CIB Tapped For $15 Million PILOT

The Municipal Corporations committee of the City-County Council added a $15 million payment in lieu of taxes (PILOT) obligation to the CIB's 2013 budget last night, by a party line 5-3 vote.

You can watch the entire hearing by visiting the WCTY archives.

You can expect that unelected Mayor Vaughn (sitting in for Mayor Greg Ballard who is on a four year world tour) did not like the outcome. And you can expect that any action taken by the CIB in response to the PILOT, will be action dictated by Vaughn.

There was much legal wrangling during the meeting between Councillor Bob Lutz, Council Counsel Fred Biesecker, and CIB Attorney Toby McClamrock.  The bones of contention revolved around a) whether adding a paragraph requiring the PILOT was an additional appropriation (which is not allowed under state law), b) whether an assessed value made after March 1 can be used to levy taxes in 2013, or if they must wait until 2014, and c) whether ordinary tax procedures apply to PILOTs anyway.  McClamrock hoisted the flag of - we may not pay it anyway - to see who saluted, but no responses were made from either side of the aisle.

On the actual meat of the reasons for this PILOT, Councillor Brian Mahern kept bringing it back to the fact that the Mayor's proposed budget would let police and fire numbers drop even further.  He said there are already 100 fewer police than at the time of the merger and by not holding recruit classes, the numbers would drop even further.  He noted as well, that the CIB relies heavily upon IFD and IMPD services for the many events that are held in their facilities.

While Councillor Lutz primarily discussed the legal aspects, Councillor Cardwell brought up all the trickle down taxes that he said were due to the CIB, indicating that was more than enough help to the City.

Ann Lathrop mentioned "I feel your pain" and later said she had a fiduciary responsibility to the CIB "not to run it into bankruptcy".  Oh pah-leez on both counts.

The CIB has had more than enough cash to give $10 million for each of the last three years to the Pacers and at the same time increase its year end 2009 cash balance from $26 million to a year end 2012 cash balance expected to be $76 million.  They also have so much money that they are proposing that all of an anticipated $4 million gained from the sale of one of its buildings be simply given to the ICVA - over and above the $9 million the CIB usually gives them.

Unfortunately for the CIB, their believability index runs near the empty mark for much of the public and some elected officials as well.

Is this PILOT the perfect solution?  No.  But the Mayor isn't offering any solutions at all to the drop in IFD and IMPD counts that would be caused by having no recruit classes.  I'm very glad that someone is stepping up to the plate and getting some solutions in place.

In the age of tax caps, the city does have to rethink some of its own self inflicted revenue hits - especially not sunsetting TIF districts that are no longer in debt.  They should rethink the airport keeping hundreds of acres of land, that it does not need for aviation purposes, off the tax rolls.  With the Great Recession still upon us, the city budget has to make it through a few more years with services intact.  This year's challenges include the recruit classes.

The CIB is given special treatment each year because they are key to the ever sacred cow - sports.  IndyGo is running on bare bones and told to dig to dangerous levels in their cum fund to survive.  The Library has had to cut employees and hours over the last few years.  Its not asking all that much for the CIB to help out here.

The budget goes to the full Council Monday night.  Come January 10, 2013, when the PILOT is due, we'll see if the CIB pays up, or if Vaughn has them fight it out in court.

Muni Corps Committee Trims Airport Budget

As I mentioned in my last blog entry, this phase of the budget season is usually dry and boring.  What with split government this year, we are seeing an attempt by the Democrats to change Mayor Ballard's introduced budget in significant ways.  But, still I was expecting the Muni Corps committee meeting to be dry and perfunctory.  Figuring I'd save myself a needless trip and parking fee, I emailed Chairman Monroe Gray and asked if there were going to be any amendments introduced.  Yes, he thought Councillor Lutz would be putting forth something.

Councillor Bob Lutz is a Republican, so what's up?  Could he be fiddling with the Airport's budget?  The airport got an earful from the public and a polite note of disagreement from the Councillors when they presented their budget in committee last week.  A key spark was the fact that the Airport Board had just decided to begin an appeal of Judge Keele's ruling against them in their lawsuit that tried to stop a Fast Park facility from being built in Ameriplex.

Well, they got more than that this time.

Lutz offered an amendment to cut their budget by $100,000; the cost of the appeal.  In a $161 million budget, they won't be left wounded or anything.   Through this cut, the Council would be sending a message that the continuation of this lawsuit is frowned upon.

Lutz and Councillor Jason Holliday share the airport in their districts.  Lutz on the Wayne side and Holliday on the Decatur.

Between them they laid out some of the history of the airport/Ameriplex/Fast Park story that I had not heard discussed in public before.  And it is telling.  Both the developer and Ameriplex approached the airport as soon as they thought there might be a good match in locating a Fast Park facility within the industrial park.  They wouldn't go any further if the airport had a problem with it.  The airport didn't have a problem.  The Mayor's office didn't have a problem.

Fast forward to  when plans were coming to fruition.  Indy Park Ride & Fly - an off airport parking facility that moved out of Marion County and into Plainfield when the new terminal opened - had hired an attorney who went door to door in the abutting neighborhood.  That attorney is now representing the airport in its lawsuit.

Lets face it, this lawsuit doesn't have merit.  Never did.  The airport is simply using its deep pockets to make it too expensive and too prolonged for Fast Park and Ameriplex to continue.  They want to drive a legitimate business out of Decatur Township.  They don't want the competition.  This governmental entity wants to kill off competitors in a free market.

Long story short,  the committee voted 4-3 to amend the airport's budget by $100,000.  Voting with the Decatur community were Councillors Lutz, Holiday, Cardwell, and Mahern.  Voting against were Councillors Gray, Talley, and Osili.

They also voted to send it to the full Council with a do-pass recommendation.  I could see Gray vote no, but could not tell who else may have joined him.

This is an important vote for Decatur Township.  We overwhelmingly want the Fast Park to be built.  It is not your granddad's parking facility; rather it is so green that it can teach the airport a thing or two about being environmentally responsible.  It would be located outside the TIF and bring much needed tax dollars to our schools and help move us toward a more balanced tax base.  It will spark the development of much need commercial property that will benefit the community at large and help Ameriplex attract more high salary tenants to the Purdue Research Park.

I want to thank Councillors Bob Lutz, Jason Holliday, Jeff Cardwell, and Brian Mahern for standing up with us and standing up for us.  Your support means a lot to us.

For those who are interested, I've embedded that part of the committee meeting from the WCTY archives below - it runs almost half an hour:



Prop 15 - A Nightmarish Mess

The tortuous life of Prop 15 through the Indianapolis-Marion County City-County Council is not the Council's finest hour by any stretch of the imagination.

The ridiculoucity continued this past week with two evenings of meetings of the Metropolitan & Economic Development committee.

Even before Monday night's meeting began, the committee knew it would be recessing that night without passing Prop 15 due to a disagreement with the Ballard administration over a proposed amendment that sought to add language guaranteeing two microloan programs and one job training program.  Councillor Vop Osili had a memo from Deron Kintner to the effect that the City agreed to those programs, but wanted it written into the proposal.  I uploaded to Google Docs the disputed, and never introduced, amendment.  What you'll notice is it's clarity of language.  The header suggests this amendment was intended to be voted on at the full Council meeting where, instead, the Council decided to send Prop 15 back to committee.

What was introduced Friday night, after they had four full days and nights to come to an agreement, was a mess - tortuous language construction, dubious protections for the intended beneficiaries of the programs, and massive loopholes.  Not to mention the misspelling of the word "Councillor" - which is defined in Council rules, by the way.  Plus you'd think commas were an endangered species that had to be included sparingly.  This amendment passed by a vote of 6 to 1, with Councillor Zach Adamson providing the sole no vote.  I have uploaded my copy of this amendment, as the Council website has not yet updated their version of Prop 15.  Sorry for the scribbling, I wasn't thinking I'd be sharing it with everyone.

