Big Night At Rules Committee

The City-County Council Rules Committee will be taking up some big issues tonight, including partner benefits for City/County employees, and an ordinance banning blackballing of hotel workers who preveiusly worked for a temp agency. 

While most people attending will be interested in one of those two, I do want to make mention of an additional proposal that,if passed, would seek a half million loan from the state and then increase your taxes in 2013 to pay it back.  Hmmm...
Prop 168 does not say what purpose the half million would serve, just that it would be deposited in the City's Cumulative Capital Development Fund.  According to the budget for 2012, this fund was estimated to have over $3.7 million fund balance at the end of this year.  They used this fund to handle some of the property tax circuit breaker credits, eating into the over $8.8 million beginning balance. (see p 82 and 33 of the pdf) So why they need to feed this fund with a loan and add to our taxes next year is not clear.

Prop 179, sponsored by Councillor Brian Mahern, would establish a new requirement for a hotel to qualify for its annual operating license from the City.  No hotel would be able to enter into a services contract if that contract contained a stipulation that the hotel could not employ a person who had previously worked for the services agency.  This practice traps people in the employ of these temporary agencies and their attendant low wages with no benefits.  The hotels were quite happy to hide behind the skirts of the maids and other hotel workers in petitioning for more and more taxpayer funds to flow to the ICVA and the CIB - then unceremoniously cut these workers' jobs in favor of these black-hearted outsourcing agreements.
Prop 213, sponsored by Councillors Mansfield, Adamson, Barth, Hickman, Lutz and Hunter, would make various benefits available to City and County government employees who are in domestic partnerships. To qualify, the couple would have to be living together for at least one year and file a Domestic Partnership declaration the Human Resources.  The benefits provided to the partner would be the same as those now afforded to a spouse of an employee - such as health insurance and pension benefits - and family/medical leave would be provided to the employee for situations arising with their partner.  Should the domestic partners cease being a couple, HR would have to be notified immediately.  All benefits provided to a partner would be taxable to the employee.

On Prop 213, all I can say is - about time.  The State refuses to allow same sex partners to marry, stripping these couples of many legal rights married couples take for granted.  The least we can be as a City is progressive enough to provide equal benefits for partners as we provide to spouses.

The agenda for the Rules Committee lists 8 items.  The meeting will begin at 5:30 pm in the Public Assembly Room.

Public Access Counselor Sides With Airport on Open Door Law Complaint

Yesterday the Indiana Public Access Counselor issued his opinion on my complaint that the Indianapolis Airport Board violated the Open Door Law in initiating a lawsuit without a meeting to take a vote and without an established policy giving the Board President the authority to unilaterally make this decision.  I spoke with Joe Hoage, the PAC, today, to try and get some clarification of the opinion.
I have uploaded the opinion to Google Docs, as I don't see it posted on the PAC website yet.

A little background on what has happened at the Airport since I filed the complaint and since they were notified by Hoage of that complaint on May 10, 2012.  (See "Airport Board Did Not Authorize Lawsuit On Fast Park Zoning" for information about the complaint itself.)

Since receiving word of the complaint, the Airport Chief Legal Office, Joseph Heerens, signed an engagement letter with Doninger Tuohy & Bailey LLP to file and litigate the lawsuit on May 11.  Then, on May 17, both Heerens and Airport Authority Executive Director, Bob Duncan, signed an amended letter of engagement setting a $70,000 limit on the professional services contract.  On May 25, the Airport Board voted unanimously to support the lawsuit.  The posted agenda for that meeting did not, however, contain mention of this vote so that interested parties could attend and make their opinions known.

The crux of the PAC opinion is that as a general rule, the law does not mandate that any Board hold a meeting in order to initiate a lawsuit.  In fact there is a chilling court decision that says that decisions can be made in executive sessions; the same executive sessions were taking a vote is illegal.  It is his opinion, as well, that there is a policy allowing the Executive Director of the IAA to enter into personal services contracts for less than $150,000 without prior Board approval and that allowed the engagement of the law firm. He also puts value on the late board vote saying:

I would note that to clear up an impropriety, or perceived impropriety; the Board conducted a vote on May 25, 2012 in an open, properly noticed public meeting where the Board unanimously ratified the initiation of the legal action.

Heerens comments omitted  the fact that the May 25 meeting agenda does not mention the issue coming before the Board for a vote.  So, that action does not really meet any standard for proper notice and does not embrace any openness with respect to the public.  And I would have to disagree strenuously with the PAC that it clears up any impropriety.  The impropriety is not that the Board would have voted unanimously before the lawsuit was filed, the impropriety is that it did not vote and thus blocked the public from having input before the decision was final. 

