Tuesday, August 12, 2014

Hallelujah !! Its Raining Cash Again at the CIB !!!

I've come to the conclusion that the CIB is manic-depressive.  But, I could be wrong.

The CIB engages in cycles where it says -
we're going broke, give us more taxes
thanks, now we're okay
wow ! we've got more money than we need ! let's throw some away !
we're going broke, give us more taxes......

We're Going Broke

The latest cycle began in 2012 when the CIB said they couldn't spare a dime to help fund public safety.  They had debts coming due for which there was no money.  You'll recall the drama played out with the CIB, the Mayor, and the Democrats on the Council back when Brian Mahern was VP.  The Council voted to tap the CIB for a $15 M payment in lieu of taxes.

Here's what I wrote about the contentious Council Muni Corp Committee meeting at the time:
On the actual meat of the reasons for this PILOT, Councillor Brian Mahern kept bringing it back to the fact that the Mayor's proposed budget would let police and fire numbers drop even further.  He said there are already 100 fewer police than at the time of the merger and by not holding recruit classes, the numbers would drop even further.  He noted as well, that the CIB relies heavily upon IFD and IMPD services for the many events that are held in their facilities.
While Councillor Lutz primarily discussed the legal aspects, Councillor Cardwell brought up all the trickle down taxes that he said were due to the CIB, indicating that was more than enough help to the City.
Ann Lathrop mentioned "I feel your pain" and later said she had a fiduciary responsibility to the CIB "not to run it into bankruptcy".  Oh pah-leez on both counts.
The PILOT was reversed.  Later a deal was struck between Council President, Maggie Lewis, and Acting Mayor, Ryan Vaughn, to increase the admissions tax and car rental taxes for the CIB, with the City getting a fraction of that new money back.  This deal netted the CIB an additional $5.6 M per year.

Thanks, Now We're Okay

At the CIB's 2014 budget hearing, Ann Lathrop laid out how the new money would be saved in a reserve fund so that upcoming debt could be paid off.  There are two debts due, for which no money has been put aside. 
First, there is an outstanding principle of $34 M due to the so-called "mall investors" who loaned the City money back when the Circle Centre Mall was just a hole in the ground.  That is due in 2017.  The Indy Star is part of that group, by the way.
Second, there are two $9 M loans that the State made to the CIB as part of the huge 2009 bailout.  Those are due in 2019 and 2020.
Lathrop testified that they needed to put this new $5.6 M away every year just to pay these outstanding loans.
Here is the shortest clip I could gather from the September 12, 2013, CIB budget hearing that lays out the need to use the new money to make ends meet.  They have capital improvements to make, like new carpeting for the Fieldhouse, as well as the two loans to repay in the near future.  No fluff, just necessary revenue.  Councillor Jason Holliday asks some follow-up questions of Lathrop, and Councillor Monroe Gray has some back and forth in between.  (click here to view the entire hearing and choose "Sep 12, 2013 Video")

Wow ! We've Got More Money Than We Need ! Let's Throw Some Away !

Fast forward to yesterday when the CIB board voted 4-2 to throw away $5 M on the IUPUI Natatorium project.  Yes, folks, the CIB had more money than it needed.  Go figure.

Councillor Lewis, who sits on the Board, was one of the two NO votes.

We're Broke, Give Us More Taxes

Just wait, its coming.  This pattern is the same one we have seen play out over and over and over again.

Some might accuse the CIB and its President, Ann Lathrop, of simply and continually lying about the true state of finances of the CIB.  Me, I think the organization is just manic-depressive.  But, I could be wrong.


Anonymous said...

There is no money available to reimburse the city for its public safety resources used for CIB event related traffic control and beefed up security-the concentration of IMPD officers downtown taking away from neighborhood coverage-but IMPD officers routinely patrol the Simon mall properties and downtown mall parking garages-all at taxpayer expense. Again-those patrols take away from time spent in neighborhoods. And just because private security firms are engaged by the CIB for basketball, football and other venues for inside security detail, doesn't mean we taxpayers aren't ultimately footing the bill for those public safety costs which come out of the CIB's budget.

Had Enough Indy? said...

Exactly ! Well said.