Friday, August 31, 2012

WCTY Archive For Metro Development Committee

The WCTY archives now has the longer version of Monday night's Metro Development Committee meeting.  This clip begins as close as I can get to the Chairman gaveling the meeting into adjournment.

Thursday, August 30, 2012

Marion County's TIF Districts See Base Erode By Nearly Half a Billion Dollars In One Year

 If you want to continue to believe the outright lies told to you about TIF districts, stop here and do not read any further.

After eroding $43 million in 2010, and less than a million in 2011, the combined assessed value of the base of all of Marion County's TIF districts dropped precipitously in 2012.  The pay2012 assessed value of all taxable property in the base was $1.56 billion.  The pay2013 value is down to $1.07 billion - a staggering loss to the base of $490 million or about a third.

All this while the assessed value of taxable property throughout the County increased a modest 0.8%.

This matters because the base is the property value you were told would always cast its property taxes to your schools and libraries and fire departments, and even the city-county government.  If this doesn't debunk that old lie, nothing will.

Two more TIF districts saw their base AV drop to zero this year; making a total of 17 of 40 districts to have achieved that status.

The TIF districts comprising the consolidated downtown TIF saw a minor gain of $261,618 in base AV.  However, the airport TIF base dropped an incredible $108 million, for just over one third of its prior value.  Congratulations Wayne and Decatur Township taxpayers.  This is a significant number that will cause your tax rates and tax bills to increase, while your schools will find less money in their stockings due to more people hitting the tax caps.

Services don't pay for themselves - taxpayers do.  We all carry the weight of this fiasco.

$489,761,569 drop in TIF base AV








but true

I uploaded a copy of the forms filed by the Auditor this year to determine the new base values for all TIFs in Marion County.  I also uploaded a summary spreadsheet showing the districts and base assessed values that I created from the Auditor's forms.

Tuesday, August 28, 2012

What's Wrong With This Picture? - The Proposed Mass Ave TIF

Prop 15 proposes two expansions of the consolidated downtown TIF district.  A westward expansion of 604 acres, and an eastward expansion of 112 acres.  The latter is also known as the Mass Ave TIF, although about half of the acres are nowhere near Mass Ave.  The project area is less than one acre - by my calculations 0.8 acres, in fact.

But, see for yourself. 

I've actually been working on this for a few days and just waiting for one more piece.  I'll update you once I have secured that additional piece.  But, last night's maybe legal, maybe illegal, vote to push the TIF out of committee has hastened my schedule.  Helping me with information about the location of future proposed development has been Gary Welsh, author of the Advance Indiana blog and nearby resident.

I have uploaded all of these pictures in one document to Google Docs, so you can review them with as much zoom as you wish.

Proposed Mass Ave TIF - with Google aerial maps

Proposed Mass Ave TIF - outline
Proposed Mass Ave TIF - close up of East Area

Proposed Mass Ave TIF - close up of Mid Area

Proposed Mass Ave TIF - close up of West Area

The recommendations of the TIF Study Commission would protect the public interest by requiring disclosure of pertinent facts.  All of which would combine to address these questions:

Why this TIF?  Why this Place?  Why this Project?  Why this Footprint?

Its easy, once you see the outline of the proposed TIF, to want to know why a TIF is the best vehicle to fund the project?  Why not sell the block with the fire station and actually make money for the taxpayers to help build the new station?  Why not give the block away to the developer?

Why does the Mass Ave corridor require investment of public dollars at all?  The place is up and coming and a number of projects are already slated to begin within the next 12 months without a TIF and public dollars.

Why does this project need over 100 times its footprint to support it?  Or is the extra land included for other reasons, like setting up an extensive slush fund?  It is even said that the value of the already developed Trail Side project in the East Area will be immediately removed from the base (so current tax dollars will not continue to flow to the schools, library, etc) and included in the increment.

Indy's TIFs already cover 10% of Indy's property value.  It is irresponsible to pass this proposed TIF, or any TIF, without thorough evaluation and adjustment, if needed, or dismissal, if warranted.

[edited to add: I received a copy of the amendment to Prop 15 - it calls for excluding two properties from the TIF - 875 Mass Ave and 1201 Indiana Ave.  The former is the site of the Trail Side and the other is student housing next to the IUPUI campus.]