The fact that they gave me 5 minutes to comment AFTER the lawsuit was filed seems to mean a lot to Heerens.  It is a sad day for public input into the affairs of government when those in power don't get the idea that input is only valuable when it has a non-zero chance of affecting the outcome of a decision.
Heerens is not unique at the Airport.  We often see this detachment from any respect for the public's opinion and the true meaning of transparancy.  He just was the one who wrote it up.  Here is his take on how all this AFTER decision posing elevates the IAA Board above all reasonable expectations:

Not only did the IAA board act in a manner consistent with the above-referenced Advisory Opinion 08-FC-136, it went above and beyond by taking several additional steps in order to ensure that this matter was handled in a fully transparent manner and that the general public was informed and made aware of the litigation in question.

Just days after the Petitions were filed, President Wells took the opportunity to publicly announce and report, at an IAA public board meeting, that the IAA had filed this litigation challenging the MDC Approval.  At the conclusion of his public comments, Mr. Wells also announce that Complainant had requested, and was being granted, five (5) minutes to address the IAA board on this particular subject.  In her public comments, Complainant indicated that the Decatur Township Civic Council was opposed to the Petitions and requested that the IAA withdraw or dismiss them.  Complainant, along with several of her colleagues, also provided certain documents to the IAA board for its consideration.  No on else offered public comments or asked to be heard.

Again I must reiterate that the Airport Board is granted by State Law the right to sue and be sued.  They have not delegated that authority, through establishment of a policy, to the sitting President of the Board.  Thus, they must make that decision through a vote at an open meeting.  I am not deterred in this interpretation.  I am staggered that a Board of such importance does not have a policy establishing a mechanism for Board decisions between Board meetings.  Every non-profit on whose Board I have served has just such a mechanism. 

As for that chilling court opinion that decisions may be made in executive session, even though there may be no vote taken - the minutes of the Airport Board's executive sessions pretty much show no decision was made regarding this lawsuit in that venue either.  In November and December's Executive sessions, yes the Board did discuss allowable matters under IC 5-14-1.5-6.1 (b)(2)(B)

(2) For discussion of strategy with respect to any of the following:
...
(B) Initiation of litigation or litigation that is either pending or has been threatened specifically in writing

In the January 20 and February 17 meetings, no such discussion was noted in the minutes.  The MDC hearing was held on February 15.  The March 23 meeting, after the filing of the lawsuit, again notes IC 5-14-1.5-6.1 (b)(2)(B) - discussion of strategy regarding litigation.  So, no discussion of lawsuits took place in the time frame most interesting for this lawsuit.  Heerens, in his comments, carefully avoids saying that they did.  He gets very general on this saying only:

While the IAA has not historically secured the vote of its board before initiating litigation, IAA board members have regular opportunities to be advised on, and to discuss, recommended proceedings, threatened and pending litigation, and the strategy about on in connection therewith.  These discussions occur frequently in executive sessions throughout the year, as permitted by the ODL.  See, Indiana Code 5-14-1.5-6.1(b)(2)(B).  For example, at this time there are nine (9) pending lawsuits involving IAA, and these matters are discussed, from time to time, in executive session.

In our conversation, the PAC noted that it is not in his purview to opine on whether the Airport Authority Board was required to hold a meeting to decide if this lawsuit should be filed.  Given that big caveat, I cannot fault him from arriving at the position he did.  But, that is the crux of my argument that the Board violated the open door law - because they have the sole authority to sue and they did not delegate it to any Board President, nor did they make such a decision in an executive session without taking a vote.  The very fact that AFTER the airport was apprised of my complaint they even saw the first draft of a letter of agreement with the outside lawfirm handling the lawsuit, and a week later got a version signed by the Executive Director, and the very fact that AFTER the airport was apprised of my complaint they took a vote in a public meeting - all speaks to the fact that they did not do things right the first time and were bailing themselves out as best they could.  And, it looks like it worked.

Is This How The Professionals Do It?

It would make me extremely nervous to hire a lawyer and let him work for me for two months before having a written agreement as to his billing rate.

Maybe that's just me.  The Indianapolis International Airport hired a whole firm to represent them and went two and a half months before finalizing the terms of their arrangement.

From an open records request, I received four iterations of a letter of engagement of Doninger Tuohy & Bailey, LLP, by the airport.  This is the law firm the airport hired to file and support its lawsuit against the MDC, trying to kill off a Fast Park facility on a prime location within Ameriplex.

