Sunday, September 26, 2010

MDC-CIB Deal Requires Council Approval

Mayor Greg Ballard recently struck a dirty little deal whereby property tax dollars will be funneled to the Pacers organization.

This deal, you will recall, is in the form of an Interlocal Agreement between the Metropolitan Development Commission and the Capital Improvement Board (see "DMD Budget Hearing - Say What?" and "MDC/CIB Interlocal Agreement"). The MDC is in charge of property tax revenue derived from a variety of TIF (Tax Increment Finance) districts, including the 'Consolidated Downtown TIF District'. It was mentioned at a recent MDC pre-meeting, that this district takes in about $43 million a year in property tax revenues, and the $30 of that is required for the repayment of bonds and other debt tied to that TIF district.

So, Mayor Ballard decided that this TIF district could serve as his personal Pacers piggy bank. He ordered the MDC to send $8 million a year of that $43 million, almost one-fifth of all revenue and nearly two-thirds of all excess revenue, to the CIB so that they could send it on to the Pacers.

The only problem with that plan is that state law requires Council approval of any Interlocal Agreement of the MDC and any Interlocal Agreement of the CIB.

IC 36-1-7 covers all types of Interlocal Agreements. Only Agreements between two 'economic development entities' can avoid review and approval. IC 36-1-7-15 (e) says:
An agreement under this section does not have to comply with section 3(a)(5) or 4 of this chapter.

Section 4 is the part that determines who does the review and approval, but we will get to that in a minute. IC 36-1-7 also list 5 kinds of organizations that qualify as 'economic development entities'. The MDC is on that list. The airport authority is even on that list. But, sadly for Mayor Ballard, the CIB is not on that list.

Thus, the MDC/CIB Interlocal Agreement must be reviewed and approved according to section 4. Here is section 4 in its entirety:
IC 36-1-7-4
Agreements; when attorney general's approval required
Sec. 4. (a) If an agreement under section 3 of this chapter:
(1) involves as parties:
(A) only Indiana political subdivisions; or
(B) an Indiana political subdivision and:
(i) a public instrumentality; or
(ii) a public corporate body;
created by state law;
(2) is approved by the fiscal body of each party that is an Indiana political subdivision either before or after the agreement is entered into by the executive of the party;
(3) delegates to the treasurer or disbursing officer of one (1) of the parties that is an Indiana political subdivision the duty to receive, disburse, and account for all monies of the joint undertaking;then the approval of the attorney general is not required.
(b) If subsection (a) does not apply, an agreement under section 3 of this chapter must be submitted to the attorney general for the attorney general's approval. The attorney general shall approve the agreement unless the attorney general finds that it does not comply with the statutes, in which case the attorney general shall detail in writing for the parties the specific respects in which the agreement does not comply. If the attorney general fails to disapprove the agreement within sixty (60) days after it is submitted to the attorney general, it is considered approved.

The bottom line is, if an Interlocal Agreement meets certain criteria, then it can avoid being submitted to the state Attorney General for review and approval. But, that criteria includes being "approved by the fiscal body of each party that is an Indiana political subdivision either before or after the agreement is entered into by the executive of the party". The fiscal body of the MDC is the City-County Council. The fiscal body of the CIB is the City-County Council.

Sorry Mayor Ballard, but your plan to avoid Council review is not going to work.

State law requires this review and I dare say that it is to protect the taxpayers from shenanigans just like this.

But, I'm not finished yet. It is not just the Mayor who is hip deep in this dirty little deal.

Where is the outrage from Council President Ryan Vaughn? Where are his demands that state law be followed to protect the interests of the taxpayers?

Sure, the Councillors who are in favor of funnelling more money to the Pacers will not speak up and demand the review and approval required by state law - because they don't want to vote 'aye' in public. But, what of the rest of the Councillors? What does it take for them to speak up and stand up?

Indianapolis residents and taxpayers deserve that this dirty little deal be reviewed by the Council, as required by law. And, they further deserve for this dirty little deal to be struck down by the Council. If that doesn't happen, then not only should Mayor Ballard be held accountable at the ballot box, but, so too should every Councillor who remains silent.


Gary R. Welsh said...

Pat, You heard Reynolds state $4 million of the $8 million has already been transferred to the CIB, didn't you?

Had Enough Indy? said...

Yes, the missing page (which you caught as missing) stipulated that the first $4 million was to be transferred on September 15.

Interestingly enough, if the Interlocal Agreement had actually qualified under section 15 - there would have been a 30 day window for challenging the agreement. Given that it is governed by section 4, instead, makes the challenge window at least 60 days. So, they were in a big hurry for nothing.

Also, this $4 million, and the one the agreement says will be transferred on December 31, has not been appropriated by the Council, and therefore cannot be spent. Again, not sure what the rush was.