Slush Funds Advance Out of Public View

From WCTY archives:

There were no proposals seeking to establish TIF districts on last night's Metropolitan and Economic Development committee's agenda.  This is all we have this morning.  You can clearly see and hear Chairman Steve Talley adjourn the meeting at time stamp 1:33:40.  At the end of the WCTY tape you can hear, but not see, Councillor Virginia Cain ask Republican Council Attorney Elrod for advise.  Then audio cuts out, too.
Early on, before this clip begins, when members of the public are addressing the committee, you can see Deron Kintner in the last row of the room.  Trust me, I've been to more budget hearings than some Councillors, but nobody comes to one if their interests aren't being entertained.  So, Deron  Kintner, Executive Director of the Bond Bank, was given a heads up that this would happen.  The public was not informed.
From Jon Murray, IndyStar reporter, we have the skeleton of what happened.  He reports that Democrats Mary Adams, Zach Adamson, Vop Osili and Republicans Virginia Cain and Jeff Miller all voted in favor of the proposal, evidently after amending it.  There was one lone "no" vote by Democratic Councillor Leroy Robinson. 
Thank you, Councillor Robinson.
Murray reports on the amendment:
But the ice thawed Monday after the administration reached an agreement with Democratic council members Vop Osili and Joseph Simpson. They represent districts near those proposed new development zones.

In a newly released memo outlining the agreement, Deron Kintner, Ballard’s new deputy mayor for economic development, commits to tapping $13.5 million from city economic development funds for three loan and workforce training programs.

The committee also amended the proposal to require some local hiring by contractors on new projects and to promote minority employment.
The proposed expansion of the downtown TIF to the west aims to capture 604 acres to support road improvements around Bush Stadium and to the east to capture 111 acres to support redevelopment of a block no more than 3 acres in size.  Now add to it more tax dollars swapped by the two district Councillors and you clearly have huge new slush funds being set up. 

There has been no disclosure of basic information justifying or answering the questions : Why this TIF?  Why this place?  Why this project?  Why this footprint?  The three submissions in response to the RFP for the Mass Ave TIF (the 111 acre expansion to the east) are held in embargo; kept out of sight of public eyes and disclosure.

The recommendations of the TIF Study Commission would have required all of this disclosure so that the public AND the Councillors had real information upon which to base a real evaluation of the proposed TIFs.  These recommendations would have protected the public.

The Ballard administration, including Ryan Vaughn and Deron Kintner, do not want any details to escape into the public and have held as much under wraps as they could.  Now we find that Councillors are deliberately helping them keep the wraps on.  This is foul.

The full Council will have an opportunity to send this back to committee where the public can take their rightful place in the discussion.  As it stands now, this action by Adams, Adamson, Osili, Cain and Miller is a travesty that screams of their real distain for proper proceedure, public process, and putting in place recommendations that will protect the public interest.  If this is an inaccurate review of their attitudes, then they have the opportunity to clarify things by walking this proposal back to committee themselves.

Monday, August 27, 2012

Say It Ain't So

I have to wait until the WCTY archives log tonight's Metropolitan Development committee meeting.

It is being reported that that committee voted to push forward two new TIFs, AFTER the meeting was adjourned.  Worse - it was without public notice that this topic would be considered.

I await the tapes to see how much input was made in public, much less how many people got a chance to speak to the issues.

I had to be somewhere else tonight.  But you can be sure that I would have moved heaven and earth to be there if I knew these TIFs were to be manhandled into position.

More, once I can review the tapes.   If true, this is betrayal of the public trust.

Sunday, August 26, 2012

Budget Hearings - Week 2

Three City-County Council committees will hold budget hearings this week.  All meeting begin at 5:30 pm in room 260 of the City-County building.

Monday - Metropolitan and Economic Development committee :
Department of Metropolitan Development budget
Tuesday -  Admin & Finance committee will hold hearings on the proposed budgets for :
Office of Audit and Performance
Election Board
Voter Registration
County Recorder
County Surveyor
Wednesday - Public Safety & Criminal Justice committee will hold hearings on the budgets for :
County Clerk Circuit & Superior Court

Friday, August 24, 2012

Some Budget Details Available Online

The traditional budget book that contains the overview of revenues and expenses for the City, put in the perspective of previous years budgets, is still not online.  And the details of income and expenses for each department and agency also has not yet been posted.

However, some details have been posted.  Here are those links:

The City's OFM (Office of Finance & Management) webpage will have all the links to this and previous budgets.  
2013 City-County Fund Balance Summary.pdf  This is a spreadsheet with the overview of the gory details for City and County Funds.  It includes June 2012 fund cash balances, income, outgo, all the way through to the projected December 2013 fund cash balance.

TABLE Property Tax Info by Fund BB2013  This is a table showing how much property tax revenue is requested in the 2013 proposed budget ("certified levy") for each fund, how much of that property revenue would be lost to the City because of the property tax caps ("circuit breaker"), and the amount of property tax money the City-County would actually receive ("net levy").

TABLE Income Tax Allocation BB2013  This table shows where the three types of income tax revenues go.

TABLE Summary of Interfund Transfers BB2013  This table shows aggregate transfers between fund types.  Not the complete detail of interfund transfers, but some detail, is present.

Budget Summary by Department BB2013  These pages list the overview of revenue sources and expense categories for the budget of each department and agency.  No detail, but the overview is the starting point for understanding how much money is going into what part of the City-County budget.

Thursday, August 23, 2012

Update - Budget Overview

The complete budget still has not been published online, and hopefully will be by week's end.  Therefore I am unable to tell you what the real overview is, not even the budget total.

On Tuesday night, City Controller Jeff Spalding gave the Admin & Finance committee his overview presentation.  Here are some highlights that affect how the 2013 budget is constructed.

There are three agencies that primarily charge other departments and agencies for their services, rather than get revenue from the various city or county funds. 

Over the last few years, the ISA (information services agency) has underwritten some of its actual costs by using excess money from one of its own funds.  That fund is nearly depleted, so this year the true costs are being charged to the various departments for their technology usage.  ISA will charge $30 million for its services in 2013, up $4 million from this year.

OCC (office of corporation counsel) will charge  $3.7 million, up $146,000 from this year.

The MAC (mayor's action center) will charge $1.2 million, up $0.4 million from this year.

[keeping track --- so far about $4.5 million additional costs demonstrated]

In addition, certain other costs are rising - retirement benefits, health insurance, rent for instance.  No price tag was mentioned for these rising costs.

They also want to include a fund from which merit raises to non-public safety employees would be taken.  If I understood it correctly, $3 million would be set aside for these raises.

[keeping track -- so far about $7.5 million additional costs demonstrated with others mentioned, but no price tag noted]

The budget for each department and agency is said to begin with the 2012 budget and add additional revenue to cover all of these added costs.  (This is apparently not the case for at least one of the budgets presented in the first two days of hearings.)

Income tax revenue is expected to be $233 million, down $10 million from last year which saw a $47 million boost due to correction of a State distribution error for 2011 and 2012.  $30 m of that returned money was put into a rainy day fund and some will be tapped for 2013. 

The City-County expects to actually collect, after the tax caps are subtracted, $307 million from property taxes in 2013, down $10 million from this year.  The tax caps for the city-county alone, should eat up $44 million in 2013, up $7 million from this year.  Remember that the City's own TIFs cause about a third of the tax cap problem for all taxing units throughout the County.  Other 'incentive' programs like abatements also increase the amount of money governmental units could collect but don't because of the tax caps.  And, don't forget the thousands of acres the airport does not need for aviation purposes, but is keeping off the tax rolls anyway.  Returning these acres to private ownership and therefore to the property tax rolls could lower all of our property taxes and simultaneously increase the amount of money governmental units actually recieve.

[keeping track --- so far some of the revenue sources of the City-County are down a total of $20 million]

The Controller said that the difference between the 2012 plus additional costs and the expected 2013 revenues, is $65 million.  He plans to fill that difference by drawing $20 m from fund balances, using $17 m from the rainy day fund, and by taking another $10 m from one of the TIF districts (they haven't decided which ones yet).  They want to end the homestead tax credit in order to net an additional $8 m for the City in COIT money. (The homestead credit is funded with COIT money to the tune of $13 million.  When that credit is removed from tax bills, the tax cap credit will increase to cover the difference for those homeowners who already hit the caps.  That amounts to $5 million increase in tax caps.) They want to institute a charge for use of take home cars to gain $1 m.  They want to save $5 m by suspending the 3% raise for fire and police union employees, $3 m for the election board because it is not an election year, and save $1 m in IMPD and IFD overtime charges.

We will revisit the budget overview once the entire budget has been released.

Tuesday, August 21, 2012

Big Time Bailouts of Indy's TIFs

The budgets for the last four cycles - from 2010 through the proposed 2013 annual City-County budgets, show massive taxpayer bailouts of most of Indy's TIF districts.  These would be Mayor Ballard's budgets.

Here are the links to the budgets, from which I pulled all the numbers I'll be noting in this blog entry:
2013 budget
2012 budget
2011 budget
2010 budget
Contained in these budgets are catchall funds for the various TIF districts that combine some TIF districts in one fund, and others in other funds.  Please note that the currently proposed 2013 budget does not include a very important fund - the "TIF Revenue Bond Fund" - the one that covers the income and expenses for the combination of the Consolidated Downtown TIF and the Consolidated Airport TIF. This budget proposal also does not give any detail as to which fund transfers came from which, or went to which, other fund.  That information, however, is included in the other budgets.

Three other TIF funds are the ones I want to go into.  There is the "Redevelopment General Fund", the "Redevelopment District Sinking Fund", and the "Economic Development Revenue Bonds Fund".  All take in property taxes from the rest of the TIF districts besides the downtown TIF and the airport TIF.

Here is the short summary.  Over these four budgets, the property tax revenues from the non-downtown and non-airport TIF districts amounted to $53.3 million.  But that was far from the amount needed to cover their costs, which totaled $80.0 million.  They also received an infusion of cash from other taxpayer monies:
$1.2 million from Local Option Income Taxes
$6.1 million from garage operation receipts
$16.6 million transfers from the downtown and airport TIFs
and - wait for it
$16.6 million from additional property tax levies that all of those properties outside the TIFs paid
It bears repeating, property taxes OUTSIDE the TIFs was raised to cover costs associated INSIDE the TIFs, in addition to income taxes and transfers from two better performing TIFs.

This should give all of those in the Ballard administration who are pushing the new TIFs and those Councillors contemplating the new TIFs, a lengthy and pregnant pause.  Taxpayers should demand that no new TIFs are forced through before the recommendations of the TIF Study Commission can be implemented.  These recommendations would not ban TIFs.  They would simply require full disclosure on the proposed TIF so that an educated evaluation of each proposal could be made by the Council, as well as by the taxpayers who will continue to pay for bad TIF decisions - and pay far more than they are clearly told about.

It is not asking much that the lies about TIF districts cease.  We should be given enough information to be able to evaluate - why this TIF, why this place, why this footprint, and why this project.  Instead we are getting almost no pertinent information and much that is available for disclosure, is being deliberately kept from the public.  This is an outrage that all Councillors should demand stop immediately.

One more item that  needs to be shown the light of day in the proposed 2013 related to the "Economic Development Bonds Fund".  In last year's budget ordinance covering the 2012 budget, it was estimated that this fund would have an end of year 2012 cash balance of POSITIVE $5.3 million.  Now they estimate an end of year 2012 cash balance of NEGATIVE $2.0 million and project an end of year 2013 cash balance of NEGATIVE $6.7 million.  What happened to cause a $7.3 million swing in the 2012 budget for a fund whose annual costs amount to only $4 million. You draw your own conclusions as the validity of the budget projections and the wisdom of being satisfied with such a huge negative cash balance in a fund used to pay Indy's debt.  All I know is I wouldn't want to hold one of those bonds.

Monday, August 20, 2012

Thursday's Budget Hearing - Parks

The Parks committee will consider the Parks budget this Thursday, beginning at 5:00 pm (not the usual 5:30) in room 260 of the City-County building.

Limited information is online, with Prop 285, 2012, providing the most detail. As I compare budgets, I will be referring to information in Prop 241, 2011, that set the 2012 budget.


After years of being slashed, the requested 2013 Parks budget would actually grow by 3.9% (+ about $0.8 m) over this year's budget.  The total budget requested is $21 million.  While salaries and benefits sees a comparatively modest $65,000 increase, the lion's share of the increase comes in the piece of the budget representing contracts for services and the like.  This piece of the budget would rise 9.3% to $7.5 million.

Curiously, the number of employees would grow by 44.81, to 322.80.

Wednesday's Budget Hearing - Prosecutor's Office & More

Wednesday's budget hearings will be before the Public Safety & Criminal Justice committee.  The meeting will begin at 5:30 pm in room 260 of the City-County Building.

On the agenda are the budgets for:
Marion County Prosecutor and Child Support Division
Marion County Public Defender’s Agency
Community Corrections
Limited information is online, with Prop 285, 2012, providing the most detail. As I compare budgets, I will be referring to information in Prop 241, 2011, that set the 2012 budget.

The Prosecutor's Office and Child Support Division will be handled as separate budgets, so I will do so here, as well.


The Prosecutor's budget for 2013 would increase by 4.0% (+ about $0.9 m) over this year's budget, if adopted.  The lion's share of the increase would go to salaries and benefits, with a $0.8 m increase to $18.8 m.  The total requested budget is $23.6 m.

The employee count, however, would rise by only 3.73 to 303.73 full time equivalents.


The budget request for the 2013 Child Support Division is a 2.9% increase (+ about $100,000) over this year.  The total request is for $4.4 m with $3.1 m going to salaries and benefits.

The number of employees would rise by 18, to 97.  This is curious, as the salaries and benefits budget piece only rises by about $90,000.


If adopted, the 2013 budget for the Public Defender Agency would rise by 3.3% (+ about $0.6 m) to $18 m.  The lion's share of the increase is in the salaries and benefits piece of the budget (+ $0.4 m).

The number of employees would rise by 8.78, to 205.78.


The requested 2013 budget for Community Corrections is a drop of 1.6% (- about $0.2 m).  The lion's share of the drop is in the piece that accounts for contracts, including for services as well as for leases and other things.

The number of employees would drop by 0.37, to 70.63.

Budget Hearings Begin This Week - On Tap Tuesday, Mayor's Budget & More

The Admin and Finance committee of the City-County Council will kick off the first of dozens of hearings on Mayor Ballard's 2013 budget (see agenda).

Limited information is online, with Prop 285, 2012, providing the most detail.  As I compare budgets, I will be referring to information in Prop 241, 2011, that set the 2012 budget.

Normally I'd go into the overview of the budget, but no overview numbers are available as of now.  Even if I were to start my own spreadsheet, I would be missing critical information.  So, lets just jump into the pieces of the budget to be up for hearing this week.  I'll split the three days of hearings into three blog entries. 

First up - Admin and Finance - Tuesday, August 21 - 5:30 pm in room 260 of the City-County Building.  Hearings will be held on the budgets for
Office of the Mayor
Office of Finance and Management (Finance, Purchasing & HR)
Office of Corporation Counsel
Office of Minority and Women Owned Enterprises
The last office is new.  This function is currently within the Office of the Mayor.  I will keep these two together for a proper review of the 2013 budget as compared with the current budget, otherwise, one might get an improper perspective.


The Mayor's Office is seeking a 15.9% increase in his net budget (+ roughly $600,000).  When you throw in the new OMWOE, it comes to an increase in net budget of 36.0% (+ roughly 1.3 m).  The net budget requested for the two groups combined is $5.1 m, up from $3.7 m this year.

However, that is not the whole operating budget for the Mayor.  This office charges other departments and agencies for some of the services they provide.  These charges total nearly $1 million for the 2013 budget, as compared with about $0.8 m this year.

All taken together, the operation of the Mayor's office plus OMWOE is being proposed at $6 million, and increase of 33.1% or $1.5 million from this year.  The lion's share is allocated to salaries - a total proposed for 2013 of $4.9 m, up from $4.0 m. 

Despite claims of reducing the number of positions in the Mayor's Office to justify the recent obscene raises there, the number of full time equivalent positions in the Mayor's Office plus OMWOE will grow from 64.15 to 73.65, if this budget is adopted intact.


The Office of Finance and Management is seeking a 12.1% increase in their budget (+ roughly $0.8 m).  The request is for $4.1 m for salaries and benefits, and $3.4 m for contracts, with a total operating budget of $7.5 m.

OFM's number of employees would grow by 1, to 66.


The Office of Corporation Council is seeking a 2013 net budget of $615,274, down 11.3% from this year.  This office, like the Mayor's Office, charges other departments and agencies for their services.  These charges are substantial and would amount to $3.4 million in 2013.  If you look at the actual operating budget for OCC, it would rise by 2.8% (+ about $0.1 m) to $4.0 m.

OCC's number of employees would grow by 2.68, to 48.68.

Thursday, August 16, 2012

Bloggers Expose Roots of PR Campaign to Push Mass Ave TIF

The pressure has been mounting from the Ballard administration to push and/or extort the Council into approving 5 new TIF districts (with a 6th rumored to be waiting in the wings) before the recommendations of the TIF Study Commission are acted upon and therefore before significant details would have to be disclosed on those 5/6 TIFs.
At least part of the PR campaign has been uncovered and is now exposed by two fellow bloggers, Gary Welsh of Advance Indiana, and Matt Stone of Indy Student.
Welsh got the ball rolling (see "How To Get Your Political Nemesis To Sing Your Praises") when he uncovered the fact that Gordon Hendry, former so-called public servant, stands to see the company he works for, CB Richard Ellis, rake in over a million taxpayer dollars in commissions if the Mass Ave TIF goes in.  Hendry's wife is Jennifer Wagner who used to pen an outstanding blog of her own - Taking Down Words - on behalf of the State Democratic Party.  Ms. Wagner is now a spokeswoman for the Ds, even though her personal life seems more corrolated with her comments than does the actual positions of the Democratic Party.  Ms. Wagner has supported the obscene raises Ballard gave to his office mates.  She has supported the Mass Ave TIF.
In today's post (see "What the Hell is Grow Mass Ave?"), Stone reported some rooting around he did with domain names and the like, to expose the very new website for the newly invented "Grow Mass Ave".  Surprise, but the domain name was just registered this month by Wagner.  The website it already up and running - fast work that surely isn't pro bono. 
Back to Welsh's post today (see "Grow Mass Ave A Shill For Developers?"), Welsh propels Stone's report forward with revelations that Mass Ave business owners aren't all that thrilled with the proposed TIF or a developing plot to create an Economic Improvement District that could assess an additional tax from local businesses and residents in the Mass Ave area.  He lays out how the area has seen private investment in recent years, belying any need for public taxpayer dollars:
In the past couple of years, the corridor has seen continued redevelopment despite the depressed economic condition without the assistance of a TIF. On the north end of the corridor, Riley Area Development CDC is just completing a mixed use project, Trail Side, that involved razing a building formerly owned by Center Township and redeveloping a half block area into 69 affordable apartments with ground level retail/commercial space and off-street parking. The Cunningham Group opened up its second restaurant on the Avenue, Bru Burger, which has enjoyed great success, along with its first restaurant, Mesh. A microbrewery is slated to open up a block from the Avenue at the corner of Park and North, and a major mixed use project, which will cover almost an entire city block at the corner of Michigan and College, is slated to kick off next year without any government assistance.
Welsh also notes that the head of Grow Mass Ave, Cassie Stockamp, is not a business owner in the area, but runs the non-profit Antheneum.  The Mass Ave businesses already have an association to represent their interests.  The Ballard administration is always pulling in favorable comments from organizations that would like a little sugar, and this sounds like the case with Grow Mass Ave's Stockamp.
I'm not going to say it any better than Welsh - so here's the bottom line take home message for Indy taxpayers:
What should be abundantly clear to the public is that a propaganda machine has been put into place in an effort to steer tens of millions of tax dollars into the hands of private developers to redevelop an area that has already proven that it can sustain current and future development without ciphoning off much-needed property tax revenues from other taxing districts. Unfortunately, the mainstream media has simply been shilling for the Ballard administration and the private developers/architects, who stand to benefit handsomely from government handouts. This is an outrage when you consider that basic city services must be reduced because of the lack of revenues to finance them. The public must rise up and demand accountability from their elected officials. If Mayor Ballard gets his way, you will be paying higher property taxes on your homes, while these fat cats walk off with milliions of taxpayer dollars. Call your city councilor and the mayor's office today and demand that they represent the public's interest, not the fat cat contributors who are lining their pockets with campaign contributions, free dinners at five-star restaurants and tickets to sporting events.  

Paucity Of Budget Information Available Online

On Monday night, Mayor Ballard gave 6 minutes of introduction to his proposed budget for 2013.  As of right now, very little is available to the public on the City's website.

There are four Council Proposals that were introduced Monday night - Prop 282, 283, 284, and 285.  Significant information is left out of the first three, which are replete with blanks instead of numbers.  Only the last one has figures for revenue - but no details on expenditures.  For instance, it is of extreme interest where money is being transferred from one fund to another, which is normally listed in the last Proposed budget ordinance.  Yet, what we find is just a catchall "interfund transfer" instead of the usual breakdown into exactly how much is being transferred into exactly which fund.

The Office of Finance & Management webpage still has the 2012 budget details that are critical to any review of the budget - but not a single byte of information about the proposed 2013 budget.

Lets hope that the Council and County Offices aren't being held as much in the dark as the public is by the administration that claims to be so transparent.

Sunday, August 12, 2012

After Mayor's Folks Get There's - Everyone Else Can Pay More

Jon Murray, IndyStar reporter, did an excellent job in today's Star running down the Mayor's proposals for fixing the supposed $60 million shortfall in this year's City budget.  I still do not understand why we have a shortfall of this magnitude - but we have time to work on that.

I still have family in town and don't have much time to sit and blog - but the idea of getting rid of the homestead credit appalls me so greatly that I need to at least spit out a few thoughts that might give you the gist of my reaction.

First, if you pay more in taxes - its a tax increase.

Getting rid of the homestead credit clearly demonstrates that this Mayor and his administration never did care about the residents of Indy.  It just reemphasises the theme from previous budgets - cut parks budget each and every year - cut the library with token efforts to get them a million or two lately - cut IndyGo --- all the basics for quality of life for those of use who want it to be a great place to live.
The Mayor's people got their $20,000 raises - so what do they care if everyone else has to take a cut or pay more.

The homestead credit is real money saved for real people.  Money they can use to a) keep their homes, b) buy their groceries, c) put shoes on their kids' feet.  Its not just $22 per person, either.  Maybe the math works out when you throw in people who have reached the caps and no longer benefit from any property tax credit or deduction and all the people who do not own their own home.  But there is no way that the average sacrifice will be $22 for the people who are benefiting from the homestead credit - and it is disingenuous to suggest that is the case.

If the homestead credit were to be legally removed by the State Legislature, then the new tax revenue would flow to all the taxing units - not just to City coffers.  Is the Mayor suggesting he split the new millions with all the units, or keep it all to himself? 

One of the reasons belts needed to be tightened in all the taxing units except the City (for the City, revenues increased each year until the 2012 budget, when the Mayor just took $40 million from the consolidated downtown TIF to ease his pain) is that the property tax caps are in place to protect property owners. 

The TIF districts in Indy help push taxpayers into the tax caps and account for over 30% of the 'lost' revenue for the taxing units.  Ironically - the Mayor has 6 new TIF districts he wants to push through the Council so he has more gravy to spread to his favorite developers.  But he wants YOU to make up the difference in City coffers by donating your homestead credit to the cause.
So, here's the diagram of how Mayor Ballard sees public money --
give as much taxpayer money to favorite developers as you can lay your hands on - sell the city's assets when necessary
give obscene raises to a handful of co-workers
reopen union contracts where you still have unions in the City and cut raises
cut parks budgets
cut Library and IndyGo budgets
ask homeowners to dig even deeper in their pockets and give up their homestead credit to pay for the loss of taxes to the City due to the tax caps, 30% of which is because of TIF districts/slush funds
create new slush funds, aka TIF districts, because all the other slush funds have been run dry - blackmail the Council into creating these new slush funds by withholding your signature from the partner benefits ordinance
give as much taxpayer money to favorite developers as you can lay your hands on 
Oh  - one more thing -- the Pacers will be getting tens of millions more money from taxpayers just as soon as this budget and the 6 new TIF districts are all approved.

Wednesday, August 8, 2012

Portland, Maine, To Study TIF Policy

An alert reader of this blog sent me a link to a Portland, ME, newspaper article regarding that City's venture into studying its policies on TIFs.  Thank you for that.

I can't say if our City's Study Commission had any role in Portland's decision to move in the same direction, or if TIF policies are finally pushing enough on common sense that cities are deciding reviews are necessary so elected officials know what is going on and how they should move forward.

For perspective on the numbers involved in Portland's TIFs, a little comparison with Indy might be in order.  Portland, like most cities, is not the entire county.  It covers 52.6 square miles, while Indy stretches to 372 square miles.  Portland also has a much smaller population - 66,194 vs Indy's 829,718 by the 2010 census.

The headline to Randy Billings' article in the Portland Press Herald kind of says it all:

Time to rein in tax breaks for Portland developers?

Lacking a framework for how to use tax increment financing fairly and wisely has led to something of a free-for-all. Now, some city officials say it's time to set limits.

Portland's TIFs appear to be different from ours in a couple of ways (all gleaned from the article, so do not take this as comprehensive research on my part).  First, they include tax breaks for 30 years for the project property- like a very long term abatement rolled into a TIF.  Second, the developer is on the hook for the tax break, instead of the city, if a project "went belly-up".
"When we approve TIFs absent a policy context and the rationale is little more than cheerleading, then we're sending the message: You get a tax break, you get a tax break -- everybody gets a tax break," said Councilor Kevin Donoghue.
Sounds familiar.

The Portland TIF process also appears to be different than ours, as there are goals associated with each project, but no clawbacks if those goals aren't met:
Each TIF agreement is unique, and spells out why that particular TIF is needed, the public benefit, and usually includes the projected number of jobs created.

But those figures are not firm commitments for which the developers are held accountable.

"There is a tendency to overpromise," said Charles Colgan, a professor of pubic policy at USM's Muskie School, who believes TIFs are a valuable tool for towns to stimulate economic development.
Like Indy, Portland has seen successful TIFs and unsuccessful ones.  So, like here, there is hope that forethought into which ought to be created and which avoided would result in better use of taxpayer funds.

While some of the particulars are different, the pursuit of a City Council to understand what it is implementing and what policy is actually in the best interest of their City, is to be applauded.

Tuesday, August 7, 2012

TIF Study Commission Recommendation # 5 - Public Access To TIF Accounting

For my fifth choice of a common sense recommendation from the TIF Study Commission, I am bundling a couple of items that are meant to 'establish transparent financial practices, accounting, reporting and monitoring'.

These include creating the types of data that should be monitored for established TIF Districts, including whether goals are being met, creating a standardized database for evaluation of the performance of the TIFs, and making it easily available to the public on a City TIF website.

Remember, Indy's TIF districts :
* consume over one tenth of all the assessed value of all the real estate in Marion County
* generate roughly $100 million in property tax revenues every year
Compare that to the roughly $340 million sent to the City/County coffers from property taxes and you can see what a huge fraction has been set aside, and which the rest of us taxpayers must make up with higher taxes until we hit the protection of the tax caps.

With the gargantuan size of our collective TIF Districts, monitoring them and making the data regarding them public, should be of the highest priority.

The exact wording is (click here and scroll to page 20 of the pdf) :
2) Establish transparent financial practices, accounting, reporting and monitoring. Specifically, the MDC, in coordination with the Controller and Bond Bank, should:
a. Engage a third party review of all TIF financials and documentation to establish a uniform documentation, reporting, tracking and monitoring system and to document Marion County process and practices in a Marion County TIF Handbook; Create a uniform application that will be used to capture TIF information, preserve institutional memory and monitor project outcomes (number of jobs, for example) in comparison to agreed upon outcomes.

b. Build a TIF database for the collection of consistent information which can be used in the evaluation and analysis of TIF transactions and data.

c. Create and maintain a TIF website which would be a repository of the TIF data and information made available to the public.
I can tell you that the lion's share of the data about TIFs that I have gathered over the years has come from the Indiana Department of Local Government Finance, where some must be reported.  Our local "transparent" Ballard administration is very slow to give out information.  So, a website that must be maintained with required data would bring TIFs out of the shadows and into the sunlight.  I am always in favor of that sort of thing. 

Want to see how the money in the TIF near you was spent last year?  Look it up online.  If you don't know what they are doing, how can you voice your opinion and help change the direction, if need be?

Monitoring is important beyond the public access point.  If the City isn't watching what these huge financial vehicles are doing, we stand to get surprised.  More than two people should be able to review the performance numbers, as well.  It bears repeating that, combined, our TIFs cover about 1/10th of all taxable property in Marion County and generate about $100 million in property tax revenue each and every year.  The ongoing health of these districts affect us all - as they are backed with the moral obligation of the City and any associated debt WILL be paid, no matter whether that means services have to be cut to pay off the bonds or not.

