Will the CIB's New Found Wealth Get SB 90 a Hearing?

It's easier to follow the plot of Games of Thrones than it is to track the fortunes of the CIB.  Is today a day when the CIB is rich? Or, have they fallen once more on the verge of bankruptcy? 

Whenever budget time comes around, when a PILOT is discussed, or when  the Mayor's office gets an itching for an even bigger CIB slush fund - well, then the CIB is pennies away from bankruptcy court.  At those times, its a wonder Peter Francis Geraci hasn't been placed on their Board.

And, after pleading poverty in order to get their hands on two new tax increases, the CIB just yesterday managed to find $2 million for Lucas Oil Stadium improvements.  Maybe they found the money in the seat cushions.  At budget time they weren't sure they had enough money to get matching carpet for the older sections of the convention center.

This $2 million follows the additional $10 million ($5 million from 2012 funds and $5 million from 2013 funds) recently handed over to the Simons.  It seems the CIB was $12 million better off than they led us to believe.  Some might think they knew about these 'expenses' when they were protesting the $15 million PILOT levied against them by the Council Democrats.  That, of course, was before eight of the Council Democrats caved in and swapped the PILOT for two tax increases.  But, I digress.

Let's not forget who is running the show.  The Mayor gets 6 of the 9 appointments to the CIB.  The same Mayor who wants to neuter the Council (and gets most of the Republican Councillors' blessing to do so).  The same Mayor who puts out to the press the possibility that THIS next budget may have to include police and fire layoffs to make ends meet.  This same Mayor who is spending tens, if not hundreds of millions from TIF slush funds, Airport slush funds, and CIB slush funds to make certain people wealthy and help others climb higher on the Forbes richest people in the world list.  This Mayor's priorities are screwed up and he needs to be held accountable.

All the CIB stuff hitting the fan yesterday, made me wonder what happened to Senator Mike Young's bill to cut off the two recent CIB tax hikes after 10 years.  That's SB 90 and it seems to have cleared the Senate on a party line vote - Democrat Mark Stoops joined all Republicans in voting for the bill.  That was February 12.  On February 26 it was assigned to the House Ways & Means committee, where it appears lifeless.

Maybe the House will now find ample reason take action on this bill.  Its the least they can do to protect the public from paying taxes for frivolous items that will never benefit the community.

Investigation of CIB Practices

Previously I called for a study of the City of Indianapolis' goals for downtown and how to reach them. I now call for an investigation of the money management practices of the Capital Improvement Board over the past twenty-five years. I think it could illuminate how we got to this point in the CIB's financial mess, but it might also bring to light debt management issues that should be questioned more broadly than just the CIB.

Here are some areas I can think of, that should be looked into. You can add your own.

Many are making generalized statements about deficit spending by the CIB since 2000. The documents available online at www.capitalimprovementboard.org show detailed comparative data only since 2001, due to an accounting method change. Much of the public focus on the CIB's financial mess has revolved around the new Colts contract with the City (2005) and the operating expenses for the new Lucas Oil Stadium. There is no doubt all of that should be gone over with a fine toothed comb. But I would add that in the late 1990's, then Mayor Goldsmith renegotiated the contract with the Pacers - guaranteeing them a median league income no less, and built them a new stadium, Conseco Fieldhouse, whereby they could make money beyond what their team alone brought in. How did these additional costs affect subsequent annual 'profit and loss' statements?

Also, have the bonds to build the old Market Square Arena ever been paid off or were they rolled into other bonds? We know that the old Hoosier Dome - turned RCA Dome - is now gone, yet we, the taxpayers are on the hook for $70,000,000 when it originally cost only $55,000,000 to build. Have we done the same thing with the MSA? Why was debt allowed to grow like this?

According to the Conseco Fieldhouse website, it cost $183 million to build. Yet, information provided by the Indianapolis Bond Bank that covered the CIB's bonds, show two outstanding bonds for Conseco Fieldhouse. Still due as of June 30, 2008, was $191 million and $14 million. There is a third bond entitled 'Conseco Fieldhouse Cash Flow Funding' with an outstanding amount of $34 million. What is that? Is it related to the $34 million still owed to the Circle Center Mall investors, or are we looking at an additional $34 million on top of the bonds? Not to leave well enough alone, there is a fourth bond for the Virginia Avenue Garage, built primarily for the Pacers along with Conseco Fieldhouse, and part of the City's contract with the Pacers. At an initial cost of $25 million, the outstanding amount was $5 million last year. All taken together, CIB debt related to the Pacers as of June, 2008, was $244 million for facilities that cost a total of $208 million to build ten years ago. And, it is not clear if the Circle Center Mall investors' $34 million has been accounted for in this tally.

The same document shows two RCA Dome bonds. Again as of June 30, 2008, $45 million and $25 million were still outstanding. Recapping, we have an outstanding debt of $70 million for a building that cost $55 million to erect.

In addition to the Lucas Oil Stadium bonds, which are held by the Indiana Stadium & Convention Center Building Authority, the Indianapolis Bond Bank floated a $74 million bond/loan on behalf of Jim Irsay so he could fulfill his $100 million 'contribution' to the cost of building the LOS. That bond was floated in 2007 and not one dime in principal had been paid by April 1 of this year (2009). Those bonds need to be examined as well.

The Convention Center costs may have had an alternate fate - actual reduction of debt. The best I can find online is that the Convention Center cost $26 million to build in 1984, and the 2001 expansion cost $84 million. As of June 30, 2008, the CIB still owed $21 million and $59 million on two bonds that are labeled 'Convention Center'. So, $80 million owed for a building that cost $110 million to build. One still must ask why only $5 million has been paid off the original cost from 25 years ago.

Those of you who take advantage of the only sports venue that is actually affordable for most of us living in Indianapolis, Victory Field, rest assured that only $5 million was still outstanding on a bond for that facility as of June last year.

Debt in general and debt management needs to be examined in Marion County. But, an investigation of the finances of the CIB could lead the way.

The taxpayers deserve clear answers of how we got to where we are today when it comes to our sports teams. We need to know that the mess can actually be put behind us and is not going to explode in our faces yet again due to long term disregard for the actual costs of operating these facilities, sweetheart contracts to retain professional sports teams in a small market, and irresponsible debt service.