charging the stands to beat up a spectator a few years ago.

Bad sports metaphors aside, the citizens of Indianapolis deserve a plan to make downtown self sufficient and to reset priorities that make downtown work for the whole County, not continue the practice of the whole County working for downtown.

Council Meeting Chock Full Tonight

Tonight's City-County Council meeting will be an interesting one. Click here for the agenda.

For consideration by the Council acting as a committee of the whole are two new proposals.

Prop 309 -- by Councillor Bob Cockrum -- calls a meeting of the Marion County Income Tax Council for August 25 at 5:00 pm in Room 260 of the City-County Building to discuss whether the tax rate should be adjusted.

Prop 331 -- by Councillor Jackie Nytes -- creates a council task force to research and develop a long-term regional solution to the funding of the Capital Improvement Board (CIB) of Managers and its related entities -- the task force would have two Democrat and two Republican Council members and one appointee of the Mayor and would represent the Council at the General Assembly and before the contiguous Counties on matters related to a long term financial solution to CIB funding.

Coming before the Council once again is Councillor McQuillen's Prop 237, banning solicitation at intersections.

Two biggies tonight -- Mayor Greg Ballard will introduce his 2010 City-County budget and the full Council will vote on Prop 285, which increases the hotel tax by 1%, accepts a $27M loan from the State, and expands the Professional Sports Development Area to capture an additional $8M a year, all proceeds to go to the operating budget of the CIB.

Proposals to be introduced tonight include:

Prop 292 , authored by Councillors Lutz, Mansfield and McQuillen, that would reduce the Township Assessor salaries from $27,500 per year to $19,470 for Decatur, Franklin, and Pike -- $23,364 for Lawrence and Perry -- $25,960 for Warren, Washington, and Wayne -- while Center Township Assessor gets the full $27,500. WOW !!!

Prop 293, authored by Councillor Coleman, that would direct the Director and Board of Indy Parks to consider selling all golf courses owned by the City.

Prop 303, also authored by Councillor Coleman, that would require the internet posting of all contracts with any unit or board of the City or County government, or any municipal corporation, within 7 days of the execution of the contract - with a search feature for accessibility.

Prop 310, authored by Councillor Cockrum, that would direct the Council's votes on the Marion County Income Tax Council to increase the County homestead credit from 8% to 8.0086% and keep the county option income tax rate at 1%, keep the additional county option income tax at 0.27%, keep the public safety income tax rate at 0.35% -- choosing not to reduce those taxes.

Introduction of the various budget ordinances. I have posted links to the proposed budget ordinances for the municipal corporations in a side bar, and will add the City-County budget data and ordinance once those links are made live on the City's website.

Council Committee Votes 5-1 Do Pass on Prop 285

Warning: Rant ahead

Last night, the City-County Council Rules & Public Policy Committee voted 5-1 to move Proposal 285, 2009, to the full Council with a do pass recommendation. Aye votes were from Councillors Lutz, Cockrum, Plowman, Malone, and Pfisterer -- all Republicans. The lone nay vote was from Councillor Mansfield, the only Democrat Committee member present.

The meeting, Chaired by Councillor Bob Lutz of Wayne Township, was a grueling 4-ish hour affair that was an orchestrated parade of 'invited witnesses' with unlimited time to disgorge all of their thoughts, followed by a brief public comment period where speakers were limited to 2 minutes (more on that below) but who were 'graciously' allowed to dribble over that time limit in 5 second increments. Of the parade of maybe two dozen 'invited witnesses', all save three had a personal financial interest in more money being thrown at the Capital Improvement Board and all save two were in favor of the Proposal.

At the conclusion of the public testimony, Councillor Lutz feigned a let's get this over with and let the chips fall where they may attitude, fully knowing he had the votes to get this out of committee. Why did he know he could accomplish his goal? Because two Democratic Councillors, Sanders and Gray, were no-shows. Lutz had indicated he would likely not take a vote last night, but re-convene in a week to give the Committee members time to mull over the testimony they had heard. This probably was because the Committee is composed of 5 Republicans and 3 Democrats; certainly the Committee most likely to produce a positive outcome for the Proposal. Even so, Lutz could not count on Councillor Malone to vote do pass. With all three Democrats present, that could have caused a tie vote which would leave the Proposal in Committee. But, with the two MIAs, the math moved in his favor and he was guaranteed that his reliable 4 votes would serve his needs.