According to Brian Tuohy in an email to airport Chief Legal Officer, Joseph Heerens, he began doing work for the airport on March 1, 2012, which would be two weeks after the MDC hearing that the airport is now suing over, and two weeks before the lawsuit was filed.  As time passed, Heerens would inquire of Tuohy in multiple emails as to when he would get the letter of engagement.  March came and went.  No letter.  April 23 saw a court hearing before Judge Michael Keele.  No letter.

On May 3, Tuohy emailed a draft engagement letter to Heerens for discussion.  Attorney rates were noted in the text as $150.00 to  $325.00 per hour.

On May 11, an unsigned version of the engagement letter, with a start date of February 17 and an attorney hourly rate of $75.00 to $175.00 was sent by Tuohy to Heerens.

An identical letter of engagement has Heerens' initials and a May 11 date for that signing.

On May 17 a revised engagement letter dated the same day was sent by Tuohy to Heerens.   This was signed by both Heerens and interim IAA Executive Director, Bob Duncan, on May 18.  This version included a start date of March 1 and a limit of $70,000 for fees and expenses.

Well, at least it got done before the airport received an invoice.

Mike Wells, Indy Airport Board President, Misled Press and Public on Airport Finances

On May 14, 2012, almost all local news outlets reported that the Indianapolis International Airport lost $31.3 million in its operating fund in 2011.  Mike Wells, President of the Airport Board, was prominently featured, talking about how the airport must improve its non-airline revenues, most notably through protecting on-airport parking proceeds.  On May 24, the $31.3 million loss figure was repeated when the media reported that three top executives of the Airport had been laid off to save money.

On May 25, [correction: the internal memo was sent on May 15, 2012] Airport CFO Marsha Stone, sent an internal memo to all airport employees, refuting the notion that the airport is in "financial trouble" - instead laying out how the airport actually saw a real net operating profit of $74.9 million in 2011.

Wells got the story aired all over town that the airport is facing financial problems.  By doing so, he misled the press and the public about the true nature of the airport's situation.  But, was his real target for the misinformation Judge Michael Keele, who is considering the Airport's lawsuit against the MDC that aims to derail plans for a Fast Park facility on a prime site in Ameriplex?

Here are links to the news articles (with the exception of those printing AP reports and/or IBJ reporting):  IBJ (Chris O'Malley - May 14 - May 24)  Indy Star (Dan McFeeley - May 24, 25)  WRTV (Norm Cox on May 14 and general story on May 24)  Fox59 (Kjerstin Ramsing May 14 and general story on May 24).

I have uploaded a copy of the internal memo sent by Marsha Stone, so you can review it in its entirety.
Stone begins by blaming the media for the misinformation getting published.  She says:

You may have noticed recent news stories referring to supposed "financial trouble" faced by the Indianapolis Airport Authority.  Driving these stories is the format in which our financial reports are required to be presented by various accounting rules and the difficulty the media and others have in analyzing and reporting on them.

She goes on to explain that the loss is merely a "paper loss".

In our 2011 audited financial statements, the IAA reported $167.8 million in operating expenses - but $106.2 million of that was a "paper loss" that is based on the depreciation, or loss in estimated value, of property.  IAA's annual depreciation expense also includes this charge for property we (IAA) didn't even have to pay for, such as the FedEx sort facility.  Yet when our tenants build such improvements on our property, we must record them as an IAA asset, and annually record their depreciation as an IAA expense.  However, losses attributed to a depreciation involve no change in the Authority's cash levels.

An analogy would be if someone gave you a new car as a gift, then pointed out that you faced an immediate "loss" due to its depreciation.  Even though you spent nothing on the car and saw no loss in cash, you could be said to have suffered from an "operating loss" on the car's annual depreciation.

Stone goes on to note that, outside of on paper, there was no loss - but actually a $74.9 million PROFIT.

Looking at our operating expenses for 2011 excluding depreciation, they totaled $61.6 million.  Comparing that to our operating revenue of $136.5 million, you can see we earned a $74.9 million operating profit excluding depreciation, meaning the IAA generated positive cash flow.  In fact, we recently made a $20 million early payment against our debt principal, which will save us $1 million per year in interest payments.

So, Stone's scapegoat is an uninformed media who do not know how to properly read an annual report.  But that doesn't pass the smell test.  All of the media outlets mentioned above simultaneously talked about the supposed financial woes of the airport all while getting the get-tough message from Mike Wells.  No, Wells got the reporting he wanted.
The question is, who was Wells' real target for his misinformation campaign?  The media?  Well, they bought his story, and published it.  The public?  Well, they read it and absorbed the idea that the airport is navigating a rough patch that requires considerable effort to reverse.  But, there may be one particular individual in the public who was a prime target for the incorrect status of the airport's finances.