From the header one might think this amendment would be introduced at the full Council.  The meeting Friday night did start 5 minutes late and the amendment was not available until seconds beforehand.  So, it may be the negotiations were deemed done enough and this messy amendment was introduced at the committee instead.

Here are some attributes of the amendment that catch my eye:

The $10 million microloan program will require "the leveraging of current resources" which usually means floating bonds to be repaid with some revenue stream.  There aren't many details provided on this proposed program.  One thing that is stated is that it would be a county wide program.  It would be a violation of state law for the funds to come from the downtown TIF.

I looked through google street maps and the Marion County Assessor's interactive map to try to locate the "Bryant Heating & Cooling Facility located at 21st and Montcalm".  All parcels at that intersection are owned by private entities, none of which are Bryant.  To the west, however, at 1100 W. 21st Street, there is a large parcel with large buildings that appear abandoned, which is owned by DMD.  Why the lack of specificity when an address or parcel number is three mouse clicks away?  This is important because there is an attempt to require the demolition of this facility.

In multiple places the phrase "the area" is used.  From context it seems like it refers to possibly different boundaries at times - but the phrase is never clearly defined, which results in little to no protection of the residents of the Bush Stadium area that any of the promises made to them will actually be fulfilled - or even be required to be fulfilled.

The $2 million microloan program can be awarded to any business within a two mile radius of the enlarged downtown consolidated TIF.  The language is poor, again a comma or two might clarify, but it is either attempting to say the business must be located in a lower income area (median household income 75% or less of the median income in the County) or that the 2 mile perimeter must be centered on a low income area.  Just by the way, the median household income in the County is $40,421.  But a two mile radius?  How does that adequately target the Riverside or UNWA residents who came out to say they needed help?  Looking at maps, this perimeter could reach the Speedway to the west, Garfield Park to the south, Butler University to the north, and nearly Emerson Avenue to the east.  The intent is to take the funds from the TIF.  But TIF revenues must be spent within the TIF.  These requirements are a clear attempt to circumvent the state laws regarding the expenditure of TIF revenues, and it does not target the folks who live in the Bush Stadium area.

The exact same thing can be said of the $1.5 million job training program as was just stated for the $2 million microloan program.

And the last I'll mention is the really botched attempt to get work for the TIF district residents.  The language seems to say that any business receiving TIF money, should they require new hiring, would have to ensure that 40% of those hired lived in the TIF district.  The business could get out of this by filling out a form that indicated why it tried but failed to get to the 40% figure.  Or, they could bring in all their additional help from out of state, since those folks will not be counted.

Osili has been all over town touting the targeted benefits he personally negotiated for the residents and businesses of the Bush Stadium expansion area.  But, he is not delivering on that promise with this language.  Someone is being scammed - its either Osili or the residents.

Prop 15, that twice beaten dead horse now burdened with the worst amendment in the history of amendments, was voted on twice by the committee Friday night.  The first time the phrasing of the motion left off the key part where it would be sent back to the full Council with a do-pass recommendation.  On the advice of Council counsel, they did a do-over with the correct motion.

Both times the vote was 6 yeas and 1 nay.  Councillor Zach Adamson was the lone no vote both times.  The yeas were Councillors Robinson, Talley, Adams, Osili, Miller and Cardwell.  The last two are Republicans and the rest are Democrats. 

Prop 15, that raggedy, tattered zombie that it is, returns to the full Council Monday night.

TIF Study Commission Wraps Up Its Work

With the 10th and final meeting, the TIF Study Commission wrapped up its work last night.  The vote was 5 to 2 to adopt proposed recommendations along with a very lengthy report that distilled the testimony presented.   To summarize this herculean effort effectively, I will cut this into three parts - the Commission itself, the ideas and facts collected, and the recommendations.

