Thursday, September 26, 2013

There Needs to Be an Independent Investigation of the ROC Deal

Tracing the tentacles of this deal are madding.

I refer to the deal made to lease space in the old Eastgate Mall for a Regional Operations Center - in time for the 2012 SuperBowl.  The ROC was to be used as the heart of surveillance for the public gatherings - Homeland Security, IMPD, IFD central commands combined with federal agencies in one spot away from the action downtown.

The latest tentacles to be revealed were broadcast during last night's WTHR 11 O'clock news.  Sandra Chapman did an interview with Alex Carroll, owner of the facility.  He discloses that there was a secret deal with the City that involved a sizable up front payment to him, and that the City was responsible for drafting the lopsided lease agreement that puts all of the maintenance burden on the taxpayers.

Gary Welsh, over at Advance Indiana, did an excellent job of recapping the interview and putting what is known about the whole deal in perspective.  Previously, Paul Ogden described how lopsided the agreement is and that representatives of City Legal and the City Controller refused to sign off on the lease - leaving then Public Safety Director, Frank Straub, on his own (see here and here)

There must be an independent investigation of this deal.  All business conducted on behalf of the public must be made public - there can be no secret deals.  What is disclosed to the public must be accurate - officials cannot say they are making lease payments when they are paying off a loan directly.  The City may not take out a loan.  The City cannot float a bond without disclosing what that bond is to be used for and what dedicated revenue stream will repay it.

At this point it is unclear IF there was a secret deal, IF there was a sizable upfront payment and how much that was, IF there was a concerted effort to keep information from most of the Council and the public, IF there is a bank loan or a bond, and IF campaign contributions were part of the big picture.

The lease was put forth as Prop 102, 2011 with no lease details.  It originally was for 210,000 square feet, but that was reduced to 76,000 square feet before passage by the full Council on May 16, 2011.  The sponsors of the proposed lease were Councillors Ben Hunter and Mary Moriarty Adams.  The Eastgate Mall is in Hunter's district, but almost in Adams'.  At the time, Hunter Chaired the Public Safety Committee and Adams was the senior Democrat on that committee.

Below I have embedded a portion of the April 12, 2011 meeting of the Admin & Finance committee meeting - the first of two committee meetings to consider this lease.  This portion begins after Homeland Security Director Gary Coons' half hour presentation on what a ROC would be and why one was needed.  The embedded portion are the questions that the Councillors had.  Jon Mayes, Deputy Director, Special Counsel for the City responded to the questions.  It is instructive as to how little information these committee members were given initially.  Look for Councillor Barbara Malone's question of whether there any upfront fee for renovation of the facility and Councillor Jackie Nytes inquiry as to whether construction had already begun on the facility.

The answers by Mr. Mayes include that this was to be a 20 year lease, with no upfront money and all construction and renovation costs amortized in the lease payments.  Those payments were to be $1.2 million per year.  The Proposal was amended later and his statements may only refer to the introduced situation.  Construction had already begun on this site by the time the committee was given Prop 102 to consider.

There needs to be a full vetting of exactly what the arrangements were, who authorized them, and how honest everyone has been in divulging the details of that arrangement.

Thursday, September 19, 2013

IMPD Budget Recap - It's Probably Not What You Expected

Last night's budget hearing for IMPD was quite well attended.  For those who missed it, let me recap.

Public Safety Director Troy Riggs, Police Chief Richard Hite, and Public Safety Deputy Director Valerie Washington present limited IMPD budget numbers; noting only that the money flowing to IMPD from one fund (the IMPD General Fund) would remain the same, at $187m.  

In 2014, the want to hire 35 civilians to take over duties now conducted by sworn Officers, allowing those Officers to return to patrol duties.  They also want to set up a recruit class of 50 new hires.  That, combined with 10 civilian hires this year, make the 90 new sworn Officers that is being bandied about in the media today.

But, in order to accomplish all of this, they need to have their budget cut by $5.65 m.

Now, I know you want to go back and re-read that last sentence.  Go ahead.  I'll wait.