The reason I say that is because of how I ended up with this internal memo.  I did not get it from an employee trying to feed me the tip.  I got it as part of the response to an open records request I made for all correspondence between representatives of the airport and representatives of Doninger Tuohy & Bailey, the law firm representing the airport in its lawsuit against the MDC, the lawsuit that hopes to keep the Fast Park facility from being built in Ameriplex.
The airport's Chief Legal Officer, Joseph Heerens, emailed a copy of the internal memo to Brian Tuohy, who is the lead attorney in the lawsuit.  It is possible that the two had an off-topic chat about the news reports of financial woes at the airport and Heerens sent the internal memo to Tuohy for its gossip value.
More troubling and equally plausible is the idea that the news stories were planted so the presiding Judge on the lawsuit would read them in the papers or see them on TV news and come away with the same misimpression of the airport's finances as everyone else.  The email to Tuohy could then have been pertinent to the case as a way to keep Tuohy from verbalizing the erroneous information directly to Judge Keele and thus violating legal ethics.
Whatever the motivation, Mike Wells' credibility, and frankly that of the entire Indianapolis Airport Authority, is shot.  I don't have any idea what information Mayor Ballard has received regarding the airport's profits or losses.  If he has been fed the same lies as the press and the public, then he has no moral recourse but to remove Wells from the Airport Board.  If he knows that Wells is lying to the press and the public, then he has but one political move to correct his image; and that again is to remove Wells from the Board.

The Airport Authority is a municipal corporation of Indianapolis - it is a unit of local government.  The President of the Board, one Mike Wells, who certainly knows his way around real estate depreciation, misled the press and the public about the state of airport finances - happy to let everyone think the airport is losing money hand over fist, when the reality is that it is making money hand over fist.  This is no small error - it is the most cynical manipulation of the press that I have ever seen.

TIF Study Commission - Last Meeting Before Final Policy Reviews

The TIF Study Commission will meet tonight, beginning at 6 pm in room 260 of the City-County Building.  The agenda is:

Meeting Agenda

Base Taxing Units (Part 2), Infrastructure, Policy Considerations

I.              Welcome and Introduction of Commission Members (5 minutes) Steve Talley, Commission Chair

II.            Presentation – Base Taxing Units, Part 2 (30 minutes)     
         Mike Holt, CFO, Warren Township Schools        Debra Hineline, Chief of Financial and Business Services Indianapolis Public Schools        Mike Terry, President and CEO, IndyGo

III.          Infrastructure (45 minutes)                    
         Lori Miser, Director, Department of Public Works

IV.          Policy Considerations (45 minutes)                                                                                                                      

                    Brad Beaubien, Director, Ball State University College of Architecture and Planning, Indianapolis Center

                                                                                      Drew Klacik, Senior Policy Analyst, IU Public Policy Institute

VI.          Discussion, Comments and Public Testimony

VII.        Next Meeting:  Thursday, June 21, 2012, 6:00 pm, City-County Building Room TBA

V.      Adjournment

Lawsuits Pile Up Against Decatur Schools

"Reporter of the Year" award recipient, Kara Kenney, reports on two recent lawsuits brought against the MSD Decatur Township.  These are in addition to the racial harassment lawsuit filed last August by a 16 year old student (see "Decatur School District - Discrimination Lawsuits and (Could It Be?) Stinson Retiring").

Kenney reports:

Bus driver Teresa Surber, 56, alleges she went on medical leave for a hysterectomy in the spring of 2011 and when she returned, MSD of Decatur Township did not renew her contract.

Surber had worked with MSD of Decatur Township for 25 years, RTV6's Kara Kenney reported. 

In the lawsuit filed May 11, Surber alleged the district kept younger, less qualified bus drivers.

The next filing mentioned by Kenney is the 2nd one filed by former School District Security Officer, Keith Jones.

Jones filed an age discrimination complaint with the Equal Employment Opportunity Commission after he was terminated in 2010. 

Jones’ [2nd] lawsuit states the school’s former Chief Financial Officer, Jeff Baer, retaliated against him by coming out of retirement to write a letter in Jones’ file calling him a “bad employee.” 

“That was wrong,” said Ken Roberts, Jones’ attorney. “It’s important because Jones was an elderly employee and elderly employees should have the same rights as everyone else. You should not discriminate on the basis of age. And once someone makes a charge of discrimination you can’t come back and retaliate against the person.” 

Roberts said Jones had no previous write ups, and an otherwise clean employee record.