Monday, August 6, 2012

TIF Study Recommendation #4 - Council Vote On Excess TIF Revenues

The fourth of what I view as a common sense recommendation of the TIF Study Commission is the one requiring approval by the City-County Council for any expenditure of excess TIF revenues of $1 million or more.  (click here, scroll to page 22 of the pdf; next to last item)
d) Require Council approval for any transfer from a TIF account that exceeds $1 million, unless it is a bond payment.
Of course this makes complete sense.

Had this recommendation been in place, the $8 million that goes annually to the Pacers from the excess funds in the consolidated downtown TIF would have gone to the Council for a vote.  Likely, the Council R's would have been strong armed by Ryan Vaughn to rubber stamp the Mayor's decision, but at least they would have been on the record.

In 2011 alone, along with the Pacers' payment, the Council would also have had to vote on:
$9 million to the Georgia Street project
$3.5 million to the Bush Stadium project
$4.6 million to Angie's List
$3.5 million to City Market project
In 2012 they would have had to vote on some, if not all, of the $40 million being taken from the TIF to balance this year's budget, under the guise of repaying the City for downtown infrastructure improvements.

This kind of oversight is prudent, increases transparency, and gives the public a better chance for evaluating and commenting on the expenditure.  Without it, the excess funds serve merely as a slush fund for a sitting Mayor who is more interested in handing out public funds for private projects than retiring debt and the TIF paying off that debt.

Friday, August 3, 2012

TIF Study Commission Recommendation # 3 : Upfront Criteria and Justification For Creating TIF

My third choice for common sense recommendation of the TIF Study Commission is that there should be a clearly defined evaluation process that provides key information justifying the creation of a TIF district and selection of the key project within that district.

This is what I have been relaying as the justification for "why this TIF - in this place - with this footprint - for this project".

The text of the recommendation is (click here and scroll to page 20 of the pdf):
m. Require a cost/benefit analysis, including a discussion of the following as part of all TIF project applications:
i. Use of a project TIF as compared to a TIF district, which has a wider footprint.
ii. A description of how the project plan aligns with the county-wide comprehensive planning document.
iii. A description of how the project plan aligns with the local/neighborhood planning document.
iv. A market analysis of the existing, possible or likely future free market unsubsidized private development in the proposed geographic area.
v. Analysis of recent changes in the assessed value in the geographic area of the proposed project.
There are several very important aspects to this recommendation. 

First is the question of why this project cannot provide enough growth in AV by itself, and the future tax dollars flowing from this parcel alone is not enough to finance the City's investment?  Why does this project require other property to secure the finances?  There should be reasons for a TIF footprint beyond it being a means to raise further cash.

There is reference to a county wide plan for economic development, which is envisioned as being akin to the land use plan referred to as the 'Comprehensive Plan'.  This is tremendously important.  As things stand now, investment follows influence, not need.  This has led to public mistrust of the motives of those in power to make decisions for TIFs, abatements, and other expenditures of public dollars.  Currently there is no plan, and that is simply absurd when you think about it.

The recommendation for a market analysis to show that public investment is necessary in order to spur private investment in an area is a requirement that is totally lacking today, but would be invaluable to the decision making and public trust that "this TIF, in this place, with this footprint, for this project" is appropriate.  If investment was already occurring in an area, then why take that growth in AV away from the taxing units and away from the taxpayers?

How very common sense is this set of recommendations - let's have a plan, let's set criteria for evaluation of proposed new TIFs, and let's make sure that investment wasn't already going to happen in the area before squandering tax dollars on a particular project.

Wednesday, August 1, 2012

Huber Cashes Out of One Government Job to Another

IndyStar reporter Jon Murray is reporting that Deputy Mayor Michael Huber is leaving his post with the City and taking a spot at the Airport that pays a whopping $190,000 a year.  Deron Kintner, currently Director of the Bond Bank, is being supported by Mayor Ballard to step into Huber's old post.

So, Huber is moving from selling taxpayer assets, creating TIFs, and spending excess TIF funds on the projects of favored developers --- to -- keeping hundreds, if not thousands of acres of land OFF the tax rolls so that the airport can make $65 million more a year in clear profit.  This is the airport city concept I have mentioned before, that is a shell game swapping private property taxes paid by private entities on private land ---  for ----  airport profits from land leases of government owned property for private businesses that have no need to be located at an airport, nor which assist the airport in its mission of providing air transportation functions.

Its a double dip that keeps taxpayers digging deeper into their pockets, while favorite local developers become accustomed to large handouts and forgiven taxes.

Edited to add: I guess they didn't clear those folks out of the airport in order to save money after all.  The $200,000 'saved' is just about Huber's salary.