The 8 Commissioners were Councillors Steve Talley, Brian Mahern, Ryan Vaughn (and his replacement Jeff Cardwell), Auditor Billie Breaux (and her proxy Richard Hunt), State Representative Bill Crawford, MDC President Ed Mahern, City Controller Jeff Spaulding, and Bond Bank Director Deron Kintner.

All came to the table with their own perspectives, and the give and take was on the highest level - all to the gain of the public in this process.

The presentations were mostly in plain English, yet had an academic rigor to them. 

All of the meetings can be found archived on the WCTY webpage (click here and scroll down to the last category, "Special Events").  The 10 meetings are listed there.  I added up the time for all of the meetings and it came to 24 hours.  You can find all of the documents that formed the presentations on the TIF Study Commission webpage, organized by date.

Needless to say, all of the information from this 24 hours makes a thick document - even when distilled.  The draft of the Executive Summary has been posted online.  I'll put up a link to the final document when it is posted, as well.  The final document without the appendices comes to 86 pages.

I cannot finish this roundup of the Commission without paying respects to two members of the Council Staff.  First, Leslie Williams took copious minutes, which can be found on the TIF Study Commission webpage.  I think the amount of work involved in taking the minutes of a meeting, especially long ones, is often undervalued.  I know that is a job I studiously try to avoid doing in organizations because of the number of hours actually required. 

Second, Hope Tribble, the Council's CFO.  I cannot begin to guess at how many hours Tribble put into this Commission - along with doing her regular job.  It appeared to me that she invited the guests, set the agendas, provided presentation and agenda materials to all through email, got super quick responses to questions fielded through email, and wrote (and likely re-wrote numerous times) the report that is being issued by the Commission. She most assuredly was the secret weapon for this Commission and a key reason why it functioned at the high level it did.

From the last two meetings it was clear that there were two camps assembled on the Commission.  All seemed to agree to more transparency and more documentation for why a TIF District should be set up.  The camps were apparent when the discussion turned to recommendations that would put limits or more oversight on the use of TIF funds or would place time limits on the life of an existing TIF District.  The majority wanted to rein in the use of TIF dollars, provide more oversight, and limit the lifetime of existing TIFs so that more of these property tax dollars could flow to the various units of government to provide the services that have been strained due to the property tax caps that were implemented a few years ago.  The minority wanted to retain the 'flexibility' that the Ballard Administration now has in determining on what to expend any excess TIF funds and maximize the options for future Mayors to reactivate dormant TIFs - all with an eye to being nimble enough to remain competitive with other municipalities that compete for the same businesses.

The work of this Commission is the finest example of good government that I have witnessed in my years of closely watching Indianapolis' government.  Everyone who attended had to have learned something new, if not a lot of stuff that they did not realize before.  The meetings are archived on WTCY for review and the report is being finalized for release.  The recommendations of the Commission will need to be reviewed and acted upon by the Council, the Mayor, the MDC, and the State Legislature.  So, this is not the last you'll hear of the TIF Study Commission's work.  Like a rock thrown into a lake, the ripples will be around for some time to come.

Excellent job.  Well done all.

No-So Hearing - Is the Council Skirting State Law?

As I noted earlier this week, the Economic Development committee was scheduled to meet on Wednesday. This was not a regularly scheduled committee meeting date and the only item on the agenda was Prop 292, which would authorize Mayor Ballard to float a $98 million bond, backed by property taxes from the consolidated downtown TIF district, and loan it to the developer of the proposed North of South project - a project which was not considered worthy of a loan from any financial institution.

The ice storms caused cancellation of Wednesday's meeting.

But, lo and behold, notice put out just today (Thursday, February 3), says that there will be a meeting of this committee Friday, February 4.

State law mandates 48 hour notice of public meetings in Indiana.

[edited 2-4-11 : the meeting is set for 4:30 pm in room 260]

Perhaps the rush is due to the full Council meeting set for Monday night. But, at least they can follow state law. It really isn't asking too much from our elected officials.

Is the committee's chairman, Jeff Cardwell, skirting or even outright violating Indiana's public notice laws?