As it stands, the mayor of Indianapolis appoints the board's leadership. That arrangement was fine as long as the city bore the responsibility for building and maintaining Downtown venues. But with regional taxpayers, and now perhaps all state residents, asked to pay for stadium and convention center operations, expanding political oversight of the board may well be appropriate.
Persistent complaints have been raised over the years that the CIB operates too much behind the scenes. To his credit, current CIB President Bob Grand helped promote a public debate over the agency's budget problems months ago. The perception remains, however, that the board consists of political insiders who make critical decisions without sufficient public oversight. Given the need to reach beyond Marion County for help, it's a good time to assess whether the CIB can operate in a way that encourages more public input into decisions.
Making the CIB a regional authority would be the worst thing that could happen. That's simply an excuse for spreading the unaccountable board's taxing authority and, by so doing, creating an even larger monster. By its very creation, the Board is intended to lack accountability. It is run by an appointed rather than an elected Board. And it's two most powerful functions, eminent domain and incurring debt for public improvements, do not require approval by the City-County Council. If the unelected Board could tap into the largess of the suburban counties, the size and scope of its projects and undertakings will only grow. Further, the same powerful law firms that dominate local government in Marion County exercise similar power over the suburban counties, particularly Hamilton County. Do you really believe these firms will lose clout if the CIB is made a regional rather than a county authority?
Bankruptcy is the answer to the mess and everyone needs to contact the city council and the folks in charge at the state legislature and insist upon it.
ReplyDeleteAs Ogden says, it will give us power to renegotiate the lopsided deal.
It will also give us a fresh start to straighten out the CIB catastrophe that was years in the making.
Our Colts and Pacers campaign contribution accepting legislature is simply offering to make the mess bigger. None of their proposals will permanently solve the problem.
Couple of quick thoughts:
ReplyDeleteAgree 100% with AI that regional expansion of the CIB taxing authority and/or control is a bad idea.
Also, I'm guessing that a bankruptcy of the CIB would have massive negative implications for the city's credit rating.
What's your man Mitch's ideas of solving the financial crisis he helped create by the State of Indiana building the new stadium?
ReplyDeleteWilson's implied suggestion here of course must be that Democrats would have opposed the stadium projects or otherwise massively scaled down their magnitude so as not to further enslave taxpayers to earning money that is transferred to these private businesses and/or their owners?
ReplyDeleteIs that the implied, by nature of feeling free to criticize, claim here? I somehow doubt it since Democrats wanted these things built too.
Please explain your logic, Wilson. The State took the big chunk of the project and left the rest (maintenance) to the City. The City (meaning YOUR man Bart and his band of thieves AKA the CIB) failed to handle their smaller chunk.
ReplyDeleteIn light of the current casino difficulties around the state, we can thank our lucky stars Bart's downtown casino didn't fly, or we'd have that mess to deal with too.
Sean,
ReplyDeleteBankruptcy would negatively effect the CIB's credit rating. (I highly doubt it would affect the City's since they are separate entities with borrowing power.)
But that drop in the credit rating only comes into play if the CIB decides to engage in new borrowing after the BK. It wouldn't affect existing CIB debt, which would be revised as part of the BK with the principal reduced and locked in at a better rate.
Sean, unless one supports the CIB engaging in new borrowing for some new venture, the BK option makes sense.
The reason that Mitch is a player in this Stadium mess is because Peterson's CIB didn't build or finance the stadium. That was seized by Mitch and Indpls was presented with a fait accompli, well, actually, a completed building. The problem is the increased cost of running this new giant facility (with moveable roof!!!). The State handled the financing of the construction but didn't handle the cost of operation. That was dumped into the hands of the new Ballard-appointed C.I.B.
ReplyDeleteSo now what is Mayor Ballard & his C.I.B. crew going to do about this gift-horse from Governor Mitch?
"What's your man Mitch's ideas of solving the financial crisis he helped create by the State of Indiana building the new stadium?"
ReplyDeleteWilson, get a clue already. Mitch and the state are _not_ to blame. Mitch was the only one who could deliver the funds to even build LOS. Bart did not have the ability to help get the regional food and restaurant tax through, Mitch did. All we heard from Bart and his lapdogs at the CIB were that the CIB was so great at these things, yet look at the CIB now. We come to learn that things have been bad for years. Wilson, what's your man Bart's idea of solving these problems? Why didn't Bart solve these issues when he was in office?
Bart and the CIB begged for control after the stadium was built. Obviously, the state should have dissolved the entire CIB and divulged to the public just how bad things were with the CIB. The state could have taken over control of everything, but no, the CIB demanded they stay in place. Now they are crying because Mitch won't part with the taxes to build the stadium. It is my opinion that all along, the powers that be figured that when push came to shove, Mitch would relinquish the food and beverage tax excess to the CIB. Mitch is smart in now allowing this. Any excess in the food and beverage tax, which is still doing well even in this economy, should be going to pay down the debt that was issued to build LOS and the convention center. To allow the CIB to touch this money would be like offering crack to a crack addict trying to get clean.
If anything, maybe it is time for the state to file a lawsuit taking total control of LOS. Then the state could cut the fat that the CIB is filled with and streamline everything to the most frugal point possible. Then after the state takes control, they could use the excess with the regional food and beverage taxes to help cover the operating costs.
Daniels control was limited to the construction of the stadium. The CIB was expressly told they could not use the revenue stream generated from the regional food & beverage tax and the diversion of state income tax revenues for the sports development area to pay operating costs on LOS. Bart said, The hell with that plan. We'll build it and let the state bail us out after I get re-elected in 2007. He did the exact same thing with the water company. This is a great deal. We won't have a rate increase for 5 years. But after Bart would be re-elected in 2007, all hell would break loose and he knew it. Rates are spiraling more than 20% and the debt the water company is facing is staggering--over $800 million. The bond rating for the water company has been downgraded and so the interest costs on that debt skyrockets. Bart was all about getting as much for as little up front commitment, knowing that someone would eventually have to pay the tab for his spending spree.
ReplyDeleteIn light of the current casino difficulties around the state, we can thank our lucky stars Bart's downtown casino didn't fly, or we'd have that mess to deal with too.
ReplyDeleteThe casino idea was the best idea around. This is the one good idea Bart Peterson ever had. The casino at French Lick was a complete joke. The casinos at the horse racing tracks were complete jokes. In fact, not allowing capitalism to kill the horse racing tracks was a complete joke as well.
A downtown casino:
#1: Would have provided plenty of revenue and operating costs wouldn't be an issue.
#2: Would likely have not hurt the riverboat casinos as much as the three newest casinos have.
#3: Considering still how most employed are still spending like drunken fools, a downtown casino would have been a great hit with the convention folks. If a person is coming for a convention, they likely have a somewhat stable job _and_ money. Even if they are cutting back at home, folks use trips as a way for spending a little extra. Even if every visitor only spent $50.00, it is still something. I don't care how nice the buses are and how short the trip is, I just don't see a lot of downtown Indy visitors wanting to take a 30 min. ride to the casino off I-74. Change that to a five to ten min. walk (if that) just a few blocks down the street, then I believe we could see a lot of people say "Hey, why not go drop a few bucks on the slots."
The reason that Mitch is a player in this Stadium mess is because Peterson's CIB didn't build or finance the stadium.
Well, then why didn't Peterson tell Mitch to take the stadium and everything that comes with it? Simple, Bart wanted something of the pie to keep the law firms he was in bed with feed with work paid for by taxpayers. That is why Peterson and the CIB flipped out and demanded they still control the project after it was built. Well, they got what they asked for. Again, Bart figured he could just force Mitch to turn over that regional food and beverage tax excess and things would be fine. Well, I am glad Mitch stood his ground. However, as a last laugh at the wasteful spending Democrat juggernaut that is the CIB, Mitch to take total control of LOS and then use the excess to do what the CIB couldn't...live on a shoestring budget.
Paul - The CIB is a separate entity but doesn't it borrow the city's credit rating? Obviously, guys like you and Welsh know a bit more about the internals of this, I just have always been under the impression that these municipal corporations "borrow" the city's credit.
ReplyDeleteI know Ft. Wayne was considering the creation of their own CIB ... I hope someone up there has been paying attention to down here.
Sean, The bond rating for the City is not directly related to the CIB's bond rating as I understand it. The CIB debt has its own dedicated revenue stream and its rating are derived independent of the City's financial well-being. The CIB's bond rating can be downgraded without the City's bond rating being lowered. The City does a lot of its borrowing through the Indianapolis Bond Bank. I noted recently that the bond rating for the water company was downgraded due to concerns about the size of its debt and its ability to repay that debt. That had nothing to do with the City's ability to repay; rather, it was related to the water company's independent financial well-being.
ReplyDelete