Two years ago, projections of a $47 million annual deficit sent Indianapolis' sports and convention board begging for help.Murray's story glosses over the fact the CIB is borrowing $27 million from the state at the same time it says it has a cash surplus of $11.5 million and cash reserves of $62 million. "It also recently received a $9 million loan from the state that was part of a rescue package approved by state legislators during the 2009 session," Murray writes. "Lathrop said CIB officials opted to take the state's loan last month at a low interest rate to provide more budget cushioning." News reports at the time the CIB approved taking out the first installment of the $27 million loan authorized by the state bailout legislation quoted Lathrop as saying the CIB had no immediate need for the money, but if it failed to approve the loan by the end of 2009, it would lose out on the opportunity to borrow the money. I guess you could say it's sort of like a homeowner taking out a second, line of credit mortgage when he or she refinances their principal mortgage just because it's made available to them whether they need it or not. Meanwhile, the library, parks, IndyGo and other city agencies providing basic services face major budget cuts. It's more important to take care of those billionaire sports team owners first you see. We could write a book on all of the misrepresentations CIB officials have made to the public about its financial picture over the past several years, but it's become pointless. Indy taxpayers need to just come to the realization that the CIB, unlike other governmental bodies, lives and operates in Fantasyland where no dream goes unfulfilled.
Now a financial turnaround -- aided by boosted tax revenue and ongoing cost-cutting measures -- has left the Capital Improvement Board flush with cash reserves and a budget well into the black. A report released Monday shows that as of November, in the most recent figures available, the CIB's budget for 2010 was running an $11.5 million surplus.
The CIB's budget had forecast a $5.2 million deficit by that point -- meaning, officials say, that the board's financial position is actually $16.7 million better than expected.
For CIB officials, who have come under fire for giving millions to the Indiana Pacers and other controversial decisions, the prospect of financial stability, at last, brings relief.
"I feel like we're in a position to self-determine what the future looks like," CIB President Ann Lathrop said, adding that a strategic plan is in the offing this year. "(Gaining) stability is probably the biggest change we've had."
The CIB operates the Indiana Convention Center and the city's professional sports facilities.
Perhaps the strongest indication of its financial strength is its cash reserves, which stand at $62 million, according to Dan Huge, the CIB's chief financial officer. In May 2009, reserves had fallen to $26 million, their lowest recent level.
But don't expect to see any money returned to taxpayers.
Huge and Lathrop said their lesson from the crisis is that the CIB's heavy reliance on hotel and food and beverage taxes -- which take a hit during a recession -- requires deeper reserves. That will help ensure a strong bond rating for the CIB's debt, they said.
Lathrop said 40 percent to 50 percent of the operating budget -- set at $73 million in 2011 -- is the new minimum she hopes to maintain in reserves. The excess in there now is needed for upcoming expenses and to guard against uncertainty, she said.
"It's important to remember that our revenue is basically at 2007 levels," Lathrop said.
Tuesday, January 11, 2011
Why Does CIB Need A PR Contract When Media Does Its PR Work For It?
WTHR's Mary Milz recently questioned a $36,000 a year public relations contract the CIB awarded to former Ballard communications director Robert Vane. Perhaps the real question is why the CIB would even need to pay anyone to do PR work given the local news media's proclivity to fall all over itself applauding the CIB for a job well done. Exhibit one is Jon Murray's story in today's Star discussing how the CIB miraculously turned a huge budget deficit of just a couple of years ago into a cash surplus with large cash reserves: