IDI Gets Curious Contract for 2009

I was kicking the tires on the City's new contract database, when I stumbled upon a curious contract between Indianapolis Downtown Inc. and the Department of Public Works in 2009.

For those unfamiliar with this new feature of City government, it has a copy of every contract with a City or County department, going back a couple of years. You can access the database by clicking here and typing the word "public" in the password field and click "login".

The search dialog box will pop up. To play along at home with this IDI contract, you can enter "5955" in both of the boxes to the right of "contract number". If you haven't used this site before, you will have to download some software in order to view the contract.

In 2009, IDI landed a contract for $120,000 from Indianapolis Department of Public Works.

The contract is for "Consulting Services" (with 3 pages of specific action items) and the agreement declares that the term shall be from January 1, 2009 through December 31, 2009. The total amount was not to exceed $120,000, which was to be paid out in 12 equal installments of $10,000.00 "after receiving appropriate invoice and status report".

To get quickly to the good part, those playing along at home should take a look at page 9, which has all the signatures. What caught my eye were the dates -- Dave Sherman, Director of DPW, signed the contract and the Board of Public Works authorized it, both on November 11, 2009, and Tamara Zahn, President of IDI, signed November 9th, 2009. With less than 2 months to go in 2009, a contract was inked down for the entire calendar year.

So, you know I filed an open records request to see all of the supporting documents and invoices.
One invoice, only, was submitted for $120,000, dated November 13, 2009, which was approved for payment six days later. Provided to me also, were 12 'Activity Report's, one for each month, including one for November and December, neither of which could not have been completed before payment was asked for and received.

These activity reports are not limited to those items performed to fulfill the contract. They include attendance, presumably by anyone associated with IDI, at any meeting - neighborhood, board, committee, or legislative hearing. It includes work done by subcontractors; mentioning every time a planter was planted, weeded, or inspected for insects and plant diseases. It includes preparation for the IDI board meeting and going to said board meeting. It includes calls made to code enforcement, DPW, or parks to attend to some matter discovered by someone at IDI, or their subcontractors. The reports list the bike patrols and meetings with public safety officials. It even lists time spent on crafting and submitting an application for a 2010 crime prevention grant (which they ultimated obtained). etc. etc. etc.

Most interesting, though, was the inclusion of items reflecting the pursuit of taxpayer funds for IDI's operations. Under the action item category "2009 City/IDI Contracts" in each month's activity report we have the following (I have highlighted the most interesting items in red):

January:
a. Department of Metropolitan Development: Attended commission meeting.
b. Department of Public Works:
i. Met with K. Walker, M. Williams and D. Fishel for bimonthly update.
ii. Attended board meeting.
c. Indianapolis Local Public Initiative Bond Bank: Attended board meeting.
d. IndyParks: Attended board meeting.

February:
nothing mentioned

March:
a. Department of Metropolitan Development: Compiled and provided completed projects report from 2002-1st quarter 2009 to J. Byrnes.
b. Department of Public Works: Met with M. Williams and D. Fishel to update contract activities and payment.
c. Indianapolis Local Public Initiative Bond Bank: Attended monthly board meeting.

April:
b. Indianapolis Local Public Initiative Bond Bank:
i. Attended board meeting
ii. Provided Downtown Economic Indicators to K. Taylor.
iii. Oriented J. Goss, board representative.

May:
a. Presented 2008 Economic Indicators to City-County Council Economic Development Committee.
b. Addressed Dept. of Public Works and Parks contracts and funding.
c. Attended Indianapolis Local Public Initiative Bond Bank board meeting.

June:
a. Received signed 2009 DMID contract and purchase order.
b. Attended Bond Bank and IndyParks board meetings.
c. Met with D. Reynolds, Controller.

July:
a. DPW: Reviewed proposed reduction in current contract.
b. Indy Parks: Met with L. Purcel and P. Pinko.
c. Indianapolis Local Public Initiative Bond Bank: Attended board meeting.

August:
a. Resolved contract status with Mayor’s Office.
b. Attended Metropolitan Development Commission meetings.
c. Attended Indianapolis Local Public Initiative Bond Bank board meeting.
d. Provided contract information. Discussed 2010 replacement funding with Mayor’s Office.

September:
a. Attended DPW and Bond Bank board meeting.
b. Met with Mayor Ballard and P. Okeson to discuss 2010 funding.

October:
a. Attended Department of Public Works board meeting.
b. Attended Indianapolis Local Public Improvement Bond Bank board meeting.

November:
a. Department of Public Works (DPW): Attended board meeting to support approval of revised 2009 contract.
b. Indianapolis Local Public Initiative Bond Bank:
i. Provided market information to D. Requiz.
ii. Attended board meeting.
c. Met with D. Wu, Mayor’s Office, to discuss Downtown issues and opportunities.

December:
Attended Indianapolis Local Public Initiative Bond Bank board meeting. Oriented B. House, new IDI board member, representing Bond Bank.

There is no mention of any other contracts between the City and IDI for 2009 in the City's new database except for the contract discussed here and one for $142,144 with DMD (Department of Metropolitan Development). That one was signed by IDI's President, Tamara Zahn, in January, by DMD Director, Maury Plambeck, in March, and by City Controller, David Reynolds, in April. The June entry "DMID" could be a simple typo.

I could not find any mention of the Indianapolis Bond Bank at all in the contract database, so it is possible that IDI had a contract with them during the year. IDI certainly seemed to spend a bit of time with Bond Bank personnel and attending their board meetings.

But the most interesting of this discussion thread in IDI's activity reports, is the contact with the Mayor's office regarding an apparent reduction in IDI's expected proceeds from it 2009 contract with DPW, and its efforts to secure funding in 2010. Reading between the lines, one could conclude there was a good little tussle going on in City government over taxpayer subsidies for IDI.

The very fact that 2009 IDI/DPW contract wasn't signed until November, with payment issued shortly thereafter and not in accord with the schedule put forth by the contract, says that the contract was nothing more than a ruse to funnel taxpayer money to IDI. The least they could do, though, is not make it so obvious.

Never Fear -- IDI Is Here !

The inclusion of Tamara Zahn in the Indiana Black Expo task force to find solutions to the violence that erupted this past weekend, sent these old eyes rolling. Zahn is President of Indianapolis Downtown, Inc., (IDI) an organization that by all appearances simply duplicates the efforts of other organizations while living large off government handouts.

You may find it interesting that IDI received a City "Community Crime Prevention Grant" to the tune of $100,000 to run from April 1, 2010, through March 31, 2011. Insulting to all neighborhood groups, they received this grant in the "Neighborhood" category. The grant is available on the City's new contract database and is contract number 7683.

The grant/contract says:

The primary goal of the IDI bike and walking patrol is to decrease the number of crimes from levels recorded in previous years. In 2010, we will strive to continue to reduce Downtown crime to fewer than 2,000 crimes. We rely on IMPD and FBI crime statistics which we regularly review and analyze in order to proactively allocate patrol hours to address and mitigate emerging trends.

Talk about duplicating services. If downtown crime can be reduced by a greater police presence, then why isn't IMPD allocating their resources accordingly? Especially when it is City money being spent by IDI.

The latest tax return for IDI on guidestar.org, is for 2008. It reports $1.8 million in revenue, 68% of which was from public sources, and expenses of $2.4 million, while sitting on assets nearing $6 million. Perhaps more interesting is that they reported 17 employees, among which they list the top 5 paid. Among these 5 is President Zahn, and 4 Vice Presidents. Talk about a top heavy organization ! No telling how many other VPs are among the remaining 12 employees.

Zahn pulled down $200,000 in reportable compensation plus $18,132 in 'other compensation' in 2008. VP Julia Watson received $104,480 plus $13,277 -- VP Fred Laughlin got $89,500 plus $3,440 -- VP Terry Sweeney was paid $85,883 plus $11,222 -- and VP Molly Williams received $84,900 plus $11,403.

The City should not be helping to fund IDI - especially since they are duplicating services provided by the City itself. IDI should be forced to sink or swim on its own hook. If it truly is a benefit to downtown businesses, then it would survive without the government dole.

The CIB - An Example of Bad Government In Action

The Capital Improvements Board (CIB) budget shortfall is causing no shortage of outrage and angst in Indianapolis. For the purposes of this blog entry, lets not go into the merits of that debate. Rather, lets look at what the CIB illuminates in how really perverse and structurally unaccountable our government can get.

The CIB is classified as a Municipal Corporation tied to Indianapolis-Marion County government. It provides a political 'arms length' between the duly elected officials - the Mayor, the County Commissioners, and the City-County Councillors - and the decisions of the CIB. These elected officials all appoint members to serve on the CIB, but the Mayor gets 5 of the 9
CIB members and it is really his organization to steer. The CIB has the authority to float bonds and has done so, although they have also used the services of the Indianapolis Bond Bank for other bonds. Part of the CIB budget is reviewed by the City-County Council which must approve that part of the budget. The state law that set up the CIB gave it the authority to levy a property tax, with the prior approval of the City-County Council to do so. So far the CIB has not dipped into that well.