Some random thoughts:

The public deserves an explanation from Councillors Joanne Sanders and Monroe Gray for their absence on this critical Committee meeting and vote. I see that the blog, Indianapolis Times, which is the mouthpiece of the County Party, remains silent on the hearing, in contrast to their seeming interest leading up to last night (see here, here, and here). This makes me to wonder if Sanders and Gray are holding their aye votes in the wings for a last minute save of Prop 285 at the full Council. Politics as usual - play 'smart' at the public's detriment. But, I don't know why they were not there and maybe there is an explanation - we deserve one. [edited to add: I have received word that Sanders has been out of town on business and was unable to attend.]

The public was done a disservice, as is usual when more than two people show up, in the public comment period. Chairman Lutz' should have given the public the same time limit as his parade of invited witnesses. His handling of comment time may have been generous by Council Committee standards, but that bar is set very low. In all of these committees it is as though the public point of view is not as worthy as that of proponents of a proposal. From my perch in the cheap seats it often seems as if the attitude of the Chairmen is that the problem with the public comments is that they drag the meeting out too long. While the Council does the public's business, I believe they need to be much more accommodating of the time in which they give the public to express its views. As I mentioned in a comment to Paul Ogden's blog, I challenge Committee Chairs to try to speak to an issue for 2 minutes with buzzers going off every 5 seconds thereafter.

The proponents of Prop 285, save one or two, hid behind the skirts and aprons of the service workers in order to shill for more tax money for the CIB. As I mentioned earlier, these folks have a personal financial interest in the ever increasing investment of more and more tax money into the sports/convention business. Folks like Tamara Zahn of IDI, Susan Williams of ISC, Barney Levengood of the CIB, and Bob Welsh of ICVA are even more outrageous, as they haul down fat salaries derived almost exclusively from tax revenues. As reported by Paul Ogden, Zahn makes around $200,000 a year while IDI has squirrelled away over $7M in savings living lavishly off the public dole, and Welsh makes about $350,000 in salary and benefits while the ICVA had 'only' $4M in assets in 2007. Meanwhile Williams makes over $130,000 (poor thing) with ISC holding assets of nearly $7M in 2007, and Levengood makes $221,000 per year while the CIB takes in over $100M in taxes each year. These folks are pulling down the more than generous salaries from the public trough and have little real accountability for how well they do their jobs. Compare that to the maids who average a mere $15,000 a year in Indianapolis. To pretend that this CIB bailout is for the little guy, is bold faced lying. Its to keep the good times rolling for a select few living large off taxpayer largess.

There has been and will be NO examination of how the CIB got into this mess. Each Councillor is apparently quite content to believe it is the Mayor of the opposite political party, or the Governor, who caused this supposed catastrophe. This attitude will never identify the problems with the CIB in its fiscal and policy structure that will continue to bleed the taxpayer. The Councillors all acknowledged last night that this is only a two year 'fix' and ignored the obvious conclusion that it is therefore not a real fix of the real problems. Only Councillor Malone expressed an opinion that indicated that a real fix was important to her - enough to influence her vote at the full Council.

There is no interest in doing the public a service and creating a plan to make the sports/convention/tourist/hospitality industry self-sufficient. Speaker after speaker tossed around numbers in the range of hundreds of thousands to billions of dollars. I kept thinking - so why aren't we rich already and why are these guys back begging for more tax revenues?

Passage of the hotel tax and acceptance of the state loan, if successful at the full Council meeting on August 10, will trigger the necessity to increase two more taxes, car rental and ticket, in 2013. This is putting the onus on the next Council. Quite irresponsible in my view and it smacks of politics. The public good should count for something and it never seems to be weighted very high when elites have their hands out for the public dole. The public good is all the rage as a foil when the discussion is more money to help those who struggle to put a meal on the table or clothe their children or what to do about those pesky panhandlers who inconvenience us at stoplights. It takes the EPA to force Indianapolis to fix the sewer overflows that push human feces into our river and streams like some third world cesspool. But, all it takes for the wealthy overseers of our sports empire to get more, is to claim a need for an additional $47M on top of the $100M they already get and the only topic for discussion among our elected officials becomes how to land that money for them. Again, no request for an examination of what the CIB did wrong to put it in the position it is in now. That is the only way you can determine what to fix.

Blame decisions past and push problems forward seems to be the name of the game. But, make sure you get the CIB all the money it wants.

I hope the significance of the August 10th Council meeting is not lost on the Councillors. Mayor Ballard will present the 2010 budget proposal with something like $30M in cuts. Proposal 285 will be voted upon with its increase of $12M of tax revenues and a $27M loan from the State to add to the $100M in tax revenues the CIB already gets. Contrasting what City services are to be cut with the bailout of our sports empire, will shed a clear white light on what is really important.