In addition to suing the District, Jones' lawsuit over retaliation also names individuals Don Stinson, Jeff Baer, Susan Adams as well as the District's attorney, Jon Bailey, and his law firm, Bose, McKinney & Evans.  Bailey was also the attorney for Wayne Township's School District when former Superintendent Thompon's infamous contract was signed and which is now a matter of litigation (see Kenney's earlier report on WRTV "Atty. Central to Superintendent's $1 Million Retirement Fired").

Jones filed an age discrimination complaint with the US Equal Employment Opportunity Commission on January 4, 2011.  On January 19, 2011, after the District was notified of the complaint by the EEOC, Jeff Baer came back to the District headquarters and penned a negative letter against Jones and put it in Jones' file.  Baer had been retired from the District for six months when he penned the letter.  Retaliation against an employee for filing a complaint is strictly against the law.

Curiously, the Distict's attorney handling Jones' age discrimination lawsuit, Karen Sharp, tells Kenney the following:

On behalf of the school district, attorney Karen Sharp told RTV6 there is no evidence Jones’ firing and failure to rehire him was because of his age. 

“Mr. Jones, the Plaintiff in this lawsuit, previously filed two charges of discrimination with the Equal Employment Opportunity Commission against MSD of Decatur Township, both of which have been dismissed as lacking evidence of any violation of the civil rights laws. The school agrees with the assessment of the EEOC that the Plaintiffs claims are meritless and will defend the lawsuit on that basis,” Sharp said in a statement.

It is curious that a lawyer would characterize the EEOC's action of 'dismissing' the complaint as meaning it lacked evidence of a violation.  In two minutes I was able to get the following from the EEOC's website:

If you plan to file a lawsuit alleging discrimination on the basis of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability, genetic information, or retaliation, you first have to file a charge with one of our field offices (unless you plan to bring your lawsuit under the Equal Pay Act, which allows you to go directly to court without filing a charge). We will give you what is called a “Notice-of-Right-to- Sue” at the time we dismiss your charge, usually, after completion of an investigation. However, we may dismiss for other reasons, including failure to cooperate in an investigation. This notice gives you permission to file a lawsuit in a court of law.

So, when the EEOC 'dismisses' a charge, it simultaneously issues a "notice-of-right-to-sue".  One cannot file a lawsuit until the EEOC reviews your charges and finds, in fact, that there just may be substance to your claims - not that no such substance exists.  Why a lawyer (also with Bose, McKinney & Evans) would make such statement to the press is perplexing, as it surely misrepresents what the EEOC process actual is.

Jones lawsuit over retaliation claims that Susan Adams, Don Stinson, and Jeff Baer conspired to have Baer to come to the District offices specifically to write the negative letter for the file. It further asserts that the letter contained false information and that Bailey repeated that false information in his response to the EEOC regarding Jones' age discrimination complaint.

At this point, the School District is fighting 4 lawsuits - one for racial discrimination and harrassment, two for age discrimination and one for retaliation.

Airport Board Did Not Authorize Lawsuit On Fast Park Zoning

What an ironic twist.  It turns out that the Indianapolis Airport Authority (IAA) Board did not authorize the lawsuit filed on its behalf, contesting the authority of the MDC to approve the Fast Park Ride & Relax project for Stansted Road in Ameriplex (see "Yesterday's Zoning Case - Its About More Than a Parking Facility", and "Indianapolis Aiport Stomps  On Free Enterprise With Court Action").

Since the March filing, I have been requesting documents from the Airport.  They show that there was no vote by the Board authorizing the lawsuit.  The final word I got was that Mike Wells, Board President, unilaterally approved it.

Yesterday I filed a complaint with Indiana's Public Access Counselor alleging that this violates Indiana's Open Door Laws - because final action was taken without a vote of the Board in a duly noticed public meeting.

I've been on a number of Boards; most incorporated non-profits and one set up by State Law.  None gave the President the power of the Board itself.  Not through the incorporation and by-laws or statutes and not through Board policy.

The IAA Board apparently did not have a Board policy allowing any President of the Board generally, nor Wells specifically, to usurp their authority or role in deciding to commence legal action.  The explanation for his power was said to be by 'inherent authority' as 'the executive representative of the board'.

State Law gives the IAA Board the sole authority and power to sue and be sued on behalf of the IAA (IC 8-22-3-11).  That means that all members in attendance at a public meeting, the agenda for which has been published at least 48 hours beforehand for the notification of the public, are the ones who get a vote on whether the IAA will be a litigant in a lawsuit - with the majority vote prevailing.  That did not happen.

How ironic that the lawsuit claiming that the action of the MDC was outside of its legal authority, should be filed on behalf of the IAA Board by an action that was outside of the legal authority of the individual (Wells) to file.