The supposed purpose of the CIB is to manage or operate the Indianapolis Convention Center, Victory Field (triple A Indianapolis Indians baseball team stadium), Conseco Fieldhouse (Pacers stadium), Lucas Oil Stadium (Colts), Capital Commons (a park between the Convention Center and the Statehouse), and a parking garage underneath Capital Commons.

The northern third of Capital Commons was donated by the CIB to Simons Property Group for their new World Headquarters in 2004, as part of a $23 million package of incentives approved by Mayor Bart Peterson and the City-County Council. The building is right across the street from the Indiana Statehouse. The Simons also own the Indiana Pacers.

The CIB manages and operates the facilities, but does not own them. The Indiana Stadium and Convention Building Authority (ISCBA) built and owns the new Lucas Oil Stadium and will build and own the pending expansion of the Convention Center. Both are leased by the ISCBA to the Indiana Office of Management and Budget (IOMB) which in turns subleases them to the CIB. In addition to the costs of the sublease, the CIB must pay the expenses of the IOMB - presumably only those connected to the stadium and convention center. The other facilities are owned by the Marion County Convention and Recreational Facilities Authority (MCCRFA) which also owns the ill-fated United Maintenance Facility on the grounds of the Indianapolis International Airport. The MCCRFA leases Victory Field, Conseco Fieldhouse, the existing part of hte Convention Center to the CIB. Again, the CIB pays for the expenses of the MCCRFA in addition to the lease payments.

The CIB negotiates and holds the contracts with the ball teams that play in the stadiums run by the CIB. Bob Grand is the current President of the CIB and he and his law firm, Barnes & Thornburg, represent the Simons and the Indiana Pacers. Joe Loftus, also a partner in Barnes & Thornburg, is a member of the board of the ISCBA. Barnes & Thornburg also represent the City of Indianapolis at the Indiana Statehouse.

Why is it so convoluted? Whether on purpose or not, the result is a Rube Goldberg device that makes accountability and transparency pretty much impossible.

The CIB collects taxes from a number of sources -- cigarette, innkeepers, food and beverage, admissions tax, car rental tax, and the sales taxes captured in a special district around the CIB's properties. The CIB must share a fixed percentage of the innkeepers tax revenue it receives with the Indiana Convention & Visitors Association (ICVA). The ICVA advertises the Convention and offers discounts on hotel space through its website, www.indy.org.

The much touted reason for keeping the CIB afloat is to keep the Indianapolis tourist and hospitality industry afloat. Oft repeated number is 66,000 service industry jobs. To that end, we not only find taxpayers funding stadiums, conventions centers, and advertising, but the City also has been quite generous with abatements and financing for hotels, and the Circle Center Mall was funded by carving out a TIF area. In addition to the players already mentioned, the City, through a variety of agencies, funds Indianapolis Downtown, Inc. (IDI) to the tune of about $1 million a year. Besides advertising and monitoring downtown office occupancy rates, IDI hires off duty police officers to patrol the mile square. What? IMPD can't do that? Guess not. The Metropolitan Development Commission waived a $6 million fine for the early sale of the Pan Am Plaza by the Indiana Sports Corp. (ISC) A lawsuit has been filed to recoup that money as modest payment for loss of precious downtown public open space.

The CIB has asked major investors of the Circle Center Mall project to forgive $34 million of the money they are owed for their loan of Mall profits to help build Conseco Fieldhouse. They are $20 million short for the annual operating costs of the Lucas Oil Stadium. They anticipate being $6 million in the hole for operating costs of the expanded Convention Center. They owe $17 million to the Indiana Treasurer for a loan so they could get out of some bad swap options. They need another $26 million to create a cash reserve for the repayment of bonds it holds. They are asking for $3 million more to give to the ICVA. And, they want to volunteer to take over the $15 million operating costs of the Conseco Fieldhouse now obligated to be paid by the Simons/Pacers.

The CIB has not been demonstrably successful. From 1998 through 2007 (the latest figures released by the CIB), the number of events held, the number of attendees, and the revenues generated at CIB managed properties has remained flat - despite a 2005 expansion of the Convention Center that increased floor space by one-third.

All these folks are busy busy busy. What never gets done, though, is an analysis of what it has cost the taxpayers to build this 'thriving' downtown and when, if ever, it will be successful enough to fund itself.

Let's talk.