Yes the IMPD budget is being reduced by $5.65 million.  This includes a $7.09 million decrease in salaries from the current year budget.  No wonder they glossed over all the numbers except that one fund's expenditure total.

So you say, but Pat, what about the $1.4 million in fees to be charged the Officers for use of their take-home cars?  Well, I assume that's in the budget somewhere, but there is  no line that says 'fuel surcharge fee' in the numbers available to the public.  And, all I can say is, what one hand giveth, the other taketh away.

And you say, but Pat, what about the two tax hikes the Council gave the CIB - the increased ticket tax and car rental taxes?  Wasn't the first year's $6m supposed to go to IMPD and IFD?  And, after that isn't 25% of those increases to continue to flow to IMPD and IFD?  Why, yes, that's true.  But the year began on March 1, so the is only two months of 100% CIB 'public safety' revenue in 2014 and the rest is at 25% - so maybe $1m to IMPD. 

But, Pat, you say, what about the proposed increase in the old IPD Tax District?  Isn't that assumed in the 2014 that is on the table?  Why, yes - yes it is.  I know they say it will net about $3 million in additional funds, but the additional revenue IMPD collects is only $1.6 m.  And it actually should show up as a decrease in the property tax circuit breaker.  But that number is just about the same as it was for the 2013 budget.  So, you got me.  I'm sure its in there.  Yet again, what one hand giveth, the other taketh away.

What about the $9 million that is supposed to come from elimination of the Local Homestead Credit?  Surely that's in the IMPD budget.  Ryan Vaughn and Troy Riggs are all over the media saying that if that credit isn't eliminated then the IMPD budget will lose $9 million and there could be no new hires next year if that happens.  Well, this one gets a 'not really'.  Should the Local Homestead Credit be eliminated, the IMPD budget would actually go down about $300,000.  IMPD is better off if its not eliminated.  The elimination frees up County Option Income Tax revenue, but IMPD doesn't see a penny of that money.

Lets add up all the new money that the Mayor Ballard, Vaughn and Riggs imply is in the IMPD budget, shall we?  $1.4 million in fuel surcharge fee, $1 million from the CIB, $1.6 million or $3 million from expanding the old IPD Taxing District, and the $9 million from eliminating the Local Homestead Credit - sounds like $13 million to $14.4 million more money to IMPD, doesn't it?

But - nope.  No $14 million more for IMPD.  The 2014 budget really is $5.65 million less than 2013.

Its all a game to use public safety to secure public support for this round of tax changes. 

They Call it "COUNTY" Option Income Tax for a Reason

In a previous blog entry I showed graphs comparing the impact of eliminating the Local Homestead Credit, expanding the old IPD Tax District, and doing both, on various units of government.  In that I showed only the aggregated impact on City and County government.  That is the government run out of City Hall.

Now, because of obfuscation and deliberate confusion being tossed around by the Mayor's Office to the media, I'd like to show you what effect these tax changes would have on the pieces of City and County government.

But, first...

The Local Homestead Credit is a reduction in property tax bills that is paid for by using County Option Income Tax (COIT) revenue.  They call it County for a reason - the income taxes collected go to the COUNTY.  Not the City of Indianapolis.  Not to the IMPD fund.  Not to the IFD fund.  But to the County of Marion. If the Local Homestead Credit is eliminated, there would be more COIT money to spend on other things.  But, again, it is COUNTY Option Income Tax.

There are 6 different property tax districts that provide money to City and County government.  Each has a different footprint in Indianapolis/Marion County.  I will give you the impact data for each of these at the bottom.  But, for clarity and a bit of simplicity, I want to concentrate on the tax impact on the Police district, the Fire district, the consolidated City, and the consolidated County.

So, without further ado...

The overview of how eliminating the Local Homestead Credit, expanding the old IPD Tax District, and doing both will affect the coffers of the Police, Fire, City and County.

The scale is Millions of Dollars
As you can plainly see, most of the additional revenue would go to the County government coffers.  That's the Sheriff, Clerk, Prosecutor, and more.  By comparison, IMPD sees only a blip in increased revenue, Fire less so and nearly imperceptible changes for the City. [edited - my mistake here, the consolidate County is actually the City's general money - but none of that fund is used for police or fire.]

Looking more closely at each individual group...


The scale is Thousands of Dollars
The Police fund would see its best gain if only the old IPD Tax District were expanded and slightly less if both changes are made.  It sees a loss of just over $200,000 in revenue if only the Homestead Credit is eliminated. 


The scale is Thousands of Dollars

The Fire fund would see less than half the gain that Police see if only the old IPD Tax District is expanded.  It would experience a loss of almost $800,000 if only the Homestead Credit were eliminated.  And it would see a modest loss if both changes are made.


The scale is Thousands of Dollars
City funds would grow by a bit if the old IPD Tax District were expanded.  It would see roughly a $2000,000 loss if the Homestead Credit were eliminated, and about $150,000 loss if both are enacted.


The scale is Millions of Dollars

The County gets buckets-o-cash if the Homestead Credit is eliminated and next to no change if the old IPD Tax District is expanded.  Please note that while the scale of the preceding three graphs has been Thousands of Dollars, this scale had to be Millions of Dollars.

Here are the exact numbers for all 6 tax districts.  You'll notice an additional 'County' district that brings in even more money to the County coffers.  Please do not ask me why there are two County districts.  Loss of revenue is highlighted in red.  Gain in revenue is black.

HSC Elim. Only
IMPD Exp Only
Marion County
Indianapolis Sanitation (Solid)
Indianapolis Police Special Service
Indianapolis Fire Special Service
Indianapolis Consolidated City
Indianapolis Consolidated County

So, what have we learned here today?  While the Mayor's office continues to connect these tax changes with some improvement in IMPD's budget, it is a fabrication intended on selling the tax changes.  Expanding the old IPD Tax District does have a small, but real, affect on IMPD's revenues.  But eliminating the Homestead Credit has a negative affect on IMPD. 

It is a shame that we cannot get the real story from the Mayor or his Chief of Staff and that we citizens have to resort to examining the minutia of the numbers to learn the truth.

Wednesday, September 18, 2013

Gas Tax "Windfall" - Not What the Mayor Makes it Out to Be

Here's how it looked back on August 14, 2013, when IBJ reporter Kathleen McLaughlin penned an article about Mayor Greg Ballard's proposal to float a bond to add revenue to the nearly depleted RebuildIndy fund:
City officials said Thursday that they intend to spend $350 million over the next three years to improve streets, sidewalks, trails and bridges.
Most of that money will come from existing funds, but $135 million will be borrowed against increased state transportation funding.
...The city expects its share of state gas tax revenue to increase by $7 million, and will leverage that into the bond issue.
The increase in gas tax revenue sent to the City from the State was refined to $7.8 million.  That's were it stood on August 29, when the Public Works Committee of the City-County Council rejected Proposal 250.  I noted in a blog entry the next day that the Mayor's statements to the press were far from the truth.

Well, add one more lie to the list.

I received the real gas tax revenue numbers from the State Auditor's office.  The estimated 2013 distribution of the "Motor Vehicle Highway" revenue to the City of Indianapolis and the County of Marion is $20.25 million.  The estimated 2014 distribution is $23.75 million.  That is a difference of $3.5 million.  Less than half of the $7.8 million the Mayor, Bond Bank Director/Deputy Mayor Deron Kintner, and DPW Director Lori Miser have been touting as the windfall that will pay for the bond.

I added the color highlights to better direct attention to the figures applicable to the City and County

As I noted earlier, the Proposal actually called for annual payments of $9 million on the bond.  So, given that the real gas tax revenue increase is a paltry (by comparison) $3.5 million - they had plans to tap $5.5 million every year for 30 years of money that is usually needed for other things in DPW.  That's not only taking the next generation's increased gas tax, its also trading existing services that by rights should remain in place for the next 3 decades.

There still remains the $240 million of revenue that is already earmarked for road and sidewalk repair over the next 3 years - and that is no small amount of money.

But, to hear Greg Ballard tell it, if the Council does not allow the City to float this additional bond, there will be no infrastructure improvements at all.  That's the story he and his administration are repeating to the media, to the neighborhoods, and to the Council.  It is all a pack of lies.  Mayor Ballard even went so far as to accost Democrat At-Large Councillor Zach Adamson at the Hob Nob with "We're going to murder you guys on this.  You're dead."

They must think they have a lock on the press, a lock on what information gets to the neighborhoods, and a lock on the facts as they prefer to make them out to be.  They must think we are all stupid.

As more of the truth comes out, and it will, I am increasingly grateful to the members of the Public Works committee who voted against this fiscally unsound and cynically presented Proposal to float these bonds - Councillors Vernon Brown, Pam Hickman, Bill Oliver, Monroe Gray, and Zach Adamson.

Friday, September 6, 2013

Sound Bites - Mayor Greg Ballard Unplugged

I'm tight on time this morning, but I simply must recommend Jon Murray's stunning interview with Mayor Ballard.  It wasn't in the paper version this morning, unfortunately.  But it IS posted online at IndyStar.  Murray tosses out questions sent by the public via Twitter.  It is amazing how uninformed and short tempered our Mayor is. 

A must read:  click here

Wednesday, September 4, 2013

Principles Matter - But, Evidently, That's Negotiable

Some power brokers in the Republican Party and some power brokers in the Democratic Party only care about how much money flows their way.  To them, there is no 'enough'. 

There is no 'enough' just because your parks aren't kept up.  There is no 'enough' just because there are too few police and the City can't afford to give them contractual raises.  There is no 'enough' just because all the sellable public assets have been sold. There is no 'enough' just because good public servants are being laid off so that well-connected organizations can get more lucrative contracts to do their jobs - and poorly at that.

There is no 'enough' as long as the City can cash in future generations' welfare for more dollars today.   There is no 'enough' as long as there are more square miles that can be turned into TIF slush funds.  There is no 'enough' as long as the City can gain, even if that gain causes an equal loss to Township Schools.  There is certainly no 'enough' as long as taxes can be raised.

Jon Murray, IndyStar city hall beat reporter, wrote an article that was posted last night online and delivered to subscribers on paper today, that clearly shows how little residents and taxpayers mean to some of those elected to serve the public - not elected to serve themselves and their money backers.  Paul Ogden, over at OgdenOnPolitics, commented on the story last night.

Murray reports on negotiations between Council President Maggie Lewis and Mayor Ryan Vaughn.  These negotiations are about eliminating the local homestead credit and expanding the old IPD taxing district.  He says of those two 'tax changes':
The combined upshot would include a tax cut for central parts of the city, higher taxes for outlying areas and a hit to township school districts’budgets. 
Council President Maggie Lewis, a Democrat, said the Republican administration was holding firm on the tax proposals but has been open to discussing options that include tapping into utility sale proceeds and unused money from tax-increment financing districts.
That could soften the blow of the tax changes by paying for council Democrats’ priorities, she said.
Its not about softening the blow to taxpayers.  The power brokers behind Lewis want those taxes raised - the more the merrier.  Schools be damned, taxpayers be damned - keep the tide of cash flowing ever greater.  Lewis is actually trying to find MORE money to spend to 'justify' voting for raising taxes.  If she cared about the public interest, she'd be negotiating to supplant some or all of the tax hikes with money in the $80 million 'fiscal stabilization fund' that was created with the utility sales money.  But, no, its all about ever more money for the power brokers and the well connected developers and the campaign contributors.

Lewis and Vaughn are just trying to soften the blowback on Councillors who vote for these tax increases.  They are trying to come up with a one-year token infusion of extra money into the budget to somehow bedazzle the public with a forever-year increase in taxes and hit to Township Schools' budgets.

Lewis' branch of the County Democrat Party is as corrupt as Vaughn's branch of the County Republican Party.  And all they want is more access to your purse so their 'friends' can broker more bond sales, lobby for more deals for their clients, land more contracts, and turn their campaign contributions into more tenfold taxpayer handouts.

There still are Councillors who act on principle and for the public good - a couple, all of the time - some, only 'negotiating' that principle away from time to time.   It is up to these Councillors how the City will move forward.