Friday, July 24, 2009

You Are Invited To Speak Your Mind About the CIB Bailout Plan

Proposal 285 will be heard by the Rules & Public Policy Committee of the City County Council. Public comments will be taken.

Where: Room 260, City-County Building
When: 5:30 pm, Tuesday, July 28, 2009
What: Presentations and Public Comments on Council Proposal 285, 2009 followed by a vote by the Committee on whether to pass it to the full Council for a final vote -- expect public comments to be limited to 2 minutes per person
Who: all members of the public are invited and urged to come speak your minds - otherwise only those people who have a financial interest in the outcome of this vote will attend


Proposal 285 would do three things: increase the hotel tax by 1%, increase the Professional Sports Development Area (PSDA) to include hotels abutting the convention center, and accept a $9M per year loan from the State to the CIB for years 2009, 2010, and 2011

Increasing the hotel tax would likely generate an additional $4M per year that would be directed to CIB operating expenses.

Income and sales taxes (up to a maximum of $8M per year) from the expanded PSDA would also be directed to CIB operating expenses.

The loan and the money from the expanded PSDA are blackmail -- if the Council does not increase the hotel tax, the state will not pass any money to the CIB from either a loan or the expanded PSDA.

The loan is PROHIBITED from being repaid until 2013.

In January through March, 2013, the City-County Council is authorized to increase two other taxes - car rental and admission tax. It is not allowed do so until then. These two taxes will likely have to be increased, if only to repay the State for its loan plus interest.

The Indiana Convention and Visitor's Association, which will likely appear at the hearing with a full presentation to the Committee, wants another $3 - $5 M per year from the CIB to advertise for more Convention business and to book discounted rooms through its website. The ICVA currently gets about $7M of its $11M annual budget from the CIB.

The CIB currently gets about $100M per year in tax revenues alone. It wants another $47M. For comparison, the entire City-County budget for 2009 is $1.1 B, including all tax revenues, grants, fees, etc.

The CIB still owes $70M for the Hoosier Dome -- which cost $55M to build and which has already been imploded. This is the type of fiscal impropriety that has caused us to be in this situation. The CIB has not been good stewards of the taxpayer's money.

Mayor Ballard says that even if Proposal 285 passes - it is not enough. He pledges he will be back to the Legislature next year, asking for even more money for the CIB.

The CIB wants $15M to take over the operating costs of the Conseco Fieldhouse - even though negotiations with the Pacers have not been reopened, the Pacers get all revenue from all events held at the Fieldhouse, and it would cost the team a penalty over $50M to break the deal. Bob Grand's position as the President of the CIB while also representing the Simons, owners of the Pacers, is a conflict of interest that is apparent to everyone except Bob Grand and Mayor Ballard.

The Councillors will find it difficult to turn away from ready cash offered by the hotel tax increase and the subsequent cash flowing from the State. But, the easy cash will only put the taxpayers in a bigger hole. They should, instead, move forward on a plan to identify the policy and fiscal decisions of the CIB that led us to this problem and change those policies and prohibit a repeat of the bad fiscal decisions; they should not pass one tax increase that leads directly to the need to raise two more in three and a half years; they should create a plan to make the hospitality-sports-tourist-convention industry self-sufficient within a decade; AND they should bar the CIB from taking over the $15M in annual operating expense of the Conseco Fieldhouse.

The members of the Committee are:

(R) Robert Lutz, Chair 241-4020
(R) Bob Cockrum (no published email address) 856-5549
(D) Monroe Gray 327-4242
(R) Barbara Malone 291-4359
(D) Angela Mansfield 872-3306
(R) Marilyn Pfisterer 244-7156
(R) Lincoln Plowman 557-7594
(D) Joanne Sanders 283-6040

Plan on attending the hearing -- contact your Councillor, too -- Tell them to do what is right for the taxpayers of Marion County and fix the problems of the CIB, not just throw more money at them.


M Theory said...

Thanks for the great synopsis Had Enough!

....friends of HFFT will be there. Will make an announcement and send emails this weekend.

BRING SIGNS and be sure to sign up to speak when you arrive. We need everyone who attends to speak.

Paul K. Ogden said...

Actually last night they said, as way of clarification, that the loan could be paid early. I'm not sure why we should care at all about this The CIB is neck deep in debt. They're not going to pay loan early.

Had Enough Indy? said...

I looked into the issue of prohibition of repayment a little deeper. I had been going by the Legislative Services Agency analysis of HB1001: "The bill authorizes the State Treasurer to invest up to $9M annually in obligations of the CIB in CY 2009, CY 2010, and CY 2011. The duration of the investment must be for 10 years and repayment may not start before January 1, 2013. The bill provides that the State Treasurer set the interest rate on the investment. The CIB is authorized to use any source of revenue to pay the obligations. The bill provides that if the CIB fails to make any payments on the obligations, the amount payable must be withheld by the State Auditor from any other money payable to the CIB."

But,from HB1001 itself: "(c) If the capital improvement board makes an application under subsection (b) and the treasurer approves the accuracy and completeness of the application and determines that there is an adequate method of payment for the capital improvement board's obligations, the treasurer of state shall invest or reinvest funds that are held by the treasurer and that are available for investment in obligations issued by the capital improvement board for the purposes of the capital improvement board in calendar years 2009, 2010, and 2011. The investment may not exceed nine million dollars ($9,000,000) per calendar year for 2009, 2010, and 2011.
(d) The treasurer of state shall determine the terms of each investment and the capital improvement board's obligation, which must include the following:
(1) The duration of the capital improvement board's obligation, which must be for a term of ten (10) years with an option for the capital improvement board to pay its obligation to the treasurer early without penalty.
(2) The repayment schedule of the capital improvement board's obligation, which must provide that no payments are due before January 1, 2013.
(3) A rate of interest to be determined by the treasurer.
(4) The amount of each investment, which may not exceed the maximum amounts established for the capital improvement board by this section.
(5) Any other conditions specified by the treasurer."

The LSA analysis may not be in sync with the actual language of the code. Perhaps your legal eyes will be better than mine in untangling this.